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February 19, 1925
My dear Mother:
I have tried to answer your very interesting letter before. I thought
I might have time to do it in the Senate yesterday, but I did not.
Bob and Marjorie were here for a few days last week. Bob had business
in one of the Courts here. We appreciated them very much. They told
about their fine visit with you.
I know that you will be happy with me concerning a gift made to me
yesterday. It was a printed copy of the Farewell Address of President
Washington, bound in leather and tooled with my name, as well as in-
scribed by the President of the Sanate and the Secretery of the Senate.
This should be a good family heirloom if it does not get lost, strayed,
or stolen.
You are reading the papers this morning and commenting on the Gold
Decision, I know. I do not like to be in disagreement with the Supreme
Court, but, just between us. I am disappointed in certain members of
the majority, especlally one of them.
His opinion indicates to me
that he really belonged with the minority, which would then have been
the majority.
Now, in the short space of one year, our Supreme Court has changed its
position from the strong protector of the citizen's property and rights
against his Government to the supporter of the Government against the
citizen respecting property that consists of contracts.
Only June 4, 1934, this same Court, passing on the war risk policies
of veterans, held:
"On the other hand War Risk Policies being contracts
are property and create vested rights.
"The repeal, (referring to the Economy Act) if valid,
abrogated outstanding contracts; and relieved the
United States from all liability on the contracts
without taking compensations to the beneficiaries.
"The fifth Amendment commands that property be not
taken without making just compensation Valid con-
tracts are property, whether the obligor be a pri-
vate individual, a municipality, a State or the United
States. Rights against the United States arising out
of a contract with it are protected by the Fifth amend-
ment.
Punctillious fulfillment of contractual obligations
essential to the maintenance of the credit of public
as well as private debtors.
"The United States are as much bound by their contracts
as are individuals. If they repudiate their obligations,
it is as such repudiation, with all the wrong and re-
proach that term implies, as it would be if the repudia-
tor had been a State, or a municipality, or a citizen."
Of course, there is an "out", for in that same case reference was
made to "paramount power", and they hold:
so Congress had the power to authorize the
Bureau of War Risk Insurance to issue them, the due
process clause prohibits the United States from annulling
them, unless, indeed, the notion taken falls within the
federal police power or some other paramount
power.
Yesterday, the Court softened and yielded under the pressure of ex-
pediency and held only this about the contract with the citizen:
"Contracts may create rights of property, but when con-
tracts deal with a subject matter which lies within the
control of Congress, they have a congenital infirmity
(Something different from vested right, isn't it?):
"Parties cannot resolve their transactions from the
reach of dominant constitutional power by making con-
tracts about them.
And against
"There is no constitutional ground for denying to the
Congress the power expressly to prohibit and invali-
date contracts although previously made, and valid when
made, when they interfere with the carrying out of the
policy it is free to adopt."
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Between us, I think that the power to borrow the money from the
citizens twenty years ago and promise to pay it back was just
as dominant a power as the power to regulate the coinage exer-
cised last year, and that, from the point of view of ethics,
honesty, reliability, as well as from the technical point of
view of what is the exercise of paramount power, those promises
made twenty years ago could not be invalidated by the carrying
out of the policy to reduce the content of gold in the policy.
However, the higher authority has held otherwise.
Mr. Justice Stone apparently did not agree with the majority
in respect to the fundamental question involved, for he said:
"It will not benefit this plaintiff, to whom
we deny any remedy, to be assured that he has
an inviolable right to performance of the gold
clause."
On the whole, I think that the decision was based on expediency,
and that it will come back to plague the Court in the future.
So far as we in the Congress are concerned it increases our re-
sponsibilities because it, in effect, tells us that the people
cannot escape the evil effects of an unconstitutional act.
This case practically tells the world that an unconstitutional
act was adopted, but that the people who suffer from it have
no remedy.
Remember, this letter is for you and not to be published. I
may sometime talk about this matter publicly, but up to date
I have kept my thoughts to myself.
Best love to you from us both.
Your loving son,
(I am sending copies of this to Bob and Edward)