The Daily Alaska empire., 1935-04-08
As Others See Us.
(Kansas City StarD

On the whole foreign comment upon the gold clause decisions of the United States Supreme
 Court has been distinctly favorable in spite of the
 fact that they involve substantial loss for foreign
 creditors. The general trend of opinion everywhere
 seems to have been of relief that issue which
 had been disturbing business confidence in this country for some time had been settled and that
 the United States Government had won practically it's entire case As the London Times remarks,
 the President and Congress their position strength
 ened by the Supreme Courts decision will be able to proceed unhampered with their work of econ- omc recovery and social reconstruction"
 The friendly way in which the rulings have been received abroad is particularly remarkable because
 the chief financial burden they impose will fall at least for the present, upon the foreign of American securities calling for payment in gold
 Due to the fact that the devauation of the dollar has not produced any marked change in the in-
 ternal price level the American owner of these
 securities, whether private or public, has not yet
 suffered any real loss in being forced to accept legal tender, dollar for dollar, instead of the gold his contract demanded. But the foreign creditor has had to take loss which amounts to the difference between the and the old gold content of the dollar, or approximately 40 per cent.
 The exact extent of the foreign investment in the securities of American corporations which con-
 tain the gold clause not known, although it must
 be considerable. It is estimated however, that foreigners Government securities of the same type to the amount of than 150 mil lion dollars. As result of the Supreme Courts decisions they like Americans, have recourse far as private contracts are concerned. But the ruling in the case of the Liberty loan bonds may have left the door open for foreigners to the Government in the Court of Claims, since, unlike the American citizen who denied redress by the Supreme Court, htey undoubtedly could prove
 Ia substantial loss from the unconstitutional action Iof Congress in repudatng the gold clause in public obligations
 This possibility is mentioned in most of the foreign comment the gold clause decisions, but not much is made of it. Most foreigners assume either that Congress will bar the Court of Claims to them that, as the New Statesman and Nation Iof London observes they will find the game mot worth the candle" because the President would devise of getting around the judg
 ment. The interesting fact is that this assump-
 tion does not seem to make them indignant. Ap- parently most foreigners have grown accustomed to accept a policy based vital national interest as superior to any specific money contract.
 Even in England where contracts are usually re-
 garded as particularly binding, a newspaper like the London Times suggests mildly that the moral default of the American Government on it's own obligations would to inhabit the United States from continuing to point the finger of
 at it's errng European debtors" In other words, even this country has had to recognize the superior force of economic necessity over the sane tity of contracts.