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The U.S. Constitution and Money Part 10 The Gold Seizure Court Cases

The U.S. Constitution and Money Part 10 The Gold Seizure Court Cases

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Published by michael s rozeff
We review Campbell's 1934 challenge of the gold seizure. We critically review the Supreme Court's judgments in the gold clause cases, plus related cases. We show the Court's role in reading new powers into the Constitution so as to justify removing gold from the system and replacing it with an irredeemable fiat currency.
We review Campbell's 1934 challenge of the gold seizure. We critically review the Supreme Court's judgments in the gold clause cases, plus related cases. We show the Court's role in reading new powers into the Constitution so as to justify removing gold from the system and replacing it with an irredeemable fiat currency.

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Categories:Business/Law, Finance
Published by: michael s rozeff on May 18, 2010
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07/27/2013

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Dr. Vieira is a lawyer. He holds an A.B. degree from Harvard College, an A.M. and
1
Ph.D. from the Harvard Graduate School of Arts and Sciences, and a J.D. from Harvard LawSchool.
 Pieces of Eight 
is an invaluable and truly monumental guide to the monetary history of the U.S. from a constitutional perspective. It is, unfortunately, out of print and not widelyavailable. Dr. Vieira brings to bear his detailed knowledge of court cases, reviews and analyzesrelevant laws, applies principles of constitutional interpretation, and extracts important debatesfrom congressional records in order to illuminate monetary history.Campbell is also mentioned in Jim Powell’s readable article
2
The U.S. Constitution and Money Part 10:The Gold Seizure: Court Cases
 by Michael S. Rozeff This is Part 10 of a series that summarizes Edwin Vieira Jr.’s two-volume work 
 Pieces of Eight The Monetary Powers and Disabilities of the United States Constitution
(2002) in its secondrevised edition. Here we examine court cases related to the gold seizure, of which there are
1
amazingly few. The corresponding pages in Volume 2 are pp. 1027-1046, pp. 1127-1212, and pp.1233-1240. All references to Vieira appear in parentheses.
The Campbell Cases
Vieira leads off by informing us (p. 1027):“In light of all this unprecedented – and wildly unconstitutional – activity by the Presidentand Congress, directly affecting tens or even hundreds of thousands of American acrossthe country, the subsequent dearth of judicial decisions on the subject stands out starkly.Essentially, only a
 single
case (under three styles) addressed in detail theunconstitutionality of the gold seizure, a case heard by a lone United States District CourtJudge whose constitutional holdings neither a Court of Appeals nor the Supreme Courtever bothered to review: the
Campbell 
cases.”There are three references:
Campbell v. Chase National Bank of the City of New York, Campbell v. Medalie,
and
United States v. Campbell 
.For background, see thecontemporary articlein
Time
magazine, dated October 9, 1933. The
2
facts of the case are straightforward. Frederick Barber Campbell was an elderly Manhattanattorney who “had deposited gold bullion with the Chase National Bank for safekeeping under contracts of bailment” on October 11, 1932 and January 25, 1933. Bailment means that heretained all title and interest in the gold and that the bank merely stored it and kept it insafekeeping for him. The bank could not lend the gold. It had to be available at all times for withdrawal.
 
