Undermining The Constitution A HISTORY OF LAWLESS GOVERNMENT (Part 13)

By Thomas James Norton

THE CONSERVATION OF SOIL IN FARMING STATES BY THE FEDERAL GOVERNMENT IS NOT AUTHORIZED BY THE CONSTITUTION

With the trickiness in the use of language which characterized the National Industrial Recovery Act, the Agricultural Adjustment Act, and the Bituminous Coal Act (all three held unconstitutional), to make believe that they were not what they were, Congress passed the second AAA and called it an act for "Soil Conservation," proceeding thereunder to irrigate the farming land with money of the taxpayers which it had been prevented by the decision of the Supreme Court from distributing under the first act. The second AAA was as lawless as the first.

For more than a decade Congress has been sending money to the farmers ostensibly to help them conserve their soil, an obligation resting upon them in the first instance, and upon the State when the erosion (or whatever is the matter) is so widespread as to call for the exertion of the police power, of which power the United States has none.

Illegal subsidies to agriculture of appalling magnitude

The magnitude of this drain upon the taxpayers of the country may be understood from the fact that in 1946

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Washington gave to the farmers for "soil conservation" $57,000,000.
The total of subsidies to agriculture in 1947, as reported (1948) by the Secretary of the Treasury (p. 429), was $2,299,000,000. Yet in the Presidential campaign of 1948 the candidates of all parties promised the farmer more! The returns indicated that he voted for the party that had delivered.
And that misuse of money favored a powerful voting class who were marketing wheat at $3 a bushel, corn at about the same price, oats at a similar price, and livestock at rates so high that restaurants were charging their patrons $4 for a sirloin steak!
Through the years, $1 a bushel for wheat, 75¢ for corn, and the same price for oats were regarded on the land as good prices.
Of course, as before said, the conservation of soil is none of the business of the United States. It is the obligation of the landowner to take care of his land. He had done that from the time the Pilgrims cleared away the timber in the Massachusetts Colonies. He mastered rivers without knowing that he should have the help of a Big or Little T.V.A., and he opened roads wherever they were needed without a Federal Highway Act.
Why Constitution for independent individual
The men who wrote the Constitution being of that kind, they never gave authority to Congress to take the money of one class by taxation and pass it along with a bow and a smile to another group of great voting power. By Magna Carta their forebears made the King promise to keep hands off industry and trade, except under the necessity

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of war. Hence, the Constitution contains no grant of power to Congress to pass anything of even the remotest resemblance to the National Industrial Recovery Act. And as they extracted a pledge from King John to let trade alone, the Constitution authorizes Congress only to "regulate" commerce carried on by men, not to engage in commerce by any branch of government, or by a Fascist corporation set up by it. The early American tilled his land without expecting any help from anybody, and he had no idea that Government could by either punitive or predatory taxation place any limit on the fruits of his industry. Accordingly, no grant for paternalism or imperialism was given by the Constitution to Congress.
Soil conservation important, but not to Washington
To be sure, the conservation of the soil of the farmer may become in some localities of so burdensome a nature that it ceases to be the obligation of the individual. Where erosion or some other peril is so widely extended and affects so many owners and so much property that it cannot be dealt with successfully by individuals or by a group of them, then it becomes the duty of the State, either to assist in the task of prevention or take it over altogether. But the United States has no police power. And the Tenth Amendment was designed to prevent it forever from usurping any.
"Soil conservation" is a deceiving term, like "commerce" in the National Labor Relations Act. It is a cover for subsidies from the pockets of the country to those on the land, a transfer of money from one class to another which the Supreme Court held could not be made when it pro-

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nounced the first Agricultural Adjustment Act unconstitutional.
As mentioned in a preceding chapter, the farmer has been put in a bad situation by the mismanagement in Government which ballooned his costs and those of everybody else beyond all endurance. But that must be mended by removal of the cause, not by subsidies, which the taxpayers cannot carry indefinitely, even if they were legal.
Procedure provided by Constitution adequate for conservation
In a condition of erosion, or of a "dust bowl," involving several States, they have open to them the "Agreement or Compact with another State" authorized by the closing words of Article I of the Constitution, with "the Consent of Congress." The seven States in the basin of the Colorado River made use of this provision to work out an agreement for a fair division of the valuable water of that stream. So when the erosion or other trouble is beyond the ability of the landowner, it becomes the duty of the State to take hold. And when the difficulty belongs to more than one State, there is a constitutional way to solve the problem.
But the subject is as far beyond the constitutional field of Congress as are the sands of the Sahara.
On July 22,1947, the Associated Press reported that the House of Representatives "had voted twice to eliminate the benefit-payment program for 1948 and sharply cut back payments on this year's crops." The Senate-House conference group agreed "to continue the main farm program into 1948." In addition to that, it agreed to a fund of $265,000,000 "to make the benefit payments and meet other costs of the farm crop program on the 1947 crop."

