The Gold Bondholders Protective Council may be championing a lost cause: It fights for the redemption of long-outstanding privately issued bonds its members own under the terms of issue - in gold coin. But it sees one glimmer of hope in the federal government's forthcoming issue of legal-tender gold coins.
Under present laws, corporations are under no obligation to redeem their old bonds in gold. That is something the council wants to change.
The council's 300 members hold gold bonds of the predecessors of such present-day American railways as Burlington Northern, Sante Fe Industries, and Norfolk Southern.
The bonds, some of which were issued before the turn of the century, are listed on the New York Stock Exchange and are ''still good-quality bonds (and) the most senior obligation issued and outstanding in America,'' says Robert Ellison, vice-president of National Securities Corporation of Seattle.
In the course of his work Mr. Ellison, the council's active president, has prepared a study of the bond issuers and guarantors and become an authority on gold bonds.
He says the council is planning to launch a lawsuit later this year to require the government to redeem, in gold coin, gold bonds it once issued.
Ellison points out that his lawsuit is ''taking advantage of the fact'' that the United States Treasury will be issuing the first legal-tender gold coin in more than 50 years next Jan. 1. This noncirculating coin, commemorating the 1984 Olympics, will contain half an ounce of gold and bear a $10 denomination.
He believes a victory would give the council new leverage in its efforts to get private gold bonds redeemed in gold.
He says this legal-tender coin is ''just the start'' of a change in the public perception of gold. There are two other major developments which Ellison says point toward a changing attitude about gold:
* He claims there is increasing sentiment favoring a return to the gold standard. ''Governments always return to the gold standard in order to stabilize their inflation,'' Ellison says.
* House bills HR 1662 and 1663 and Senate bill S 42 call for the minting of an American gold eagle coin as bullion to compete with the Krugerrand and be free from income, excise, and sales taxes. ''People would turn in their Krugerrands to get them,'' Ellison asserts. The coins would not be legal tender, but he says they would be good for private debts, such as the gold bonds he holds.
There are strong reasons, however, to doubt that the bonds will ever be redeemed in gold. ''Congress effectively abrogated the (gold) bondholders' rights,'' says David Collier, a vice-president at Carl Marks Inc., a New York brokerage firm. The requirement that they be paid in gold ''is a non-enforceable clause, because Congress made it non-enforceable.''
In 1933, a joint congressional resolution nullified the gold clauses in public and private bonds. This law was upheld by the United States Supreme Court in 1935 in the case of private bonds, such as Mr. Ellison's group holds, but the court held that it was unconstitutional for Congress to abrogate the gold clause in government bonds. But none have been paid in gold since that time, which is what inspires Ellison to bring his latest lawsuit.
In 1936, Congress passed a law saying that the courts had no jurisdiction to rule on the gold clause. That law is constitutional, the courts have ruled, because it was undertaken under the power of Congress to regulate currency, says the council's lawyer, Scott P. Crampton of Bogan & Freeland in Washington, D.C. Thus, he says, the nullification of the gold clause in private bonds has not been seen to be a law annulling a contract, which the US Constitution forbids.
The Supreme Court declined to hear a case brought against the United States by the Gold Bondholders Protective Council last year. Unsuccessful in the judiciary, the council hopes to resolve the issue in its favor through legislation.
But its chances of getting Congress to change the law are ''very slim at the present time,'' says John Robbins, administrative assistant to Rep. Ron Paul (R) of Texas. (Mr. Paul is co-author of a book advocating US return to the gold standard.)
To Ellison, the redemption of gold bonds in gold is a moral question.
''What is our monetary system based on? Trust, fairness, equity. It must be, in order to have long-term contractual agreements.
''But using fiat dollars for long-term contractual agreements is like using a rubber band to measure distances.''