Aspects of Problem To the Editor of the "Nonru-Cuxa Dary News"
Sim—Before drawing any conelusion" whether 'a certain obligation Jcontracted to be liquidated in "gold Toom of the United States" or "in money of the United States now Jcurrent," it is necessary to. analyse the inner bearing of the deal that fave rise to that particular transae-
The medium of exchange is, or rather, should be a revered thing assuring for the holder the benefit of hhis capital holdings in necessaries Jand comforts of life to the extent expected and according to the values that were ruling at the time the dividual lawfully came in possession fof his holdings. No more, no less, Now, should gold cause these holdings at any tine to deprive the holder benefiting by his holdings to the extent expected, or unduly allow him'to draw on the World's supplies fof necessaries and comforts of life at the expense of any third party, gold thas ceased functioning ceptable medium of exchange, This Tatter circumstance forced the US.A. off the Gold Standard, and the laws subsequently passed" by Congress have been promulgated simply to correct the maladjustment so caused gold, The s0 called "Gold Clause" Issue in the US. involves a round sum of '$100,000,000:—, and if lost to the Goveroment it will decidedly bankrupt almost every State and Municipality fin the U.S. According to notices in the Press these last days Mr. John M. Perry of New York and' Mr. Eugene Nortz have not got the patience to await the final issue of the previous casco but have lodged claim against the U.S. Government for the recovery of respectively $10.921:—and $170,634:—against their original investments of $10.000:—and $100.800:—respectively, In othe words, these Gentlemen have made their mind to lay their hands on production to an extent that exceeds their holdings by 70 per cent, at the Jexpense of the Government. "This is 1 typical expression of the instability. fof the value of gold, though gold naturally always maintains its value as compared with itself as docy any other commodity.
Tt, is not easy to foretell what the Anal outcome of the cases pending will be since the principle involved Is whether or not Congress has the power to abrogate the "Gold Clause" which has once constitutionally been introduced in the U.S, administration of justice. The currency infla~ tion in Burope immediately after the World War constitutes a dangerous weapon in the hands of the opponents, when the question of principle comes to the forefront, Tu the case of the Bankers' Trust Company of New York versus St. was originally intended by the Che-, Zouis, Iron Mountain and Southern Railroad, Judge Charles B. Paris, /when summing up is concerned only with conclusions which actually are contested, touching on the currenc Issue generally without substantial ing same by any convincing reasoning. The parallel drawn up between gold and opium is very unfortunate, In the former case the individual Is generally striving to maintain hig Fights ina constructive sense, whereas in the latter case the destructive mind is in the foreground with undue not to say illegal per sonal gain as the moving spirit.
The judgment should " actually have been delivered as follows "Whereas it is evident that Plaintiff when contracting obviously had in mind tater to recover in capital an amount rendering on expiry commodities and necessaries of life to the extent a9 expressed through th values ruling at the time of concluding the contract, and "Whereas gold in the meantime has upset these same values, thereby rendering the gold clause obsolete, Congress or no Congress, and "Whereas the values expressed in commodities and necessaries of life to-day are the same as when the deal was. originally consummated, expressed through the value of the United States' Dollar as fixed by Congress, (if that is 60)
"I, Judge Paris, hereby declare that' Plaintit shall have to accept the amount of US$15.00 in the money at present constitutionally adopted as the United States' cur-Feney, in full and final settlement of his claim, and that the gold clause is not applicable in the present case."
Should such a judgment have been delivered, the Supreme Court would have no reason to over-rule it, but possibly to adjust the amount be paid to correspond to the value of commodities ruling at the time of losing the deal in question. Since the US. is in actual practice still gold-bound, the final ise must now be expected with all round Keen Interest and with some mixed feeling amongst those who have the welfare of the social structure and sound government at heart, Howe Sronwau. Shanghai, Nov. 24.
Text read from the printed page and cleaned; old type leaves the occasional error.