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The "other costs" were $24,000,000 to pay the bureaucrats "for expenses of farmer committeemen who plan and check the programs"!
The farm bill compromise would provide $960,000,000 "for agricultural purposes during the fiscal year 1948 in comparison with last year's expenditures of $2,275,000,000" President Truman asked for $1,188,000,000.
National government without feeling for taxpayers
The disrespect for the rights and property of the people in general, in order to favor highly organized voting groups, is, in addition to being unconstitutional, morally wrong. In the Congress for the last decade and a half, in the White House, in the legislatures, in the city councils, everywhere in public office where there is authority to spend, there has developed, through indifference or incompetence of those who should have been on guard, the grossest unconcern for the taxpayer. As a capital illustration of this, there is cited the veto by the President of a tax-reduction bill passed by the new Congress in 1947 which had been voted into power on a platform promising relief from exorbitant taxation.^[1]
In the concluding chapter of this work it is shown that we must take the President out of this kind of politics by returning to the strictest observance of the method of election prescribed by the Constitution.

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1. The ruthless course of the Government at Washington respecting the taxpayers brings to mind the denunciation by Saint Simon of the Bourbon monarchy, which brought on by taxes the French Revolution, that it "has scourged, rather than governed, the state."

From the fine folks over at Barefoot's world.  
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Pay a visit to them.  It's a great site.

Liberty?  You have the right to complain.  Nothing more.

That right too will soon end.

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• FEDERALIST PAPERS No. 49. Method of Guarding Against the Encroachments of Any One Department of Government by Appealing to the People Through a Convention.

Undermining The Constitution A HISTORY OF LAWLESS GOVERNMENT (Part 10)

 (Photo credit: Wikipedia)

By Thomas James Norton

FIVE MONTHS AFTER THE INCORPORATION OF TENNESSEE VALLEY AUTHORITY, IN 1933, TWO MEMBERS OF THE CABINET OF THE PRESIDENT, AND THE HEAD OF THE FEDERAL RELIEF ADMINISTRATION PROCURED A CHARTER IN DELAWARE FOR THE FEDERAL SURPLUS COMMODITIES CORPORATION, CAPITALIZED BY THE MONEY OF THE TAXPAYERS

The next excursion of government beyond its constitutional domain was in October, 1933, after the Tennessee Valley Authority had been incorporated, and its aims were as general as human affairs.

Secretary of Agriculture Henry A. Wallace, Secretary of the Interior Harold L. Ickes, and Harry Hopkins, Head of the Federal Relief Administration, took out a charter under the ultraliberal law of Delaware for the Federal Surplus Commodities Corporation. The corporation, the charter recited, would have "perpetual existence."

Up to that time the "undesirable citizens," the persons of "predatory wealth," the "economic royalists," and others who became incorporators never thought of asking for their creatures more than half a century of life or, at most, 99 years. And if they organized under the laws of Dela-

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ware, they were, in the eyes of many, immediately suspect. But here the anointed in Government went to Delaware and took out a charter to last forever, until "the wreck of matter and the crush of worlds."
The tip-top corporation of Fascism
In part, the purposes of the charter were as follows (italics added):
1. "To relieve the existing economic emergency by the expansion of markets."
2. To "purchase, store, handle and process surplus agricultural and other commodities."
3. To perform "all functions" that may be "delegated to it under acts of Congress."
(By not authorizing Congress to delegate any functions to any person or group, the Constitution thereby forbids delegation. Yet delegation was done.)
4. "To accept grants ... of monies, commodities, lands or other property of any class, nature or description."
5. To "carry on any or all of its operations and business without restriction or limit."
6. To "hold, own, mortgage, sell, convey" property of "every class."
7. To borrow money on the commodities in its possession.
8. "To encourage the farmers to co-operate in any plan which calls for the reduction of acreage."
9. To engage in warehousing and exporting.
To incur debt in every conceivable way
10. "To borrow money," issue bonds and "all other kinds of obligations . . . without limit."

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11. "To loan money, to buy, discount, sell or rediscount or otherwise deal in notes" and every sort of paper.
12. "To take and hold ... by bequest, devise, gift, purchase, lease or otherwise" anything.
13. "To guarantee" or otherwise deal in shares of "any other corporation."
And so on for six more paragraphs of specifications and powers.
No engineers of high finance ever piled a pyramid of corporations with powers to match those in scope or absoluteness.
And, of course, none of those activities is any constitutional business of the United States.^[1]
Some of the Fascist activities exhibited
Yet the corporation has been acting with devilish diligence. It has had a part of several grain crops deteriorating in storage, and it has released wheat -- the prime food of man -- to feed the pigs.
In July, 1944, the Associated Press reported the War Food Administration as saying that it had purchased
1. In October, 1949, the Fairbanks Daily News-Miner published the secret draft of a charter for a Fascist company to be named The Alaska Development Corporation, which was in the main a copy of the Delaware charter of The Federal Commodities Surplus Corporation. The copy was taken to Alaska by an assistant secretary of the Interior and shown confidentially to a few persons, probably for consultative purposes.
The document went "all out" for everything -- construction of electric power systems; loans of money of the taxpayers for any purpose; construction of railroads; operation of ships, docks, and all the equipment of the sea; aid to agriculture and to culture -- nothing in the way of uplift is to be without provision. And, of course, the capital of the corporation (like that of the Commodities Corporation) will be taken by the United States out of the pockets of its taxpayers.
The plan for "the electrification of America" and the superseding of the Constitution by the Fascist corporations of Socialism is being driven with a vigor which the believers in the Republic lack.

