Evening Star Newspaper, February 19, 1935, Page 5

CONGRESS LIKES DECISION ON GOLD Democratic Comment Backs Court Opinion—0ld Line | G. 0. P. Dissatisfied. Supported by a generous scattering of Republicans, Democratic members | of Congress expressed satisfaction dur- | ing the past 24 hours at the findings | of the United States Supreme Court | on the gold cases. Starting with Majority Leader Rob inson, snatorial favor for the cour decision extended through all the key | members of the majority and among | the so-called Republican Progressives | such as Norris, Borah and Norbeck. In the House, a similar situation pre- vails, even Republican Fish of New York commending the court for & fearless exercise of its judicial func- tlons. Inflationists of both branches, such as Senator Thomas of Oklahoma and Representative Patman of ‘Texas, found encouragement in the verdict. 01d Line G. O. P. Objects. Only from the old line Republicans did objection arise, Senator Dickinson of Towa, for instance, lamenting the fact that Congress is thus allowed to repudiate individual contracts. Rep- resentative Wigglesworth of Massa- chusetts took a similar stand on the question of the Government repudiat- ing its formal obligations. Some of the congressional comment follows: Senator Fletch- er, Democrat, of Florida, chair- man of the Sen- ate Banking and Currency Com- mittee—That the Government has been sustained is gratifying. * * * It is most heart- ening under pres- ent conditions to have the court hold as it did. Senator Norris, : Republican,of Ne- braska—I haven't read the decision, of course, but I anticipated the Gov- ernment would win its suit. * * * If the court held otherwise, it would have meant it held the constitutional provision giving Congress power to regulate the value of money had been afmended and nullified. Senator Norbeck, Republican, of | North Dakota—The decision indicates that even the Supreme Court has | reécognized that our gold production has not kept pace with our industrial production. and that we must lower the unit of gold in the dollar. Borah Pleased. Benator Fletcher. jand bonds yesterday was favorable. THE EVENING STAR, WASHINGTON, D. €, TUI\‘ISDXY‘, FEBRUARY: 19, 1935. Happy Over Decision Senator Joseph T. Robinson (left) and Attorney General Homer S. Cummings leaving the White House yesterday after discussing the Supreme Court’s gold decision with President Roosevelt. —Wide World Photo. D confesses only meager knowledge of ‘The proverbial “man in the strut"‘ just what the Supremhe Court’s gold | a pears to be that whatever the court | is does, it must be right [ said wrong Supreme Court.” A good many | simply, “T don't know what it means.” All of these were apparently willing their heads about it one way or the other. Faverable Effect Noted. A few individuals pointed out that the immediate response of business as reflected by the quick upturn in stocks This sentiment its place. This opinion was summarized by | versa. Ward Adams, elderly law clerk, who | who “The Supreme Court can't be about this degi- The President or Congress | sion, may make mistakes, but never the suits, were trying | to get something persons confessed | for They wanted a dollar to accept the ruling without worrying | cents for a dollar. Had the shce been on the other foot they have pressed any demands. commodi t y— decision means, but the consensus ap- | and when money cheap prices are high, and vice The men brought by their nothing. and 69 would not ision on Gold Heurtens Proverbial Man in the Street . &'y e w io. v Those Commenting Seen to Feel That Supreme Court Is Never Wrong and That Confidence Is Fortified. logical one in tha* it put money in After all, money is only Phillip W. Austin. Dollars once were as cheap as dough. That was when everybody had them to spend. Then things were terrifically high. Now the situation is reversed. In the long run, the decision and war veteran—I guess its O. K. so long as it won’t hurt the bonus. Homer M. Hardester, a Government clerk—It must be all right. Roosevelt has been wrong mighty few times, any- way. 8. J. Wilson, a Government en- gineer-janitor—I don’t know what it means, but my money nowadays don't buy as much as it used to. E. E. Anderson, hotel clerk—It doesn’t make much difference one way or the other. Even the four who dis- sented may be right, but what of it? I. Baseman, grocer—What does it mean? I can't see that it has made any difference in my business. It didn’t make any difference when we went off gold. H. J. Johnson, traveling salesman of Chicago—I think it ought to have a steadying influence on business. A Jot of people worried because they didn’t know just how they stood. Peter Jennsen, cab driver—Guess it's all right, but how should T know? Carl Duffy, lunch room manager—I