Evening star., 1935-03-12
HUGE j. s. SAVING
At STAKE IN SUIT
Millions Involved in Taft's
Effort to Ban Call of
Bonds.
BY the Associated Press.

BY the Associated Press.
Millions of dollars in savings to the
Treasury through cheaper interest
rates today were involved in Robert
A. Taft's challenge of the Govern
ment's right to call gold bonds before
maturity.
The Treasurys gold bond debt was
$l4,565 100000. OF these. $1,s45 ,ooo,-
900 were under call for redemption
prior to their maturity dates. the
holder to receive either devalued dol
lars or new security paying lower
interest and lacking the gold clause.
How much interest might be saved
through the New Deals policy OF re-
funding such issues could not be eSti-
mated accurately, since it depended
on market rates for money at the
time of refunding fiotations. But ex-
perts believed that If present easy
money conditions continued the saw
ing would mount into many millions.
In suit filed in the Court OF
Claims. Taft contended the Govern
ment had no right to call its gold
clause bonds in advance Of maturity
without refunding them in gold.
Roosevelt Confers.
The Capital wondered If one answer
to Taft's challenge might be an act
of Congress closing the Court Of
Claims to suits such as his. Presi-
dent Roosevelt conferred with none
tary and legal advisers late yesterday.
1t was intimated afterward that their
discussion concerned legislation to
prevent the court from entertaining
suits to collect the old gold value of
Government bonds.
Some Government attorneys ex-
pressed confidence that. even II Taft's
action is not blocked by a congress
sional ban against such litigation.
it could be defeated in the courts.
They acknowledged the Supreme
Court rule recently that Congress had
no right to nullify the gold payment
promises contained in Government
bonds prior to June, 1880. They
counted heavily, however, on this
language in one of the courts de-
ciSions:
"+ The payment to the plain
tiff of the amount which he demands
would appear to constitute not a re-
equipment Of loss in any proper sense,
but an unjust enrichment"
The Government attorneys, who de-
clined to be quoted by name, agreed
that Taft's suit has raised an issue
slightly different from that fought
out in the celebrated contest before
the Supreme Court.
Some observers contended that
should Taft's suit be successful, the
Treasury would be required to pay out
sl69 Of the present currency for
each 81 of gold bonds called for re-
demption before maturity
The White House conference was
attended by Secretary Morgenthau,
Attorney General Cummings, Angus
MacLean, assistant solicitor general;
Herman Oliphant, Treasury counsel,
and Stanley Reed, counsel for the
Reconstruction Corp. Secretary Hull
Joined the group just before it ad-
| journed.
May Close Door.
Although details of the conference
were not disclosed, it was recalled that
administration officials have been
considering the advisability of addi-
tional protection against gold Itiga-
ton ever since the Supreme Court
decisions.
Officials have pointed out that an
amendment to the Court of Claims
act, fortidding the court to hear suits
for collection under the gold clause,
would close the last door to such ef-
! forts. The Government cannot be
sued unless it consents through an
act of Congress.
Secretary Morgenthau said at his
press conference that the White
House discussions concerned strictly
a legal matter" It was said in ON
| cial quarters also that the conference
| concerned nothing for anybody to
get jumpy about"