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Gold Value Clauses and Public Policy

Published online by Cambridge University Press:  12 February 2016

Eliahu Hirschberg
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Extract

Gold value clauses are rarely used in England. In the United States, before the Joint Resolution of both Houses of Congress of January 5, 1933, which abrogated gold clauses in the U.S. retrospectively and prospectively, declaring them to be against public policy, gold coin clauses were a common occurrence. In the past on the European continent much use has been made of gold value clauses.

In England gold value clauses may assume greater importance in the future. Lately, the two-tier system of gold prices has been introduced, one between Central Banks and another at the free market price. In an individual gold value clause, the question of which price is recognized by the parties, who probably did not in fact foresee the possibility of the creation of a two-tier system, is one of construction. Even today, a party to a gold value clause which refers to the free market price may gain a profit, if there is an appreciation of the price of gold on the free market above the U.S. government minimum level of $35.00 per ounce.

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Articles
Information
Israel Law Review , Volume 5 , Issue 2 , April 1970 , pp. 155 - 169
Copyright
Copyright © Cambridge University Press and The Faculty of Law, The Hebrew University of Jerusalem 1970

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References

1 Treseder-Griffin and another v. Co-operative Insurance Soc. Ltd. [1956] 2 Q.B. 127.

2 Mann, F. A., The Legal Aspects of Money, 69, Oxford University Press, 1953.Google Scholar

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4 [1934] A.C. 161.

5 [1937] A.C. 500, 562.

6 [1939] A.C. 1.

7 [1943] A.C. 507.

8 (1957) 11 P.D. p. 126.

9 Treseder-Griffin and another v. Co-operative Insurance Soc. Ltd. [1956] 2 Q.B. 127.

10 [1934] A.C. 161.

11 [1956] 2 Q.B. 127.

12 [1934] A.C. 161.

13 [1956] 2 Q.B. 127.

14 Professor Goodhart, , “Note on Treseder-Griffin v. Co-operative Insurance Society”, 72 L.Q.R. p. 311Google Scholar, Unger, J., “Gold Clauses in domestictransactions”, 20 Mo.L.R. 266CrossRefGoogle Scholar, Mann, F. A., “The Gold Clause in domestic contracts”, 73 L.Q.R. 181Google Scholar, Yale, D. E. C., “Lease-Rent-Reddendum etc.”, 1956 Cambridge L.J. 169.CrossRefGoogle Scholar

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19 [1934] A.C. 161.

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21 Goodhart, loc. cit., pp. 311–312.

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26 See F.A. Mann, loc. cit. 73 L.Q.R. 181.