Federal depository at Fort Knox

Identification Federal gold bullion depository

Date Founded in December, 1936

Although four other sites also store the nation’s gold bullion holdings, the federal depository at Fort Knox, Kentucky, has served as the primary U.S. gold safeguarding facility since the first years of the New Deal, with assets during the early twenty-first century estimated at 147.3 million ounces of gold valued at more than $123 billion.

In 1933, the new administration of President Franklin D. Roosevelt, along with the Democratic Congress, acted to stabilize a national economy reeling from the Wall Streetcollapse four years earlier. The president and legislature reoriented the United States’ monetary policy, abolishing the gold standard. Although gold had been freely circulated in the American economic system since the nation’s beginnings, since 1900 it had been established as the nation’s standard unit of currency. In a series of controversial congressional acts that culminated in January, 1934, the federal government embargoed gold shipments coming into the United States, recalled all circulating gold in the country, and then removed gold coinage as the standard currency for covering federal debts. Further, the government instructed banks to turn in their gold holdings and ultimately made it a federal offense for private citizens, except jewelers and metal merchants, to own or hold gold.

Despite conservative outcry against these actions, the federal government had by the mid-1930’s accumulated a considerable hoard of gold bullion and coin. In 1936, the Treasury Department authorized construction of a massive, two-story underground vault near Fort Knox, in north central Kentucky, which had been an U.S. Army post since the American Civil War. The facility, which cost a Depression-era federal government the equivalent of $7 million, incorporated unprecedented security measures, including more than sixteen thousand cubic feet of granite, four thousand cubic yards of concrete, and fourteen hundred tons of reinforced steel (the blast-proof vault door alone weighed more than twenty tons). The main vault itself was 105 feet by 121 feet, with a 42-foot ceiling—the gold bars inside were to be arranged unwrapped on pallets. The facility opened with little fanfare in December, 1936, and transportation of the nation’s gold holdings to the vault was completed by rail within a year.

Fort Knox, rumored to hold more than five thousand tons of gold (only the Federal Reserve in Manhattan holds more), is not open to the public. It is considered the most secure facility within the federal government. In addition to being located on a federal Army post and permanently guarded by a carefully screened detachment of the United States Mint police, the facility is ringed by numerous security fences and monitored by video. The vault is accessible only through a series of secured doors, and the combinations to the principal vault require a number of depository staff members to key. The technology protecting the holdings is updated annually. Fort Knox is a hallmark for fortification and as such has been the subject of numerous fictional and cinematic theft attempts. Despite persistent rumors that the government long ago moved the gold holdings to less well-known facilities overseas, the Fort Knox reserve continues to serve as the principal reservoir of the nation’s gold holdings.

Bibliography

Bayoumi, Tamim, et al. Modern Perspectives on the Gold Standard. New York: Cambridge University Press, 2008.

Eichengreen, Barry. Golden Fetters: The United States and the Great Depression. Oxford, England: Oxford University Press, 1996.

Hamby, Alonzo. For the Survival of Democracy: Franklin Roosevelt and the World Crisis of the 1930’s. New York: Free Press, 2004.