1. A bond for the future payment of a stated number of dollars
in gold coin of the United States "of or equivalent to the standard
of weight and fineness existing" on the date of the bond, or for
payment in gold coin of the United States "of the standard of
weight and fineness prevailing" on the date of the bond, is not a
contract for payment in gold coin as a commodity, or in bullion
(
cf. Bronson v. Rodes, 7 Wall. at p.
74 U. S. 250),
but is a contract for payment in money. Pp.
294 U. S.
298-302.
2. Such "gold clauses" are intended to afford a definite
standard or measure of value, and thus to protect against
depreciation of the currency and discharge of the obligations by
payment of a lesser value than that prescribed. P.
294 U. S.
302.
3. In determining whether the Joint Resolution of June 5, 1933,
exceeded the power of Congress by undertaking to nullify such "gold
clause" stipulations in preexisting money contract obligations, and
by providing that such obligations shall be discharged, dollar for
dollar, in any coin or currency which at the time of payment is
legal tender for public and private debts, the Resolution must be
considered in its legislative setting, with other measures
in
pari materia (p.
294 U. S.
297), and in the light of the following principles,
which have heretofore been laid down by this Court,
viz:
(a) The broad and comprehensive national authority over the
subjects of revenue, finance, and currency is derived from the
aggregate
Page 294 U. S. 241
of the powers granted to the Congress, embracing the powers to
lay and collect taxes, to borrow money, to regulate commerce with
foreign nations and among the several States, to coin money,
regulate the value thereof and of foreign coin, and fix the
standards of weights and measures, and the added express power "to
make all laws which shall be necessary and proper for carrying into
execution" the other enumerated powers. P.
294 U. S.
303.
(b) The Constitution means to provide the same currency of
uniform value in all the States, and therefore the power to
regulate the value of money was withdrawn from the States and
vested in Congress exclusively. P.
294 U. S.
302.
(c) Congress has power to enact that paper currency shall be
equal in value to the representative of value determined by the
coinage acts, and impress upon it such qualities as currency for
purchases and for payment of debts as accord with the usage of
sovereign governments. P.
294 U. S.
304.
(d) The authority to impose requirements of uniformity and
parity is an essential feature of the control of the currency, and
Congress is authorized to provide a sound and uniform currency for
the country and secure the benefit of it to the people by
appropriate legislation. P.
294 U. S.
304.
(e) The ownership of gold and silver coin is subject to those
limitations which public policy may require by reason of their
quality as legal tender and as a medium of exchange. Hence, the
power to coin money includes the power to forbid mutilation,
melting, and exportation of gold and silver coin. P.
294 U. S.
304.
(f) Private contracts must be understood as having been made
subject to the possible exercise of the rightful authority of the
Government, and their impairment, resulting from such exercise, is
not a taking of private property for public use without
compensation, or a deprivation of it without due process of law.
Pp.
294 U. S.
304-305.
4. In the exercise of the constitutional authority of Congress
to regulate the currency and establish the monetary system of the
country, existing contracts of private parties, States or
municipalities, previously made, and valid when made, but which
interfere with the policy constitutionally adopted by Congress, may
be set aside not only through the indirect effect of the
legislation, but directly, by express provision. Pp.
294 U. S.
306-309.
5. Whether the gold clauses of the contracts here in question
may be deemed to interfere with the monetary policy of Congress
depends upon an appraisement of economic conditions and upon
determinations
Page 294 U. S. 242
of questions of fact, as to which Congress is entitled to use
its own judgment. P.
294 U. S.
311.
6. The Court may inquire whether the action of Congress,
invalidating such clauses, was arbitrary or capricious; but, if
that action has reasonable relation, as an appropriate means, to a
legitimate end, the decision of Congress as to the degree of
necessity for its adoption is final. P.
294 U. S.
311.
7. Congress was entitled to consider the great volume of
obligations with gold clauses because of its obvious bearing upon
the question whether their existence constituted a substantial
obstruction to the congressional policy. P.
294 U. S.
313.
8. Taken literally, as calling for actual payment in gold coin,
these promises were calculated to increase the demand for gold, to
encourage hoarding, and to stimulate attempts at exportation of
gold coin, in direct opposition to the policy of Congress. P.
294 U. S.
313.
9. Congress has power, in its control of the monetary system, to
endeavor to conserve the gold resources of the Treasury, to insure
its command of gold in order to protect and increase its reserves,
and to prohibit the exportation of gold coin or its use for any
purpose inconsistent with the needs of the Treasury. P.
294 U. S.
313.
10. Treated as "gold value" clauses, such stipulations are still
hostile to the policy of Congress, and subject to prohibition, for
the following reasons:
(a) Although, at the date of the Joint Resolution, the dollar
had not yet been devalued, devaluation (reduction of the weight of
the gold dollar as the standard of value, which occurred later) was
then in prospect and a uniform currency was intended. P.
294 U. S.
314.
(b) Congress could constitutionally act upon the gold clauses in
anticipation of this devaluation, if the clauses interfered with
its policy. P.
294 U. S.
315.
(c) It may be judicially noticed that the bonds issued by
States, municipalities, railroads, other public utilities and many
industrial corporations contain such gold clauses. P.
294 U. S.
315.
(d) If States, municipalities, railroads, public utilities,
industrial corporations, etc., receiving all their income in the
devalued currency were obliged to pay their gold clause obligations
in amounts of currency determined on the basis of the former gold
standard, it is easy to see that this disparity of conditions would
cause a dislocation of the domestic economy. P.
294 U. S.
315.
265 N.Y. 37; 191 N.E. 726, affirmed.
Dist. Ct. U.S. (unreported), affirmed.
Writs of certiorari were granted (293 U.S. 546, 548) to review
two decisions sustaining the power of Congress to invalidate "gold
clauses" in private money contracts.
In the first case, an action on a coupon from a railroad bond,
the Court of Appeals of New York sustained the trial court in
limiting the recovery to the face of the coupon, dollar for dollar,
in currency.
In the second case, a proceeding under § 77 of the Bankruptcy
Act, a federal District Court made a like ruling with respect to
certain other railroad bonds. In this case, two appeals were taken
to the Circuit Court of Appeals, one allowed by that court and the
other by the District Judge. While they were pending, this Court
granted writs of certiorari on the petition of the United States
and the Reconstruction Finance Corporation, which had both
intervened in the District Court.
Page 294 U. S. 291
MR. CHIEF JUSTICE HUGHES delivered the opinion of the Court.
