Evening star., 1933-05-29
HOUSE DEBATE CUT
Jon GOLD MEASURE
Democratic Strength Limits
Time Further With
Passage Foreseen.
Continued From First Page.)

the gold clauses are contrary to pub
\ lie policy arises out of the experiences
| of the present emergency"
These gold clauses render ineffective
| the power of the Government to Gre
! ate currency and determine the value
| thereof" it continued.
IF the gold clause applied to a very
| limited number of contracts and Sc
curity issues, it would be a matter of
no particular consequence, but in this
country virtually all obligations. almost
| as matter of routine, contain the gold
clause.
In the light Of this situation, two
phenomena which have developed dur
ing the present emergency make the
enforcement of the gold clauses in
compatible with the public interest.
THE first Is the tendency which has
developed internally to hoard gold; the
second is the tendency for capital to
leave the country.
Under these circumstances, no cur
rency system, whether based upon gold
or upon any other foundation, can meet
the requirements of a situation in which
many billions of dollars of securities are
expressed In a particular form OF the
circulating medium, particularly when
AZ ID o uic0adkii ufoA oAAS SAASAAS
credit and currency structure rests.
Dispute Is Anticipated.
"There can be no substantial ques-
ton as to the constitutional power OF
the Congress to make this legislation
applicable to all obligations, public and
private, both past and future"
Anticipating q whirl Of dispute over
authority to do as the President wants
in this case, committee proponents
contended:
"The power Of Congress to issue a
currency and determine the value
thereof and to provide for the bor-
| rowing OF funds by the Government. Is
express and undoubted. 1t also is un-
doubted that Congress has all powers
necessary to make the exercise OF these
| two express powers effective.
Contracts Of private individuals,
past or future, are valid and enforce
able only in so far as they do not
conflict with the public policy as enun-
ciated by Congress in the exercise OF
| its constitutional powers.
when. therefore, as Is declared in
| this resolution, the enforcement or
| making of gold clause provisions OBJ
structs the proper exercise OF the con-
gressional powers, such provisions must
yield.
Nor does the fact that outstanding
obligations of the Government are ex-
pressed as payable in gold coin impose
| limitation, under the circumstances
obtaining upon the exercise of the
! powers conferred by the Constitution. T"
THE Government cannot. by con-
tract or otherwise" the report went on,
| "divest itself of its sovereign power.
All contracts of the Government are
made in the light of this inalienable
power to legislate as the public interest
may demand.
"It is too well settled to admit OF
controversy that contracts or provisions
of contracts, even though not 1ncon-
sistent with the public policy when
! made, may subsequently become con-
trary to the public policy. as authorita-
lively announced by the legislative
branch Of the Government, and that,
in such event, they become invalid and
unenforceable."
The report said that, 50 far as the
| future Is concerned. the power Of both
the Government and of private interests
| to borrow would be seriously impaired
unless outstanding obligations and fu-
| ture obligations were placed upon the
same footing in respect OF the medium
of payment"
Representative LUCE Va IanoodAACAoSsSS,
ranking republican on the committee,
in a minority report assailed the pro-
posal as renouncing obligations OF the
United States and prohibiting future
obligations of the same sort.
Luce said ARE now asked to declare
that, because such provisions (of the
gold clause act of 1862 obstruct the
power of Congress to regulate the value
of the money Of the United States, the
faith that we solemnly pledged GA years
ago is to be. repudiated.
Recalling that the first, second, third
and fourth Liberty Loan acts during the
war period contain the gold clause,
Luce said:
Millions of our people bought these
bonds with. this pledge. Whether all
gave equal weight to it Is irrelevant
where honor is involved. The pledge
alone counts, though no more than one
man gave it heed"
Luce said this bill ought to be known
throughout history as the Reputation
bill of 1888"