Evening star., 1935-02-18

Texas, Of the House Judiciary Com
mittee, said:
That's all right. The big trouble
was in the private cases. We can
take care of the Federal cases by
legislation without paying a cent"
Hughes then discussed the power Of
Congress to invalidate existing con-
tracts which interfere with its consti-
tutional power, including those issued
by private parties, State municipall-
ties and their political subdivisions.
The Court reached the conclusion,
he said, that Congress in the exercise
of its power to regulate currency could
not be controlled by gold clauses in
private obligations. The Court had
repeatedly ruled to that effect.
An attache of Attorney General
Cummings Office was present and i'm
mediately left to telephone Cummings
of the decision.
A number Of others also dashed out
of the chamber presumably to notify
other Government officials and 1ndi-
viduals directly affected.
As he spoke, Hughes now and again,
leaned forward to emphasize point.
He nodded his head frequently as he
stressed some former court decisions.
Now and then he paused, to continue
in a more vigorous fashion.
Byrns Is Satisfied.
Speaker Byrns said: "a satisfac-
tory verdict. But the importance Of
the opinion, as I've said before, is. to
my mind, exaggerated"
In his summary, Hughes said:
"The questions at issue were power
of Congress to establish a monetary
system and power of Congress to in
validate existing contracts which in
terfere with its constitutional author
ity and whether the gold clause did
constitute such an interference as to
bring them within the range Of Con-
gress over the monetary system"
The controversy over the validity
of the abrogation by Congress Of the
gold clauses in contractual obligations
reached the Supreme Court In five
cases.
Three rose out of the refusal of
railroads to observe the gold clause
In their bonds, and two the refusal Of
the United States.
All involved the validity of the
June, 1888, resolution declaring 1t
against public policy" to permit the
payment of debts only in gold or in
any particular kind Of coin or cur
rency. The prohibition included both
private and public obligations.
1t directed that all gold obligations
which had been issued shall be dis
charged upon payment, dollar for dol
lar, IN any coin or currency which at
the time of payment is legal tender
for public and private debts" 1t
prohibited issuance Of any more gold
clause bonds.
All Currency Legal Tender.
All coins and currencies of the
United States, including Federal Re-
serve notes and circulating notes of
Federal Reserve and national banks,
whenever issued, were made legal ten
der for all debts.
Norman C.. Norman Of New York,
the owner of a Baltimore & Ohio
81 900 gold bond, presented for pay
ment an interest coupon due in Feb
ruary, 1884. This called for $22.50 In
gold
He insisted that If payment in gold
was impossible, he should receive its
equivalent in currency-which he
placed at $3.50. When the railroad
refused to pay more than $3.50 in
currency, he sued in the New York
State courts. which sustained the law
and ruled the debt could be dis
charged in currency, dollar for dollar.
The second case involved 1903 gold
bonds of the st. Louis, Iron Mountain
& Southern Railway, which later be-
came q part Of the Missouri Pacific.
The Bankers Trust Co. and William
H. Bixby, as trustees of certain bond
holders, brought suit to compel the
payment to them Of $34 $4,000 and
interest in gold of the standard Of
weight and f1neness prevailing May
1, 1888, when the bonds matured. In
the event gold was not available, they
demanded an amount of currency
equal to the value Of the gold coin
"at the times Of such payments"
Railroad Bankrupt.
The Missouri Pacific was o bank
rupt, undergoing reorganization. The