These cases present the question of the validity of the Joint
Resolution of the Congress, of June 5, 1933, with respect to the
"gold clauses" of private contracts for the payment of money. 48
Stat. 112.
This Resolution, the text of which is set forth in the margin,
[
Footnote 1] declares that
"every provision contained in or
Page 294 U. S. 292
made with respect to any obligation which purports to give the
obligee a right to require payment in gold or a particular kind of
coin or currency, or in an amount in money of the United States
measured thereby"
is "against public policy." Such provisions in obligations
thereafter incurred are prohibited. The resolution provides
that
"Every obligation, heretofore or hereafter incurred, whether or
not any such provision is contained therein or made with respect
thereto, shall be discharged upon payment, dollar for dollar, in
any coin or currency which at the time of payment is legal tender
for public and private debts."
In No. 270, the suit was brought upon a coupon of a bond made by
the Baltimore & Ohio Railroad Company under date of February 1,
1930, for the payment of $1,000 on February 1, 1960, and interest
from date at the rate
Page 294 U. S. 293
of 4 1/2% per annum, payable semiannually. The bond provided
that the payment of principal and interest "will be made . . . in
gold coin of the United States of America of or equal to the
standard of weight and fineness existing on February 1, 1930." The
coupon in suit, for $22.50, was payable on February 1, 1934. The
complaint alleged that, on February 1, 1930, the standard weight
and fineness of a gold dollar of the United States as a unit of
value "was fixed to consist of twenty-five and eight-tenths grains
of gold, nine-tenths fine," pursuant to the Act of Congress of
March 14, 1900 (31 Stat. 45), and that, by the Act of Congress
known as the Gold Reserve Act of 1934 (January 30, 1934, 48 Stat.
337), and by the order of the President under that Act, the
standard unit of value of a gold dollar of the United States "was
fixed to consist of fifteen and five-twenty-firsts grains of gold,
nine-tenths fine," from and after January 31, 1934. On presentation
of the coupon, defendant refused to pay the amount in gold, or the
equivalent of gold in legal tender of the United States which was
alleged to be, on February 1, 1934, according to the standard of
weight and fineness existing on February 1, 1930, the sum of
$38.10, and plaintiff demanded judgment for that amount.
Defendant answered that, by acts of Congress, and, in
particular, by the Joint Resolution of June 5, 1933, defendant had
been prevented from making payment in gold coin "or otherwise than
dollar for dollar, in coin or currency of the United States (other
than gold coin and gold certificates)," which at the time of
payment constituted legal tender. Plaintiff, challenging the
validity of the Joint Resolution under the Fifth and Tenth
Amendments, and Article I, § 1, of the Constitution of the United
States, moved to strike the defense. The motion was denied.
Judgment was entered for plaintiff for $22.50, the face of the
coupon, and was affirmed upon appeal. The Court of Appeals of the
state considered the federal question and
Page 294 U. S. 294
decided that the Joint Resolution was valid. 265 N.Y. 37, 191
N.E. 726. This Court granted a writ of certiorari October 8,
1934.
In Nos. 471 and 472, the question arose with respect to an issue
of bonds, dated May 1, 1903, of the St. Louis, Iron Mountain &
Southern Railway Company, payable May 1, 1933. The bonds severally
provided for the payment of "One Thousand Dollars gold coin of the
United States of the present standard of weight and fineness," with
interest from date at the rate of 4% per annum, payable "in like
gold coin semi-annually." In 1917, Missouri Pacific Railroad
Company acquired the property of the obligor subject to the
mortgage securing the bonds. In March, 1933, the United States
District Court, Eastern District of Missouri, approved a petition
filed by the latter company under § 77 of the Bankruptcy Act. In
the following December, the trustees under the mortgage asked leave
to intervene, seeking to have the income of the property applied
against the mortgage debt and alleging that the debt was payable
"in gold coin of the United States of the standard of weight and
fineness prevailing on May 1, 1903." Later, the Reconstruction
Finance Corporation and the United States, as creditors of the
debtor, filed a joint petition for leave to intervene, in which
they denied the validity of the gold clause contained in the
mortgage and bonds. Leave to intervene specially was granted to
each applicant on April 5, 1934, and answers were filed. On the
hearing, the District Court decided that the Joint Resolution of
June 5, 1933, was constitutional, and that the trustees were
entitled, in payment of the principal of each bond, to $1,000 in
money constituting legal tender. Decree was entered accordingly,
and the trustees (respondents here) took two appeals to the United
States Circuit Court of Appeals. [
Footnote 2]
Page 294 U. S. 295
While these appeals were pending, this Court granted writs of
certiorari November 5, 1934.
The Joint Resolution of June 5, 1933, was one of a series of
measures relating to the currency. These measures disclose not only
the purposes of the Congress, but also the situations which existed
at the time the Joint Resolution was adopted and when the payments
under the "gold clauses" were sought. On March 6, 1933, the
President, stating that there had been "heavy and unwarranted
withdrawals of gold and currency from our banking institutions for
the purpose of hoarding" and "extensive speculative activity abroad
in foreign exchange" which had resulted "in severe drains on the
Nation's stocks of gold," and reciting the authority conferred by §
5(b) of the Act of October 6, 1917 (40 Stat. 411), declared "a bank
holiday" until March 9, 1933. On the same date, the Secretary of
the Treasury, with the President's approval, issued instructions to
the Treasurer of the United States to make payments in gold in any
form only under license issued by the Secretary.
On March 9, 1933, the Congress passed the Emergency Banking
Relief Act, 48 Stat. 1. All orders issued by the President or the
Secretary of the Treasury since March 4, 1933, under the authority
conferred by § 5(b) of the Act of October 6, 1917, were confirmed.
That section was amended so as to provide that, during any period
of national emergency declared by the President, he might
"investigate, regulate, or prohibit," by means of licenses or
otherwise,
"any transactions in foreign exchange, transfers of credit
between or payments by banking institutions as defined by the
President, and export, hoarding, melting, or earmarking of gold or
silver coin or bullion or currency, by any person within the United
States or any place subject to the jurisdiction thereof."
The act also amended § 11 of the Federal Reserve Act (39 Stat.
