Evening star., 1935-02-19
DECISION DISPLAYS
NO PART|SANSH|P|
Hughes, Republican, Sup
ports RooseveIt-Demo-
crat Is Dissenter.
BY DAVID LAWRENCE.

of reason. the Supreme Court OF the
United States has laid down prin-
ciples of history-making importance
in its gold clause decisions, the effects
of which are as follows:
First. that the Congress is warned
It cannot repudiate the public debt
of the United States or diminish by
cent the interest or the principal
on Government bonds and stay With
in the bounds of the Constitution.
Second, that domestic bondho!derS
that is. citizens of this country
NAV continue to knock at the doors
of Congress for permission to sue for
the amount of purchasing power
they may have lost through the failure
of the Federal Government TO pay
the equivalent of gold value on all
honds which contained the Speclnc
promise to pay in gold.
Diplomacy Recourse.
Third, that foreign bondholders may
epplv through the World Court anu
through the channels of diplomacy
for interest and principal on Liberty
Ronds they may hold and which are
navable in the equivalent OF gold.
Thev can show a loss because they
are getting less gold for their prln-
cipal and interest in terms OF the
purchasing power in their own coun-
tries But it is up to the Depart
ment of State and. finally, 10 CON
Oress to say whether such claims
- tnaN
Fourth, that all doubts are erased
nc IN the power of Congress to pass
laws relative to the currency ana
coinage which may impair private
contracts. Individuals, 1t is helo' can
not make contracts which interfere
with the policy of Congress In none
tary matters. ,.
Fifth. that the Roosevelt admins
tration is condemned for having
broken its plighted word in contract
NTH it's citizens. This unquestion-
ehlv will be heard from in the next
political campaign.
The effect of the decisions is ex-
ectly what was predicted in these dis
patches on January % and 3o' OF
rather in conformity with the logic
EXPRESSED therein after studying the
argument Of counsel, for obviously
no correspondent can know IN al
vance the decisions of the highest
court of the land.
Hughes Republican.
It is significant that Republican
a former candidate for the presidency
sitting in the chair as Chief Justlce,
delivered the opinions which prevented
the Roosevelt administration from
losing any money on the decision
while a Democrat, former Attorney
General under President Woodrow
Wilson, delivered the dissenting
opinion in vehement disagreement
with the rulings of the majority OF
the Supreme Court. Hence, no further
proof need be cited Of the non
political and non-partisan character
of the Supreme Court.
The decisions will stand throughout
history as a Qualification Of the rights
of the Federal Government with re-
spect to monetary changes. While
the Roosevelt administration didn't
lose any money on the cases, it lost
on principle the so-called public con-
tract cases and won the private con-
tract cases.
The reasons were simple notwith-
standing the mass of legal verbiage.
The court merely held that when two
persons make contract to pay in
dollars of a certain standard they
do not specify bullion Oh commod-
ity payment but they attempt to de-
fine dollars Thus any private
parties, even though they be States
or municipalities, must take the risk
that Congress, in the exercise of its
sovereign power to coin money and
regulate its value, may some day sub
sequently change the standard and
Impair the apparent obligation"
Decision Not Unexpected.
Otherwise private individuals could
make contracts defining dollar and
various kinds of currency would be
In circulation at the same time. This
decision was not unexpected and really
caused no surprise.
AS for the Liberty bond cases, those
in which the Government was itself
q party to the contract, the question
turned on an entirely different point.
Here the Supreme Court declared
that no majority IN Congress could
overturn a contract made by the Gov
ernment itself with its citizens. The
court argued that the fourteenth
amendment, which contains a So
called forgotten clause, mentioned in
these dispatches on January %, and
has never before been ruled upon IN
any court case, was still vital and
meant that the amount of the public
debt could not be reduced by act of
Congress.
Perhaps the most sweeping denun-
citation of the Democratic administra-
tons course in abrogating the gold
clause in Government bonds is con-
tained in this sentence, which will
be repeated doubtless for many years
to come:
While the Congress is under no
duty to provide remedies through
the courts, the contractual obligation
still exists, and despite infrmities OF
procedure remains binding upon the
conscience of the sovereign"
Future Action Possible.
This is as much as to say that some
Gay 1uCure congress may pe elecCeo
which could honor the contract and
pay claims.
But what are the amounts that
could be paid? The court did not fee
that John M. Perry, who made his
plea through the Court of Claims fol
$1.69 in exchange for every dollar
of his Liberty bonds. was entitled tc
50 cents because he had not proved q
loss, but actually, reckoned in terms
of today's currency, has made gain
But the court was careful to point
out that Mr.. Perry had not proved q
loss. Somebody else might. The
court said that a computation Of loss
involved the question of purchasing
power" Now there were some COM
modities, like cotton and wheat, which
have been measured in gold prices
If a man had agreed to buy wheat
and to pay for it in Liberty bonds
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