don’t have any gold. C. W. Conner, street car inspector: “I haven't read much about it. I guess, though, if I'd had one of those gold-clause bonds I'd have wanted $1.69. I had a few bonds once, but they are no good now.” Harry Denning, filling station at- tendant: “I don't care what they decided. I haven't any gold. All I have is & pay envelope every week.” was summed up by Ross Haworth, executive assist- ant to District Commiss ioner Senator Borah, Republican, of Idaho—I am glad the Supreme Court has construed a very vital provision of the Constitution and that the Gov- ernment h a s been sustained. Senator ‘Wheeler, Demo- crat, of Mon- tana—The deci- sion is right and Rroper. Senator Pitt- man, Democrat, of Nevada — I congratulate the Supreme Court upon so fully and ably having tra- versed and de- cided every con- stitutional ques- tion affecting the right of Congress to have and maintain unlimited con- trol over the money of the country. It has removed every doubtful qu tion and will have a wholesome ef- fect upon our monetary system. “Senator Murphy, Democrat, of Iowa ~The decision will have a stabilizing eand settling effect. Senator Dickinson, Republican, of Towa—My principal reaction is that if {ndividual contracts are subject to re- pudiation by acts of Congress in carrying out its constitutional au- thority to coin money and to regulate the value | thereof, it imposes upon the citizens of this country the duty to elect to Congress men who have a prop- er regard for the sanctity of con- tract. * * * Let’s have more sanity in Congress. - Representative Cross, Democrat, of Texas—It was splendid. But I would have felt better if the court had made the same decision on Government bonds that it did on private con- tracts, although the decision has the same effect. Representative Patnam, Democrat, of Texas—It was a fine decision. I don't see how people could have ex- pected to collect back a dollar worth more than the dollar they let the Government have. R e presentative Greenway, Demo- Senator Wheeler. Benator Dickinson, George E. Allen, who said: “If there had been any other ruling. it would have thrown the Gov- | ernment and all | stocks and bonds into a mess. In- stead, its first effect was to help the markets. Anything that will help as it did yes- terday is bound to be a boon to the country.” ¥ George M. Shriver, vice president of the B. & O. Railroad, whose bonds figured in the decision, said: “Naturally Ross Haworth. such important possibilities. “The disposal of the question should tend to stabilize the financial situa- tion in general and be reflected in a more stable business situation.” Hopes for Best. F. J. Benson, a contractor, of 410 decision, with the judges practically evenly divided, I can see where it will be a good thing for all of us, since there was so much anxious waiting. As a contractor, I would not dare make hope for the best since the Wall Street men seem to look upon it favorably. Otherwise, stocks would not have risen. That is always a barometer.” New York avenue: ‘We noticed a pick-up in business even yesterday. In the morning it was dull, but soon as the decision was out of the way people came in to spend—and business jumped $50 on the day. We are in the heart of the financial busi- ness and many brokers come in here. They seemed jubilant. As a rule, three days after the Government pay day business begins to slow off. It picked up yesterday, and that seems to be a good answer.” Sees Good Effect. Phillip W. Austin, lawyer, of Ta- koma Park, M “The decision was a of Georgia—That should help busi- ness. Representative Wigglesworth, Re- publican, Massachusetts—I always have been loath to believe that Con- gress, under the Constitution, could crat, of Arizona— It is a good exam- ple that legisla- tion which’ bor- ders on the un- constitutional should be decided promptly. R e presentative Pish, Republican, of New York—I ‘wanted to see the Bupreme Court fearlessly exercise its judicial func- tlons, and it seems to have done so. . Representative Vinson, Democrat, Rep. Greenway. Boy Tries to Sell A Paper to Hughes Telling of Gold Case By the Associated Press. A newsboy tried without suc- cess to sell Chief Justice Hughes the latest newspaper account of the Supreme Court’s gold clause decisions. 