The daily worker. [volume] (Chicago, Ill.) 1924-1958, 1935-02-06

United States, they remember the
post-Civil War inflationsry periods,
and greenback periods. So when a
bond issue was floated of say
$20,OO0,O00, the purchasers de-
manded guaranteed payment of
principal and interest in the future
in gold. The purpose of this was
to avoid losses in the event the gov
eminent decided to cheaper the
paper dollar. In other words, they
insisted on being paid in dollars Of
25.8 grains of gold.
That is known as the gold clause
in contracts. There are today in
the United States over 500, 00O, 900
900 in contracts, stocks, bonds and
government securities containing
the gold clause contract. Now these
bonds and stocks were issued be-
tween 1919 and 1929-that is, when
the dollar contained the 25.8 grains
Of gold.
The holders of these bonds Cor
at least in five instances) have now
appealed to the United States Su-
preme Court. They demand that
their contracts be paid in gold or
gold equivalent. This would mean
they would get 100000, 100000 in
the present paper dollar, which
contains only Is sal grains of gold,
in order to make up for initiation.
Two Questions
Briefly, the Supreme Court must
answer the following two questions !:
y Will they sustain the validity of
the gold clause2; or q Will they
uphold the Roosevelt governments
monetary policy and declare that
the gold contract is void, in the full
meaning Of its terms, and that the
bond holders should be satisfied by
being paid in paper dollars Of to-
days gold value2
The answer, of course, is not so
easy or so simple. To simply up
hold the gold clause in contracts,
would create an immediate panic,
first, because there is no gold for
general circulation available with
which to pay these contracts. Sec
ond, it would topple over the whole
monetary legislation of the Roose-
welt government. Yet to wipe out
the gold clause, would tend to yank
from capitalism it's historical, fun
damental basis OF money and ex-
change, its prime measure of
wealth.
What the Supreme Court has be-
fore it is to work up some solution
of this problem without, at the same
time, fundamentally calling into
question the gold foundation of cap
italism. 1t must still provide the
Roosevelt regime with every meas
ure necessary to try to save cap
italism from the crisis at the ex-
pense of the working class.
They have to do more. They not
only have to deal with the imnle-
diate issues of capitalism, or with
the immediate interests of certain
section of capitalism, but they have
to take a long range view, N the
interest of the dominant financiers
Probably Two Opinions
What will their decision be? And
what will be the effect of the va
rious possible forms this decision
may take? 1t is already indicated
in the news that the old corpora
ton lawyers in the black robes oil
Supreme Court justices are not
having an easy time of this basic
question for capitalism. They have
postponed and again postponed
their decision. But we do know now
that there will most likely be two
opinions. One will be written BY
Chief Justice Hughes, who speak.
pretty much for the immediate
needs of the Roosevelt regime. The
other will be written by Justice Var
Devanter, who is mainly concerned
with emphasizing the Fundamental
laws Of capitalism regardless o.
crisis.
While there appears to be a con.
tradiction here, in reality there is
not. 1t is actually a division Of
labor. One will be serving the i'm.
mediate interests of capitalism, ir
crisis, easing the path for Roose.
welt. The other will be stressine