PAGE TWO HEPPNER GAZETTE TIMES, HEPPNER, OREGON, THURSDAY, AUG. 15, 1935. BACKGROUND OF NEW DEAL DECISIONS THE COINAGE CLAUSE, NA TIONAL BANKS, AND A NATIONAL CURRENCY. By JAMES H. GILBERT If a central bank had been in op eration at the outbreak of the Civil War the financial position of the country would have been much stronger. Following the dissolu tion of the Second United States Bank state banks were multiplied and in certain sections of the coun try, particularly in the West, regu lation was ineffective. By 1861 there were 1600 loosely regulated state banks, each with a note issue of its own. In the confused currency situation It took an expert armed with the latest copy of the bank-note report er to tell whether an issue was genuine of a counterfeit, and if it was genuine whether it was worth face value or figty cents on the dol lar or just worthless. The unstable currency situation, coupled with reverses on the battle field and the prospect that France and England might take a hand on the side of the Confederacy, led to a complete breakdown of the bank ing and credit situation late in 1861. February, 1862, saw the issue of greenbacks and the beginning of the flat money confusion. Only on the Pacific Coast did gold and sil ver remain the standard. In the midst of the monetary confusion Secretary Chase came forward with his proposal for a na tional banking system. Two ob jects he had in mind, one tempor ary, the other destined to be of far-reaching and permanent im portance. In the first place, the Secretary sought to stimulate the sale of bonds with which the war was to be financed. National banks char tered under the new law were com pelled to buy a certain amount of bonds and must back their note is sues with bonds as collateral secur ity. The added demand for bonds was not significant The new banks came into being slowly and at the end of the war held only four per cent of all bonds sold to finance the struggle. The arrangement had enabled Secretary Case to sell but one dollar out of every twenty-five in the wartime issue. The second objective proved to be of permanent importance. Chase planned through the national banks to provide a currency uniform in design and value throughout the country. In accomplishing this program new legislation became necessary and this law gave rise to one of the fundamental questions of constitutionality and of federal functions versus the functions of the commonwealth governments. As long as the state banks con tinued to issue hundreds of va rieties of state bank notes under verying regulations no uniformity could be achieved. No direct prohi bition of state bank notes could be expected to meet with the approval of the courts. In the case of Augusta Bank vs. Earle the Supreme Court had de clared that the right of state banks to issue notes was a common law right which could not be taken away. Some device had to be found for leaving this common law right in tact but making the exercise of the right unprofitable. The act of July 13, 1866, imposed a ten per cent tax on the note issues of state banks. Since the' prevail ing rate of interest was only five or six per cent no state bank could af ford to issue notes and lend them while paying a tax of ten per cent. It was expected that state banks would cease to issue notes or sur render state charters and become national banks. Whichever alter native were chosen a uniform na tional currency would result. But state banks that had found note Issues profitable would not forego the privilege without a con test Veazie Bank, chartered by the State of Maine, brought suit in the United States Circuit Court to recover the tax paid under protest, alleging that the tax was an uncon stitutional exercise of power by Congress. Salmon P. Chase, Secretary of War under Lincoln and now Chief Justice of the Supreme Court de livered the opinion. In this famous case the Court expanded the coin age clause of the Constitution to a currency clause and made It extend not only to issues that emanate from the Federal Government but to the regulation of any currencies that may conflict or confuse the Currency situation. Congress may authorize the emission of bills of credit and suit them to use "by those who see fit to use them in connection with com merce." Congress had undertaken in the exercise of its constitutional powers to provide a currency for the whole country and must secure the full benefits to the country by appropriate legislation. "Congress may (therefore) re strain by suitable enactments the circulation as money of any notes not issued under its authority," Chase reasoned. Among these "suitable enact ments" might be a regulatory tax which might be levied at any level deemed necessary to accomplish the purpose. With the ten per cent tax on state bank notes in effect, only national banks continued to issue notes and for the first time in our history