We’re also talking about the Great Depression. There was a need for quick liquidity, so if the government was “handing out” cash I’m sure it was gladly accepted for small trinkets of gold lying around. 

Let’s put it this way, a migrant family living in a New York City tenement building isn’t sitting on bars of gold. 

 Would be interesting to know about the land-owning families of successful prospectors in the west. 

Those that made moderate fortunes through gold. Come to think of it, what happened to the gold mining industry as a whole during this time?