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10,500 carloads of eggs "for price support between January 1 and July 15."
No clause of the Constitution authorizes the support of prices by the Government of the United States for the benefit of farmers at the expense of the taxpayers. That point was passed upon by the Supreme Court when it held violative of constitutional limitations the original Agricultural Adjustment Act as an attempt to gather money for one class by taxing another.
In August, 1944, the dispatches told of the purchase in the Northwest by the War Food Administration of eggs at $9 a case of 30 dozen each, which it was obliged to sell at 20¢ to 50¢ a case. It dumped 14 railroad carloads of spoiled eggs. It was offering 14 more carloads to the trade. It had sold 26 carloads, about 16,000 cases, for hog feed at 5¢ a case. As stated above, the Government had paid $9 a case for them.
A consignment of 6 carloads was held in Chicago for orders from Washington to destroy them, until freight charges had accumulated to $4,200. But it was the money of the taxpayers!
The egg in its relation to great Government
The Associated Press reported in 1944 that a deputy director of War Food Administration testified before a committee of Congress that he "wished he knew" what could be done "with between $100,000,000 and $150,000,000 worth of eggs bought this year."
"Do you mean to say that the American taxpayers have invested between 100 and 150 million dollars in eggs we have no use for?" demanded the Chairman of the Committee.

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"That's right," answered the witness.
Losses of taxpayers' money on ventures of the kind described were reported as to nearly every agricultural commodity. The Federal Surplus Commodities Corporation and its subsidiaries became possessed, by using the money of the taxpayers, of many surpluses of enormous -- almost fabulous -- cost, which they had to dump. The "ever-normal granary" of Henry A. Wallace, one of the incorporators of the Federal Surplus Commodities Corporation, turned out upon trial to be an instrumentality for feeding wheat to pigs. And Harry L. Hopkins, another of the incorporators, never made any apologies, probably because of the belief which he once expressed that "the people are too damned dumb to understand."
A potato famine resulting from abundance
On December 31, 1946, the Associated Press reported from Washington that "millions of bushels of frozen and rotten potatoes will be dumped under Government instructions." The Department of Agriculture had underwritten the 1946 crop up to 90 per cent of parity. The crop turned out to be 100,000,000 bushels larger than the "planners" had expected. Then prices tumbled. The Department loaned money to the growers at the guaranteed price and asked them to store the potatoes until the price should rise. It did not rise. The great loss came from those loan-stored potatoes. The dispatch carefully did not tell what price the Government guaranteed. Here is an illustration of the worst feature of centralized authority -- its deceit, its adroit concealment of facts, its purposeful misleading of the public.

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The loss from damp, vermin, and deterioration of wheat and other grains which the Corporation ordered held in storage for better rates, the while paying out of the pocket of the taxpayers unjustifiable prices to the farmer, was enormous, and the true extent of it will probably never be known.
One of the great "plungers" in debt
The Federal Surplus Commodities Corporation had a capitalization of $100,000,000, and all the stock was owned by the United States -- which has no authority from the Constitution to own stock in any corporation. By the acts of 1938 and 1945 it was empowered to borrow up to $4,750,000,000 on obligations guaranteed by the United States, which has no authority from the Constitution to guarantee the borrowings of any corporation.
The Associated Press reported from Washington on May 23, 1949, that the total of subsidies provided for favored classes by the taxpayers without their permission for 17 years amounted to $15,571,060,000, of which $10,300,000,000 went to farmers. No clause in the Constitution authorizes Congress to appropriate money for such purposes.
Unquestionably the farmer has been put in a very serious predicament by the high costs of help on the land, and the high costs of labor going into farm implements, machinery, fertilizer, and all the other things that he has to buy. Those costs were increased out of all reason by the aid of the administration at Washington to the monopoly of organized labor, now so powerful at the polls that it holds the President captive.