uniformity in bank curren cy was achieved, 1.1913. Twelve "banks of banks were created in as many districts, all na tional banks were forced to take membership in the system and a large measure of control was given over banking to the Federal Re serve Board made up entirely of representatives of the government More recently the "New Deal" banking and currency legislation has extended still further the Con gressional control of banking oper ations and welded the entire sys tem into a nation-wide organization for the insurance of deposits. It's a far cry from the coinage clause to the guarantee of bank de posits but the Constitution is not what the Constitution makers thought it was but what generations of judges have made it Is there such a thing as judge made constitution as well as judge made law? Although the currency was uni form and sound it was soon found to be Inelastic. It did not adapt it self to changing needs of business. There was also a deplorable lack of cooperation between banks and the independent treasury estab lished under the stress of emer gency failed to function properly under present day conditions. To meet these needs the Federal Reserve System was formulated in JUDGES AS A SOURCE OF CONSTITUTIONAL RIGHTS. By WAYNE L. MORSE These are days in which many people are urging us to go back to the constitution. But I am afraid that for the most part they are uttering an unintelligent cry. Go back to what eonstitution? Or to what conception of the constitu tion? If what is meant is that we should go back to a conception that the constitution is static, then I would say that we are being asked to re vivify a mummy because that con stitution has long since been dead. As the supreme court itself has said, "The constitution was made for an undefined and expanding future." Thus, it behooves us as intelli gent citizens to give some thought to the nature of our constitution As Corwin points out: "The constitution contains about 3500 words. Reading time, about twenty minutes, but hardly two per cent of this phraseology is of ma jor significance to the student of constitutional law. A large pro portion of the thousands of cases in which the constitutional law is embodied stem upwards from the foundational document in three or four slight phrases, the due process clause, commerce clause, the obli gation of contracts clause." Unpleasant as the thought is to the conservative, the truth is that the federal constitution as a docu ment does not fix the constitution al rights of Americans. If you want to know what the American consti tution provides and means, you must read hundreds of constitu tional law decisions. And that is not enough. You must also be able to read the minds of nine distinguished justices of the United States supreme court at any given time, in order to predict as to what extent and in what way a ma jority of them may differ with con stitutional decisions already ren dered by the court. This is necessary because consti tutional law, a3 Corwin points out, i3 one field in which the doctrine of stare decisis plays a minor role. As to the influence of precedent, especially in the field of constitu tional law, Justice Cardozo has written: "In these days there is a good deal of discussion whether the rule of adherence to precedent ought to be abandoned altogether, j. would not go so far myself, I think ad herence to precedent should be the rule and not the exception. ... I am ready to concede that the rule of adherence to precedent though it ought not to be abandoned ought to be in some degree relaxed. I think that when a. rule, after it has been duly tested by experience has been found to be inconsistent with the sense of justice or with the social welfare, there should be less hesitation in frank avowal and full abandonment. We have had to do this sometimes in the field of con stitutional law." There are those who believe that our constitutional rights depend more upon the personnel, now and in the future, of the United States supreme court than upon the lan guage of the constitution, or the decisions in the books. They cite such cases as the recent gold clause decision in support of their position, pointing out that had there been one more McReynolds on the court, a significant congress ional act would have been declared unconstitutional and the cost to this country, material and psychological, would have been stupendous. They suggest that such clauses as the due process, commerce, and contract clauses do not and cannot have fixed meanings that they are highly relative terms and the mean ings given them in any constitu tional controversy will be deter mined, to a large extent, by the po litical, social and economic phil osophy of the members of the court, They classify the judges a3 lib erals and conservatives and they point to the number of five-to-four and split decisions on constitution al questions