752) so as to authorize the Secretary of the Treasury to
Page 294 U. S. 296
require all persons to deliver to the Treasurer of the United
States "any or all gold coin, gold bullion, and gold certificates"
owned by them, and that the Secretary should pay therefor "an
equivalent amount of any other form of coin or currency coined or
issued under the laws of the United States." By Executive Order of
March 10, 1933 (No. 6073), the President authorized banks to be
reopened, as stated, but prohibited the removal from the United
States, or any place subject to its jurisdiction, of
"any gold coin, gold bullion, or gold certificates, except in
accordance with regulations prescribed by or under license issued
by the Secretary of the Treasury."
By further Executive Order of April 5, 1933, forbidding
hoarding, all persons were required to deliver, on or before May 1,
1933, to stated banks, "all gold coin, gold bullion, and gold
certificates," with certain exceptions, the holder to receive "an
equivalent amount of any other form of coin or currency coined or
issued under the laws of the United States." Another Order of April
20, 1933, contained further requirements with respect to the
acquisition and export of gold and to transactions in foreign
exchange.
By § 43 of the Agricultural Adjustment Act of May 12, 1933 (48
Stat. 51), it was provided that the President should have
authority, upon the making of prescribed findings and in the
circumstances stated,
"to fix the weight of the gold dollar in grains nine tenths fine
and also to fix the weight of the silver dollar in grains nine
tenths fine at a definite fixed ratio in relation to the gold
dollar at such amounts as he finds necessary from his investigation
to stabilize domestic prices or to protect the foreign commerce
against the adverse effect of depreciated foreign currencies,"
and it was further provided that the "gold dollar, the weight of
which is so fixed, shall be the standard unit of value," and that
"all forms of money . . . shall be maintained at a parity with this
standard," but
Page 294 U. S. 297
that "in no event shall the weight of the gold dollar be fixed
so as to reduce its present weight by more than 50 percentum."
Then followed the Joint Resolution of June 5, 1933. There were
further Executive Orders of August 28, 1933, and August 29, 1933 ,
October 25, 1933, and January 12 and 15, 1934, relating to the
hoarding and export of gold coin, gold bullion, and gold
certificates, to the sale and export of gold recovered from natural
deposits, and to transactions in foreign exchange, and orders of
the Secretary of the Treasury, approved by the President, on
December 28, 1933, and January 15, 1934, for the delivery of gold
coin, gold bullion and gold certificates to the United States
Treasury.
On January 30, 1934, the Congress passed the "Gold Reserve Act
of 1934" (48 Stat. 337) which, by § 13, ratified and confirmed all
the actions, regulations, and orders taken or made by the President
and the Secretary of the Treasury under the Act of March 9, 1933,
or under § 43 of the Act of May 12, 1933, and, by § 12, with
respect to the authority of the President to fix the weight of the
gold dollar, provided that it should not be fixed "in any event at
more than 60 percentum of its present weight." On January 31, 1934,
the President issued his proclamation declaring that he fixed "the
weight of the gold dollar to be 15 5/21 grains nine tenths fine,"
from and after that date.
We have not attempted to summarize all the provisions of these
measures. We are not concerned with their wisdom. The question
before the Court is one of power, not of policy. And that question
touches the validity of these measures at but a single point --
that is, in relation to the Joint Resolution denying effect to
"gold clauses" in existing contracts. The resolution must, however,
be considered in its legislative setting and in the light of other
measures
in pari materia.
Page 294 U. S. 298
First. The Interpretation of the Gold Clauses in Suit.
In the case of the
Baltimore & Ohio Railroad Company,
the obligor considers the obligation to be one "for the payment of
money, and not for the delivery of a specified number of grains or
ounces of gold;" that it is an obligation payable in money of the
United States, and not less so because payment is to be made "in a
particular kind of money;" that it is not a "commodity contract"
which could be discharged by "tender of bullion." At the same time,
the obligor contends that, while the Joint Resolution is
constitutional in either event, the clause is a "gold coin," and
not a "gold value," clause -- that is, it does not imply "a payment
in the
equivalent' of gold in case performance by payment in
gold coin is impossible." The parties, runs the argument, intended
that the instrument should be negotiable, and hence it should not
be regarded as one "for the payment of an indeterminate sum
ascertainable only at date of payment." And, in the reference to
the standard of weight and fineness, the words "equal to" are said
to be synonymous with "of."
In the case of the bonds of the
St. Louis, Iron Mountain
& Southern Railway Company, the government urges that, by
providing for payment in gold coin, the parties showed an
intention
"to protect against depreciation of one kind of money as
compared with another, as for example, paper money compared with
gold, or silver compared with gold,"
and, by providing that the gold coin should be of a particular
standard, they attempted "to assure against payment in coin of
lesser gold content." The clause, it is said,
"does not reveal an intention to protect against a situation
where gold coin no longer circulates and all forms of money are
maintained in the United States at a parity with each other;"
apparently "the parties did not anticipate the existence of
conditions making it impossible and illegal to procure gold coin
with which to meet the obligations." In view of that impossibility,
asserted to exist both in fact and in law, the
Page 294 U. S. 299
government contends that "the present debtor would be excused,
in an action on the bonds, from the obligation to pay in gold
coin," but, as only one term of the promise in the gold clause is
impossible to perform and illegal, the remainder of the obligation
should stand, and thus the obligation "becomes one to pay the
stated number of dollars."
The bondholder in the first case, and the trustees of the
mortgage in the second case, oppose such an interpretation of the
gold clauses as inadequate and unreasonable. Against the contention
that the agreement was to pay in gold coin if that were possible,
and not otherwise, they insist that it is beyond dispute that the
gold clauses were used for the very purpose of guarding against a
depreciated currency. It is pointed out that the words "gold coin
of the present standard" show that the parties contemplated that,
when the time came to pay, there might be gold dollars of a new
standard, and, if so, that "gold coin of the present standard"
would pass from circulation, and it is taken to be admitted by the
government's argument that, if gold coins of a lesser standard were
tendered, they would not have to be accepted unless they were
tendered in sufficient amount to make up the "gold value" for
which, it is said, the contract called. It is insisted that the
words of the gold clause clearly show an intent
"to establish a measure or standard of value of the money to be
paid if the particular kind of money specified in the clause should
not be in circulation at the time of payment."
To deny the right of the bondholders to the equivalent of the
gold coin promised is said to be not a construction of the gold
clause, but its nullification. [
Footnote 3]
Page 294 U. S. 300
The decisions of this Court relating to clauses for payment in
gold did not deal with situations corresponding to those now
presented.
Bronson v.
