Evening star., 1936-09-20

INC OHtLcu DLuL6S SupTeWe
Court has ruled Congress had the
poDer to abrograte payment In
gold OF pripate obligations DHich
stipulated payment in gold cotn or
gold notes. In its gold clause"
decision 1t added the Government
had no right to stop payment OF
its obligations In gold Uhen that
method OF payment Uds specified.
A tew cases haze been appealed,
contendin0 that neD phases tDere
presented concerning the ruling,
but the court has refused to pass
on them.
Hy the Associated Press.
KANSAS CITY, September 19.-
Federal Judge Merrill E. Otis today
upheld lease signed in 1890 requir-
ing a realty company here to pay 139,-
800 grains of pure gold, or its money
equivalent at current gold prices, as
quarterly rental for a store location.
Emery, Bird. Thayer Realty Co., the
lessees, had invoked the gold clause"
resolution passed by Congress in 1888,
abrogating the right to collect gold
obligations, payable In coin or notes,
in such coin or notes. The lessees
had asked that they be allowed to pay
only $4,000 in currency quarterly.
The Boston Ground Rent Trust.
owner OF the land, had demanded
$40, 0,l58.75. contending that amount
was the value Of the pure gold speci-
fed in the lease since dollar devalua-
ton.
The realty company Is rental agent
for the Emery. Bird, Thayer Dry
Goods Co, which occupies the site.
1T Is simple case" Judge Otis
wrote. "One man owned a piece Of
ground in Kansas City. Another man
desired to use that ground . for
business purposes.
Foresaw Change in Value.
''In effect, the owner said to the
merchant who wished to rent. I will
lease my ground to you, not for dollars,
but for grains Of gold. I want grains
Of gold because next year or at
some time during the life Of this lease
the Government may devalue dollars.
II cannot devalue grains OF gold
I'm reply. the merchant said, in
effect:
"I understand, and . I will
pay you grains Of gold, not devalued
dollars. . II I do not then
ground and building go back to you"
Commenting on the abrogation
clause. Judge Otis wrote:
The resolution applies only to
those obligations payable in money.
An obligation payable in fence
posts or bushels Of wheat or grains
Of gold Is not payable in dollars so as
to be included in the language (of
the resolution). Discharged upon pay
ment. dollar for dollar"
Surrender Rule Held Void.
Referring to the Kansas City firms
claim that owners of the land would
have to turn their l3e,3 ,320 grains Of
gold in to the United States Treasury
for only s6,000Athe Judge added:
ANY statute or regulation which
purpcrts to compel the lawful pos
SCISSOR of gold bullion to sur
render it to the sovereign for any
thing less than Just compensation
is clearly void"
We do not suppose that if Mis-
souri, farmer IS bound by his contract
to deliver a horse to his neighbor,
he can fulfill his obligation by de-
livering horseshoe on the theory
that if he did deliver a horse, Robin
Hood would steal it, leaving a horse
shoe as souvenir.
"Oh. for a pilot who will safely
steer their craft between Scylla and
Charybdis, the Scylla of paying the
rent they agreed to pay, the Charyb-
dis Of surrendering the premises If
they do not pay the rent"
Attorneys for the store here said
they have not decided what further
steps in the case will be taken.
Four-Fold Ruling Sought.
Emery. Bird, Thayer Realty Co.,
which sublets the property involved
to the dry goods company, one of
the largest and oldest department
stores here, sought a four fold decree
in its suit.
1t sought to void payment OF rem
tails in grains Of gold; a decree that
demands for payment in gold bullion
were unlawful; another that demands
for more than $4,000 quarterly rem
tails were unlawful and an injunction
to prohibit collecting more than that
amount every three months.
1t also asked recovery of $40. 1913
additional rent, paid under protest
since the Boston trust invoked the
gold clause in 1884. The additional
rent was paid to avoid termination of
the lease in the event the stores con-
tentlon was not upheld.
There has been," the opinion fur
ther stated, such legislation and
pursuant to that legislation, such ex-
ecutive action as that it is impossible
for plaintiffs emery. Bird, Thayer)
literally to comply with terms Of the
lease. They cannot deliver quarter
"AAAAA1Ay AcSfo<O dhlo vi puIC kOlCl
at any bank in Kansas City, or New
York or Boston,"
Might Pay in London.
There are two things they can do,
neither a literal compliance with the
terms Of the lease. They can deliver
quarter-annually 139,320 grains of
pure gold to the lessons in London,
England. (The Boston trust had sug-
gested this alternative.)
They can pay defendants quarter
annually the present value in currency
OF 1S9, 800 grains of newly mined gold.
There is one other thing they can do
land they agreed to do it if they did
not pay the stipulated rent. they can
surrender possession of the premises
to the lessons and, if possible, negotiate
q new lease.
plaintiffs contemplate the first and
second Of these alternatives with dis
tress and are aghast with horror as
they view the third"
The opinion commented at length
on the stores contention that "the
oo,,iya Iapf of 100 aon rro;1s ef ,.is a.,