dealing with great so cial and economic problems; 'such as child labor, taxation, commerce, property vested with a public in terest, interference with contract. These critics contend that time after time the judges seem to, divide in accordance with their known so cial and economic views. Unquestionably, the writings and decisions of the so-called liberals on the court show a difference in emphasis to the social ends and philosophy from those of the con servatives. Thus we find Cardozo, in his book, The Nature of the Judicial Process, writing with an objectivity so characteristic of him, "that the adaptation of rule or principle to changing combination of events de mands the creative action of the judge." After discussing the influence which procedent exerts on any judge, we find him admitting that subconscious forces influence ju dicial decisions. His discussion of this matter is so frank and honest that I feel justified in quoting from it at some length: "Deep below consciousness are other forces, the likes and dislikes, the predilections and the prejudices, the complex of instincts and emo tions and habits and convictions, which make the man, whether he be litigant or judge . . . The great tides and currents which engulf the rest of men, do not turn aside in their course, and pass the judges by . . . Marshall's own career is a conspicuous illustration of the fact that the ideal is beyond the reach of human faculties to attain. He gave to the constitution of the Uni ted States the impress of his own mind; and the form of our constitu tional law is what it is, because he moulded it while it was still plastic and malleable in the fire of his own intense convictions." Cardozo quotes with approval the words of Theodore Roosevelt to the effect that "The chief lawmakers in our country may be, and often are, the judges, because they are the final seat of authority. Every time they interpret contract property, vested rights, due process of law, liberty, they necessarily enact into law parts of a system of social phil osophy; and as such interpretation is fundamental, they give direction to all law-making." Other members of the court have written in a similar vein. Thus, Holmes declared shortly before he retired: "I can discover hardly any limit but the sky to the court's present power in disallowance of state acts which may happen to strike a ma jority of this court as for any rea son undesirable." If Holmes is right, then the sky is the limit for the court in sustain Ing legislation which may strike the members as desirable. In the case of Burns Baking Company v. Bryan, the majority de cision written by Pierce Butler de clared unconstitutional a Nebraska statute requiring that bread be sold in pound and a half loaves. Butler held that the act was unreasonable and arbitrary. Brandeis in commenting upon the decision of the majority char acterized it as "an exercise of the powers of a super legislature." In an even stronger vein, Hughes, while Governor of New York, wrote these words, "We are under a con- st!tution, but the constitution is what the judges say it is." But such language should not be interpreted too literally, nor should we form the conclusion that con stitutional decisions of the court are naught but rationalizations in legal language of the prejudices and personal philosophy of the judges. The record of the court for fear less, independent decisions unin fluenced by waves of popular clam or stand to its everlasting credit and the decisions of the court on constitutional questions have for the most part been works of art in moulding the constitution to chang ing social demands. Nevertheless, it is well to recog nize the fictitious features of the oft repeated maxim that our govern ment is one of laws and not of men, because, as the realists point out, a study of law in action shows our government to be one of laws and men. Oregon Women Plan Own Extension Work Program Oregon homemakers who are Members of home economics exten sion units are just a bit ahead of those in most other states in that they have an active part in deciding just what projects each group will carry each year, Mrs. Miriam Birds- eye of Rogue River, president of the State Home Economics Exten sion council, told some 50 members of that organization at its annual summer meeting at Oregon State college August 5 and 6. She pointed out that instead of the college handing each county a cut-and-dried program each year, representatives of the local units meet with the state leaders and the county home demonstration agent and decide what sort of work in clothing, cookery, canning, parent education and other projects will best meet the needs of that group. The home economics extension staff then makes every effort to provide such a program. It was voted during the session that the State Home Economics Extension council will offer a schol arship of $25 