Evening star., 1935-02-19
DOUBTS GENERAL
ON GOLD RULING
How to Show Damage SUI
fered One Problem for
U. S. BondhoIderS.
By the Associated Press.

Sy the Associated Press.
II you're lost in a mage OF dollar
signs, gold clauses" "inValidatiens"
and "devaluations," don't feel down.
hearted.
Just think of the learned men in the
National Capital. Many of them are
In the same fix.
Even the Supreme Court, whose
nine justices represent the acme OF
legal learning, couldn't agree on just
what should result when the Govern
ment took gold out of circulation and
chopped the dollar down to 59.06 per
cent of its old gold content.
The best thing to keep in mind Is
that practically speaking, the Govern
ment was upheld yesterday by the
high court, 8 to 4.
Liberty Bond Different
But if you've got a Liberty bond
you're entitled to somewhat more de-
tails. Out of the torrent of confusion
over the courts ruling on Federal
bonds which have gold clauses, has
emerged possibility that future legal
actions against the Government may
be possible. But the potentialitieS were
considered somewhat unclear and ex-
perts were divided.
John M Perry, New Yorker, who
knows considerable law himself, con-
tended the Government owed him
$169 in devalued dollars for every old
dolalr he invested in Government
bonds. Chief Justice Hughes, reading
the majority report, said the Govern
ment acted unconstitutionally in alb
rogating the gold clause in its own
contracts, but then added:
Because the Government is not at
liberty to alter or repudiate its OBJ
legations, it does not follow that the
claim advanced by the plaintiff shall
be sustained. Plaintiff can re-
cover no more than the loss he has
suffered and of which he may right
fully complain. He is not entitled to
be enriched
How to Show Damage.
This apparently was the nub Of the
question for Government gold bond
holders How as Justice Hughes put
1t, to show ANY actual damage"
Justice Stone indicated it might
need a return of gold to circulation
to prove such damage and dismissed
the question as academic" Even in
such an event, Stone said, Congress
could withdraw the privilege of suit
upon its gold clause obligations"
Some high administration quarters
take the same view, that is. that no
damage could be proved unless Con-
gress returned gold to use as money
But since an administration Spokes-
man considers this an imposSibility
these same officials believe the door
Is locked at all times" for damage
suits.
Some legal authorities, however
think that the purchasing power OF
the dollar is involved. This view
holds a damage suit could be filed
If the bondholderS could prove In
court that the devalued dollars offered
them by the Government have less
purchasing power than the dollar
they invested. But what a job!
Many Causes Contribute.
Lawyers say in such a court actor
It would be necessary to show the loss
in buying power was due to deValua-
ton and not possibly TO thousands OF
other causes that might make a 81
shirt of three years ago cost $l.25
today.
Entering into such q case would
be such vast questions as the opera
ton of the law of supply and demand
ON prices and whether the drought
or devaluation has boosted the price
Of meat to its present level, as COM
pared to the price when the bonds
were bought.
Some experts frankly don't look for
many suits of this kind, even if a
theoretical legal right exists.