Evening star., 1934-01-18
GOLD BILL IS GIVEN
FULL RIGHT OF WAY
Mouse Leaders Ignore Com.
mittee in Scheduling Ac-
ton Tomorrow.
CONTINUED From First Page.)


and report. However, the Banking
Committee protested vehemently anc
hte yesterday stole q march on 1t.
rival by inserting, the administration
measure entire under the title OF tne
doldsborough commodity dollar bll
and reporting 1t forthwith.
'I never heard Of anything like 1t, >
MD Representative Byrns.
Meanwhile the Treasury continued u
receive gold coins and certificates from
small holders without penalty, setting
back indefinitely its deadline, supposed
20 have gone into effect last midnight
Secretary Morgenthau said the ordel
had been temporarily relaxed so buSl'
ness men getting such money in return
for merchandise and services could olS'
pose Of 1t.
Black Statement Due.
Gov. Eugene Black Of the Federal Re
serve Board was expected to untangle
before nightfall one of the ccmplica'
tions around the gold-impound1ng pro
posal. Having been quoted varlouSly
frst as in favor Of the move and ther
Is believing the gold should be LETT VIII
the Federal Reserve banks, he prom
he'd a statement.
Black was summoned before a closec
session Of the Senate Banking Com
Mite. After a brief appearance yes
terday, Senator Glass Of Virginia. g
former Democratic Secretary Of the
Treasury, quoted Black as saying ne
favored giving the Government the
more than two-and-a-half billion proflt
that would result from the dollar de-
valuation. but as believing the gold It.
self should remain where 1t Is. Glass
intimated he had many questions te
ask the Reserve Board governor.
In his appearance yesterday before
The Senate Banking Committee, Attor'
ney General Cummings asserted un-
equivocally that the gold impoundlne
step was valid since lust compensa-
ton" would be given the reserve system
1.-THE monetary gold stock may bt
taken by the Government IN the ex.
ercise Of its right to eminent domain.
he said. Such power extends to every
form Of property required for public
use"
Court decisions to back his view anc
asserted that every consideration o.
'sjust compensation is completely salts
ned by the provision for payment In
eold certificates in equivalent amounts
Of dollars"
Glass View Unchanged.
Asked later if Cummings argument
hed changed his opinion on the const1-
tutionally OF seizing the gold, Senator
Glass replied:
mot the least in the world"
Cummings quoted the Supreme Courl
q ruling that this right is "nseparaole
from sovereignty" and belongs to every
indenendent government" The court
has decided that exercise OF this Is
within the control Of the Legislature;
the Attorney General said, IN the 1ol-
lowing language: =,
"It is no longer an open Questlon IN
this country that the mode OF exercs-
irg the right of eminent domain IN tne
absence Of any provision IN the organic
law prescribing a contrary course Is
within the discretion OF the LeglslatuIe.
There is no limitation upon the power
Of the Legislature in this respect, II tlie
purpose be q public one, and JlSt com.
pensation be paid or tendered 10 the
owner for the property taken.
Saws Use Is Public One.
Cummings continued in his own Ian
"Tnuuestionably. the taking OF gold
Sor monetary purposes is for public use
The establishment and regulation OF
monetary system is one OF the 1unoa-
mental functions Of Government. Itie
power to coin money and regulate Iiie
value thereof is expressly reposeo ~
Congress by article l sectlon o. Iiau'e
s of the Constitution"
Turning to the subject OF JUST COM,
pensation for the gold seized, ne neio
= declSlOI
in the "leeal-tender cases" it may nc
longer be successfully disputed tnal
CONGRESS may make paper money legaI
tender for the payment OF an oeots
naIblic or private, and that the Gov
ernment may discharge its obngaIlons
in currency Of that type. ,
He found that the amount OF COM
rensation must be determined as O
the time of taking the gold ana no
that of some later date.
aaThe mere fact that at later perloe
xhe property may acquire an ennances
value. or that there may be an accre'
tSon to the thing taken, does not IN
crease the compensation to which th'
owner is entitled" he said.
Value ut Time Counts.
.~Thus In this instance, the value o
ths gold must be determined as OF tn'
moment that title passes to the Onlte'
States. The mere fact that, there
after the weigh Of the gold dollar snouit
be reduced, the value OF the gold wouit
become proportionately greater, does no
serve to give the prior owner any rign
to secure increased reimburSements."
Nor could he find that the membe
banks Of the Federal Reserve System
which are the stockholders Of the Re
serve banks, have any right, title O
interest In the gold coin or bullion,
which the President proposes to appro
pirate to the Government.
'The member banks have no CLAIM
azainst the assets Of the Federal Re
serve banks except as stockholders, ano
OF course, 1t cannot be contended tina
in taking any Of the assets Of corpo
ration any compensation should b'
paid directly to the stockholders there
Of. Every Federal Reserve bank is nov
required to maintain gold reserv
against circulating notes and deposits
Any part Of such reserve may be use'
as part of the collateral for Fedora
Reserve notes, which is required to b'
deposited with Federal Reserve agents
Holds Source Immaterial.
sThe mere fact that the source o
some or all Of such gold may be de
posits made by member banks with tn
Federal Reserve banks is immateria
As soon as the gold is deposited witt
the Federal Reserve bank it loses it
identity and the relationship betweel
tho Federal Reserve bank and th'
member bank becomes that Of debto
and creditor"