Over 2,500 years ago, gold coins became the first state-issued currency system, and even in the 20th century, the value of fiat currency was tied to the gold standard. Gold has always been a precious metal representing long-term value preservation.
But after the Second World War, gold ended up at the centre of an unusual, controversial story.
In this blog article, we look at the circumstances which led the French central bank (Banque de France) to release millions of "stretched" 20 Franc gold coins into circulation between 1951 and 1960.
These ‘counterfeit’ coins looked exactly like the real 20 Franc Marianne/Hahn gold coins minted from 1907-1916, down to the smallest detail. However, unbeknownst to many people, they were created from less gold.
Below, we explore what exactly happened – and why.
France’s Post-War Counterfeiting of Gold Coins
Precious metals expert Yannick Colleu uncovered an unusual story while researching archives for his recent book L'Or des Français. In 1951, the French Minister of Finance and the Bank of France secretly produced stretched gold coins to conserve the country's gold reserves.
These counterfeit coins, known as 'rooster' coins, were quietly circulated to create the illusion of larger gold reserves, allowing France to stabilise its post-war economy without fully depleting its gold supply.
To the dismay of many French citizens, the Bank of France confirmed that this was true. So what exactly happened – and why?
After World War II, life was difficult in France. The economic situation was dire, with high inflation and shrinking gold reserves. Under the Bretton Woods system, only the U.S. dollar could be converted into gold at a fixed rate – and countries had to maintain currency stability by supporting the dollar through foreign exchange interventions.
For France, the only way to obtain more U.S. dollars – needed to support economic recovery and global trade – was to exchange gold. However, France’s gold reserves were rapidly disappearing, creating a significant problem for the government.
So, the Ministry of Finance devised an innovative plan. They would mint coins that were identical replicas of the 20 Franc Marianne/Hahn gold coins from 1907-1916, but with less gold content.
Then, they would release them into circulation – conserving gold reserves while still meeting currency demands. This would allow France to stretch its gold supply, acquire more U.S. dollars, and ease economic pressure.
Why Did The French Government Resort to Counterfeiting Their Gold Coins?
To understand why France circulated stretched coins, it’s important to consider the impact of World War II.
Prior to the war, the Bank of France held 2,500 metric tons or 80,375,000 troy oz of gold. As a precaution they sent their gold to various countries to keep it out of German hands. In case they needed to buy arms, France sent 600 tons to the United States for storage. They also stored gold in Canada, Morocco and Senegal.
However, although France successfully safeguarded some of its gold by sending it abroad, Germany still managed to seize a significant amount during its occupation.
Also, the war itself – the cost of financing it, as well as the economic recovery – depleted France’s gold stores. In his book, Colleu describes the dire situation: “At the end of the war, we had almost no gold left; it had all been melted down to buy munitions.”
France desperately needed more gold to stabilise its war-torn economy. This is what led to the country releasing 37.5 million counterfeit gold coins into circulation. By minting these coins using a slightly lower gold content, using 897.3 parts per thousand instead of the original 900, the state saved roughly 654 kilograms of gold.
According to Colleu, not everyone was convinced by the stretched coins – and many wondered why some coins looked newer and weighed less than others. Nonetheless, the plan appeared to work – and for decades, it was kept a secret.
The Bretton Woods System post-war monetary agreement tied the US dollar as the primary reserve currency. In July 1944, delegates from 44 Allied nations met in Bretton Woods, New Hampshire, to create a framework for post-war economic stability. Central to the system was pegging currencies to the U.S. dollar, which was convertible to gold at a fixed rate of $35 per ounce. The system lasted until 1971, when the U.S. ended dollar-to-gold convertibility, transitioning the world to floating exchange rates.
Why Gold Belongs in Your Portfolio
The story above is certainly unusual. Moreover, it highlights gold’s enduring role as a stabilising safe haven asset – and is especially relevant in today’s era of high inflation and currency devaluation.
Historically, gold has been an effective hedge against inflation – and for good reason. Its ability to preserve value over time is backed by data and widely recognised by experts. Gold performs well during times of economic uncertainty and financial instability, so many investors value it as a reliable way to diversify a portfolio and create savings.
It’s no surprise, then, that gold has been used for thousands of years as currency, a store of value, and a symbol of wealth.
To ensure that you're purchasing real gold, we recommend a few simple steps:
⭐ Buy gold from trusted, reputable retailers like GOLD AVENUE. Check out our guide to buying precious metals here.
⭐ Look for independent quality certifications, (e.g. the LBMA certification).
⭐ Purchase gold that has a unique serial number or other anti-counterfeit features.
