, 1935-01-13
EMERGENCY
GOLD ACTION
PLANS MADE

WASHINGTON. Jan. ~. Up
Quick congressional action to es-
cape from what administration
spokesman have called possible
Achaos" was projected in wash
ington Saturday as a likelihood
should the supreme court overturn
the Roosevelt monetary program in
the gold clause" cases.
Some-and they were not confin-
cd TO those who merely speculate
upon such problems-held that re-
gardles sof the forthcoming verdict.
the treasury could make no change
In its present method of redeeming
maturing government bonds until
congress 50 ordered.
Stocks Have Gold Iinge'
Even though a probable month or
suspense remains before the nine
high justices hand down their de-
ctSions q gold tinge was given TO
much OF the news. In Wall Street
prices declined sharply. but later
stiffened. There was a rush Of gold
clause bond buying. but the bond
market generally was irregular.
Grains again slumped but recover
"a.
Although officials would say moth
ing, and privately expressed conf
dence that the court would decide
IN favor OF the government, the
subject vas gone into on Capitol
Hill, especially among the initiation
ist bloc. and in administration
quarters as well.
"A decision against the govern
ment would mean. in short that
gold bonds and contracts would be
worth-in present devaluated cur.
rency--169 per cent OF their face
value. The result would be TO in
crease the outstanding public and
private debt from around $780, 1000
000,00 to s169. 600. 900 900.
The courts ruling is to turn upon
the constitutionality OF a congress
sionai resolution declaring invalid
the clause or most contracts guar
a~nteeing payment on demand I'm q
stipulated quantity Of gold OF in the
n equivalent of that amount of gold
Congress, through the president,
ordered the amount OF gold In 81
reduced BY 1914 per cent. and the
treasury has been meeting gold bond
Il r~edemptions with 81 OF the deval-
nated currency for each dollar OF
the bonds face value.
None among washington off,
Cials would say Saturday that
should the court decide adversely
the treasury would at once start
paying Sligo for every dollar OF gold
bonds. Physically. the actual sup
ply or currency would not be great
NJ enough. The concensus was thai
some offsetting action would at
once be taken.
Various alternatives have been
Speculated upon. In Greenville. ..
c.. Representative McSwain said he
thought II likely a constitutional
convention would be called. He
pointed out that the constitution
gives the power to call a conven-
Ftion. adding that the matter could
be handled In the minimum time
possibly 30 days, and we would be
back on the road 10 normally"
Congressional inflationists NEAR
while studied the possibility OF Il
creasing the membership Of the SUI
preue court from nine to II or IL
within the Is DAYS elapsinr between
the decision and the court ruling
upon q government appeal for re-
consideration.
Such q course, however, was re-
tgarded as a last resort. although all
were agreed that certainly Presi-
dent Roosevelt would leave nothing
undone TO offset a decision which
would destroy the new monetary
system built UP by the administra-
uOn.
"A third possible avenue OF action
amay lie in the president declaring
an emergency and asserting con-
troll over the currency under the
old wartime laws which he invoked
70 bring order out OF the bankinT
and financial disruption which
existed when he took office.