The daily worker. [volume] (Chicago, Ill.) 1924-1958, 1935-02-06
If the Gold Clause Wins.
More Millions Will
Lose Their Jobs
By Harry Cannes


The spectre Of gold hangs threat
eningly over the whole economic
structure of the country. Every
bank, every stock and commodity
exchange in the country is prepar-
ing as If for mighty storm. Talk
Of panic freely reigns in the biggest
financial institutions Of the country
and in Congress.
Any day now the nine old su-
preme Court justices, grown white
and grey in the services Of the big
gest trusts in the country, are ex-
pected to hand down a decision, the
effect of which may rock the coun-
try like the stock market crash of
1929.
These gentlemen are dealing with
the fundamental of fundamentals
Of the capitalist legal rules Of pri-
vate property-the function of gold
in exchange and sale of goods.
In order to understand the basic
issues involved, it will be necessary
to trim away q lot Of the techni-
calities and legal rubbish that is
usually thrown around these cases.
Grab for Gold
The whole matter arises out of
the economic crisis that has en-
quilted American capitalism for
nearly six years. The breakdown of
the industry and trade of the coun-
try brought about the closing of
the banks. Hoarding Of money
took place. All of the normal
laws Of the exchange of goods broke
down. In the period of such crises
there is always rush for gold. Dur
ing periods Of the usual functioning
Of capitalism, gold hardly ever
enters into day to day consideration
AS Karl Marx put it;
When things go smoothly, the
capitalists declare only goods,
factories, and the like are wealth.
When the crisis hits them, they
cry, only gold is wealth.
But with everybody grabbing fol
gold during crisis, the banks are
drained, the government gold re-
serves dwindle. There is not enough
gold to go around. Gold becomes q
fetter to the capitalist governments
in their effort to smash their way
out of the crisis. In order to dyna-
mite the financial blockade, they &c
off the gold standard-that is, they
begin to issue paper money without
gold backing, or with reduced gold
backing.
Now specifically in the United
States this has created a serious
problem for the capitalists. The
Roosevelt government concentrated
in the Federal Treasury all the
gold in the country in order to heir
the big trusts and the bankrupt
banks.
Roosevelt Initiation Policy
When Roosevelt took office, the
whole banking system was closed
down. Roosevelt then pursued 6
policy of initiation, that is OF print
ing government bonds and money
without gold bccking, in order tC
hand money to the capitalists tt
get them out of their tight hole
Later he concentrated the coun-
try's <old reserves in the govern.
ment Golfers to use them in the in
terest of the capitalist class. Still
later he cut down the gold-content
of the dollar.
Before the present crisis the
American dollar was worth 25.S
grains of gold nine-tenths pure
Roosevelt cut this down to Is So
grains of gold,
The effect of this was to raise
prices. Since there was less gold il
a paper dollar, more dollars wert
demanded for the same article. FoI
the bosses, this raised profits, be
cause with rising prices the value O
his stocks and bonds went up. Fo
the workers, 1t cut his living stand
ard, because he had to pay NOR,
dollars for food, rent, and clothing
But in this whole process Their
was one big hitch. And that is tn,
subject of discussion in the Su.
preme Court. 1t is the ghost tina
hovers over the whole economic anC
financial structure of American
capitalism today. 1t reaches to tn,
fundamental roots of capitalism. /
new contradiction arose that i
plaguing capitalism and is fraugh
with dangerous consequences TO
the working class, whichever way /
is decided by the Supreme Court
Contracts for Gold
In floating bonds, in making con
tracts, the capitalists are old ex
perienced, willy pirates. They re
member capitalism has a long his
tory of crisis. Especially in tn