The Omaha guide., 1935-03-09
ECONOMIC
HIGHLICHTS
Happenings That Affect the Din
ner Pals Dividend Checks and
Tax Bills of Every Individual.

eudt ID mOLlCIllOuS Ado
there-and is happening.
First and foremost comes the
Supreme Courts long delayed de
cision on the gold clause cases
held by some to be. the most i'm
pOrtant decision in a great many
years, inasmuch as the Admin
stralion's whole recovery and re-
form program hinged upon it.
Readers Of newspaper headlines
obtained the impression thai the
court, by a five-to-four majority,
upheld the Government 100 per
cent. But, as a financial commen--
tator said shortly after, it really
upheld the Government about SO
"A 100 per cent-implied in the
decision was a warning to Con-
gress to the effect that there were
limits beyond which it could not
60. ,
The majority decision, read by
Chief Justice Hughes, held that
the case against the Baltimore
and Ohio Railroad, which was
sued by a "gold" bondholder who
wan ed his interest paid on the
gold dollar basis, must be dismis-
sed, inasmuch as Congress had
the power to control, regulate and
determine the gold value Of cur
rency. Of greater interest was
the decision in the Liberty Bond
cases, where a bondholder sued
the government itself. The ma
jority opinion held that Congress
had gone beyond its constitution
al power in abrogating its gold
contract-but that the plaintiff
was not entitled to recover
damages, as he could not show
that he had actually lost anything.
The reason he had not lost, said
Mr.. Hughes. was that il he were
actually paid in gold he would
not be able to use it; he would
have to turn it into the govern
ment at once and would be paid
at the old rate per ounce. He.
could not trade with it, could not
export if, could not get more for
it than he could get for the same
amount of existing currency. The
warning to Congress lies in the
admoniti0n that Congress went
too far-and in the implication
that, if a person can prove loss III
the future through a~br0gation of
a government gold contract, he
may be entitled to recover dam
ages.
Result Of the decision was a
temporary boom in the stock
market whic Immediately subsid-
ed. Frade A bonds rose, held
the advance.
Observations on the decision.
whether favorable or unfavorable.
seemed to be that the Court had
simply followed the law. Most
editorial comment regretted
that the decision had been BY SO
narrow a margin-in effect n
man had the power to make or
break the policy Of an Administra-
mi~nistration.
1t is an interesting fact that this
man Mr. Hughes, was once a Re
publican candidate for the Presi-
dency. When Supreme Court
votes are taken, the Chief Justice
votes last, so that when Mr.. Hugh
es turn came the Court was even
~ divided, and he had the power
to throw the balance either wav.
Also interesting is the fact that
the biting minority opinion was
read by Mr.. McReynolds. a Demo-
crat who served under Wilson as
Attorney General.
After the Supreme Court. the
Washington gaze focuses on Con
gress, which is exhibiting an I'M
looked for independence. Before
the session started, most observers
forecasted that the President
would have a harder time getting
what he wants than he did last
session. But no one thought that
opposition to his wishes would be
IS strong as it is. At this writing.
the work relief bill is not vet pas
sed and it probably will not be-
come law for some weeks. as Con-
gress has done something the
President is strongly opposed to-
made it obligatory to pay public
works employees wages as high as
those paid by private industry.
The President wants the scale fol
be lower, SO that workers will
Keep an eve out for private Jobs,
Will not be satisfied to work in
definitely for the government.
senator Glass fought on behalf of
the Administration to stop Con-
gress from putting in the undesir-
ed provision. but failed