Evening star., 1935-02-19
Congress Move
Not Finally
Ruled Out.
COURT FINDING
is SCRUTINIZED
Sterilization Held
Determining
Damages.
By the Associated Press.

Supreme Court gold decision today re-
affirmed first. impressions that any
immediate legislative action was un-
necessary.
This word was given at the White
House and repeated in other official
quarters as Government experts made
themselves more familiar with the
practical application of the voluminous
legal rulings.
Future congressional steps were not
finally ruled out, however, as Justice
Department lawyers pondered the eX-
act meaning of the Courts finding
that while abrogation of the gold
clause in Government bonds was un-
constitutional, damages must be shown
to prove breach of contract.
Damage Proof Limited.
For the most part it was believed
that only if the dollar was stabilized
and gold returned to circulation at
below the former level of 25.8 grains
to the dollar would it be possible TO
prove damages.
Treasury officials held that foreign
holders of United States gold clause
bonds we're in the same position as
domestic owners. Should loss be
suffered through foreign exchange
transactions on the devalued dollar.
they contended the loss was charge
able to the individual himself and not
this Government.
Legislative possibilities were dis
cussed informally at a meeting of the
Cor9 Y,3iftna NOM
bers said it was concluded tentatively
that for the present none was neces-
sary.
Senator Bulkley. Democrat, of Ohio
raised the point that the decision on
Government bonds was based on con-
ditions resulting from present gold re-
strictions, and that a change in the
status of gold domestically might pro-
vide the basis for new legal action.
Prevention May be Desirable.
He suggested to the committee,
without urging the point. that it
might be advisable to prevent such a
change.
Later Bulkley told the Associated
Press he had not made up his mind
about the question. He said it prob
ably would require several days of
study for him or for the Governments
legal experts to decide whether action
was required.
There was much discussion in sena-
torial circles today of the status of
foreign holders of Government bonds,
but the opinion was generally ex-
pressed that they could show no more
legal ground for action than Amer
lean citizens because the bonds are
payable in the United States.
Foreigners May Show Damage.
The argument was made that
though the Supreme Court held resi-
dents of the United States could not
show actula damage. foreigners might
be able to show that depreciation of
the dollar resulted in actual losses to
them.
Senator Glass, Democrat, of Vir-
ginia was the most caustic commenter
among Senators on the Supreme
Courts decision. He said it marked
'the depth of moral insensibility to
which the Nation has fallen" and
forecast its effect would be felt for
"a century"
What good is a contract if it can
be violated?" he asked. Its nothing
but scrap of paper"
Stone Indicates Course.
What course legislation might take
II decided upon, was marked out in
a special opinion on the Government
bond issue by Justice Stone.
He said any question of such dam
age suits may be transferred wholly
to the realm of speculation by the
exercise of the undoubted power of the
Government to withdraw the privilege
Of suit upon its gold-clause obliga-
tions."
Responsible officials, however, were
not ready to say what may be recon-
mended to Congress after further
study. If anything.
In any event, the Courts decision
does not become effective for 25 days
the period within which an appeal
Tor rehearing may be filed.
Other Developments.
Other developments in the gold
situation today we're:
!. Senate inflationists, led by Sen
ator Thomas, Democrat, of Oklahoma.
started new movement to drive the
value Of the dollar still further down.
Thomas praised the court decision, de-
claring it shows Congress has "unre-
strictable power in handling money. =
2. Some other Democratic legis-
lators thought the decision might be
viewed as brake on any inf1ationary
tendencies. In their opinion, the Gov
ernment might be called upon to pay
huge damages to holders of its gold
bonds If the value of the dollar should
be sliced drastically.
3. A firm opinion that bondholder
would find it impossible to prove
the bonds redeemed in gold and per-
mits q free market in that metal was
expressed by an administration spokes-
man. He did not give his reasons, but
some other financial observers thought
there would be difficulty in proving
how much of any change in the pur-
chasing power of the dollar was due
to the abrogation of the gold clause
and how much to other causes.
4. Wall Street and commodity
markets, after experiencing something
of frenzy of buying yesterday, hoped
that the end to uncertainty over the
gold cases would prove tonic for the
struggle back to prosperity.
5. There was no official comment
on reports from diplomatic quarters