7 Emerging from the National Theater, where he had applauded the Gilbert and Sullivan opera, “Gondoliers,” the Chief Justice looked a bit startled at the boy's cry: “All_about the gold de- cision!” Then he smiled and climbed into his automobile with- out buying the paper. Associate Justices Roberts and Stone, and Secretary Morgen- thau also attended the perform- ance with their wives. place the Government in the position of repudiating its formal obligations. Uncertainty Held Removed. Representative McCormack, Demo- crat, of Massachusetts—I am pleased with the opinion of the Supreme Court. Uncertainty as to its decision is now removed and the countty can g0 to work with confidence. There is a wonderful opportunity for real leadership in business, finance and industry to assert itself and if it does we will make great strides forward. Senator Thomas, Democrat, of Oklahoma, an advocate of a cheaper - dollar, said there was a “loophole” left through which action might be taken, but regarded it a very small loophole. Senator Con- nally, Democrat, of Texas, author of the law re- ducing the gold content of the dollar, while terming the deci- sions sound, saw a slight prospect for some additional legislation “in order to allay the feelings of those fellows who they have been outraged. Representative Eagle, Democrat, of ‘Texas—For the first time since March 4, 1933, I feel we are out of the hole. The Wall Street bankers, who have been hanging back, know they have got to go along now.” Senator Connally. 'A we are pleased to have! disposed of the question which had | Mount Ida avenue, Alexandria Va.:| “While I cannot quite fathom all the reasoning behind the Supreme Court | a prediction what it will mean, but I| private owner- Burt Lapadin, restaurateur, of 1418 “I am glad the | Supreme Court decided the way it did. | will have a good effect, I am sure— | for it will teach the lesson what the dollar really means.” Oswald Varela, a bank cashier: “It is a far-reaching decision—be- cause every account which was opened | prior to the beginning of this admin- | istration would demand liquidation in gold. In plain language, a man who | had deposited gold certificates could | have ing, ay cff in gold"—and had the Supreme Court ruling been the other way around the banks of America | would nave had tc pay off in gold. Had that been the case, they might as well have closed their doors. It would have meant the paying of $1.69 for every dollar on deposit. You can figure it out for yourself.” Sees Disaster Averted, Clarence Beall, a taxicab driver, 56 New York avenue—“After all, I be- lieve the court could have done noth- ing else, even though there was almost an equal division. Supreme Court | Justice Hughes is a great Ameri- can, and he prac- tically made the decision. It means that Congress still maintains its con- trol over our cur- | rency. This in it- | self “is a good thing, since there | have been so | many charges of | ship of the right ""ciyrence Beall to coin and con- trol money. Had thé decision of the court been just the opposite. I believe we would have headed for disaster.” Philip Friedlander, a stock broker.— “It is a fair decision. Nobody got | hurt. Also, it leaves the way open for | Government bondholders to take fur- ther action if by any chance, due to further depreciation of the dollar, they suffer amy losses.” Miss Aubrey Becker, stenographer, | of the Shoreham Building.—"I was | taught in school the principle set down by Chief Justice Hughes in his S majority opinion and that is that Congress must be free to control the currency. Congress did that, in an emergency. After ull, the Government has power to do what should be done when the situa- tion demands— and the situation demanded dras- tic action at the time the gold clause was abro- gated. I think the Supreme Court de- cision will have & tendency to put the Nation back on an even keel.” Charles G. Hoyt, a student of 1417 Massachusetts avenue: “The decision of the Supreme Court will have a great psychological effect on the people of America—and perhaps the people of the world. Its effects will be felt more later on, when prices adjust them- selves to the ruling. There is only one danger and that is that Congress might further devalueate the dollar. A 25-cent dollar would have a bad effect on business and on the life of the people. However, tnat is a bridge to cross when we come to it. The im- mediate effect of the decision seems to be putting everybody in a better frame of mind. We have come out of the dark, so to speak. Now we know ‘where we are going, at least—and how Aubrey Becker. tepped up to the window, say- | U. S. Workers Silent. A number of Government clerks | declined to express an opinion, three 10( them frankly admitting they would ) prefer “not to stick my neck out.” Obviously they sided with the minority decision. Those who waited in a long line outside the court chamber yesterday, unable to get in, had a little more interest than the pedestrian rushing to work today. They had these comments: C. O. Hart of Flint, Mich.: “I think a devalued dollar buys as much.” Mrs. Catherine Hill, New York City: “It would have been very difficult for the Government if the decision had not been favorable.” E. Leroy Pelletier of Detroit, Mich.: “It's & good, sound decision. We