Evening star., 1935-02-19
PRIVATE BOND CASES.

senting opinions:
PRIVATE BOND CASES.
The question before the court Is
one of power. Not of policy. And
that question touches the validity Of
these measures at but single point,
that Is, in relation to the joint reSolu-
ton denying effect to the gold
clauses" in existing contracts. The
resolution must, however, be con-
sidered in its legislative setting and
In the light of other measures in pari
materia.
The decisions of this court re-
lating to clauses for payment in gold
| did not deal with situations corre-
spending to those now presented,
The rulings upholding gold clauses
| and determining their effect were
made when gold was still in circu-
lation and no act of the Congress
prohibiting the enforcement of such
clauses had been passed.
We are of the opinion that the
gold clauses now before US were not
contracts for payment in gold coin
as a commodity or in bullion, but
were contracts for the payment OF
money.
We also think that, fairly con-
strued, these clauses were intended
to afford definite standard or
measure of value and thus to protect
against q depreciation of the cur
rency and against the discharge Of
the obligation by payment of lesser
value than that prescribed.
| 1t is unnecessary to review the his
| toric controversy as to the extent OF
this power (of Congress to establish
a monetary SYSTEM or again to go
over the ground traversed by the
court in reaching the conclusion that
| the Congress may make Treasury
notes legal tender in payment Of
debts previously contracted as we'll as
of those subsequently contracted,
whether that authority be exercised
in course of war or in time of peace.
Here, the Congress has enacted an
expressed interdic$ion. The argument
against it does not rest upon the mere
| tact that the legislation may cause
hardship or loss. Creditors who have
not stipulated for gold payments may
suffer equal hardship or loss with
| creditors who have so stipulated. The
former, admittedly, have no constitu-
tional grievance, and while the latter
may not suffer more, the point is
pressed that their express Stipulations
for gold payments constitute property
and that creditors who have not such
| stipulations are without that property
right. And the contestants urge that
the Congress is seeking not to regu-
late the currency but to regulate con-
tracts and thus has stepped beyond
the power conferred.
This argument is In the teeth OF
another established principle. Con-
tracts, however expressed, can not fet-
ter the constitutional authority of the
Congress. Contracts may create rights
of property, but when contracts deal
f. with q subject matter which lies
/ within the control of the Congress
they have q congenital affirmative
Parties can not remove their trans
| actions from the reach of the domi-
nant constitutional power by making
| contracts about them.
Despite the wide range Of the dis
cussion at the bar and the earnestness
with which the arguments against
\ the validity of the joint resolution
have been pressed, these contentious
necessarily are brought under the
dominant principles to which we have
referred to a single and narrow point.
That point is whether the gold clauses
do constitute an actual interference
with the monetary policy Of the Con-
gress in the light of its broad power
! to determine that policy. Whether
| they may be deemed to be such an
| interference depends upon an ap-
praisement Of economic conditions and
upon determinations of questions OF
fact.
With respect to these conditions
and determinations, the Congress Is
entitled to its own Judgment.
The devaluation of the dollar placed
| the domestic economy on new basis,
In the currency as thus provided,
States and municipalities must receive
their taxes; railroads, their rates and
fares; public utilities, their charges
for services. The income out Of which
they must meet their obligations Is
determined by the new standard.
1t requires no acute analysis or
profound economic inquiry to disclose
the dislocation of the domestic econ
omy which would be caused by such
a disparity of conditions in which it
Is insisted those debtors under gold
clauses should be required to pay
$l.6s in currency while respectively
receiving their taxes, rates, charges
and prices on the basis of 81 Of that
currency.
We are not concerned with conse-
quenees, in the sense that conse-
quences, however serious, may excuse
an invasion of constitutional right.
We are concerned with the constitu-
| tional power of the Congress over the
monetary system of the country and
! its attempted Illustration. Exercising
that power the Congress has under
taken to establish uniform currency,
and parity between kinds of currency,
and to make that currency, dollar foi
dollar, legal tender for the payment
of debts. In the light of abundant ex-
perience, the Congress was entitled to
choose such a uniform monetary sys-
tenn and to reject dual system with
respect to all obligations within the
range Of the exercise of its eonstitu-