Gold Clause Cases

Gold Clause Cases

Several U.S. Supreme Court cases arising out of the Gold Reserve Act of 1934. According to this act, private citizens were no longer allowed to own more than a token amount of gold. However, many contracts enacted before the act contained gold clauses, which allowed one party to demand payment in gold (in order to protect against inflation of the U.S. dollar). The Supreme Court ruled that these clauses became invalid upon the passage of the act and that no party could demand such payment. The argument behind this ruling states that Congress has the authority to invalidate valid contracts if these contracts go against any monetary policy Congress may adopt. These cases were decided jointly in 1935.
References in periodicals archive ?
Timberlake closes with a recount of the Gold Clause Cases, which centered on the Franklin Roosevelt administration's outlawing of private gold holdings.
This harkens once again to the so-called Gold Clause cases decided by the Supreme Court.
But standing doctrine has developed considerably since the Gold Clause cases.
While the Gold Clause cases and the more recent line of cases provide an avenue for standing, at least for the Social Security Trust Fund, they present another obstacle: that of remedy.
In the Gold Clause cases the Court held that it could not order Congress to issue a specific type of currency and only that specific type of currency would suffice to redress the harm at issue.
Given the history of the Gold Clause cases and the Jenkins cases, especially in light of recent exercises of judicial power in cases such as Brown v.
Magliocca, The Gold Clause Cases and Constitutional Necessity, 64 Fla.
The issue quickly reached the Supreme Court in 1934 and gave rise to an important and controversial set of decisions known as the Gold Clause Cases (see Holzer 1980).
Given the unconstitutional reasoning on both sides of the Court decision, what judgment on the Gold Clause Cases might have preserved constitutional integrity and prevented unwarranted "enrichment" of creditors?
Had the Court dutifully observed that the Hepburn case had been reargued and the decision reversed the next year, they would have had both a model for further argument in the Gold Clause Cases and a decision that did not rest on the horns of a dilemma.
Shortly after the Gold Clause Cases, Congress passed the Banking Act of 1935, which effectively confirmed Congress's unconstitutional control over the monetary system.