Rodes, 7 Wall. 229;
Butler v. Horwitz, 7
Wall. 258;
Dewing v. Sears, 11 Wall. 379;
Trebilcock
v. Wilson, 12 Wall. 687;
Thompson v.
Butler, 95 U. S. 694;
Gregory v. Morris, 96 U. S. 619.
See also The Vaughan and
Telegraph, 14 Wall. 258;
The Emily
Souder, 17 Wall. 666. The rulings, upholding gold
clauses and determining their effect, were made when gold was still
in circulation and no act of the Congress prohibiting the
enforcement of such clauses had been passed. In
Bronson v.
Rodes, supra, p.
74 U. S. 251,
the Court held that the Legal Tender Acts of 1862 and 1863, apart
from any question of their constitutionality, had not repealed or
modified the laws for the coinage of gold and silver or the
statutory provisions which made those coins a legal tender in all
payments. It followed, said the Court, that
"there were two descriptions of money in use at the time the
tender under consideration was made, both authorized by law and
both made legal tender in payments. The statute denomination of
both descriptions was dollars, but they were essentially unlike in
nature."
Accordingly, the contract of the parties for payment in one sort
of dollars, which was still in lawful circulation, was sustained.
The case of
Trebilcock v. Wilson, supra, was decided
shortly after the Legal Tender Acts had been held valid. The Court
again concluded (pp.
79 U. S.
695-696) that those acts applied only to debts which
were payable
Page 294 U. S. 301
in money generally, and that there were, "according to that
decision, two kinds of money, essentially different in their nature
but equally lawful." In that view, said the Court, "contracts
payable in either, or for the possession of either, must be equally
lawful, and, if lawful, must be equally capable of
enforcement."
With respect to the interpretation of the clauses then under
consideration, the Court observed, in
Bronson v. Rodes,
supra, p.
74 U. S. 250,
that
"a contract to pay a certain number of dollars in gold or silver
coins is therefore, in legal import, nothing else than an agreement
to deliver a certain weight of standard gold, to be ascertained by
a count of coins, each of which is certified to contain a definite
proportion of that weight."
The Court thought that it was not distinguishable, in principle,
"from a contract to deliver an equal weight of bullion of equal
fineness." That observation was not necessary to the final
conclusion. The decision went upon the assumption
"that engagements to pay coined dollars may be regarded as
ordinary contracts to pay money, rather than as contracts to
deliver certain weights of standard gold."
Id., p.
74 U. S.
251.
In
Trebilcock v. Wilson, supra, where a note was
payable "in specie," the Court said (pp.
79 U. S.
694-695) that the provision did not
"assimilate the note to an instrument in which the amount stated
is payable in chattels, as, for example, to a contract to pay a
specified sum in lumber, or in fruit, or grain;"
that the terms "in specie" were "merely descriptive of the kind
of dollars in which the note is payable, there being different
kinds in circulation, recognized by law;" that they meant "that the
designated number of dollars in the note shall be paid in so many
gold or silver dollars of the coinage of the United States." And in
Thompson v. Butler, supra, pp.
95 U. S.
696-697, the Court adverted to the statement made in
Bronson v. Rodes, and concluded that,
"notwithstanding this, it is a contract to pay money, and none
the less so because
Page 294 U. S. 302
it designates for payment one of the two kinds of money which
the law has made a legal tender in discharge of money
obligations."
Compare Gregory v. Morris, supra.
We are of the opinion that the gold clauses now before us were
not contracts for payment in gold coin as a commodity, or in
bullion, but were contracts for the payment of money. The bonds
were severally for the payment of $1,000. We also think that,
fairly construed, these clauses were intended to afford a definite
standard or measure of value, and thus to protect against a
depreciation of the currency and against the discharge of the
obligation by a payment of lesser value than that prescribed. When
these contracts were made, they were not repugnant to any action of
the Congress. In order to determine whether effect may now be given
to the intention of the parties in the face of the action taken by
the Congress, or the contracts may be satisfied by the payment
dollar for dollar, in legal tender, as the Congress has now
prescribed, it is necessary to consider (1) the power of the
Congress to establish a monetary system and the necessary
implications of that power; (2) the power of the Congress to
invalidate the provisions of existing contracts which interfere
with the exercise of its constitutional authority, and (3) whether
the clauses in question do constitute such an interference as to
bring them within the range of that power.
Second. The Power of the Congress to Establish a Monetary
System. It is unnecessary to review the historic controversy
as to the extent of this power, or again to go over the ground
traversed by the Court in reaching the conclusion that the Congress
may make Treasury notes legal tender in payment of debts previously
contracted, as well as of those subsequently contracted, whether
that authority be exercised in course of war or in time of
Page 294 U. S. 303
peace.
Knox v. Lee,
12 Wall. 457;
Juilliard v. Greenman, 110 U.
S. 421. We need only consider certain postulates upon
which that conclusion rested.
The Constitution grants to the Congress power "To coin Money,
regulate the Value thereof, and of foreign Coin." Article I, § 8,
par. 5. But the Court in the legal tender cases did not derive from
that express grant alone the full authority of the Congress in
relation to the currency. The Court found the source of that
authority in all the related powers conferred upon the Congress and
appropriate to achieve "the great objects for which the government
was framed" -- "a national government, with sovereign powers."
McCulloch v.
Maryland, 4 Wheat. 316,
17 U. S.
404-407;
Knox v. Lee, supra, pp.
79 U. S.
532-536;
Juilliard v. Greenman, supra, p.
110 U. S. 438.
The broad and comprehensive national authority over the subjects of
revenue, finance, and currency is derived from the aggregate of the
powers granted to the Congress, embracing the powers to lay and
collect taxes, to borrow money, to regulate commerce with foreign
nations and among the several states, to coin money, regulate the
value thereof, and of foreign coin, and fix the standards of
weights and measures, and the added express power "to make all laws
which shall be necessary and proper for carrying into execution"
the other enumerated powers.
Juilliard v. Greenman, supra,
pp.
110 U. S.
439-440.
The Constitution "was designed to provide the same currency,
having a uniform legal value in all the States." It was for that
reason that the power to regulate the value of money was conferred
upon the federal government, while the same power, as well as the
power to emit bills of credit, was withdrawn from the states. The
states cannot declare what shall be money, or regulate its value.
Whatever power there is over the currency is vested in the
Congress.
Knox v. Lee, supra, p.
