In Boston last week a spinster poured out a bag of walnuts on a bank counter. A teller smashed them open, found in each pair of neatly glued shells a $5 gold-piece. In Waukesha, Wis., an elderly woman passed a handful of gold-pieces to a bank teller. "They're good," she said. "That's just a little mildew on them. I kept them in a bottle hanging by a string in my well." In Manhattan all one evening the dark cavern of Maiden Lane echoed with unaccustomed footsteps as one after another, clerks, stenographers, women in shawls, fathers carrying children clutching baptismal coins, trudged to the postern of the Federal Reserve Bank. "Gold?" asked two armed guards. A nod, and each figure passed in. Midnight was the deadline for the use of gold coins as legal money.
Thus the U. S. Treasury took away the last gold of the common people. It estimated its receipts since Jan. 1 at $12,000,000. Then, still hungry, the Treasury extended the deadline indefinitely hoping to get more gold. Such were the Treasury's preparations while it waited to. have Congress pass the President's devaluation act (TIME, Jan. 22).
Meantime Congress went through the motions of considering the law. Said Congressman Snell, Republican leader in the House: "About 10% of the members know what effect this gold bill will have and not more than 5% can make an intelligent statement in regard to it." No one in Washington questioned his remark except possibly as an exaggeration of Congressional understanding.
Both Senate and House held hearings. Banker James P. Warburg, Professor Edwin W. Kemmerer, Professor O. M. W. Sprague and several Reserve Bank officials criticized one or several aspects of the President's plans for the dollar. The House Coinage Committee received Father Coughlin of Detroit with open arms, posed with him for pictures, came member by member and whispered in his ear. and attended in awed silence while he declared:
"If Congress fails to carry through with the President's suggestions. I foresee a revolution greater than the French Revolution. It is either Roosevelt or ruin."
In the Senate Banking & Currency Committee Senators Glass, McAdoo and Gore questioned the constitutionality of the whole proceeding, demanded a written opinion from Attorney General Cummings on the right of the Treasury to seize the gold of the Federal Reserve and give gold certificates in payment — certificates which, when the dollar is de valued, will call for only about half as much gold.
Mr. Cummings delivered a lengthy opinion, citing several decisions of the Supreme Court. His conclusion: "The monetary gold stock may be taken by the Government in the exercise of its right of eminent domain. . . . Congress may make paper money tender for the payment of all debts. . . . The Government may discharge its obligation [for the seized gold] in currency of that type."
Said Mr. McAdoo: "Well, we got our legal opinion."
Said Mr. Glass: "What we got was an illegal opinion."