GOLD CLAUSE CASES

Press, Volume LXXI, Issue 21404, 21 February 1935, Page 13

GOLD CLAUSE CASES

Possible Defects In Decision GOVERNMENT CIRCLES ANXIOUS (UNITED PRESS ASSOCIATION—BV ELECTRIC TELEGRAPH—COPYRIGHT.) (Received February 20, 5.5 p.m.) NEW YORK, February 20. The general elation in Administration circles in Washington changed to serious consideration today, owing to the possible loopholes in the decision as it pertains to the gold clause in Government bonds. Reports from London that holders of such securities are preparing court action in order to force payments in gold led some to believe that Congress would pass special legislation denying that any or all bondholders had, under any consideration, recourse to court claims. Meanwhile the Administration is preparing to push ahead with its 4,000,000,000 dollar financing programme when and if Congress passes an Enabling Act in terms of the Supreme Court's decision on the gold clause cases.

POWERS OF CONGRESS

GOLD CLAUSE INTERFERES (Received February 20, 5.5 p.m.) WASHINGTON, February 19. The majority opinion of the United States Supreme Court on the gold clause declared in part: "We think that it is clearly shown that the gold clause interferes with the exertion of the power granted to Congress, and it is certainly not established that Congress arbitarily or capriciously decided that such interference existed." LONDON MARKET ACTIVE (Received February 20, 5.5 p.m.) LONDON, January 20. Throughout the day there were active dealings in gold shares on the stock exchange in consequence of the American gold clause decision. Most West Australian gold mining shares showed advances in the street before the close of the market. AMERICAN MARKETS EASIER (Received February 20, 5.5 p.m.) NEW YORK, February 20. Both security and commodity markets turned easy to-day after yesterday's enthusiastic reception of the Government's Supreme Court victory by traders. The volume of sales on the New York exchange was greatly reduced. Steady though orderly selling gradually erased yesterday's price gains. It is reported that yesterday's frantic buying was'largely due to speculators who were caught "short" on commitments.

AUSTRALIA INTERESTED

HEAVY LOAN PAYMENTS Australia is vitally interested in the Supreme Court action tsken in New York to test the validity of President Roosevelt's gJd devaluation policy. Australian governments and local governing bodies owe about 274.500.000 dollars (normally £54.900.000) in New York in "gold bonds." The debt is made up as follows: Normally Dollars. £ Commonwealth Govt . .. 135,000.000 33,000,000 N.SiW. Govt. .. 50,000,000 10,000,000 Queensland Govt. . . 22,000,000 4,400,000 City of Brisbane .. 20.000,000 4,000,000 City of Sydney 10,000,000 2,000,000 Sydney Water Eoord .. 7,500,000 1,500,000 Total .. 274,500,000 £54,900,000 As there is no immediate probability of the debts being repaid before their obligatory redemption dates, the payment of interest is the principal question "* that would have been affected by an adverse decision of the United States Supreme Court. The rnnual interest amounts to 13,952,500 dollars (normally £2,790,5001, made up as follows: Normally Dollars, (stg.) Commonwealth 8.000,000 £1,600.000 N.S.W. .. 2,500,000 500,000 Queensland .. 1,440,000 288,000 City of Brisbane .. 1,050,000 210.000 City of Sydney 550,000 110,000 Sydney Water Board .. 412,000 82,400 Total .. 13,952,000 £2,790,400 At the current rate of exchange this interest payment is increased to £3,559,000 in Australian currency, but on the old gold dollar basis it would amount to a considerably larger sum.