JUDICIARY: Gold Indictment No. 1

On Oct. 11, 1932 an elderly Manhattan attorney named Frederick Barber Campbell marched into Chase National Bank followed by an armed guard trundling 13 bars of gold. Mr. Campbell had just drawn this bullion from the Federal Reserve Bank in return for gold certificates. Each bar, worth approximately $5,000, had been cast by the U. S. Treasury and bore its stamp and number. Lawyer Campbell arranged for the Chase Bank to act as hired custodian for his bullion.

On Jan. 25, 1933 Mr. Campbell again appeared at Chase National with 14 more gold bars which were stowed away in the vault with the first batch. By gold standard reckoning his total deposit of metal amounted to $135,000.

On March 9 Congress passed the Emergency Banking Act which empowered the President to call all gold into the Treasury, with heavy penalties for those who disobeyed his orders. At that time $1,400,000,000 in gold was in circulation, most of it hoarded. In the next 30 days more than one-third of this was turned in to the Treasury.

On April 5 President Roosevelt issued an executive order requiring holders of gold to turn it into the Treasury in exchange for paper currency under penalty of ten years imprisonment and $10,000 fine. Department of Justice agents began visiting known hoarders who, to date, have surrendered $38,901,009 in gold. During the same period unknown hoarders have given up more than $300,000,000. Attorney General Cummings issued threat of prosecution against recalcitrants who still held $560,201,000.

On Aug. 28 President Roosevelt issued another order requiring every possessor of gold to register his holdings with the Treasury before Sept. 18. Those who failed to do so were also to be punished by ten years imprisonment, $10,000 fine.

On Sept. 16 Lawyer Campbell appeared at Chase National Bank, demanded his 27 bars of gold. The bank told him that under the law it could not deliver them to him but would have to surrender them to the Government in accordance with the President’s orders.

On Sept. 26 Mr. Campbell started a civil suit in Manhattan Federal Court to compel the bank to release his gold deposits. In his petition he argued that the President’s orders which prevented him from regaining his property were unconstitutional.

On Sept. 27 after an 18-minute session a Federal grand jury in Manhattan indicted Frederick Barber Campbell for failing to register gold now valued at $200,574.34 before Sept. 18 as required by the Aug. 28 order. Also imminent was a second indictment charging actual hoarding of gold in violation of the April 5 order.

Thus last week was President Roosevelt’s whole gold policy started on its winding way to the Supreme Court for a major test on constitutionality. If Defendant Campbell is convicted by a jury, and the Supreme Court sustains his conviction, the Department of Justice will be on solid legal ground to move against some 30,000 citizens who have so far defied the President’s gold orders. If Defendant Campbell wins a Supreme Court appeal the Administration’s whole gold program will be set at naught and President Roosevelt will have to start all over again conserving the Treasury’s gold supply.

In Defendant Campbell the Government picked for this test not only the largest “gold hoarder” on its list but also a respectable lawyer whom Prosecutor Medalie called “exceedingly able.” Born in Brooklyn, Mr. Campbell was graduated from Harvard Law School in 1894, is a director of U. S. and British insurance companies, belongs to such swank Manhattan clubs as Union, Metropolitan (where he lives) and Century. When he filed his civil suit against the Chase Bank, he well knew he was inviting the Government to prosecute. His argument in that suit will become his defense in the criminal action, to wit: 1) Congress has no Constitutional power to delegate its legislative authority over gold to the President; 2) the President is prevented by the 5th (“due process of law”) Amendment to the Constitution from depriving him of his property. The “property” in this case is not only the gold bars in the Chase vault but his $65,000 paper profit incident to the rise in gold from $20 to $31 per oz.

Mr. Campbell, who promptly pleaded not guilty to the indictment and was released on $1,000 bail because no moral turpitude was involved in the charge, was thoroughly aware of the risks he was running in this contest with the Government. If convicted, he could be disbarred, fined $10,000, imprisoned for ten years. But he was, he intimated, making a fight for his Constitutional rights and “if I have to go to jail, I don’t care.”