can do what France and Germany and all the other countries did—they all devalued.” Puzzled Over Delay. J. H. Little of Cleveland, Ohio: “What I want to know is why it took the Supreme Court so long to make that kind of a decision.” Donald Anderson of Paw Paw, Mich.: “The best thing possible would have been for the court to de- cide it was entirely unconstitutional. That would have precipitated a crisis and the sooner a crisis is precipi- tated the less difficulties will come in working out the problem of the country.” Woolvin Patten, law student from Macon, Ga.: “It is the only way it ITALY ASSAILED FOR “BOISTEROUS” TROOP MOVEMENT (Continued From First Page.), acceptable to Italy for humanitarian reasons. “This is the condition,” he explained, | “that Nomad tribes shall have the iright to use wells and cross through ithe neutral zones to wells for the ‘needs of their cattle. But there are other conditions that are not accept- iable at all.” What these are, the spokesman said, he did not wish to say. “There can be no question of a neutral zone,” he added, “until the Ethiopians have evacuated the places they have occupied.” “Our precautionary measures,” the spokesman commented, “do not seem to have affected them in any way.” SOVIETS ACCUSE GERMANY, Hold Reich Approved Japanese In- fluence in Ethiopia. MOSCOW, February 19 (#).—Prav- da, officially inspired daily, said to- day it had “discovered” that indirect German approval has been given to Japanese influence in Ethiopia. The newspaper called attention to what it termed the raging of the German Fascist press against Italian “aggression” in the African kingdom. At the same time it quotes foreign newspapers to the effect that Jap- anese have an understanding with the Ethiopians which enables Japan to flood the Ethopian market with its goods, An increasingly bitter attitude is shown toward British comment on Germany's stand on the London pro- posals. They are indications that | Russia considers that Great Britain | betrayed her by encouraging the | Nazis. “Germany'’s resistance to the east- ern pact,” Pravda says, “puts empha- sis on the Nazis' aggressive inten- tions.” ‘The paper raises a cry of alarm over the plans of Germans and Poles to whom the Soviets for some time have been attributing ambitions to seize the Ukraine. “In view of the attitude of Polish and German Fascism,” it says, “countries interested in keeping peace in Eastern Europe must increase their vigilance.” MALARIA TOLL MOUNTS TO 30,000 IN CEYLON Drought and Crop Failure Stalk Land, and Starvation Threat Grows. By the Assoclated Press. - COLOMBO, Ceylon, Fébruary 19.— Sanitary authorities said today that more than 30,000 persons have died in the malaria epidemic in Ceylon. In the Kurunegala district, one of the worst affected spots, 2,162 persons have died in the last two weeks. Of these, 1620 were children. . In the {north central province there were 1,309 deaths during January. A drought and consequent failure of the crops is adding to the country’s suffering. A relief commissioner said starvation threatens many districts. Gaming Bill Passes. HELENA, Mont., February 19 (#).— The Montana House of Representa- tives yesterday passed a bill to legalize gambling. much we must pay as we go.’ Edward J. Harding, managing di- rector, Associated General Contractors of America—The Supreme Court’s de- cision in the gold clause cases removes a major factor of uncertainty in the money market that unquestionably has retarded recovery. With the atmos- phere cleared by the decision, private investment in capital goods should quickly return to its normal flow and bring about that sustained business activity which it alone can induce. Business confidence is dependent upon the removal of uncertainties, of which the monetary question has been one of the most vital. I look for & very pro- nounced and favorable reaction in the private construction field. Charles McLemore, liquor salesman » Before Selling Investigate the Prices We Pay old Gold Jewelry of every description, bridgework, silver. No matter how old or dilapidated any of foregoing articles might be you will be greatly surprised at the cash prices paid by us. by U. 8. Govt) (Licensed SHAH & SHAH - 921 F St. N.W. Phone NA. 5543—We Will Call NEW GOLD LAWS HELD UNNEEDED Move to Bar U. S. Bond Suits Not Finally Ruled Out, However. (Continued From First Page.) in London that disappointed foreign holders of United States gold bonds might ask their governments to take diplomatic action. The State Depart- ment sent a comprehensive” summary of the gold decisions to its embassies abroad so they could inform other governments. Discussion Almost Endless. ‘The discussion on the verdict prom- ised to be almost endless. The ma- jority, headed by Chief Justice Hughes, ruled that