Evening star., 1935-01-23
GOLD CASE ST|RS
UNUSED CLAUSE
"Forgotten" Provision of
Constitution May Have
Bearing on Decision.
BY DAVID LAWRENCE.

A forgotten" section of the Consti-
tuition may play a part in the con-
sideration of one of the gold clause"
cases.
Little noticed during the argument
before the Supreme Court-in fact,
never construed before in any court
decision-the constitutional section
reads as follows:
THE validity of the public debt of
the United States, authorized by law,
including debts incurred for payment
of pensions and bounties for services
In SuppreSsing inSurrection and re-
bellion, shall not be questioned"
Prior to fortnight ago no cases
ever invoked this particular section,
but during the argument before the
Supreme Court one of the claimants
made the point and while there were
no other references to 1t on the part
of Government counsel or anybody
else. the briefs did indicate the his
torical background of the section.
Conflict Pointed Out.
A member of the New York bar,
P. j. Eder, writing in the Cornell Law
Quarterly in December, 1888, first
pointed out that while this conSti-
tutional provision has lain dormant
for years it conflicts with the attempts
of the Government to pay in cur
rency what it should really pay in
gold.
The "gold clause" cases are Of two
kinds-those which argue that the
Government has a right under its
coinage powers to end gold payments
and thus compel private persons to
discharge debts in currency, because
1t is illegal to hold gold, and those
which say that the Government itself
when a contracting party on bonds
must fulfill its promise to pay in gold.
The fourteenth amendment was
adopted just after the Civil War and
there was debate in Congress then
about possible reputation of the
national debt Senator Wade, in ar
guing in support of the constitutional
amendment quoted above, said
1T puts the debt incurred in the
Civil War on our part under the
guardianship of the Constitution of
the United States so a Congress can
not repudiate it l have no
doubt that every man who has prop
erty in the public funds will feel safer
when he sees that the national debt
Is withdrawn from the power of Con-
gress to repudiate it and placed under
the guardianship of the Constitution
than he would feel if it were left at
loose ends and subject to varying ma
1orities which may arise in Congress.
In the House Of Representatives at
the same time a resolution was
adopted declaring it the sense of the
House that any attempt to repudiate
or in any manner to impair or scale
the debt should be universally dis
countenanced.
Senator Hendricks. who was de-
batting the proposed constitutional
amendment and was opposed to it, in
sisted the amendment was Superhuous
as nobody would question the Govern
ments intention to pay in gold.
Proposals to pay the public debt ir
paper currency were freely being made
at that time and the constitutions
amendment was unquestionably in
tended to prevent any reputation o.
the Civil War debt by any future
Congress.
But did the constitutional provision
refer only to the Civil War debt or tc
all future debt of the Government
Had it referred to the Civil War deb
only, the amendments doubtless woulc
have said so, and usually a change iI
the Constitution is not meant to apply
to q particular situation, but to any
similar contingency which might arise
in the future.
Validity Challenge Denied.
The Government counsel, in touch
ing on this very section of the Con,
stitution, told the Supreme Court II
days ago that there has been no ques'
ton of "the validity of the public
debt and declared that the wore
validity" refers to "the essential ex'
istence of the obligation" It wa.
further argued by the Government
lawyers that the action of Congress
docs not denounce or repudiate the
Governments obligation"
Is devaluation of currency or refusa
to pay in gold,a reputation? This il
one Of the very points now before the
Supreme Court. President Grant II
his inaugural address on March
1869, held the view that payment ir
paper currency was reputation. HI
said:
ITO protect the national honor
every dollar Of Government indebted
ness should be paid in gold, unles;
otherwise stipulated in the contract
Let it be understood that no repudiatol
of one farthing of our public debt viii
be trusted in a public place"
So If the public debt" provision o.
the Constitution plays a part in the
decisions hereafter it will be truly 9
forgotten section come to life again.
(Copyrieht 1881