The President’s authority under the Act of March 9, 1933 was to investigate, regulate, or 
3
 prohibit the hoarding of gold bullion, but not to yield up one’s interest in it.Vieira did some serious legal research on the sequence of events. There are no records of 
4
the appeal itself, but certain of the events that occurred are documented in Campbell’s Affidavitand Notice of Motion to restore Case to Calendar and Memorandum in Support Thereof, UnitedAfter Roosevelt’s Executive Order of August 28, 1933, the Secretary of the Treasury onSeptember 12, 1933 issued a requirement that anyone possessing gold file a return answeringvarious questions about such possession. The Bank informed Campbell that he would have to filea return and that the Bank was going to surrender his gold to the government. Campbell thendemanded to withdraw his gold. The Bank refused and informed him it would file a return withthe Collector of Internal Revenue. On September 26, 1933, Campbell filed a case in equityagainst the Bank (pp. 1027-1028.)“seeking specific performance of its contracts of bailment, and an injunction against theBank’s delivery of the gold to anyone other than himself. On 28 September, Campbellwas indicted for failing to make a return. Campbell demurred to the indictment on theground that the Emergency Banking Act of 1933 ‘was unconstitutional in so far as it purported to affect gold bullion in private ownership, and that the executive action takenthereunder was, therefore, without authority and invalid.’ On 5 October, the governmentobtained a superseding indictment, charging Campbell with failing to make a return andholding gold without a license. Campbell demurred again, on the same grounds. On 17October, Campbell brought suit in equity against United States Attorney Medalie, seekingto enjoin him from prosecuting Campbell under the superseding (or any other)indictment.“The court,
 per 
Judge John Munro Woolsey, dismissed Campbell’s suit against the bank for lack of jurisdiction over the subject matter. It also dismissed his suit against prosecution on the ground that he had an adequate remedy by raising his constitutionaldefenses in the criminal proceeding.”The indictment had two counts. In the trial, Woolsey found Campbell guilty of failing to make areturn. He found him innocent of holding gold without a license on a technicality. It was becauseSection 5 of the Act of March 9, 1933 gave authority to the Secretary of the Treasury torequisition the gold, but the August 28, 1933 requisition order came from an Executive Order of the President. This explains why the Secretary of the Treasury issued his own requisition order 
3
on Dec. 28, 1933.When the government was defeated on the second count of the superseding indictment, it had aright to appeal to the Supreme Court. The government appealed on Dec. 27, 1933, but thenquickly caused the appeal to be dismissed. Campbell had a right to go to the Court to get theappeal reinstated. This he wanted to do in order to air his arguments. He obtained a certified copyof the appeal on Feb. 8, 1934 and saw to it that the Clerk of the Supreme Court received it onFriday, Feb. 9, 1934. The government mailed to him its counter-motion to dismiss on Saturday
4
 
States v. Campbell, No. 779 (filed 15 February 1934).Campbell asserted that to fill out the return involved self-incrimination, since he had no
5
gold license, which was required under a previous government order. The Fifth Amendment alsosays that “No person shall...be deprived of life, liberty, or property, without due process of law;nor shall private property be taken for public use, without just compensation.” Campbell alsoargued that due process of law was absent and that he was not being justly compensated. He wasaware that gold had risen in price from $20.67 to over $30 in market value, so that an exchangeof dollars for gold at $20.67 was unjust compensation. Furthermore, he could have argued thatthe dollars being given were not Money, as defined in the Constitution, but paper promises of redemption, that is debts. Furthermore, they were promises not in Money, but an undefinedobject known as “lawful money.”the 10 at 2:30 p.m., which he received in New York on Tuesday the 13. Monday the 12 was
ththth
an official New York holiday (Lincoln’s Birthday.) Meanwhile, the government made its motionto dismiss in open Court on Monday the 12 and the Supreme Court
instantly
dismissed it. In this
th
way, the Supreme Court cooperated with the government to fend off having to hear the appeal.They prevented any further adjudication by Campbell on his loss of gold.The Supreme Court knew that Campbell was not present to make his case. The record containedno evidence that he knew of the proceeding. Besides, there was no way for him to get toWashington from New York to appear on Monday even had he received the notice on Monday.Campbell learned from a press inquiry what had happened on Monday afternoon. Had the Court been at all interested in justice, it would not have participated in these tricks.In his affidavit, Campbell explained that the President’s Executive Order was invalid, not because of the technicality of being“made by the President rather than by the Secretary of the Treasury, but because...Section5 of the Order and section 2 of the Act of March 9 were inherently invalid...as contrary
th
to the Fifth Amendment, as well as by an invalid delegation of legislative power, and because of vagueness in section 2 of the Act (transactions in ‘hoarding’).”These three arguments are solid. The gold seizure was a
taking 
of 
wealth
that discriminatesamong people who have gold and do not have gold. Part 9 of this series argued the invalidity of 
5
the delegation of power and the lack of definition of hoarding.Campbell pointedly queried the Court:“Should the Government having coerced [Campbell] through the medium of unconstitutional...enactments carrying ferociously terrorizing penalties, be allowed towithdraw this appeal upon the ground that such...illegal coercion having beensuccessfully accomplished, further proceedings are unnecessary?”In other words, Campbell asked whether the Court approved his being railroaded with no

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