79 U. S. 545.
Another postulate of the decision in that case is that the Congress
has
Page 294 U. S. 304
power
"to enact that the government's promises to pay money shall be,
for the time being, equivalent in value to the representative of
value determined by the coinage acts, or to multiples thereof."
Id., p.
79 U. S. 553.
Or, as was stated in the
Juilliard case,
supra,
p.
110 U. S. 447,
the Congress is empowered
"to issue the obligations of the United States in such form, and
to impress upon them such qualities as currency for the purchase of
merchandise and the payment of debts, as accord with the usage of
sovereign governments."
The authority to impose requirements of uniformity and parity is
an essential feature of this control of the currency. The Congress
is authorized to provide "a sound and uniform currency for the
country," and to "secure the benefit of it to the people by
appropriate legislation."
Veazie Bank v.
Fenno, 8 Wall. 533,
75 U. S.
549.
Moreover, by virtue of this national power, there attaches to
the ownership of gold and silver those limitations which public
policy may require by reason of their quality as legal tender and
as a medium of exchange.
Ling Su Fan v. United States,
218 U. S. 302,
218 U. S. 310.
Those limitations arise from the fact that the law "gives to such
coinage a value which does not attach as a mere consequence of
intrinsic value." Their quality as legal tender is attributed by
the law, aside from their bullion value. Hence, the power to coin
money includes the power to forbid mutilation, melting, and
exportation of gold and silver coin -- "to prevent its outflow from
the country of its origin."
Id., p.
218 U. S.
311.
Dealing with the specific question as to the effect of the Legal
Tender Acts upon contracts made before their passage, that is,
those for the payment of money generally, the Court, in the legal
tender cases, recognized the possible consequences of such
enactments in frustrating the expected performance of contracts-in
rendering them "fruitless, or partially fruitless." The Court
pointed out
Page 294 U. S. 305
that the exercise of the powers of Congress may affect "apparent
obligations" of contracts in many ways. The Congress may pass
bankruptcy acts. The Congress may declare war, or, even in peace,
pass nonintercourse acts, or direct an embargo, which may operate
seriously upon existing contracts. And the Court reasoned that, if
the Legal Tender Acts
"were justly chargeable with impairing contract obligations,
they would not, for that reason, be forbidden unless a different
rule is to be applied to them from that which has hitherto
prevailed in the construction of other powers granted by the
fundamental law."
The conclusion was that contracts must be understood as having
been made in reference to the possible exercise of the rightful
authority of the government, and that no obligation of a contract
"can extend to the defeat" of that authority.
Knox v. Lee,
supra, pp.
79 U. S.
549-551.
On similar grounds, the Court dismissed the contention under the
Fifth Amendment forbidding the taking of private property for
public use without just compensation or the deprivation of it
without due process of law. That provision, said the Court,
referred only to a direct appropriation. section. A new tariff, an
embargo, or a war might bring upon individuals great losses, might,
indeed, render valuable property almost valueless, might destroy
the worth of contracts. "But whoever supposed" asked the Court,
"that, because of this, a tariff could not be changed, or a
nonintercourse act or embargo be enacted, or a war be declared."
The Court referred to the Act of June 28, 1834, by which a new
regulation of the weight and value of gold coin was adopted and
about 6% was taken from the weight of each dollar. The effect of
the measure was that all creditors were subjected to a
corresponding loss, as the debts then due "became solvable with six
percent less gold than was required to pay them before." But it had
never been imagined that there was a taking of private property
without compensation or without due
Page 294 U. S. 306
process of law. The harshness of such legislation, or the
hardship it may cause, afforded no reason for considering it to be
unconstitutional.
Id., pp.
79 U. S.
551-552.
The question of the validity of the Joint Resolution of June 5,
1933, must be determined in the light of these settled
principles.
Third. The Power of the Congress to Invalidate the
Provisions of Existing Contracts Which Interfere with the Exercise
of Its Constitutional Authority. The instant cases involve
contracts between private parties, but the question necessarily
relates as well to the contracts or obligations of states and
municipalities, or of their political subdivisions -- that is, to
such engagements as are within the reach of the applicable national
power. The government's own contracts -- the obligations of the
United States -- are in a distinct category, and demand separate
consideration.
See Perry v. United States, post, p.
294 U. S. 330.
The contention is that the power of the Congress, broadly
sustained by the decisions we have cited in relation to private
contracts for the payment of money generally, does not extend to
the striking down of express contracts for gold payments. The acts
before the Court in the legal tender cases, as we have seen, were
not deemed to go so far. Those acts left in circulation two kinds
of money, both lawful and available, and contracts for payments in
gold, one of these kinds, were not disturbed. The Court did not
decide that the Congress did not have the constitutional power to
invalidate existing contracts of that sort if they stood in the way
of the execution of the policy of the Congress in relation to the
currency. Mr. Justice Bradley, in his concurring opinion, expressed
the view that the Congress had that power and had exercised it.
Knox v. Lee, supra, pp.
79 U. S.
566-567. And, upon that ground, he dissented from the
opinion of the Court in
Trebilcock v. Wilson, supra, p.
79 U. S. 699,
as to the
Page 294 U. S. 307
validity of contracts for payment "in specie." [
Footnote 4] It is significant that Mr.
Justice Bradley, referring to this difference of opinion in the
legal tender cases, remarked (in his concurring opinion) that "of
course" the difference arose "from the different construction given
to the legal tender acts." "I do not understand," he said,
"the majority of the court to decide that an act so drawn as to
embrace, in terms, contracts payable in specie would not be
constitutional. Such a decision would completely nullify the power
claimed for the government. For it would be very easy, by the use
of one or two additional words, to make all contracts payable in
specie."
Here, the Congress has enacted an express interdiction. The
argument against it does not rest upon the mere fact that the
legislation may cause hardship or loss. Creditors who have not
stipulated for gold payments may suffer equal hardship or loss with
creditors who have so stipulated. The former, admittedly, have no
constitutional grievance. And, while the latter may not suffer
more, the point is pressed that their express stipulations for gold
payments constitute property, and that creditors who have not such
stipulations are without that property right. And the contestants
urge that the Congress is seeking not to regulate the currency, but
to regulate contracts, and thus has stepped beyond the power
conferred.
This argument is in the teeth of another established principle.
Contracts, however express, cannot fetter the constitutional
authority of the Congress. Contracts may create rights of property,
but, when contracts deal with a subject matter which lies within
the control of the Congress,
Page 294 U. S. 308
they have a congenital infirmity. Parties cannot remove their
transactions from the reach of dominant constitutional power by
making contracts about them.
