U.S. DOLLAR

Hokitika Guardian, 14 January 1935, Page 5

U.S. DOLLAR

GOLD DEVALUATION

COURT DECISION AWAITED

(United Press Association —By Eleitrk Telegraph—Copyright).

NE WYORK,' January 12.

A seeming dubiousness with which the Supreme Court Justices received Hhe Government’s 'arguments that President Roosevelt’s gold revaluation' policy should lie held to he valid- - 11 acl sharp repercussions on the markets to-day.

The Court is hearing a suit to test one of the most vital clauses of the New Deal, namely, the action of Condress in voiding the .so-called gold clause in public and private securities. It is a test suit, which involves the holder of a. single bond of the ■Ballimore-Ohio Railroad. On the markets to-clay, there wa.s ,i (considerable flow of capital into those Government securities containing the gold payment clause, with the result that various Liberty Loan hotels rose up to one point. On the other hand, some fifteen billion dollars worth of bonds issued since the devaluation slumped. The -Stock Exchange brokers admitted that they were mystified as to what may happen if the Court’s decision is against the Government. Manv are taking seriously the At-torney-General, Mr Cumming’s plea that “chaos” would result in the event of such a decision. Commitments of all sort s were limited, with the prices slightly off. In his final day’s argument, Mr Cumimngs made an unprecedented request that the Court should keep its decision open so that the Government might present 'further evidence, if necessary.

Previously several Justices, notablv Mr Hughes, had sharply questioned various parts of the Government’s agreement, particularly the legality of the voiding of the gold clause in Government bonds. Because of the utmost seriousness of the natter, the Court will probably consider the case for a fortnight and perhaps even for a month.