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Rejection of external government needed
But the cure for the grievances of the farmer, and of every other citizen weighted down by the operation of indefensibly high wages, is not the bestowal of subsidies from the taxpayers of the country, but the removal of the cause -- the rejection for the future of the external government of the United States, and the exclusion of the President from the field of low politics.
And the Federal Surplus Commodities Corporation is only one of a number, the magnitude of the spending of which nobody certainly knows. At least, that is what is gathered from the reports of Senator Byrd on his efforts to find out what is doing by the spenders and wasters.
Congress, by setting up such activities in competition with man, assailed his liberty to live, unhampered and unannoyed, which it was its duty to safeguard.
No such corporation in Jackson's administration
On the proper and only place of Government in the affairs of men, President Andrew Jackson said more than a century and a decade ago:
"The duty of Government is to leave Commerce to its own capital and credit, as well as other branches of business, protecting all in their legal rights, giving exclusive privilege to none."
That cogent statement contains the American philosophy laid down in the Declaration of Independence, that Government is limited strictly to giving protection to men from men and to men from Government, and it is entirely without grant from the Constitution of any paternal authority.

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The idea of President Jackson and other right-thinking Americans, that Government has no place in business, is sustained by the report of the Commodity Credit Corporation for the last fiscal year. A dispatch from Washington dated September 26, 1949, and sent by the United Press, said that the fund for the support of prices of farm commodities for the year had been set at $500,000,000. That was altogether wiped out, and an additional "red" expenditure was made of $170,000,000.
The "planner" and the bagatelle
The loss of cash in price support was $254,000,000
Inventory losses were $416,000,000
Losses on potatoes were $203,886,000
Losses on peanuts were $23,000,000
Losses on corn were $99,000,000
Losses on cotton were $36,000,000
On wheat there was written off as lost $56,000,000, of $529,000,000 invested.
Of $81,000,000 in eggs, $38,000,000 was written off.
Of $191,000,000 in linseed and other oils, $73,000,000 was written off.
The dispatch stated, without figures, that the report showed inventory losses on wool, peas, beans, barley, resin, turpentine, prunes, raisins, grains, sorghums, and tobacco.
Wires of the bureaus crossed
Under a multilateral agreement at Geneva in 1947, large imports of potatoes at half tariff rates came to the United States in 1949. That action of the Department of State was negatived by the Department of

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Agriculture in buying 90 million bushels of domestic potatoes in 1948 to make prices higher -- keeping them out of consumption.
In like manner, 60 million pounds of butter imported from Denmark in 1949 was checkmated through the purchase by the Department of Agriculture, for price support, of 93 million, 305 pounds of domestic butter!
A recent dispatch from Washington quoted a member of the Government as saying that its business has become so large that it is next to impossible to handle it. But if the Government would abandon nongovernmental activities and consider the Constitution before taking up something new, its work would be cut by three fourths or more.
Former Secretary Morgenthau considers the situation
Contemplating the enormous volume of foodstuffs kept back from consumers in the United States by the "planning" of the Federal Surplus Commodities Corporation and other bureaus, Henry Morgenthau Jr., former Secretary of the Treasury, wrote an article in October, 1949, advocating the outright gift of the great quantities in storage to the needy in the Far East and the Near East. He gave a "partial listing" of the stocks of goods in possession of the Federal Surplus Commodities Corporation, which, after taking over all the available storage room in the country, must now "finance the building of much new storage capacity." He wrote that "the quantities of farm products which have been bought and paid for with the taxpayers' money, and which continue to be stored in warehouses at the taxpayers' expense, are so tremendous as to be almost beyond belief."

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"It costs the United States Government," he added, "$237,000 a day just for storage and carrying charges on these commodities." Those charges now aggregate, he said, $76,281,725.
A table showing unconstitutional prodigality
The following are "partial listings" by Mr. Morgenthau of commodities in storage, which will be increased, he thinks, from the harvests of 1949 and 1950:

Commodity	Quantity		Value (Cost)
Wheat	190,600,000	bu.	$451,722,000.00
Corn	75,000,000	bu.	132,000,000.00
Linseed Oil	212,889	tons	119,218,153.32
Eggs, Dried	65,558,257	lbs.	84,786,714.83
Butter	87,378,000	lbs.	55,048,140.00
Beans	4,950,000	cwt.	40,639,500.00
Barley	27,700,000	bu.	39,334,000.00
Milk, Dried	204,167,000	lbs.	26,541,710.00
Oats	13,250,000	bu.	10,997,500.00
Mexican Meat	34,691,585	lbs.	9,832,679.39
Dried Prunes and Raisins	36,036,330	lbs.	3,646,226.68
Cheese	16,250,000	lbs.	5,525,000.00
Rice	431,000	cwt.	2,439,460.00
Soybeans	580,000	bu.	1,450,000.00
Rye	850,000	bu.	1,351,500.00

The Vice President summarizes those figures
Speaking at Chicago on August 18,1949, Vice President Barkley said that "the Democrats have done more in 17 years for the farmers than ever was done before by any party."
In his campaign speeches in 1948 President Truman

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appealed directly to agriculturists to remember what had been done for them by his administration. They did.

Government of that sort must be put at end through a return by the States to the exercise of their police power and to the constitutional appointment of presidential electors.

