United States Bullion Depository

Coordinates: 37.882983° N 85.965099° W

The United States Bullion Depository, commonly called Fort Knox, is a fortified vault building located near Fort Knox, Kentucky which is used to store a large portion of United States official gold reserves, as well as from time to time, other precious items belonging to, or entrusted to, the United States of America.

The United States Bullion Depository holds about 5,037.5 tons (4,570 metric tonnes) of gold bullion (147.3 million ounces ^[1]). It is second in the United States only to the Federal Reserve Bank of New York's underground vault in Manhattan, which holds about 5,000 metric tons of gold in trust for many foreign nations, central banks and official international organizations.

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History

Before the election of Franklin D. Roosevelt in 1932, gold coins had circulated freely in the United States as legal money, and gold bullion was owned by banks and other private entities. In early 1933, as part of the New Deal, the U.S. Congress enacted a package of laws which removed gold from circulation as money, and which made private ownership of gold in the U.S. (except for coins in collections or jewelry such as wedding rings) illegal. All gold in circulation was seized by the government in exchange for dollars at the fixed rate of $20.67 per ounce. Owners of gold bullion in the U.S. were also required to trade it for other forms of money. All of this left the government of the United States with a large amount of gold metal, and no place to store it.

In 1936, the U.S. Treasury Department began construction of the United States Bullion Depository at Fort Knox, Kentucky on land transferred from the military. The site is located on what is now Bullion Boulevard at the intersection of Gold Vault Road. The Gold Vault was completed in December 1936 at a cost of $560,000, or about $7.5 million in 2007 dollars.

The first gold shipments were made from January to July 1937. The majority of the United States' gold reserves were gradually shipped to the site, including old bullion and more newly made bars made from melted gold coins. Some intact coins were stored, as well. The transfer needed 500 rail cars and was sent by registered mail, protected by the Postal Inspection Service.

During World War II, the depository held the reserves of several European countries and several key documents from Western history. For example, it held one of four known copies (exemplifications) of Magna Carta, which had been sent for display at the 1939 New York World Fair and when war broke out, was kept in America for the duration, and other key documents from Western history. It also held the original U.S. Declaration of Independence and U.S. Constitution during the war. The repository also held the Crown of St Stephen, part of the Hungarian crown jewels given to American soldiers to prevent them from falling into Soviet hands.

Construction and security

Below the fortress-like structure lies the gold vault, which is lined with granite walls and is protected by a blast-proof door that weighs 24.6 tons (22.3 metric tonnes). No single person is entrusted with the combination to the vault. Various members of the Depository staff must dial separate combinations known only by them. Beyond the main vault door, smaller internal "cells" provide further protection.

The facility is ringed with several fences and is under armed guard by officers of the United States Mint Police. The Depository premises are within the site of Fort Knox, a United States Army post, allowing the Army to provide additional protection. The Depository is protected by numerous layers of physical security, alarms, video cameras, armed guards, and the Army units based at Fort Knox, including the 194th Armored Brigade, the 16th Cavalry Regiment, and the United States Army Armor School, totaling over 30,000 troops, with associated tanks, armored personnel carriers, attack helicopters, and artillery.

Gold and coin holdings

Gold holdings peaked during World War II at 649.6 million troy ounces (20,205 metric tons). Current holdings are around 147.3 million ounces^[1] (4,570 t) in around 368,000 standard 400 troy ounce (12.4 kg or 27.4 lb avoirdupois) gold bars. At late 2007 rates of $837 an ounce it is worth a little more than $123 billion.^[2]

The depository also holds monetary gold coins. It also holds several specimens of Sacagawea Dollar coins made out of 22kt (91.6% pure) gold from blanks that are used to strike the $25 half-ounce American Gold Eagle bullion pieces made for an unknown project. The 1933 Double Eagle was also a temporary resident after transfer from 7 WTC in July 2001, until its sale in July 2002 for $7.59 million. Sometime in 2004, 10 stolen 1933 Double Eagle examples recovered from the heirs of Israel Switt were transported to Fort Knox for safekeeping.

Not all the gold bars held in the depository are of exactly the same composition. The mint gold bars are nearly pure gold. Bars made from melted gold coins, however, called "coin bars," are the same composition as the original coins. Unlike many .999 fine gold bullion coins minted in modern times for holding-purposes today, the coin alloy for pre-1932 U.S. coins, which were intended for circulation, was a much tougher and wear-resistant 22 carat alloy derived historically from crown gold (this alloy is actually still used by law in modern U.S. American Gold Eagle bullion coins). The 22-carat coin bars are therefore only 22/24 = .9167 fine, or 91.67% gold.

All of the gold in the depository, if pure, could form a cube 19.7 feet (6 m) on a side. For a comparison, all the gold ever mined in the world would form a cube 64.3 feet (19.6 meters) on a side.[1]

The United States holds more gold bullion than any other country, with about 2.37 times that of the next leading country, Germany.

Conspiracy theory

A popular and recurring conspiracy theory, as alleged by Edward Durrell, Norman Dodd, Tom Valentine, Peter Beter and others, claims that the vault is mostly empty and that most of the gold in Fort Knox was removed to London in the late 1960s by President Lyndon Johnson.^[3] In response, on September 23, 1974, Senator Walter Huddleston of Kentucky, twelve congressmen, and about 100 members of the news media toured the vault and opened various cells and doors, each filled with gold. Radio reporter Bill Evans, when asked if it seemed like the gold might have been moved in just for the visit, replied that "all I can say is that I saw gold there" and that it seemed like it was always there.^[4] Additionally, audits of the gold by the General Accounting Office (in cooperation with the United States Mint and the United States Customs Service in 1974 and the Treasury Department) from 1975-1981 found no discrepancies between the reported and actual amounts of gold at the Depository.^[5] However, the audit has been described as a peculiar process because it was only a partial audit done over an extended period of time.^[6] The report states only 21 percent of the gold bars were audited as of 1981 (the audit report's issue date) and that the audit has "covered more than 212.7 million fine troy ounces of gold" which "represents over 80 percent of the total amount of United States-owned gold of 264.1 million fine troy ounces."^[5] A small amount of gold is removed for regularly scheduled audits to ensure the purity matches official records.^[1] The theory continues to persist, however. In 2007, KPMG will carry out an independent audit^{[citation needed]}.

In popular culture

The bullion depository has become a symbol of an impregnable vault, leading to phrases such as "locked up tighter than Fort Knox", or "safer than Fort Knox".

Cinema

• The 1937 RKO Lee Tracy film Behind the Headlines climaxes in a plan to steal gold bars en route from Washington D.C. to Fort Knox.
• The 1951 Bud Abbott & Lou Costello film Comin' Round the Mountain has the two using a treasure map to find a stash of gold. When they finally reach the gold at the end of the film, they find themselves in the middle of Fort Knox and are immediately arrested.
• The popular 1959 Ian Fleming-written James Bond novel Goldfinger, and the 1964 movie of the same name, are about a criminal plot called "Operation Grand Slam" to break in to the U.S. Bullion Depository. In the book, Auric Goldfinger's plan is to steal the gold. In the movie, it is to render the gold contained in the Depository radioactive and useless with a nuclear device, crippling the economy and driving up the price of the gold Goldfinger already has. The movie was set before the U.S. dollar ceased to be backed by gold in 1971.^[7]

See also

• Federal Reserve System
• Federal Reserve Bank of New York
• List of attractions and events in Louisville, Kentucky
• Official gold reserves

References