Congress had power to nullify the gold clause in private con- tracts; that a gold certificate is worth only its face value in devalued cur- rency, and that while Congress has no right to abrogate the clause in Government bonds, a bondholder could not collect more than the face value in devalued dollars unless he showed actual damage. There was also much comment on {the minority decision, rendered by | Justices McReynolds, Butler, Van Devanter and Sutherland. Justice McReynolds, departing from the writ- ten opinion, used language of a strength rarely heard in e court chamber. His remarks that “the Con- stitution is gone” and “this is Nero at his worst” brought varying reac- tions. Former Representative James M. Beck of Pennsylvania, widely known as a constitutional lawyer, praised the McReynolds opinion as “powerful and moving.” He said the majority deci- sion impaired the “sanctity of con- inflationists.” Senator Thomas, on the other hand, stenographic copy of the McReynolds address because it was more typical of the Senate than the court room. Cummings Pleased. As for the majority verdict— “I am greatly pleased,” said Attor- ney General Cummings, who argued the cases for the Government. Sen- ator Robinson, Democratic leader who arrived in such haste at the White House after hearing the decision that he left his hat and top coat behind, said simply: “I'm satisfied.” Jjubilation to pained sorrow, depending on the outlook of the commentator. In the hurry and confusion as the complicated decisions were interpreted ing opinion by Justice Stone. Stand- ing with the “liberals” in the cases in which they upheld the New Deal, clause in Government bonds. The majority, while holding that FANN tracts” and opened the way for “the | remarked that he would like to get a | Congress could not do this, ruled that the question of collecting more than the face value of bonds in terms of devalued dollar was another matter. Can Recover Only Loss. “As a remedy for breach of con- tract,” they said, “plaintiff can re- cover no more than the loss he has sufered and of which he may right- fully complain. He is not entitled to be enriched.” The court,in effect, held that buy- ing power must be considered in de- termining losses. This led to the speculation as to how a bondholder would fare if, at some future time, he could show that the New Deal dollars he receives for his bond buy much less than the money he invested. ‘The particular bond at issue in the test case, it was pointed out, was bought in war time, when prices were high, and therefore it might be hard at present to prove a loss in purcchas- ing_power. The court’s stand in upholding the New Deal's nullification of the goid clause in all private contracts and securities was based directly on “the constitutional power of Congress over the monetary system.” If private con- tracts interfere with this power, it held, they must yleld. A significant sentence in the opin- jon was: “Contracts may create rights of property, but when contracts deal with a subject matter which lies within the control of Congress they must give way.” The gold certificate case, brought by F. Eugene Nortz of New York, Dboiled down, in the opinion of the ma- jority, to the conclusion that Nortz suffered no actual loss. If the Gov- ernment had paid him gold for his certificates, the court said, he would have had to turn the gold in to the | Treasury because holding the metal was {llegal. cates. compensation. Advice on Gold Glad Take Your Devaluated Dollars, Say Lawyers, Be to By the Assoclated Press. everyday words: the railroad owes you. Other comments ranged from a gay | observers almost overlooked a dissent- prove damages? Just try. lars and be satisfied. To the holder of a $10 gold cer- tificate—you hold it illegally and can if accidentally he went even further and argued that | you still have one, be more than glad Congress could wipe out the gold |if the Goverment is willing to ex- | change $10 in devalued dollars with- be jailed for it. So, out prosecuting. I ORI MARKETS FREED, D.C. BANKERS SAY Weight Delaying Business Activity Held Lifted by Decision of Court. In the local banking district today financiers stressed the fact that the Supreme Court gold clause decisions (lift & great weight that hampered financial markets and brought busi- ness almost to a standstill. Frederick P. H. Siddons, president of the District Bankers’ Association, and secretary of the American Secur- ity & Trust Co., said: “For the last several months many | businesses have been hesitant because of the uncertainty as to how and when the gold clause decisions were ¥¥¥ K-S steady improvement, business here will shcw some benefit, the exchange head asserted, adding that many local bonds are now at their all-time high marks. The fact that there