DECISION ANNOUNCED

Evening Post, Volume CXIX, Issue 42, 19 February 1935, Page 9

DECISION ANNOUNCED

U.S. SUPREME COURT

INVALID IN PRIVATE BONDS

GOVERNMENT SUSTAINED

United Press Association—By Electric/.Teleeriiph—Copyrlgliu* (Received February 19, 11 a.m.) WASHINGTON, February 13. The United States Supreme Court upheld the Government's right to cancel gold clauses in private bonds, but ruled that Government gold obligations could not be paid off on a dollar for dollar basis. . Chief Justice Hughes, in a summarisation of the decisions, disclosed the Court's ruling that Government "gold clause" bonds must be paid off in gpld^or the equivalent amount of devalued currency, meaning that for.every. 1000-dollar gold bond the Government must pay 1690 dollars. A later interpretation of the ruling showed that while the Court held invalid the. resolution of Congress saying that Government obligations need not be paid in gold, the decision also apparently 'closed the door to the recovery of damages by saying that bondholders could not sue for redress. . The Court completely sustained the Government with respect to private bonds, saying that they need not be paid,in gold. It also ruled that the holders of gold certificates had no legal Cause of complaint, since the Devaluation Act merely carried out- the power of Congress to regulate currency. What the Administration's attitude is has not been, announced, ■ except that the Administration has decided that legislation is not called for.