The Christchurch Star PUBLISHED BY New Zealand Newspapers Ltd. THURSDAY, JANUARY 10, 1935. LEGAL AND MORAL COSTS.

Star (Christchurch), Volume LXVI, Issue 20509, 10 January 1935, Page 8

The Christchurch Star PUBLISHED BY New Zealand Newspapers Ltd. THURSDAY, JANUARY 10, 1935. LEGAL AND MORAL COSTS.

A RAILWAY BONDHOLDER in America claims that his interest payment is worth 10 per cent less than it ought to be under the old gold value of the dollar, and he is testing the legality of Congressional action voiding the so-called gold clause covering public and private securities. If he succeeds, he will have swept away the basis of Roosevelt’s monetary policy, lhat policy is based upon a gigantic repudiation, t.he repudiation of the gold dollar, lhe moral obliquity of that financial coup may be noted in the fact that on April 23, 1933, the Government offered 500 million dollars worth of Treasury Notes, recommending them particularly to small investors and explicitly stating, " The principal and interest will be payable in United States gold coin of the present standard of value.” Thirty-three days later, by joint resolution of Congress, the Government repudiated the contract. It declared the gold clause in this and in all other Government obligations to be “ contrary to public interest and therefore invalid,” and asserted its right to pay the notes in any 7 kind of paper money it might see fit to print. the lesser evil. 'T'HE DEFENCE that the A Attorney-General offers to the Government’s repudiation is that summary action was necessary to keep the people from slipping to a lower level of civilisation. lhat may be justified, for America was in a revolutionary ferment before it pinned its faith to the integrity of Mr Roosevelt. Nevertheless, the moral cost of this pursuit of national rccoverv under such practices may 7 be very 7 great, for there can be no trust or faith in the Government if the people believe that the money they 7 invest in bonds to-day 7 will be paid back in a debased form. That is one of the difficulties that we are faced with in New Zealand, for the credit of the Government is inseparable from faith in the currency 7 . Order, in fact, cannot come out of chaos until there is a stabilisation of currencies such as the World Economic Conference hoped for in 1933. THE VALUE OF AGITATION. 7V/TR LYONS lias summoned up ’ LVJ - enough courage to tell the potato growers of Tasmania, in effect, that New Zealand has the whip band in the arguriient about potatoes and oranges. We may be sure that he has arrived at the sticking point as the result of agitation, not from the potential potatoeaters of New South Wales, but from the orange growers as a whole. It recalls Mr Seddon’s advice to a Canterbury deputation to " agitate, agitate, agitate.” Hitherto the potato growers of Tasmania have shouted the loudest. Now it is the turn of the orange growers. New Zealand at least could strengthen the bands of the orange growers by 7 a stronger insistence upon the economic advantages to Australia of a rational agreement on this point. ASSASSINATION RISKS. IV/f R KNOX, the head of the Saar X A Commission, works in judicial isolation, as becomes his position as a neutral administrator, acting under the instructions of the League, and now he has also been forced into protective isolation. There has been gathering about him the same sort of atmosphereas preceded the assassination of Herr Dollfuss and King Alexander. Whatever the final decision of the people, the plebiscite will involve many in the Saar in poignant individual tragedies, for the question of sovereignty, alway 7 s important in the lives of nationals, becomes increasingly so where racial prejudice is deliberately fostered as part of the national sentiment of the country concerned. And it is one of the weaknesses of the Continental character that men directing national destinies should be made the local point of violent action lhat is born of a mental confusion of personal fears and national prejudices.