GOLD CLAUSE INVALID

Dominion, Volume 30, Issue 135, 4 March 1937, Page 11

GOLD CLAUSE INVALID

U.S. Supreme Court Decision Extended Washington, March 2. The Supreme Court, by a five to four decision, ruled that clauses in private contracts calling for payment in gold bullion are invalid, thus extending the court’s decision of February 18, 1935. The majority decision was that the contracts are actually for the payment of money and not gold as a commodity. By a five to four majority of the. Supreme Court on February 18, 1935, it was held in the case of private contracts that Congress had the right to abrogate the gold clause since it interfered with its right to regulate currency, while in the case in which a plaintiff sought to collect 1 dollar 69 cents for each 1 dollar of gold certificates turned into the Treasury, the court dismissed the action on the ground Hint no loss had been suffered and that the Court of Claims had no right to entertain such a pica. In the ease involving the right of Congress to abrogate the gold clause in Liberty bonds, the majority opinion held that Congress had exceeded its power and that such abrogation was unconstitutional, but it likewise ruled that the Court of Claims had no jurisdiction.