Evening star., 1937-03-01
Decision, Split 5-to-4, Is
First Since Demand for
Judiciary Reform.
DISPUTE GREW OUT
OF RENTAL CONTRACT
Effect of Agreement Held to Be
Avoidance of Compliance With
Devaluation Act.
BY JOHN H. CLINE.

In deciding its first case of ma
ional Importance since President
2oosevelt's demand for reorganization
If the judiciary, the Supreme Court
;oday ruled for the New Deal in the
'o-called Massachusetts, gold case.
The justices were divided to 4,
With Van DeVanter, McReynolds.
sutherland and Butler dissenting. BY
his same division, the justices upheld
he Government in the gold clause
Eases decided in 1885.
The present controversy grew out of
rental contract between the Holyoke
Water Power Co. and the American
Writing Paper Co. Although the Gov
'rnment was not an immediate party
% the litigation, it awaited the out
;ome with apprehension, since an
adverse ruling would have seriously
mpeded enforcement of the legisla-
lion devaluing the dollar.
Avoidance of Law Charged.
The contract called for payment of
.ent in "a quantity of gold which
shall be equal in amount to 1900 of
he gold coin of the United States of
he standard of weight and fineness of
he year 1894, or the equivalent of
his commodity in United States cur
:ency."
1t was contended that the effect of
his agreement was to avoid complying
with the legislation devaluing the dol
ar and prohibiting the payment of
obligations in gold coin.
Holding the agreement unenforce-
able, Justice Cardozo, delivering the
majority opinion, said:
The fact is of little moment that
currency is characterized as a COM
modify in the verbiage of the cove
nant as long as it is currency. Weasel
words will not avail to defeat the tri-
umph of intention when once the
words are read in the setting Of the
whole transaction.
so read. the end to be achieved is
shown forth unmistakably as a pay
ment, not SALE
Hold Contract One of Sale.
Attorneys arguing in support of the
lease had contended the provision
calling for the payment of the rent
in ounces of gold should be treated as
any other contract for the sale of
commodity
Justice Cardozo pointed out that
transactions for the sale or delivery
If gold for industrial purposes, such
as ART work, are not within the mean
.ng of the statute, but he held this
transaction did not come within the
exception.
The Government had contended the
contract, if upheld, would serve to
lullify the effort of Congress to as
sure for the country single and uni
'orm system of money"
The dissenting justices did not write
an opinion.
Roper Order is Upheld.
The court upheld an order by Sec
'etary Roper, directing three steam
hip companies transporting freight
,etween Gulf ports and the Pacific
Coast through the Panama Canal to
:ancel a contract rate system whereby
'ome shippers obtained concessions.
In an 8-to-1 decision delivered by
Justice Stone. the tribunal affirmed
'uling by a three e-judge Federal Dis
riot Court in the District of Columbia
iismissing the complaint against the
,rder. Justice Sutherland dissented
The court also declared invalid
3alifornia's 1885 caravan act" requir-
ng SIS fee for each motor vehicle
iriven or towed into the State for
ale.
In an unanimous decision delivered
~ Justice Stone the tribunal affirmed
ruling by three Judge Federal Dis
rict Court in California holding the
itatute invalid.