The certificate from the Court of Claims shows the following facts:
Plaintiff brought suit as the owner of an obligation of the United States for $10,000, known as 'Fourth Liberty Loan 4 1/4% Gold Bond of 1933-1938.' This bond was issued pursuant to the Act of September 24, 1917, § 1 et seq. (40 Stat. 288), as amended, and Treasury Department circular No. 121 dated September 28, 1918. The bond provided: 'The principal and interest hereof are payable in United States gold coin of the present standard of value.'
Plaintiff alleged in his petition that at the time the bond was issued, and when he acquired it, 'a dollar in gold consisted of 25.8 grains of gold .9 fine'; that the bond was called for redemption on April 15, 1934, and, on May 24, 1934, was presented for payment; that plaintiff demanded its redemption 'by the payment of 10,000 gold dollars each containing 25.8 grains of gold .9 fine'; that defendant refused to comply with that demand; and that plaintiff then demanded '258,000 grains of gold .9 fine, or gold of equivalent value of any fineness, or 16,931.25 gold dollars each containing 15 5/21 grains of gold .9 fine, or 16,931.25 dollars in legal tender currency'; that defendant refused to redeem the bond 'except by the payment of 10,000 dollars in legal tender currency'; that these refusals were based on the Joint Resolution of the Congress of June 5, 1933, 48 Stat. 113 (31 USCA §§ 462, 463), but that this enactment was unconstitutional, as it operated to deprive plaintiff of his property without due process of law; and that, by this action of defendant, he was damaged 'in the sum of $16,931.25, the value of defendant's obligation,' for which, with interest, plaintiff demanded judgment.
Defendant demurred upon the ground that the petition did not state a cause of action against the United States.
The Court of Claims has certified the following questions:
'1. Is the claimant, being the holder and owner of a Fourth Liberty Loan 4 1/4 bond of the United States, of the principal amount of $10,000, issued in 1918, which was payable on and after April 15, 1934, and which bond contained a clause that the principal is 'payable in United States gold coin of the present standard of value', entitled to receive from the United States an amount in legal tender currency in excess of the face amount of the bond? '2. Is the United States, as obligor in a Fourth Liberty Loan 4 1/4% gold bond, Series of 1933-1938, as stated in Question One liable to respond in damages in a suit in the Court of Claims on such bond as an express contract, by reason of the change in or impossibility of performance in accordance with the tenor thereof, due to the provisions of Public Resolution No. 10, 73rd Congress, abrogating the gold clause in all obligations?'
First. The Import of the Obligation. The bond in suit differs from an obligation of private parties, or of states or municipalities, whose contracts are necessarily made in subjection to the dominant power of the Congress. Norman v. Baltimore & Ohio R. Co., 294 U.S. 240, 55 S.Ct. 407, 79 L.Ed. 885, decided this day. The bond now before us is an obligation of the United States. The terms of the bond are explicit. They were not only expressed in the bond itself, but they were definitely prescribed by the Congress. The Act of September 24, 1917, both in its original and amended form, authorized the moneys to be borrowed, and the bonds to be issued, 'on the credit of the United States,' in order to meet expenditures needed 'for the national security and defense and other public purposes authorized by law.' Section 1, 40 Stat. 288, as amended by Act April 4, 1918, § 1, 40 Stat. 503, 31 USCA § 752. The circular of the Treasury Department of September 28, 1918, to which the bond refers 'for a statement of the further rights of the holders of bonds of said series,' also provided that the principal and interest 'are payable in United States gold coin of the present standard of value.'
This obligation must be fairly construed. The 'present standard of value' stood in contradistinction to a lower standard of value. The promise obviously was intended to afford protection against loss. That protection was sought to be secured by setting up a standard or measure of the government's obligation. We think that the reasonable import of the promise is that it was intended to assure one who lent his money to the government and took its bond that he would not suffer loss through depreciation in the medium of payment.