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One Government Has No Problem Confiscating Gold. Is It Yours?

In recent months a lucky Chinese herdsman stumbled onto a 17-pound gold nugget. But there are now questions swirling around just how lucky he truly is as China’s government may force him to turn over the nugget to the state as it is a public “mineral resource.”

The ethnic Kazak herdsman tripped over the gold nugget, which apparently was lying “on bare ground,” while traversing through China’s far western Xinjiang region about three weeks ago. After the local government appraised the rock and investigated the ownership of the nugget, the government decided it might seize the gold nugget, a move that has triggered controversy across China, as legal experts and laypersons alike debate who should get to keep the gold nugget.

The local cultural heritage authority has already admitted the nugget isn’t a “cultural relic” — which would automatically make it a state asset — referring to it instead as a “mineral product,” a separate report by the state-run Xinhua Daily Telegraph said earlier this week.

However, the report quoted a lawyer based in Shanxi province as saying that if the nugget is eventually determined to be any type of “mineral resource,” it would still be the property of the government under Chinese law.

Some other law experts disagree, however.

Cheng Jianwei, a lawyer in the northwestern city of Xining, said that since the nugget was sitting uncovered on the ground rather than buried below the surface, the discovery would be outside the legal definition of “inspecting and recovering mining resources,” according to the Beijing Morning Post report.

Likewise, China University of Political Science and Law professor Li Xiandong told the newspaper that the circumstances of the find show the nugget is “an ownerless thing,” which should belong to the herdsman.

The report said that if the state does take the gold, the herdsman’s outlook for compensation might be dim, noting that in 2011 a farmer found a priceless Neolithic stone ax while digging on his land but received a mere 100 yuan ($16) reward after authorities took possession of it.

Of course, this is a drastically different circumstance than the Executive Order issued by Franklin Delano Roosevelt forcing all gold coin, gold bullion and gold certificates be turned in at a Federal Reserve Bank, branch or agency, or to any member bank of the Federal Reserve System.  Nonetheless, this is still an example of an over-reaching bureaucracy.

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