The Washington times., 1934-12-20

will decide. 1t SHOULD be interest
ing. lust TIE same, to see what
arguments a New Deal Attorney
General can scrape together 10 oe-
tend his Governments reputation.
(D The first point in his
brief is that to make people
live I'D to their promise to pay
In gold, is contrary to public
H. policy" Power over coinage
and currency, says he, is an at
tribute of sovereignty. Also, he
alleges compelling reasons" for
abandoning the gold standard.
But what is public policy? To
assume that anything is against
public policy because some polltl-
cal administration says so, begs
the whole question. The fact that
Congress has power to control
coinage has nothing whatever to
do with corporations promise TO
pay it's debt in gold.
It certainly cannot be proved
that there we're compelling reasons
to abandon gold; but even if there
had been, what has that to do
with the payment of debt specifi-
cally payable in gold?
90 AS if recognizing the weak
ness of this point, the brief adds
that if gold had been paid, the
bondholders couldn't have cashed
it! But they could have done so
fast enough, if the Government
would let them. Look at the
prices paid for old gold! The
Government now claims to allow
exports of gold, and the price of
gold abroad would satisfy any
bondholder.
90 The second main point in
the brief is that the gold clauses
in bonds were a hangover from
a dual monetary system, and that
there is no longer any reason for
them.
Well, even if the hangover"
idea were true, there the clauses
are! The New Dealers may not
see any reason for the promise,
but the promises had been made.
The fact is, however, that
there was plenty of reason for
such gold clauses. The best rea-
son is found in the very fact
that the Government is now try
ing to "renege." That is why
they were put into the bonds.
When we were not definitely
on the gold standard (prior to
190D. lenders insisted on the as
surance of gold clauses. Now we
are again off gold, and the rea-
son for the gold clauses is more
apparent than ever.
az Finally, the Attorney
General gets over into eco
nomic theory, and asserts that
the fuIfillment of a promise to
pay gold is inconsistent with
the declared policy to stabilize
the dollar. That means that
think they can control prices
by a managed currency" the
Governments promise to pay
gold does not have to be kept.
But aside from morals, how
can you prove that majority of
Congressman believe in a man
aged currency? An expressed
wish" for stable money or for
higher prices, does not commit
Congress to Prof. Fishers peculiar
notions nor to the repudiation of
bond clauses.
Nor is there the slightest evi-
dence or reason to believe that
such reputation has anything
to do with stabilizing the dollar,
or with the control of prices.
In fact, the evidence thus far
has been to the effect that no
specific relation exists between the
New Dealers tinkering with the
gold dollar and the purchasing
power of the paper dollar.
Even if Congress Cor anyone
else) wished to stabilize the dollar
by abandoning the gold standard,
there is no reason to think that
it could do so. Surely there must
be some reasonable connection be-
tween a wish or purpose and the
means used to attain that wish or
purpose.
We can't fly to the moon, or get
rid of supply and demand, merely
by wishing.
The plain fact is that in a
fit of emergency" psychology
we have allowed the politicians
to plunge us into a maze of un-
sound experiments. Much
crooked thinking and some
downright dishonesty have re-
suited. Now the plea is that
"The king can do no wrong"
May our Supreme Court do its
duty!
PETROLEUM DIVIDEND
Darby Petroleum Corp. has au-
thorized a dividend of 25 cents,
DaVable January 25 to stock of rec.