THE "NEW DEAL"

New Zealand Herald, Volume LXXII, Issue 22004, 10 January 1935, Page 9

THE "NEW DEAL"

FURTHER LITIGATION INTEREST ON SECURITIES VOIDING OF GOLD CLAUSE BONDHOLDER'S TEST ACTION By Telegraph—Press Association—Copyright (Received January 9, 5.5 p.m.) WASHINGTON. Jan. 8 Following upon the Supreme Court's adverse decision yesterday against the Government's petroleum control programme the tribunal to-day started consideration of perhaps the most vital phase of the "new deal," namely, the action of Congress in voiding the gold clause in public and private securities. The test suit before the Court involves the holder of a single bond of the Baltimore-Ohio Railway Company. He contends that an interest payment of 22 dollars should have been equivalent to the old gold value, or about 40 per cent more, and that in effect complainant has been deprived of property without due process of law. It is estimated that about one hundred billion dollars' worth of securities are involved in the issue as well as the entire basis of President Roosevelt's monetary policy. For that reason the Attorney-General, Mr. H. S. Cummings, has taken the almost unprecedented action of personally defending the suit. To-day he argued that the crisis of 1933 was so serious that summary action was necessary to keep people from slipping to a lower level of civilisation.