See Hudson County Water Co. v.
McCarter, 209 U. S. 349,
209 U. S.
357.
This principle has familiar illustration in the exercise of the
power to regulate commerce. If shippers and carriers stipulate for
specified rates, although the rates may be lawful when the
contracts are made, if Congress through the Interstate Commerce
Commission exercises its authority and prescribes different rates,
the latter control and override inconsistent stipulations in
contracts previously made. This is so, even if the contract be a
charter granted by a state and limiting rates, or a contract
between municipalities and carriers.
New York v. United
States, 257 U. S. 591,
257 U. S.
600-601;
United States v. Village of Hubbard,
266 U. S. 474,
266 U. S. 477,
note.
See also Armour Packing Co. v. United States,
209 U. S. 56,
209 U. S. 80-82;
Union Dry Goods Co. v. Georgia Public Service Corp.,
248 U. S. 372,
248 U. S.
375.
In
Addyston Pipe & Steel Co. v. United States,
175 U. S. 211,
175 U. S.
229-230, the Court raised the pertinent question if
certain kinds of private contracts directly limit or restrain, and
hence regulate, interstate commerce, why should not the power of
Congress reach such contracts equally with legislation of a state
to the same effect? "What sound reason," said the Court,
"can be given why Congress should have the power to interfere in
the case of the state, and yet have none in the case of the
individual? Commerce is the important subject of consideration, and
anything which directly obstructs, and thus regulates, that
commerce which is carried on among the states, whether it is state
legislation or private contracts between individuals or
corporations, should be subject to the power of Congress in the
regulation of that commerce. "
Page 294 U. S. 309
Applying that principle, the Court held that a contract, valid
when made (in 1871), for the giving of a free pass by an interstate
carrier in consideration of a release of a claim for damages could
not be enforced after the Congress had passed the Act of June 29,
1906, 34 Stat. 584.
Louisville & Nashville R. Co. v.
Mottley, 219 U. S. 467.
[
Footnote 5] Quoting the
statement of the general principle in the legal tender cases, the
Court decided that the agreement must necessarily be regarded as
having been made subject to the possibility that, at some future
time, the Congress "might so exert its whole constitutional power
in regulating interstate commerce as to render that agreement
unenforceable or to impair its value." The Court considered it
inconceivable that the exercise of such power
may be hampered or restricted to any extent by contracts
previously made between individuals or corporations. . . . The
framers of the Constitution never intended any such state of things
to exist.
Id., p.
219 U. S. 482.
Accordingly, it has been "authoritatively settled" by decisions of
this Court that no previous contracts or combinations can prevent
the application of the Anti-Trust Acts to compel the discontinuance
of combinations declared to be illegal.
Addyston Pipe &
Steel Co. v. United States, supra; United States v. Southern
Pacific Co., 259 U. S. 214,
259 U. S.
234-235.
See also Calhoun v. Massie,
253 U. S. 170,
253 U. S. 176;
Omnia Commercial Co. v. United States, 261 U.
S. 502,
261 U. S. 509;
Stephenson v. Binford, 287 U. S. 251,
287 U. S.
276.
The principle is not limited to the incidental effect of the
exercise by the Congress of its constitutional authority. There is
no constitutional ground for denying to the Congress the power
expressly to prohibit and invalidate contracts although previously
made, and valid when made,
Page 294 U. S. 310
when they interfere with the carrying out of the policy it is
free to adopt. The exercise of this power is illustrated by the
provision of § 5 of the Employers' Liability Act of 1908 (35 Stat.
65, 66), relating to any contract the purpose of which was to
enable a common carrier to exempt itself from the liability which
the act created. Such a stipulation the Act explicitly declared to
be void. In the
Second Employers' Liability Cases,
223 U. S. 1,
223 U. S. 52, the
Court decided that, as the Congress possessed the power to impose
the liability, it also possessed the power "to insure its efficacy
by prohibiting any contract, rule, regulation, or device in evasion
of it." And this prohibition the Court has held to be applicable to
contracts made before the act was passed.
Philadelphia, B.
& W. R. Co. v. Schubert, 224 U. S. 603. In
that case, the employee suing under the Act was a member of the
"Relief Fund" of the railroad company under a contract of
membership, made in 1905 for the purpose of securing certain
benefits. The contract provided that an acceptance of those
benefits should operate as a release of claims, and the company
pleaded that acceptance as a bar to the action. The Court held that
the Employers' Liability Act supplied the governing rule, and that
the defense could not be sustained. The power of the Congress in
regulating interstate commerce was not fettered by the necessity of
maintaining existing arrangements and stipulations which would
conflict with the execution of its policy. The reason is manifest.
To subordinate the exercise of the federal authority to the
continuing operation of previous contracts would be to place, to
this extent, the regulation of interstate commerce in the hands of
private individuals, and to withdraw from the control of the
Congress so much of the field as they might choose by "prophetic
discernment" to bring within the range of their agreements. The
Constitution recognizes no such limitation.
Id., pp.
224 U. S.
613-614.
See
Page 294 U. S. 311
also United States v. Southern Pacific Co., supra; Sproles
v. Binford, 286 U. S. 374,
286 U. S.
390-391;
Federal Radio Commission v. Nelson Brothers
Co., 289 U. S. 266,
289 U. S.
282.
The same reasoning applies to the constitutional authority of
the Congress to regulate the currency and to establish the monetary
system of the country. If the gold clauses now before us interfere
with the policy of the Congress in the exercise of that authority,
they cannot stand.
Fourth. The Effect of the Gold Clauses in Suit in Relation
to the Monetary Policy Adopted by the Congress. Despite the
wide range of the discussion at the bar and the earnestness with
which the arguments against the validity of the Joint Resolution
have been pressed, these contentions necessarily are brought, under
the dominant principles to which we have referred, to a single and
narrow point. That point is whether the gold clauses do constitute
an actual interference with the monetary policy of the Congress in
the light of its broad power to determine that policy. Whether they
may be deemed to be such an interference depends upon an
appraisement of economic conditions and upon determinations of
questions of fact. With respect to those conditions and
determinations, the Congress is entitled to its own judgment. We
may inquire whether its action is arbitrary or capricious -- that
is, whether it has reasonable relation to a legitimate end. If it
is an appropriate means to such an end, the decisions of the
Congress as to the degree of the necessity for the adoption of that
means is final.
McCulloch v. Maryland, supra, pp.
