The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-02-29
DEBTORS Law
CHANGE URGED
BY PRESIDENT
Special Congress Message
Proposes Revision of
Court Procedure.
FLAGRANT ABUSE CITED
Bankruptcy Statute Gives
INSCRIPTIONS LoophoIe,
Asserts Hoover.
BY HENRY F. MISSELWITZ
United Press stan Correspondent

dent Hoover today sent a special
message to congress urging impor-
tant changes in judicial procedure
designed to facilitate the admins
tration Of justice.
With the message, he submitted
yoluminous report compiled by
the attorney-ge general on the bank
ruptcy act and its administration
in the federal courts.
The Preside lent particularly
stressed the importance of changes
in the bankruptcy laws. He pointed
TO the increase in bankruptcy cases
IN recent years and urged legisla-
ton Ito provide remedial processes
IN voluntary proceedings under
which debtors may have the protec-
ton Of the court without being adj
judged bankrupt"
Mr.. Hoover, it is understood
considered findings of the Wicker
Sham commission on law enforce
ment, as well as other material, in
preparing his message.
The only mention he made of pro-
ambition is a renewal of his preyi-
Gus recommendations regarding law
enforcement in the District of Co
lumoia. He urged that suggestions
OF the encouragement that local
police be given authority to act
with federal agents in prohibition
enforcement in the District of Co.
lumbia, be adopted.
Mr.. Hoover long has had a desire
to make Washington model for
prohibition enforcement throughout
the country.
Should Set Example
The President plainly urged that
criminal procedure should be speed
ed up. He held that federal courts
could set an example to courts all
through the judicial system.
He suggested that the laws be
changed to limit the time for max
ing motions to quash indictments
because of disqualiflcations of
grand jurors.
The President recommended:
That the supreme court be au-
thorized to prescribe uniform rules
Of practice and procedure in GRIM
inal cases.
GlldGIGU
uniting an accused person to waive
the requirement of indictment by
grand jury, and speed up the en-
tire proceedings.
That legislation be passed pro-
viding that if not less than twelve
eligible grand jurors vote for an
indictment it shall not be invali-
dated because of the presence of in
eligible jurors.
That most juvenile cases be
turned over to state authorities
rather than be tried in federal
courts.
That a corporation operating in
one state, but incorporated in an
other, should be treated as a citi-
zen of any state in which it does
b siness.
Supplement Dry Law
That congress act on recon-
mendat' IS by the general
supplementing the prohibition law
in the District of Columbia.
That the bankruptcy laws be
amended materially strengthening
them and protecting both debtors
and creditors. The powers of the
courts would be broadened in act
ing on discharges.
The 'dent said that a sound
bankruptcs vstem should operate:
First, to lieve honest but UNI
fortunate debtors of an overwhelm-
ing burden of debt.
Second, to effect a prompt and
economical liquidation and distri-
button of insolvent estates: and
Third, to discourage fraud and
needless waste of assets by with
holding relief from debtors in
proper cases
The report from the justice de-
partment condemned the bank
ruptcy statute on the grounds that
in many instances it was function
ing under circumstances of fraud
and futility which the courts were
powerless to correct.
1t estimated that through the
law, payment of almost 81 ZOO, 000,-
900 in debts is being escaped an
nually.
Cite Huge Increase
Solicitor General Thomas D.
Thatcher and Lloyd K. Garrison,
special assistant Encouragement,
who prepared the report, said the
present act had had serious unfore-
seen consequences. They cited the
increase of bankruptcy cases from
$4,000 with assets of $171,000,000 in
1881 to 10000, with assets of 81 ,008,-
100000, in the fiscal year 1881.
THE bankruptcy court increas-
ingly has become a dumping
ground" they reported to Mr.. Hoo
yer, for the refuse of commercial
wreckage and a sanctuary where
debtors obtain cancellation of their
debts, regardless of how they may
have wasted their property"
Asserting that the bankruptcy
courts no longer function for the
.elief of creditors, but rather only
to discharge debtors of obligations
Thatcher and Garrison complained
too that credit often is extended
careless,y They sharply rebukeo
modern Salesmenship" for its ten
dence to induce sales regardless OF
the credit risk involved.
The situation is we'll illustrated,
the report continued, 'in the case Of
wage earners who in large numbers
seek discharge from their debts in
bankruptcy because they have beer
induced by one group Of creditor:
at the expense of another to buy
lvxuries rney can not afford"