The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1935-03-08

Several weeks since the supreme court
of the United States
Call IL rendered its history
Repudiofion making decision in
the gold cases. there
is no slackening in the disturbance
from the effects of the administra-
TONS gold policies, even in the light
OF the court ruling. While the court
held that congress had no power to
enact legislation invalidating the gold
clause in government bonds. it said in
the same breath that collection from
the government by bond holder
was another story. Since the govern
ment has taken gold out of circulation.
collection appears virtually impossible
but the appearance is not going to stop
bond holders from seeking what they
regard as justice.
1t is now apparent that the govern
ment's action is going to be regarded
both here and abroad as Reputation.
That is nasty word when applied to
governments and its repercussOns
likely will be heard for a good many
years
While the Reputation of the gold
payments will affect comparatively few
people directly, the significance of the
action In a political way is becoming
more and more apparent. The repuda-
ton in its effect on the bond holders
may be only temporary. but its effect
politically will be far-fiung.
/ think it is generally considered
now that the gold question will become
a paramount issue in the next political
campaign and it is not impossible that
it will continue to be an issue over a
period of years This is so because.
admittedly, actual damage has been
done to American prestige in foreign
lands. 1t is made to appear, therefore,
that there will be a combination of in
ternatiOnal and domestic Influences at
work henceforth with respect to this
governments gold policies.
DOmestically, the issue was born in
the presentation in congress of two
bills designed to restore. partially at
least, the status of this government as
regards the gold policies to that OBJ
tanning before the devaluation of the
dollar. simultaneously, former Pres-
dent Herbert Hoover, in one of the
few expressions made since retiring
from office. declared his belief that the
return of gold payments was necessary
and vital to stabilizing conditions and
re-establishing the United States in
world favor.
Of course, with the abundant Demo-
cratic majority in congress, the gold
bills will get nowhere very fast. Like
wise, Mr.. HoOver's expression can and
will result only in providing ammuni-
ton for New Deal supporters, whose
answer to criticism usually is a ques-
ton whether it is desired to return to
the conditions that caused the depres-
sion.
Nevertheless, I{hear considerable dis
cussion to the effect that these ripples
must be considered as only the begin
ming. They will have the effect of caus-
ing many people to think about the
problem. Discussions will take place
in the homes and in the shops There
will be those who contend for sound
money of the old style. Equally vehe
ment defenders of the New Deal will
arise. Thus. the issue becomes Joined
and it is not outside the realm of pos
sibility that monetary questions will be-
come as important in 1896 as they
were in the Bryan free silver days.
Now as to the practical operation
of the gold rulings:
There can be no
Operation of doubt that the Con.
Gold Rulings stitution gives con-
gress power to coin
money and regulate its value. The
Supreme court always has sustained
this power. So. when congress, by
resolution, allowed President Roose-
welt to seize all of the gold in this
country and hold it in the treasury.
it accomplished indirectly that which
it could not do directly. In this way
it forced the invalidation of thousands
of private contracts wherein one parry
promised to make payments in gold
Congress made such payments impos
sible and those who were to be paid
have nothing left but disillusionment.
AS to the gold payment clause in the
government bonds the Supreme court
said that congress had no right to en-
act legislation the effect of which was
to void that payment. 1t would seem,
found to force the government to make
good That way lies only, through
the Court of Claims of the United
States. and when that court is denied
Jurisdiction in suits to recover, the
bond holder is left with right, but
that right is unenforceable since the
government can be sued only with its
permission.
On top of these circumstances, and
as long range proposition, consider
able attention has been directed to the
relationship between the gold clause
decisions and imitation. There is di-
rect link. This link, without doubt
should be watched by all of those who
think of the future of this nation.
Initiation of the credit has been GO
ing on continuously since Mr.. RoOse-
welt took office. The federal govern
menr has sci no limit to the borrowing
which it will undertake in its pro-
gram for recovery. The Supreme
court has said directly that govern
ment securities are worth whatever
the administration and congress de-
termine them to be worth because the
dollar can be valued UP or down as cir
cumstances warrant
But the value which the President
and congress place upon the dollar
may differ materially from the value
which the public places upon the cur