Thanks to the fine folks over at Barefoot's world.  

http://www.barefootsworld.net/

Undermining The Constitution A HISTORY OF LAWLESS GOVERNMENT (Part 9)

Battle of the Hook, 2013 (Photo credit: Battleofthehook)

By Thomas James Norton

IN MAY, 1933, CONGRESS, BY THE AGRICULTURAL ADJUSTMENT ACT, UNLAWFULLY PERMITTED THE PRESIDENT TO REDUCE THE GOLD CONTENT OF THE STANDARD DOLLAR

It was well settled law (293 U. S. 388) that the power conferred on Congress by the Constitution cannot be delegated to another Department. That principle of the law of Agency was found by Bryce to be the best conception of the Constitutional Convention.
Yet the Legislative Department authorized the President, by a Senate amendment to the House Agricultural Adjustment bill, to reduce the content of the gold dollar, but not below 50 per cent. In 1936 the Agricultural Adjustment Act was held (297 U. S. 1) unconstitutional for taking money from one class for the benefit of another. But in the meantime the President had acted on the Senate amendment and cut the gold dollar.
Among the powers conferred on Congress by the Constitution is that "to coin Money, regulate the Value thereof, and of foreign Coin." At the time the Constitution was written there was much coin of other nations in circulation in America. The Spanish silver dollar was the coin of first importance. By the language quoted, recognition was given to the fact that governments had found it necessary

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to change the content of their standard coins, a course which conditions might make necessary in the New World.
President given no authority over money
But all the authority given by the Constitution was conferred, as the language quoted puts beyond question, on Congress alone. Neither in Article I, creating the Legislative Department, nor in Article II, establishing the Executive Department, is there even an intimation that the President should have anything to do with regulating the value of money. That is to say, the power was withheld from him. For another elementary rule of interpretation is that what is not granted is prohibited.
With the authority to regulate the value of coin limited by the Constitution to Congress, the President was, nevertheless, directed (or, what is more probable, allowed) by Congress to perform its task of fixing the value of the dollar. It was for Congress to determine whether the content of the dollar should be changed and, if so, to change it.
Constitutional power cannot be delegated
Delegation of administrative powers to fact-finding bodies which are guided, not by their own will or judgment, but by the specifications and limitations in the Acts of Congress creating them, has been common. The Federal Trade Commission, the Board of Tax Appeals, and many other agencies have been set up to relieve Congress of details not legislative .
But "the Congress, manifestly, is not permitted to abdicate, or transfer to others, the essential legislative functions with which it is invested," said the Supreme Court (293 U. S. 388) in 1934. (Italics inserted.) It pointed out

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the settled practice that Congress, in the act of delegating administrative powers, must declare a policy, establish a standard, and lay down a rule for its agent to follow in executing the Congressional (not its own) will.
In passing to the President an "essential legislative function," not a merely administrative function, second to none conferred by the Constitution on it, Congress did not itself, so far as the Act and the Joint Resolution show, determine anything -- except that the Chief Executive might use his own judgment within a very wide range.
Here began the course of unconstitutional conduct by Congress which brought upon it and its successors the epithet of "rubber stamp."
The beginning of "directives" by the President
So, on January 31, 1934, the President "directed" that the standard gold dollar be reduced from 25.8 grains to 15-5/21 (15.238) grains.
On March 9, 1933, Congress had passed the Emergency Banking Relief Bill, which authorized the Secretary of the Treasury to require all persons to deliver to the Treasurer of the United States "any and all gold coin, gold bullion, and gold certificates" owned by them, and to accept therefor "an equivalent amount of any other form of coin or currency."
Here began the practice of the President and his rubber-stamp Congress of declaring an "emergency" when it seemed desirable to seize power not granted by the Constitution.
But "emergency does not create power," wrote Chief Justice Hughes (1934) in an opinion (290 U. S. 398) sustaining a law of Minnesota (1933) which extended the

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time for an owner of property to redeem it after sale under foreclosure of mortgage.
Congress repudiated its contract with the people
By a Joint Resolution of June 5, 1933, Congress proclaimed that the promises of the United States in the law under which the Second, Third, and Fourth Liberty Bonds were issued "are hereby repealed" so far as they pledged any payment except "dollar for dollar in any coin or currency which at the time is legal tender." The United States had borrowed money of the people for carrying on World War I and had issued bonds therefor payable as to both principal and interest "in the United States gold coin of the present [1918] standard of value." That is, in dollars containing 25.8 grains of gold nine-tenths fine.
The vastness of the debt repudiated
Just before this legislation, in 1932, the interest-bearing debt of the Nation was $19,161,273,540.^[1]
At that time the States had submerged themselves in an interest-bearing debt of $17,589,515,000.^[2]
Thus, the two governments of the American had loaded him in a time of peace with a burden of $36,750,788,540.
On the National Debt he was paying a yearly interest of $599,276,631, and the debt of his States cost him yearly in interest $527,685,450.
His interest load for the two debts was $1,126,962,081 per year, or $155,399,491 more than the National Debt the year before we entered World War I.
1. Report Secretary of Treasury, p. 405.
2. Financial Statistics States, pp. 52, 64.

