Evening star., 1933-05-28
HOUSE ACTION DUE
TOMORROWONGOLD
PAYMENTS REPEAL
Bill to Set Aside Clauses
Rushed Despite Cries of
"Repudiation."
STEAGALL DEFENDS PLAN
FOR MANAGED CURRENCY
Glass and Few Others Condemn
Measure as Move to Impair
Validity of Contracts.
BY the Associated Press.

BY the Associated Press.
The administra tons move to abol-
ish the gold clause in existing and fu-
ture contracts and to make public and
private obligations payable in legal
tender money received speedy Congress
sional Committee approval yesterday
and plans were completed for House
action on it tomorrow.
Despite the swift action on the reso-
luton, introduced only Friday, the pro-
posal was asSailed by some in both
parties, who argued that it constituted
rank reputation" and notification of
Government and private obligations
amounting to approximately 100000
100000.
Shortly after the House Banking Com
mittee reported the measure, II to 4,
the Senate Banking Committee voted
1t out, to 8. Then, to expedite House
action tomorrow, the Rules Committee
approved procedure giving the resolu-
ton right of way.
The resolution would make all con-
tracts, heretofore and hereafter made,
payable in legal tender coin, regard
less of whether they contain a clause
providing for their payment in gold.
This would cover mortgages and
bonds OF all kinds, including Liberty
bonds, all forms of securities and war
debts, most of which have carried a
clause in the past providing for their
payment In gold.
Executive Sessions Held.
In executive sessions. Dean Acheson,
the new, Undersecretary of the Treas
ury, explained the measure before the
Senate Committee. He said about $2,-
000,000,000 of the Governments $22,-
C00,000000 of Indebtedness must be re-
financed during the next few months
and, therefore, action on the legislation
was imperative.
The House banking group acted
after Chairman Steagall read a Treas
Try Department memorandum on the
measure.
BY the narrow margin of to 6, the
Senate group defeated an amendment
by Senator Glass, Democrat, Of Vir-
ginia, to eliminate obligations to or
from the United States Government. 1t
was designed to require payments In
gold on the $22 2,000, 900 900 In outstand-
ing Federal bonds and war debts due
the United States from European coun-
tries.
As the measure now stands, foreign
governments may pay S11 900, ,000, 900
in war debts in United States paper
money instead of in gold as contracted
and the United States may pay its
bonds in currency instead of gold.
1T is just rank reputation, and
that's all there is to it, Senator Glass
tall f1apo SoItyoc hlfIa
in the face and they can't make any
thing else out of it."
Glass joined Senators Kean, Repub-
1ican, of New Jersey, and Gore, Demo-
crat, of Oklahoma, in voting against
the bill. In the House Committee,
Representatives Luce, Republican, of
Massachusetts,; Walcott, Republican, of
Michigan; Brown, Democrat, of Michi-
gan, and Reilly. Democrat, of Wiscon-
sin, voted against the measure.
Amendment Defeated.
Earlier, the House group defeated, /
to S. an amendment by Luce to prevent
the measure from becoming retroactive.
Luce contended the gold clause in
existing contracts should not be abro-
gated
In a statement, Luce said the measure
'impairs the obligation Of contracts,
IL Is unfair, ana unQeTHllIlcS OuI WIiolC
business as well as our social structure. "
The worst part of this proposal is the
breaking up of faith with those who
hold money in trust for the relief OF
the unfortunate and the afflicted he
said.
From the practical point of view
this action" he said, has two very
serious objections; first. it restricts the
freedom of our delegates to the London
Economic Conference by at least in
timating what will be the policy of the
United States, and secondly, 1t still
further discourages merchants, manu-
facturers and all men Of affairs from
attempts at immediate resumption Of
activities"
Chairman Steagall said the measure
'ratifies, reaffirms, confirms and makes
legal a situation now existing"
This bill will put us on managed
currency basis. 1t will broaden our
currency basis" he said. 1T frees us
home and abroad of dependence on gold.
It is a declaration of economic inde-
pendence 1t will restore prosperity.