Hi Babaoriley

The short answer is that the U.S. currency was backed by gold at the time, and the government wanted to be able to cover any settlement with creditors in the money of the time. This has not been the case since Nixon's 1971 decision to remove the U.S. from the gold standard.

Sinclair has touched on this...

http://www.jsmineset.com/2012/10/30/gold-confiscation-rumor-control/

as has Peter Schiff...

http://www.europacmetals.com/Portals/0/newsletters/december2010.html

I tend to believe that the people who hold gold now are not quite so trusting or compliant as perhaps they were back then.

After Cyprus, I would be more cconcerned about confiscation of my money.

S