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National and State governments had agreed with those who lent to them $36,750,788,540 to pay in dollars containing 25.8 grains gold. They had likewise promised to pay in such dollars yearly in interest $1,126,962,081.
But the governments would henceforward measure their debt to those who had lent money to them in time of need by a dollar containing 15-5/21 grains of gold instead of the promised dollar of 25.8 grains. Nor, as before said, would their creditors, under the decision of the Supreme Court, to be noticed presently, get the lesser gold dollar. They would be obliged to take paper money. Neither would they, the Supreme Court held, be entitled to enough additional paper money to compensate for the difference between the dollar lent and the dollar paid back.
The "profits" to governments from repudiation
The measure of value by which debtor and creditor had contracted was cut down not quite 41 per cent. If the debts of the Nation and the States just before given were to be cut down 40 per cent the debtor governments would gain over 15.7 billion dollars; and, of course, the people from whom they borrowed would be out of pocket that much, only a little less than the National Debt amounted to in 1931 after Secretary Mellon, by wise management, had reduced it almost 9 billion from the World War I peak of 25 billion, 234 million.
In like manner, all the other debtors in the United States, those not holding bonds or other obligations of Government, would receive in the depleted dollar from their creditors a forced forgiveness of 40 per cent of their debts.
That this was the effect of the performance was ad-

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mitted of record by the Secretary of the Treasury in the report for the fiscal year ending June 30, 1946, where (p. 364), under receipts of money, there was entered "increment resulting from devaluation of gold dollar, $2,811,375,756." Whether that amount was allocated to 1946, or to all the years up to that time, does not appear; but the "clip" on all the bonds of the United States outstanding was $7,760,315,773.
Chief Justice Marshall on honor in government
On the action of the Government in favoring debtors -- and most of all itself and the States -- by clipping the dollar 40 per cent, in one of the opinions of Chief Justice Marshall this is to be found:
"It may well be doubted whether the nature of society and of Government does not prescribe some limits to the legislative power; and, if any be prescribed, where are they to be found if the property of an individual, fairly and honestly acquired, may be seized without compensation."^[3]
Hamilton on inviolability of governmental contracts
Long before that, Alexander Hamilton, who was Secretary of the Treasury in the Cabinet of Washington, stated with his characteristic clarity and force the position of a contracting Government, as ours was a contracting Government when it borrowed money from the people and promised to pay in dollars containing 25.8 grains of gold:
"When a government enters into a contract with an in-
3. Fletcher v. Peck, 6 Cranch. 87, 135.

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dividual, it deposes, as to the matter of the contract, its constitutional authority, and exchanges the character of legislator for that of a moral agent, with the same rights and obligations as an individual. Its promises may justly be considered as excepted out of its power to legislate, unless in aid of them. It is in theory impossible to reconcile the idea of a promise which obliges with a power to make a law which can vary the effect of it."^[4]
Hamilton was a member of the Constitutional Convention, which "told the world" that the new Government would pay the creditors of the old.
Constitutional Convention for payment of all debts
Among the final words of the Constitution are these:
"All debts contracted and engagements entered into before the adoption of this Constitution shall be as valid against the United States under this Constitution as under the Confederation."
That provision gave the United States high standing and credit among the nations.
On the morality of government respecting its debt, Madison made this interesting observation ( The Federalist , No. 43):
"This can only be considered a declaratory proposition; and may have been inserted, among other reasons, for the satisfaction of the foreign creditors of the United States, who cannot be strangers to the pretended doctrine that a change in the political form of civil society has the magical effect of dissolving its moral obligations."
4. Hamilton's Works, 518.

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The fine example set to the nations by the Constitutional Convention has not been accepted by them.
Once we upbraided governments of Europe for repudiating the obligations to us which they had incurred for World War I. But we can do that no longer.
Insolence attended repudiation of gold contracts
From the review which has been made of opinion on both sides of this subject, it is manifest that the Government of the United States, without adequate explanation to the people, took a step respecting their property of tremendous importance to them. The only pretense of explanation by the Government, as a Government, was in the authority given by a rider on the Agricultural Adjustment Act to the President to "fix the weight of the gold dollar ... as he finds necessary ... to stabilize domestic prices or to protect foreign commerce against the adverse effect of depreciated foreign currencies"; and in the Joint Resolution of Congress (June 5,1933) declaring that "the holding or dealing in gold" had been disclosed by "the existing emergency" to "obstruct the power of Congress to regulate the value of money," for which reason "any obligation" purporting to give to the lender of money "a right to require payment in gold" was "declared to be against public policy."
But just how the cut by the President of 40 per cent from the gold dollar would stabilize domestic prices or protect foreign commerce, or how the repudiation by Congress of its promises to pay its bonded debts in gold, with the release of all other debtors from such promises, would help it "to regulate the value of money," was left without

