Evening star., 1935-01-09
CUMMINGS ENTERS
BATTLE To RETAIN.
u. s. GOLD POLICY.
Attorney General Appears
in High Court to Meet
Attack on Clause.
DECISION WILL AFFECT
BILLIONS IN SECURITIES
Government Claims Issue Il
Whether Sligo Shall Be Paid
for 81 Borrowed.
BY the Associated Press.

BY the Associated Press.
Attorney General Cummings TOLD
the Supreme Court today that Con-
gress and President Roosevelt "acted
reasonably In a period Of very great
difficulty" when they abrogated the
gold payment clauses in public and
private contracts.
Many members Of Congress were IN
the crowd that packed the small
court room to hear Cummings resume
his detailed review Of economic con-
ditions confronting the country when
Mr.. Roosevelt entered the White
House.
The Attorney General said he Eould
show that the results Congress and
the President accomplished cannot be
said ito be the product Of caprice OF
arbitrary action"
Says Contracts Must Yield.
There Is only one question pre-
sented," he said. TT Is: Did they
act within their constitutional au-
thority? The primary difficulty Of the
argument in behalf Of those insisting
upon the gold obligations being OBJ
served Is that 1t Is based upon the
tnviolabiltty Of contract undertakings
Written understandings (referrtng to
the gold clauses) must yield to the
public welfare"
For the first time in his official
capacity. Attorney General Cummings
appeared at the bar of the tribunal
to meet q five-fold challenge to the
act Of Congress suspending gold pay
ments in June, 1888. 4, :
The issue involved IN, f1ve CASES
was. whether holders Of bonds snd
other obligations bearing provisions
for payment in gold sor its equivalent
shah Be paid III the present currency
cr, In the equivalent sof the abandoned
gold dollar. II IS estimated that 90 TO
l25 billions Of dollars in public and
private securities carry the "goId
clause" - -
Acts Legality Defended. =
Res,lming today after brief ap-
pearance yesterday, the Attorney Cen
eral was prepared to elaborate on the
Governments contention that Con-
gress was within its constitutional
right in forbidding gold payments.
This was disputed by counsel for
Norman G. Norman of New York, q
holder Of Baltimore g. Ohio Railroad
bonds. His client, he argued, should
be paid $3.50 in interest on each
bond, representing the current equiv
alent Of $22 in gold. He held that
Congress had no authority to inter-
fere with contracts.
Adopting the unusual procedure Of
defending the Government, in ad-
vance OF argument from the opposing
side. the Attorney General dealt spe-
ciflcally with two cases involving Sc
curities of the st. Louis, Iron Noun
tain & Southern Railroad.
Seek to Reverse Decision.
In them, the Bankers Trust Co.
and William H. Bixby, trustees for
holders Of first mortgage bonds, de-
mand payment equivalent to the gold
redemption value. A st. Louis Fed
eral Court decision had held such
payment In gold was impossible IN
fact and in law"
A Government brief asserted:
"Succinctly, the issue Is this: Are
all these obligations to be discharged
at the rate Of $1.69 for each 81
borrowed?"
The Attorney General denounced
the briefs of his opponents as con-
tradictirg each other and lacking In
coordination. He told the high court
that the Government, despite usual
procedure. was defending the law in
Volved without waiting for the other
side to present its arguments.
A law must be presumed to be
constitutional" until proved other
wise, he reminded the court, assert.
ing that this was mot only q valid
but vital doctrine which surcharges
the whole atmosphere Of conStitu.
t:onaI discussion"