ABSTRACT
The threshold question for lawyers would seem to be whether the Gold-Clause Cases were correctly decided, principally in the context of their abrogation in contracts between private individuals but also in obligations of the federal government itself. Once gold was stripped of its monetary functions, gold clauses ceased to be a method of permitting private parties to adjust underlying monetary obligations in light of subsequent changes in the value of money. Gold clauses were intended to protect creditors against changes in the value of money, not to create such windfalls. Enforcement in 1934 would thus likely do more violence to genuine notions of freedom of contract than abrogation, assuming again the validity of government's prior actions toward gold. As for the gold-clause obligation in government contracts, Buchanan and Tideman argue persuasively that it presents a different case. The Supreme Court has made it clear that government has enormous discretion to regulate "economic" rights.