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explanation beyond the bare recitals just quoted from the acts.
The opinions of some writers on finance
Some writers on finance had contended that the value of the gold in a dollar had increased in the market, and that therefore the creditor (the holder of bonds, the depositor of money, and some others) were receiving value above that intended by their contracts, for which reason a reduction of the content of the gold dollar was called for. But, as before indicated, the representatives of the Government said that the purpose was to increase the price of agricultural commodities, to stabilize American money against foreign currencies, and to make a profit for the Treasury of the United States.
While the depletion of the dollar quickly lifted the prices of wheat and other products in demand in foreign markets, it less quickly, but just as surely, increased the costs at home -- of food, of clothing, of housing, of living. If the writers on finance were right, then the wearying burden of living costs carried by the American for fifteen years is in considerable part attributable to the devaluation of the gold dollar.
Supreme Court expounded repudiation
In one of the three Gold Clause Cases the Supreme Court held, on February 18, 1935, in an opinion by Chief Justice Hughes, that the Fourth Liberty Bonds of the United States, promising to pay the buyer (the lender of money to the Government) "in the United States gold coin of the present [1918] standard of value," could not be repudiated as to the form of payment. The bonds having

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been issued under the clause of section 8 of Article I of the Constitution authorizing Congress "to borrow money on the credit of the United States," and being affected by the provision of the Fourteenth Amendment that "the validity of the Public Debt of the United States authorized by law . . . shall not be questioned," those quoted expressions stating the sovereign will of the people, it was not within the power of Congress, a servant of the people with inferior authority, "to override their will thus declared," and by the joint resolution of June 5, 1933, to proclaim that the promises in the law under which the bonds were issued "are hereby repealed" so far as they pledged any payment except "dollar for dollar in any coin or currency which at the time is legal tender."^[5]
Yet the bondholder won a Pyrrhic victory. He got nothing but a favorable judicial declaration that he should be paid in gold when the gold of the country had been seized and withdrawn from circulation.
The holder of Government bonds thoroughly "frisked"
Nor did he get in paper money the additional sum to equate the difference between the two gold dollars for the reason that "the plaintiff," the Court said, "has not shown, or attempted to show, that in relation to buying power he has sustained any loss whatever." Congress having withdrawn gold from circulation, it was unascertained what the new gold dollar would be worth to plaintiff in the "domestic and restricted market." He had not proved that, and as he had sued for damages for violation of contract, he failed for want of proof.
5. Perry v. United States, 294 U. S. 330.

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Dissenting Justices found the milk in the cocoanut
In the dissenting opinion in the Gold Clause Cases by Justices McReynolds, Van Devanter, Sutherland, and Butler, this was said (italics inserted):
"The Agricultural Adjustment Act of May 12,1933, discloses a fixed purpose to raise the nominal values of farm products ^[6] by depleting the standard dollar. It authorized the President to reduce the gold in the standard, and further provided that all forms of currency shall be legal tender. The result expected to follow was increase in nominal values of commodities and depreciation of contractual obligations. The purpose of section 43, incorporated by the Senate as an amendment to the House bill, was clearly stated by the Senator who presented it. It was the destruction of lawfully acquired rights."
Congress recognized damage by repudiation
That destructive result was admitted by the Government, for by an act of Congress of June 14, 1934, a credit of $25,862,750 was established on the books of the Treasury in favor of the Philippine Islands, that amount compensating for the cut in its gold-standard fund held by the banks in this country.
The fact deserves special emphasis that it was by an act of Congress taking a course of avowed favor to agricul-
6. Where did Congress get authority "to raise the nominal value of farm products"?
This is one more support of the statement frequently made herein, namely, that those in places in Government have generally ceased to ask or raise the question: Does the Constitution warrant this action? Or, does the Constitution forbid it?

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ture, as the dissenting justices stated in the foregoing quotation, that the President was empowered to reduce the gold content of the dollar. In the act the purpose of stabilizing "domestic prices or to protect foreign commerce against the adverse effect of depreciated foreign currencies" is recited. It is not clear why a dollar supported by the resources and productive power of this country could not stand up against foreign money. No explanation was vouchsafed by the prestidigitators of finance who drafted and put through the bill.
A senator clearly explained the trick
But this from the senator who incorporated section 43 as an amendment to the House bill, referred to in the foregoing quotation from the dissenting justices, is to a high degree lucid (italics inserted):
"The amendment has for its purpose the bringing down or cheapening of the dollar, that being necessary in order to raise agricultural and commodity prices. . . . The first part of the amendment has to do with conditions precedent to action being taken later.
"It will be my task to show that if the amendment shall prevail it has possibilities as follows: it may transfer from one class to another class in these United States value to the extent of almost $200,000,000,000. This volume will be transferred, first from those who own the bank deposits. Secondly, this value will be transferred from those who own bonds and fixed investments."^[7]
There is nothing in that about cutting the value of the dollar over 40 per cent to protect it against "depreciated
7. Congressional Record, April, 1933, pp. 2004, 2216-7, 2219.

