Evening star., 1933-07-02
GOLD ACTION DEPLORED
AS BLOW TOU. S. CREDIT
Congress Enacted Some Helpful Laws,
But Hurt Nations Good Name,
Representative Beck Holds.
BY JAMES M. BECK.

ox JAMES lu. DESh,
Representative from Pennsylvania.
TINE first session of the Seventy
third Congress has ended and It
will hold the record for -saaaJN
l. years to come for caSS=Ictive
and destructive legislation.
Many Of the emergency measures have
reached the high-water mark Of leg1s-
lativs folly. The political Pollyannas
MAY attempt to justify these excesses
on the theory that they were demanded
by an emergency, but America has
passed through greater economic crises
han the present without destroying its
| form of government, as the Congress
has now done.
! The present depression is not COM
/ parable to that of the critical period
between 1871 and 1887, when men de-
risively papered the walls Of their houses
bonds of the Government were selling
at cents on the dollar; and yet There
was born of that travail the wisest and
most conservative form Of government
in the world Today a depression of
| less intensity has, overnight, trans
formed our individualistic form Of gov
ernment into a highly socialistic state,
comparable to that of Italy, Germany
and even Russia. For our Nation to
destroy In day and in spirit of un-
reasoning hysteria what it required $50
years to build Is the greatest folly In
the history Of the American people.
| The optimistic philosopher, who, like
DR.. Pangloss in Voltaire's "Candide,"
can see good in everything, can, as to
many Of these emergency measures.
have at least the satisfaction that there
is no more effective method of educa-
ton than the experience Of demon
strated folly, but our education has
come too late.
As our Nation now proceeds to ex-
pend many billions of dollars in the
vain effort to lift itself by tugging at
its -pillaging the industrial
States for the benefit Of the wheat and
cotton belts in the process-it will soon
learn, to its great sorrow, that the
American people must save themselves
and that the attempts of government
to create prosperity by borrowing more
money will be as Intellectual in bringing
about the return Of prosperity as was
the effort of Mr. Wilkins Micawber to
restore his personal fortune by paying
his debts with promissory notes.
Holds Experience Costly.
The Union will probably survive the
folly of these emergency measures, for,
as Franklin said: Experience is dear
school. but fools will learn in no other. "
The Union existed before the Constl-
tuition and can conceivably survive 1t.
The one folly of the recent session Of
Congress from which no recovery is pos
| sible is the destruction Of the honor OF
| the American Nation when it not only
| authorized the President to reduce the
| gold dollar in his discretion and to issue
| 5000 100000 of paper currency, but
also proceeded to the final infamy OF
not only repudiating its own prior con-
tracts to pay in gold of a specified
quantity and quality, but permitted all
debtors to escape their just obligations
| by similar method.
There is no better evidence OF the
utter generalization of the present time
than the fact that in 1896 when it was
| only proposed to liquidate debts in sill
yer at an arbitrary ratio with gold
enabling ST to be paid by SO cents
the American people, by an overwhelm-
ing majority redupiated this attempt to
| pull to our masthead the black flag Of
partial repudiation but today, without
a murmur of dissent and with only ser
functory discussion in Congress or the
press. the authority is given to liquidate
all public and private debts conceivably
by paper money, which might not one
day be worth 10 cents on the dollar, if
we continue on the downward path of
| imitation.
will not discuss the legalistic or con-
stitutional phases of this question at
| any length, for it is the spirit of the
times that any legalistic considerations
| are to be disregarded in this period of
emergency The difficulty with this
argument. which sounds we'll, is that
most legalistic considerations are based
| upon profound considerations Of moral
ity, and such is the case in the matter
| of repudiating the gold clauses in pub
lie and private contracts.
Until the decision in the legal tender
cases, which were born of the despera-
ton of the Civil War. no one believed
that Congress had the power to say
that piece of paper was as valuable
as gold in the payment of debts. 1t is
true that while the Constitution forbids
a State from impairing the obligation
of contract, the Constitution contains
no express prohibition as to the Federal
Government. But it was never doubted,
prior to the legal tender cases, that the
| fifth amendment to the Constitution,
which prohibited the destruction of
property without due process" of law,
implied the same prohibition. However,
the Supreme Court, while it vindicated
in the first of the legal tender cases
this construction of the Constitution,
yet, when the court was enlarged and
two additional judges were appointed,
it did hold that the power of Congress
to regulate the value of money was
broad enough to include the reputation
OF contract to pay in money of a
certain quality and intrinsic value.
Sustained After War.
While this was based in part upon
the war power, yet in later case (Jul-
lard VS.. Greenman) the power was
sustained in times of peace. The court
said:
Under the power to borrow money
on the credit of the United States and
to issue circulating notes for the money
borrowed its power to define the quality
and force of those notes as currency IS
as broad as the like power over me-
tallic currency under the power to coin
money and to regulate the value there
| Of. Under the two powers, taken to-
gether, Congress is authorized to estab-
ltSh q national currency, either in coin
lawful money for all purposes, as re-
CARDS the National Government or pri-
rate individuals"
| In the second legal tender case Mr..
Justice Strong said:
Every contract for the payment of
money, simply. is necessarily subject to
the constitutional power of the Govern
ment over the currency, whatever that
power may be, and the obligation of the
parties is, therefore, assumed with ref
erence to that power"
Let us consider the policy Of repudia-
tion concretely. On April % last the
Secretary of the Treasury invited SUBJ
scriptions for $500.000. 900 Of bonds, and
in the invitation to subscribe he made
the following promise:
"That the principal and interest Of
the notes will be payable in United
States gold coin Of the present standard
of value"
A little more than a month ago the
President Of the United States signed
the so-called Federal securities bill, u
designed to promote greater standard
Of honesty in the business life of our
| collntrv Tn the Nttlo ceremonial that