17 U. S.
421-423;
Juilliard v. Greenman, supra, p.
110 U. S. 450;
Stafford v. Wallace, 258 U. S. 495,
258 U. S. 521;
Everard's Breweries v. Day, 265 U.
S. 545,
265 U. S. 559,
265 U. S.
562.
The Committee on Banking and Currency of the House of
Representatives stated in its report recommending
Page 294 U. S. 312
favorable action upon the Joint Resolution (H.R. Rep. No. 169,
73d Cong. 1st Sess.):
"The occasion for the declaration in the resolution that the
gold clauses are contrary to public policy arises out of the
experiences of the present emergency. These gold clauses render
ineffective the power of the Government to create a currency and
determine the value thereof. If the gold clause applied to a very
limited number of contracts and security issues, it would be a
matter of no particular consequence; but, in this country,
virtually all obligations, almost as a matter of routine, contain
the gold clause. In the light of this situation, two phenomena
which have developed during the present emergency make the
enforcement of the gold clauses incompatible with the public
interest. The first is the tendency which has developed internally
to hoard gold; the second is the tendency for capital to leave the
country. Under these circumstances, no currency system, whether
based upon gold or upon any other foundation, can meet the
requirements of a situation in which many billions of dollars of
securities are expressed in a particular form of the circulating
medium, particularly when it is the medium upon which the entire
credit and currency structure rests."
And the Joint Resolution itself recites the determination of the
Congress in these words: [
Footnote
6]
"Whereas the existing emergency has disclosed that provisions of
obligations which purport to give the obligee a right to require
payment in gold or a particular kind of coin or currency of the
United States, or in an amount in money of the United States
measured thereby, obstruct the power of the Congress to regulate
the value of the money of the United States, and are inconsistent
with the
Page 294 U. S. 313
declared policy of the Congress to maintain at all times the
equal power of every dollar, coined or issued by the United States,
in the markets and in the payment of debts."
Can we say that this determination is so destitute of basis that
the interdiction of the gold clauses must be deemed to be without
any reasonable relation to the monetary policy adopted by the
Congress?
The Congress, in the exercise of its discretion, was entitled to
consider the volume of obligations with gold clauses, as that fact,
as the report of the House Committee observed, obviously had a
bearing upon the question whether their existence constituted a
substantial obstruction to the congressional policy. The estimates
submitted at the bar indicate that, when the Joint Resolution was
adopted, there were outstanding seventy-five billion dollars or
more of such obligations, the annual interest charges on which
probably amounted to between three and four billion dollars. It is
apparent that, if these promises were to be taken literally as
calling for actual payment in gold coin, they would be directly
opposed to the policy of Congress, as they would be calculated to
increase the demand for gold, to encourage hoarding, and to
stimulate attempts at exportation of gold coin. If there were no
outstanding obligations with gold clauses, we suppose that no one
would question the power of the Congress, in its control of the
monetary system, to endeavor to conserve the gold resources of the
Treasury, to insure its command of gold in order to protect and
increase its reserves, and to prohibit the exportation of gold coin
or its use for any purpose inconsistent with the needs of the
Treasury.
See Ling Su Fan v. United States, supra. And, if
the Congress would have that power in the absence of gold clauses,
principles beyond dispute compel the conclusion that private
parties, or states or municipalities,
Page 294 U. S. 314
by making such contracts, could not prevent or embarrass its
exercise. In that view of the import of the gold clauses, their
obstructive character is clear.
But, if the clauses are treated as "gold value" clauses -- that
is, as intended to set up a measure or standard of value if gold
coin is not available -- we think they are still hostile to the
policy of the Congress, and hence subject to prohibition. It is
true that, when the Joint Resolution was adopted on June 5, 1933,
while gold coin had largely been withdrawn from circulation and the
Treasury had declared that "gold is not now paid, nor is it
available for payment, upon public or private debts," [
Footnote 7] the dollar had not yet been
devalued. But devaluation was in prospect, and a uniform currency
was intended. [
Footnote 8]
Section 43 of the Act of May 12, 1933 (48 Stat. 51), provided that
the President should have authority, on certain conditions, to fix
the weight of the gold dollar as stated, and that its weight as so
fixed should be "the standard unit of value" with which all forms
of money should be maintained "at a parity." The weight of the gold
dollar was not to be reduced by more than 50 percentum. The Gold
Reserve Act of 1934 (January 30, 1934, 48 Stat. 337), provided that
the President should not fix the weight of
Page 294 U. S. 315
the gold dollar at more than 60% of its present weight. The
order of the President of January 31, 1934, fixed the weight of the
gold dollar at 15 5/21 grains nine-tenths fine as against the
former standard of 25 8/10 grains nine-tenths fine. If the gold
clauses interfered with the congressional policy, and hence could
be invalidated, there appears to be no constitutional objection to
that action by the Congress in anticipation of the determination of
the value of the currency. And the questions now before us must be
determined in the light of that action.
The devaluation of the dollar placed the domestic economy upon a
new basis. In the currency as thus provided, states and
municipalities must receive their taxes, railroads their rates and
fares, public utilities their charges for services. The income out
of which they must meet their obligations is determined by the new
standard. Yet, according to the contentions before us, while that
income is thus controlled by law, their indebtedness on their "gold
bonds" must be met by an amount of currency determined by the
former gold standard. Their receipts, in this view, would be fixed
on one basis, their interest charges, and the principal of their
obligations, on another. It is common knowledge that the bonds
issued by these obligors have generally contained gold clauses, and
presumably they account for a large part of the outstanding
obligations of that sort. It is also common knowledge that a
similar situation exists with respect to numerous industrial
corporations that have issued their "gold bonds" and must now
receive payments for their products in the existing currency. It
requires no acute analysis or profound economic inquiry to disclose
the dislocation of the domestic economy which would be caused by
such a disparity of conditions in which, it is insisted, those
debtors under gold clauses should be required to pay $1.69
Page 294 U. S. 316
in currency while respectively receiving their taxes, rates,
charges, and prices on the basis of $1 of that currency.