is not more activity on the exchange is be- cause holders refuse to sell, rather than because of any action taken by the Supreme Court. Preston Distatisfied. Ord Preston, president of the Union Trust Co., said that personally he was not satisfled with the gold decisions. He sald he felt that Liberty bonds should be paid for in the same amount of gold with which they were pur- chased. The gold content of the dollar when these bonds were pur- chesed stood at & certain figure. The Goyernment should pay back the same amount, = Mr, Preston de- Ord Preston. Clared. He added {that he thought the gold ruling would have a bad effect abroad, where the United States has always going to be made, | €njoyed an enviable record for paying “With the Su. |21l debts. preme Court of | FRolfe E. Bolling, president of the the United States | Liberty National Bank, said he had not had an opportunity to study the having acted, st " | fine points of the siness general- | o 1o G He ly now should 150t be a0 ‘hesi-| {5 BOWEVCE tant There - nt the i should be soon |BOUNCEment evident contin- | would ‘d" Swey ued improved | with the uncer- business _condi- | {2ty that has t 1 . dons throughout | 0"y siness and He would then have received the same kind of paper currency wkiich, in fact, he did receive for his certifi- This occurred before the dol- lar was devalued and so, the court said, the currency represented full What the Supreme Court said—in | To the holder of a $100 railroad | bond—it may have called for payment in gold, but you take $100 in devalued dollars and be glad to get it; that's all To the holder of a $100 Liberty bond —the Government was wrong in chop- ping down the size of the dollar it promised to pay you, but can you Lawyers say take your $100 in devalued dol- the country. By the end of 1935 business generally should have j};gun better records compa.ed with 4. “I do not believe, however, that there will be immediately a demand for credit, but the more growing need { for it will gradually create some de- mand F. P. H. Siddons. See No Effect on D. C. Exchange. Y. E. Booker, president of the Washington Stock Exchange and | senior partner in the investment firm of Y. E. Booker & Co., said the gold clause decisions would have little or no effect on the Washington Stock Exchange. ‘The only way | the rulings are likely to have any reflection on the Washington Exchange would be through the New York Stock Exchange, Mr. Booker added. When the mar- ket in New York is especially ac- tive, that buoyancy is felt on the ex- change here, with an inerease in buy- ing orders. The Washington exchange is an investment market. Should the in- vestment demand in New York reveal ¥. E. Booker, investment Everybody knows now what the de- cision is and can | carry out long- delayed action “Sure to be help- ful,” he said Howard Moran, vice president of the American Security & Trust Co., |said he was satisfied with the Su- preme Court decision. It prevents an endless amount of confusion. Things ight have been unsettled for two or three years had the ruling been the other way. It greatly clarifies the atmosphere, he said Harry G. Meem, president of the Washington Loan & Trust Co—"The | decision in effect maintains the status |quo and that is certainly preferable | to the upset which would have been | precipitated by an opinion adverse to | Congress and the administration.” Rolfe E. Boliing. |DILLINGER IN COLORADO COLORADO SPRINGS, Colo. (#).— | “John Dillinger,” called Magistrate | G. Russell Miller, and an overalled miner stepped forward. | “Is that your name?"” magistrate. | *“Yes,” replied Dillinger. “That's my name and I'm no outlaw.” He admitted he had been drunk and was fined $5. asked the L new love /.iféw “SOME CALL IT BONDAGE” Boris All her life, Ervine Tate had borne her family’sburdens. Shehad taken- care of her helpless parents, sup- ported herbrothersandsisters, freed the farm from debt. Now, her re- sponsibilities ended, she was des- perately sick herself—sick with the realization that, at 32, life offered nothing but a lonely spinsterhood, a ““deadly empty vacant this.” Then—a letter from a sister in need . . . a telegram from an ailing brother . . . a desperate call for help from the man she almost married . . « Trouble made Ervine’s life worth living again. What hap- pened to her because others needed her is told by Fannie Hurst in this warmly human, understanding story. ‘‘Some Call It Bondage” was written especially for the first issue of THIS WEEK. Don’t miss it. Order your Sunday paper now. Gilso IN THE FIRST ISSUE Sinclair Lewis, Rupert Hughes, I. A. R. Wylie, Dorothy Sayers, Roy Chapman Andrews. Fine first-run fact and fic- tion—good clean reading for everyone. THIS WEEK OUR NEW Wwww MAGAZINE FIRST ISSUE NEXT SUNDAY i ’@fhe Sunday Star