each year to a senior or graduate student in home econ omics at O. S. C. who wishes to bet ter qualify herself for extension work. The fund is to be raised by voluntary contribution of Oregon homemakers interested, and the scholarship will be awarded at the annual spring honor convocation as soon as sufficient money is avail able. Counties represented at the meet ing were Clackamas, Columbia, Deschutes, Jackson, Josephine, Lane, Multnomah, Benton, Doug' les, Linn, Marion and Morrow. CARD OF THANKS. We wish to express our deepest gratitude to all those whose many kindnesses have helped to sustain us during our recent loss. Mrs. W. O. King and Family. WAS UNABLE TO EAT NOW FEELS FINE! Shelvador Refrigerators. More space for your money. Case Fur niture Co. 9tf. Iowa Man Tells of Wonderful Re lief From Stomach Trouble. Here is a letter of interest to many residents of Heppner and vi cinity. Elza E. Beck, Mt Ayr, Iowa, writes: "I have suffered from catarrh of the stomach for a long time. I was unable to eat without food souring on my stomach and my stomach seemed raw. 1 had severe gas pains and was constipated. While I was in the drug store they asked me to try a bottle of Williams S. L, K. Formula and after I had taken just one bottle I could eat almost anything and did not have those awful gassy pains and soreness in my stomach. I ve tried many other medicines but no other has done the work as ha3 Williams S.L.K. For mula, This wonderful medicine is the prescription of a physician for stomach, liver and kidney disor ders, associated with constipation, sour or gassy stomach, distress af ter eating, sick headache, neural gia, rheumatic pain, neuritis, bil iousness, dyspepsia, heartburn, gen eral weakness and loss of vitality. If you suffer, don't wait. See your druggist today at Patterson & Son. Satisfaction or your money back. Breakfasts . Luncheons . Dinners. . ..25 . .30 Coach and Tourist Car Passengers of the PORTLAND ROSE Union Pacific now oilers new low-cost meal service for coach and tourist car passengers of its famous transcontinental train the Portland Rose. , Breakfasts at 25c may include scrambled eggs with two strips of bacon, rolls or bread, coffee or milk. Luncheons at 30c, dinners at 35c are equally attractive. Menus are varied daily. The new economy-meals are served at regular meat hours. PILLOWS and drinking cups are now furnished FREE In all coaches on through trains. The PILLOWS are available from the Porter in charge of the coach. In addition lights in the coaches will be dimmed at 10 P. M. to provide restful conditions for sleep. All coaches are fully air-conditioned. Very Low Fares Are now in effect in roomy, comfortable, air-conditioned coaches. Bargain fares also for Tourist and Standard Sleeping Car travel. For greatest economy cool, clean air conditioned comfort speed with safe ty TRAVEL BY TRAIN. SEE YOUR UNION PACIFIC AGENT BEFORE MAKING ANY TRAVEL PLANS UN ID ou are entitled to ALL THESE FEATURES when you buy a low-priced car w p 1 . 11 a.'ii.JS' DEALER ADVERTISEMENT and you get them only in CHEVROLET The most finely balanced low-priced car ever built You are entitled to all of the fine car features pictured here when you buy a car selling in the lowest price range. And the new Master De Luxe Chevrolet is the only car in its price range that brings you all of them! It is the only car of its price with a Solid Steel Turret-Top Fisher Body the smartest and safest built. The only car of its price that gives the famous gliding Knee Action Ride. The only car of its price with Blue Flame Valve-in-Head Engine Stabilized Front End Construction and Weatherproof Cable-Con trolled Brakes. See and drive the Master De Luxe Chevrolet and learn by actual test how much these features mean in terras of added motoring enjoyment. Do this and you will agree that the Master De Luxe is exactly what its owners say it is the most finely balanced low-priced car ever built. Visit your nearest Chevrolet dealer and drive this car today! CHEVROLET MOTOR CO., DETROIT, MICH. Compare Chevrolet' $ low delivered price andsyGMA.C. terms. A General Motor Value Heppner FERGUSON MOTOR COMPANY Oregon I" YOUR MODI M PACIFIC 4-H Club Fair Wool 6 Grain Show NEXT WEEK END RESERVE YOUR SEATS NOW! Reservd seat tickets $1.50 each day now available at Hotel Hepp ner. Phone of mail orders honored. Other admission prices: Grandstand $1.00; General 75c; Child's 50c Thursday and Satur day (School, children free Friday.) Show Starts 1 :30 Each Day. GRANT COUNTY DAY, FRIDAY With running of Grant County Derby for $100 purse given by business men of John Day PARADE OF OLD WEST, SATURDAY Many cash and merchandise prizes. Parade to start promptly at 10:00 a. m. Entries to be at M. E. Church corner at 9:00 a. m. HEPPNER SCHOOL BAND ALL THREE DAYS Browning Amusement Company With Rides Dancing Each Evening! Music by Kaufman's Orchestra Heppner Invites You