Evening star., 1936-03-02

1tSel1.
The Taft suit, first of several score
gold suits to come before the Court OF
Claims since the Supreme Courts rul-
ing in the gold cases is scheduled to
be argued within the next two weeks.
Personal Trend Hinted.
A hint as to the personal trend
which the Governments argument
will take is seen in a brief it has Just
filed asserting:
This court was created for the
examination Of claims for compen-
satory damages, and not for the pur-
pose of vindicating the political
philosophy of litigants, nor yet as a
testing ground upon which purely
theoretical objections to governmental
action may be determined"
The small amount for which TAFT
has brought suit. Department OF JUS
tice attorneys declared, "discredits the
plaintiffs claim as bona fide appli-
cation for a mere money judgment. !"
THE plaintiff is suing for SLOT
q sum which Is obviously but negh-
sible fraction of the cost of this liti-
cation" the Governments brief
pointed out. "It is therefore, on its
face, not an ordinary claim for dam
ages for an injury involuntarily sls-
tanned In ordinary business dealings
with the defendant"
Taft, on behalf of the Dixie Ter
minal Co., admits his firm had to do
considerable shopping around before
It could find the exact bond desired
for the litigation.
Taft is suing for the amount OF q
coupon attached to fourth Liberty
Loan AZ per cent gold bond OF the
1933-3S series.
Interesting Story.
The story behind the suit Is an
Interesting one.
The Dixie Terminal Co. had no
such bond at the time it decided to
contest the Governments gold ban.
That was in March of last year. The
firm began search for a bond that
would provide suitable grounds for its
proposed suit. After long hunt it
finally located in Newark, N. j., one
A. L. Bowerman who had a bond OF
the type needed.
The intent Of the company in &C
quiring the bond was not disguised
by its officers. Defense testimony OF
record states:
THE purpose was in order to acquire
q bond on which this suit could be
brought 1t was necessary 10
acquire a first called bond, one on
which at that time there was a coupon
maturing after the call date OF the
bond. A fourth Liberty bond which
was called for April is, 1885, obviously
no suit could be brought on because
the coupons we're perfectly valid.
I'm order to raise this question we
had to have bond called so long ago
that a coupon had matured after the
call date of the bond Therefore, in
order that there should not be another
years delay, we bought first called
bond. They were scarce, and we hap
pened to find this one"
The plaintiff presented the bond to
the Treasury two days after It's pur-
chase from Bowerman. and demanded
its redemption in fifty gold dollars.
each containing 25.8 grains of gold.
g fine" The Treasury refused pay
ment in gold, but offered to redeem the
bond in currency. This offer was re-
jected.
The holder of the bond then de-
manded payment of SLOT on the cou-
pom. either in gold coin or currency.
This demand was refused by the
Treasury on the ground that interest
on the bond ceased with its call for
redemption on April IS, 1884.
The company. through Taft. insti-
tuted suit against the Government
that same day, contending that the
bond never was called. in fact, be-
cause of the Governments refusal to
pay In gold. Since the call was "in-
effective" Taft argued, interest on the
bond was not stopped and the coupon
was still good
q Taft's brief declared that while his
suit involves only one $50 bond, "the
issue presented is almost exactly the
same as that presented In total Of
more than eight and one-half billion
dollars of bonds called by the Govern
ment since the reputation of its obli-
cations to pay in gold"
Position of Taft.
The issue, Taft charges, "is whether
the Government, after the Supreme
Court has held that its obligation to
pay its bonds in gold coin is a valid
and binding obligation-however de-
tective the remedy may be-can de-
Gberately exercise the privilege given
to it of calling its bonds in order
tnat it may pay them in deprecated
currency instead Of in gold coin."
The Government counters with the
contention that the Dixie Terminal Co.
has not acted in good faith and that
its purchase of the bond was ma
neuver designed to acquire some ones
else claim against the Government.
1.-THE plaintiff knew when it pur-
chased the bond" the Department of
Justice declares. "that the interest
coupon upon which this suit is brought
was not regarded as an obligation by
the defendant (the United states). It
was, at best, from the plaintiffs stand
point, disputed claim.
TN other words, the plaintiff frankly
admits that what it bought was a
lawsuit against the United States"
The Taft suit is one of many await
ing action by the Court Of Claims. The
cases had been held in allegiance pend
ing the Supreme Courts decision In
the gold clause litigation.
Optimist Club to Meet.
The Washington Optimist Club will