We are not concerned with consequences, in the sense that
consequences, however serious, may excuse an invasion of
constitutional right. We are concerned with the constitutional
power of the Congress over the monetary system of the country, and
its attempted frustration. Exercising that power, the Congress has
undertaken to establish a uniform currency, and parity between
kinds of currency, and to make that currency, dollar for dollar,
legal tender for the payment of debts. In the light of abundant
experience, the Congress was entitled to choose such a uniform
monetary system, and to reject a dual system, with respect to all
obligations within the range of the exercise of its constitutional
authority. The contention that these gold clauses are valid
contracts and cannot be struck down proceeds upon the assumption
that private parties, and states and municipalities, may make and
enforce contracts which may limit that authority. Dismissing that
untenable assumption, the facts must be faced. We think that it is
clearly shown that these clauses interfere with the exertion of the
power granted to the Congress, and certainly it is not established
that the Congress arbitrarily or capriciously decided that such an
interference existed.
The judgment and decree, severally under review, are
affirmed.
No. 270. Judgment affirmed.
Nos. 471 and 472. Decree affirmed.
MR. JUSTICE McREYNOLDS, MR. JUSTICE VAN DEVANTER, MR. JUSTICE
SUTHERLAND, AND MR. JUSTICE BUTLER dissent.
See post, p.
294 U. S.
361.
* No. 270,
Norman v. Baltimore & Ohio R. Co.; Nos.
471 and 472,
United States v. Bankers Trust Co.; No. 531,
Nortz v. United States, post, p.
294 U. S. 317, and
No. 532,
Perry v. United States, post, p.
294 U. S. 330,
popularly called the "Gold Clause cases," were disposed of in three
opinions (
post, pp.
294 U. S. 291,
294 U. S. 323,
and
294 U. S.
346). MR. JUSTICE STONE filed a concurring opinion in
the
Perry case,
post, p.
294 U. S. 358.
The dissenting opinion,
post, p.
294 U. S. 361,
applies to all of the cases.
[
Footnote 1]
"
JOINT RESOLUTION"
"To assure uniform value to the coins and currencies of the
United States."
"Whereas the holding of or dealing in gold affect the public
interest, and are therefore subject to proper regulation and
restriction; and"
"Whereas the existing emergency has disclosed that provisions of
obligations which purport to give the obligee a right to require
payment in gold or a particular kind of coin or currency of the
United States, or in an amount in money of the United States
measured thereby, obstruct the power of the Congress to regulate
the value of the money of the United States, and are inconsistent
with the declared policy of the Congress to maintain at all times
the equal power of every dollar, coined or issued by the United
States, in the markets and in the payment of debts. Now therefore
be it"
"
Resolved by the Senate and House of Representatives of the
United States of America in Congress assembled, That (a) every
provision contained in or made with respect to any obligation which
purports to give the obligee a right to require payment in gold or
a particular kind of coin or currency, or in an amount in money of
the United States measured thereby, is declared to be against
public policy, and no such provision shall be contained in or made
with respect to any obligation hereafter incurred. Every
obligation, heretofore or hereafter incurred, whether or not any
such provision is contained therein or made with respect thereto,
shall be discharged upon payment, dollar for dollar, in any coin or
currency which at the time of payment is legal tender for public
and private debts. Any such provision contained in any law
authorizing obligations to be issued by or under authority of the
United States, is hereby repealed, but the repeal of any such
provision shall not invalidate any other provision or authority
contained in such law."
"(b) As used in this resolution, the term 'obligation' means an
obligation (including every obligation of and to the United States,
excepting currency) payable in money of the United States, and the
term 'coin or currency' means coin or currency of the United
States, including Federal Reserve notes and circulating notes of
Federal Reserve banks and national banking associations."
"Sec. 2. The last sentence of paragraph (1) of subsection (b) of
§ 43 of the Act entitled 'An Act to relieve the existing national
economic emergency by increasing agricultural purchasing power, to
raise revenue for extraordinary expenses incurred by reason of such
emergency, to provide emergency relief with respect to agricultural
indebtedness, to provide for the orderly liquidation of joint-stock
land banks, and for other purposes,' approved May 12, 1933, is
amended to read as follows:"
"All coins and currencies of the United States (including
Federal Reserve notes and circulating notes of Federal Reserve
banks and national banking associations) heretofore or hereafter
coined or issued, shall be legal tender for all debts, public and
private, public charges, taxes, duties, and dues, except that gold
coins, when below the standard weight and limit of tolerance
provided by law for the single piece, shall be legal tender only at
valuation in proportion to their actual weight."
"Approved June 5, 1933, 4:40 p.m."
[
Footnote 2]
One appeal was allowed by the District Judge and the other by
the Circuit Court of Appeals.
[
Footnote 3]
As illustrating the use of such clauses as affording a standard
or measure of value, counsel refer to Article 262 of the Treaty of
Versailles with respect to the monetary obligations of Germany
which were made payable in gold coins of several countries, with
the stated purpose that the gold coins mentioned "shall be defined
as being of the weight and fineness of gold as enacted by law on
January 1, 1914." Reference is also made to the construction of the
gold clause in the bonds before the House of Lords in
Feist,
appellant, and Societe Intercommunale Belge d'Electricite,
Respondents, L.R. (1934) A.C. 161, 173, and to the decisions
of the Permanent Court of International Justice in the cases of the
Serbian and Brazilian loans (Publications of the Permanent Court of
International Justice, Series A, Nos. 20/21), where the bonds
provided for payment in gold francs.
[
Footnote 4]
Mr. Justice Miller also dissented in
Trebilcock v.
Wilson, 12 Wall., pp.
79 U. S. 699-700, upon the ground
"that a contract for gold dollars, in terms, was in no respect
different, in legal effect, from a contract for dollars without the
qualifying words 'specie' or 'gold,' and that the legal tender
statutes had therefore the same effect in both cases."
[
Footnote 5]
Compare New York Central & Hudson R. Co. v. Gray,
239 U. S. 583;
Calhoun v. Massie, 253 U. S. 170,
253 U. S.
176.
[
Footnote 6]
See note 1
[
Footnote 7]
Treasury Statement of May 26, 1933.
[
Footnote 8]
The Senate Committee on Banking and Currency, in its Report of
May 27, 1933, stated:
"By the Emergency Banking Act and the existing Executive orders,
gold is not now paid, or obtainable for payment, on obligations
public or private. By the Thomas amendment, currency was intended
to be made legal tender for all debts. However, due to the language
used, doubt has arisen whether it has been made legal tender for
payments on gold clause obligations, public and private. This doubt
should be removed. These gold clauses interfere with the power of
Congress to regulate the value of the money of the United States,
and the enforcement of them would be inconsistent with existing
legislative policy."
Sen.Rep. No. 99, 73d Cong., 1st Sess.