Evening star., 1935-02-18

Reconstruction Finance Corp. had
loaned it S23134. 800, taking as Sc
curity bonds subordinate to the 1908
first mortgage bonds.
Also, the United States held claim
against the railroad for $4,000, 900
unpaid taxes.
So the Government became appre-
henSive that, should the Iron Noun
tain first mortgage bonds be paid in
currency in accordance with the de-
mand of the trustees, its position as
a creditor would be materially i'm
paired, and its chances Of collecting
what was owed it would be subStan-
TALLY leSSened.
The Government joined in the Fed
eral District Court at St. Louis In
opposing the demands of the trustees.
Judge Ferris, recently promoted to
the Federal Eeighth Circuit Court
of Appeals, declared payment of the
Iron Mountain first mortgage bonds in
gold or its equivalent in currency was
impossible in fact and in law"
The trustees took the controversy
to the Eighth Circuit Court-but to
expedite a final decision-the Su-
preme Court agreed to review the two
cases, as requested by the United
States, without awaiting action on
them by the Circuit Court.
New Yorker Sued.
In the next case, F. Eugene NortZ,
of New York, owner of S106,300 in
gold certificates, protested he had re-
ceived only their face value in cur
rency when compelled to surrender
them. He sued in the Court OF
Claims, demanding in addition S64,-
334, which he asserted was the differ
ence in what he had received and the
value of the gold to which he was
entitled.
The last case involved John M.
Perry Of New York, owner Of q $lO,-
900 Fourth Liberty Loan bond, which
had been called for redemption. He
filed suit in the Court Of Claims de-
manding either the gold called for
by the bond or $16,931 in currency,
which he insisted represented the
value Of the gold to which he was
entitled.
The Court of Claims, being un-
certain as to Its jurisdiction to decide
the two suits which had been filed
without the consent Of the United
States, asked the Supreme Court for
instructions.
The cases, five according to docket
numbering, but in reality presenting
only four separate disputes, were
heard by the Supreme Court in sue
cession, the oral argument extending
beyond three days in January.
In recognition Of the crucial i'm
portance of the questions involved,
Attorney General Cummings made
his first appearance in argument since
taking charge Of the Department of
Justice. He was assisted by Assistant
Solicitor General Angus D. MacLean
and Stanley Reed, general counsel of
the Reconstruction Finance Corp.
Counsel In Cases.
Emanuel Redfield appeared as coun-
sci for Norman and Frederick H.
Wood for the B. & o.
Edward j. White appeared for the
trustees of the Missouri Pacific and
James H. Mcintosh and Edward w.
Bourne for the trustees Of the bond
holders.
Otto e. Sommerich and Raymond
T. Heilpern were counsel for Nortz.
Perry appeared as his own counsel.
The cases, from the Government
viewpoint, involved its sovereign pow
er to dpal with and the authority Of
Congress to legislate in respect of
coinage and currency, to declare what
shall be legal tender for all debts,
and to annul all contracts which re-
ject the legal tender as a full meas
ure, dollar for dollar, In the discharge
of gold clause obligations.
It argued the laws declaration that
gold payment clauses were contrary
to public policy, and the suspension
of gold payments, to be justified by
conditions following the World War
which made 1t necessary, In the 1udg-
ment Of Congress, to abandon the
dual monetary system which had pre-
vailed during and following the Civil
War, when two kinds Of money, with
different values, were in circulation.
Other Contentious.
Other Government contentious:
1t was the purpose Of Congress to
maintain at all times the equal power