The Waterbury Democrat., 1935-02-18

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 Total ......$100,000 $l69.000
 The exact figure for United States States government loans Is avail able. It is $21,565.727,180. The figure was much larger, but 1t has been consistently reduced through assurance of non-gold clause bonds in refunding operations.
 Since the supreme court began it's open hearings on the gold clause on January 8. markets of the world have been unsettled, On the day before that, the stock mar ket had made new highs for 1885. Since then there has been @ steady decline as traders put their ac- counts into shape to withstand any sort of decision. The Dow-Jones industrial stock average declined 1-2 per cent; railroad average 15 per cent, and utility average, 8.2 per cent.
 The reason for the wide decline in the rails was primarily the fear over the gold clause decision. Util- ities have more of the bonds out standing but they have been earn ing more than the railroads and hence the latter would feel more severely any increase in debt bur den. Southern Pacific Railway has outstanding $83i. .0O0,000 in funded debt, most of 1t in gold obligations The largest amount of utility bonds outstanding by one unit amounts to more than $1.000,0O0,000 of the Bell Telephone System.
 Not only were stocks affected but bonds and commodities felt the in- fiuence of the impending gold clause bonds and buy gold clause decision. For a time there was a rush to sell non-gold clause bonds and buy gold clause issues. Then the market settled down to narrow movements with trading dull. It was relatively more active than stock trading which set low marks for more than a decade in January if measured on an hourly basis.
 Foreign exchange rates dropped sharply as traders bought dollars. For time there was a rumor the dollar would be revalued on It's old basis, but this was discredited by experts and by officials. However, the drop in European gold rates was sufficient to make highly prof. itable import of gold by New York bankers. In the period from mid. January to early February some- thing like s2O0.000.00O in gold was taken from Europe.
 When the dollar was devalued to its present rate of 59.06 per cent of the old figure. foreign curren- cies automatically were adjusted to . higher par value. The French franc. for example, had an old par of 3.92 cents and new par of 6.63 cents; Belgian belga old of 1890 and new of 23.54: Dutch guilder old of 40.20 and new of 68.06; and Swiss franc old of 19.3O and new of 32.67 cents.
 (eucstions Answered
 Washington. Feb. IS = tUP) - The gold cases decided by the su- preme court today involved some of the most intricate and importa nj questions. to come before the court in many years.
 The following questions and answers present a simplifed ex. planation of complex issues
 Q. What are the gold cases A. The gold cases involve the so. called gold clause of government and private obligations u h us notes, bonds and other promises to pay money.
 c. What is the gold clause?
 A. The gold clause is provi- sion written into the promise to pay by which the person who Dor. rowed the money agrees to repay 1t and interest on it at certain specified time in dollars of given amount of gold of certain standard of fineness.
 0. How was the weight and quality of the gold decided on?
 A. It Is the weight in the dollar used in the old gold standard, namely: 25.S grains of gold of nine-tenths fine for each dollar.
 o. Why was this standard of repaynen ent adopted? A. It wGs adopted because gold as currency can not be varied as a medium of currency as easily as other coins or paper money can be varied. The person who loaned the money thereby sought assurance that he would not be repaid in paper money that might have depreciated in value. Gold itself fiuctuates in value, but not as much as paper money has at times in history.
 c. Why was the promise 70 repay in gold not met? A. Because congress declared the gold clause illegei.
 c. Why was this action taken i? IA. Because the government had decided that the currency must De revalued by revaluing the dollar in ternss of gold. This was done whcn the president reduced the content to 15-5-21 grains of gold 10 the dn1luts