6-to-s

6-to-3

In 1935, by five-to-four decision, the Supreme Court upheld the right of the U. S. Treasury to redeem bonds, sold as payable in gold, in devalued 59-c- dollars. It also denied citizens the right of suing for payment in gold dollars in the Court of Claims. Before the Court have been three cases, rising indirectly from the original gold clause decisions. In these holders of Liberty Bonds, marked payable in gold but called for redemption in "legal tender," contended that the redemption call was invalid, hence that the Government still owes interest on the bonds. This week, these three cases--two of them brought by Cincinnati's Lawyer Robert A. Taft, son of the late Chief Justice William Howard Taft--were decided. By a majority of 6-to-3, the Court once again upheld the Government's right to repudiate its pledge to pay in gold.

Written by Associate Justice Benjamin Cardozo, who was recuperating from a heavy cold, read by Chief Justice Charles Evans Hughes, the majority opinion found that the Secretary of the Treasury "did not act in excess of his lawful powers by issuing the calls without further authority from the Congress than was conferred by the statutes under which the bonds were issued." Diminished by one, when Hugo LaFayette Black replaced Willis Van Devanter, the Court's conservative minority dissented as sharply this week as it did in 1935. Said explosive Justice James Clark McReynolds for the minority: "If you will look at the Eighth Commandment [Thou shalt not steal] you will find it difficult to reconcile with it what has been done here today. ... In 1917 we had war. The Government . . . offered the best investment on earth, the promise to pay in gold coin. It continued to do this for ten years. Then the President and Congress denied the right to gold coin. No honest individual should be permitted to do this thing. . . . This opinion sanctions an act of fraud."

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