Index: .
===================================================================
--- .	(revision 3455)
+++ .	(working copy)
@@ -24,6 +24,7 @@
     static String frozenPackage=null;
     private final static Object PRESENT=new Object();
     static java.util.Hashtable frozenModules;
+    private static final String defaultSourceEncoding = System.getProperty("jython.default.source.encoding");
 
     static boolean initialized;
 
@@ -1637,6 +1638,7 @@
                 cflags = new CompilerFlags(frame.f_code.co_flags|flags);
             }
         }
+       	cflags.encoding = defaultSourceEncoding;
         return cflags;
     }
 
@@ -1658,7 +1660,7 @@
                                  boolean printResults)
     {
         return compile_flags(node, name, filename, linenumbers,
-                             printResults, null);
+                             printResults, getCompilerFlags());
     }
 
     public static PyCode compile(InputStream istream, String filename,
@@ -1942,7 +1944,7 @@
         }
         return objs;
     }    
-    
+
 }
 
 /** @deprecated **/