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foreign currencies," which Congress gave as one of its reasons, without saying how that would help against what.
Secretary of Treasury not concerned about foreign moneys
Justice McReynolds quoted from a radio address of the Secretary of the Treasury to the American people on August 28, 1934, the following unctuousness:
"But we have another cash drawer in the Treasury, in addition to the drawer which carries our working balance. This second drawer I will call the 'gold' drawer. In it is the very large sum of 2,800,000,000, representing 'profit' resulting from the change in the gold content of the dollar. Practically all of this 'profit' the Treasury holds in the form of gold and silver. The rest is in other assets.
"I do not propose here to subtract this $2,800,000,000 from the net increase of $4,400,000,000 in the National Debt, thereby reducing the figure to $1,600,000,000. And the reason why I do not subtract it is this: for the present this $2,800,000,000 is under lock and key. Most of it, by authority of Congress, 1s segregated in the so-called stabilization fund, and for the present we propose to keep it there. But I call your attention to the fact that ultimately we expect this 'profit' to flow back into the stream of our other revenues and thereby reduce the National Debt."
Usefulness of gold clause in American life stated
The dissenting justices pointed out that the gold clause in any agreement, employed by Americans for more than 100 years, "secures protection, one against decrease in the

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value of the currency, the other against an increase." Such clauses, they said, "have rendered possible our great undertakings -- public works, railroads, buildings. . . . Furthermore," the dissenters wrote, "they furnish means for computing the sum payable in currency if gold should become unobtainable." Then the borrower pays "for each dollar loaned the currency value of that number of grains." He would thereby get, what was denied by the Supreme Court, enough additional currency to make up the difference between the value of the money lent by him and that paid back.
The whole case, as seen by the dissenting justices, was stated as follows:
"The fundamental problem now presented is whether recent statutes passed by Congress in respect of money and credits were designed to attain a legitimate end. Or whether, under the guise of pursuing a monetary policy, Congress has really inaugurated a plan primarily designed to destroy private obligations, repudiate National debts, and drive into the Treasury all gold within the country in exchange for inconvertible promises to pay, of much less value."
The President did not guard against foreign currencies
It was reported in the dispatches on March 15, 1941, that President Roosevelt told his conferees of the Press, whom he used as boosters of his exploits, that "the Treasury's $2,000,000,000 stabilization fund had made a profit of $22,000,000," which, he said, was "not such a bad record for what he called facetiously a bunch of rank amateurs in

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finance." The stabilization fund was established in 1934, the dispatch said, "from profits obtained from the devaluation of the dollar." It was the opinion of the President that he had given "a pretty good illustration of the fact that the American Government was not wholly amateurish in the financial part it plays in the country."
What the Government accomplished proceeded, not from its financial ability, but from an illegal and ruthless exertion of power.
Did predatory wealth or economic royalty ever "put over" anything comparable to that? Did either, even in its dreams, ever see such easy money picked from the gullible?
On "just compensation" for private property taken
Were Congress to authorize the Secretary of the Treasury to order all of the farmers in the country to drive in their herds and accept the pay offered by the Government, "just compensation" would be given for them under the command of Article V of the Bill of Rights. On whether gold could thus be called in and appropriated by the Government without paying grain for grain, the dissenting justices said:
"Congress has power to coin money, but this cannot be exercised without the possession of metal. Can Congress authorize appropriation without compensation of the necessary gold? Congress has power to regulate commerce, to establish post roads, etc. Some approved plan may involve the use or destruction of A's land or a private way. May Congress authorize the appropriation or de-

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struction of these things without adequate payment? Of course not. The limitations prescribed by the Constitution restrict the exercise of all power."
On the point in the opinion of the majority of the Court, that as the holders of the bonds were forbidden to possess gold, it would do them no good to get payment in coin which they would be obliged to surrender immediately, and that consequently they were without damage, the dissenting justices said:
"Congress brought about the condition in respect of gold which existed when the obligation matured. Having made payment in this metal impossible, the Government cannot defend by saying that if the obligation had been met the creditor could not have retained the gold; consequently he suffered no damage because of the non-delivery.
Had an individual done such a thing
"Obligations cannot be legally avoided by prohibiting the creditor from receiving the thing promised. . . .
"If an individual should undertake to annul or lessen his obligation by secreting or manipulating his assets with the intent to place them beyond the reach of creditors, the attempt would be denounced as fraudulent."
The dissenting opinion concluded:
"Under the challenged statute it is said the United States have realized profits amounting to $2,800,000,000. But this assumes that gain may be generated by legislative fiat. To such counterfeit profits there would be no limit; with each new debasement of the dollar they would

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expand. Two billions might be ballooned indefinitely -- to twenty, thirty, or what you will.

"Loss of reputation for honorable dealing will bring us unending humiliation; the impending legal and moral chaos is appalling."

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