Evening star., 1932-02-29
Text of Hoover Message
President Urqes Increase in Judicial Personnel and
Changes in Laws to End Congestion of Undis-
posed Cases Pending in Court.

Invalidity of Indictments Through the
disqualification of Grand Jurors.
There have been many instances,
the District of Columbia where indict-
ments, returned after long and ex-
pensive hearings, have been invalidated
by the discovery Of the presence on the
grand jury of single ineligible juror.
BY law applicable to the United States
District Courts, including the Supreme
Court of the District of Columbia, 1t
should be provided that If not less than
IL eligible grand jurors vote for an in
dictment 1t shall not be invalidated be-
cause Of the presence of ineligible
jurors. Legislation should be enacted
limiting the time for making motions to
quash indictments because Of disqualifi-
cations Of grand jurors.
All the foregoing proposals relating to
criminal procedure should be made ap-
plicable to the Supreme Court of the
District. In addition, the statutes in
force in the District respecting the
qualifications of grand and petit jury
men and their selection should be
thoroughly examined and overhauled.
Grounds of ineligibility now exist which
do not affect the availability or impair
tiality of jurymen.
The system now in operation in the
District for preparing lists of persons
qualified for jury service requires i'm
provement.
Juvenile Delinquents.
Each year many juveniles charged
with violation of law fall into the Gus
tody of the Federal authorities. In
tie interest of child welfare there
should be legislation enabling the At
torney General to forego prosecution
of children in the Federal courts and
to return them to State authorities TO
be dealt with by juvenile courts and
other State agencies equipped TO deal
with Juvenile delinquents.
Jurisdiction Based on Diversity of
Citizenship.
The Constitution provides that the
judicial power OF the Federal courts
shall extend to cases between citizens
Of different States and the judiciary
acts have provided for the exercise of
this Jurisdiction. In its application,
TIE courts have determined that a cor
poration shall be deemed a citizen of
the State under whose law it is organ
lied. Cases involving corporations, with
Jurisdiction based on diversity Of citi-
zenship, form a substantial part of the
business Of the Federal courts. Legis-
lation heretofore has been proposed to
abolish entirely the Jurisdiction of the
Federal courts based on diversity of
citizenship. I do not approve of such
a measure.
The reasons which induced the con-
stitutional grant~to the Federal courts
of jurisdiction over cases between cit
liens of different States still exist To
abolish that jurisdiction entirely would
work to the detriment of those States
which look to outside capital for the
development of their business and COM
merce. As applied to special types of
cases, however, affecting corporations,
the present law allows the Federal
courts to exercise Jurisdiction because
OF diversity Of citizenship, In cases not
within the real purpose and spirit of
the constitutional provision referred to-
I recommend the consideration by
the Congress of measure to modify
this Jurisdiction to q limited extent
by providing that where q corporation,
organized under the laws of one State.
carries on business In another State
1t shall be treated as q citizen of the
State wherein 1t carries on business as
respects suits brought within that State
between it and the residents thereof
and arising out Of the business carried
on In such State. Such a change in
the law would keep out of the Fed
eral courts cases which do not really
belong there and reduce the burdens Of
the Federal courts without impairing
in any degree the diversity OF cit
izenship Jurisdiction which the trainers
OF the Constitution had in mind.
Prohibition Law in District of Columbia.
have hitherto recommended legisla-
tion effectively to supplement the pro-
hibition law for the District of Columbia.
The Attorney General has made recon-
mendations as to the character of such
legislation before the committees of the
Congress. I again urge favorable action
Bankruptcy.
The Federal Government is. charged
under the Constitution with the re-
sponsibiltty Of providing the country
With an adequate system for the ad-
ministration of bankrupt estates. The
Importance Of such a system to the
business life of the community is ap-
parent. The number Of cases in bank
ruptcy has steadily increased from
$4,000 in the fiscal year 1921 to $4,000
in 1928 and to $1,000 In 1881. The
liabilities involved have increased from
$l71 ,000, 900 In 1921 to $3.50, 900 900 in
1928 and to 81 ,008, ,000, 900 in 1881, and
the losses to creditors have increased
from S144 4000,0 900 in 1921 to STAG, ,000, 900
in 1928 and to S911 900, 900 in 1881. The
increases are therefore obviously not
due to the economic situation, but to
deeper causes.
A sound bankruptcy system should
operate:
First, to relieve honest but I'M
fortunate debtors of an overwhelming
burden of debt
Second, to effect a prompt and eco
nomical liquidation and distribution of
insolvent estates; and
Third, to discourage fraud and need
less waste of assets by Withholding re-
lief from debtors in proper cases.
For some time the prevailing opinion
has been that our present bankruptcy
act has failed in its purpose and needs
thorough revision. During the past year
the Department Of Justice. with my ap-
proval, has conducted an investigation
into the administration of bankrupt
estates in the Federal courts. Nation
wide in its scope, the inquiry has in
volved intensive study OF the practical
operation of the bankruptcy act under
varying local conditions throughout the
United States. Court records and spe-
cial reports of referees have been an
alyzed Organizations of business men
and lawyers have assisted In gathering
information not available through Off
cial channels. Judges, prosecuting off,
GERS, referees, merchants, bankers and
others have made available their expe-
rience. Data gathered by the Depart
-I-4 - ~
failure and the effect Of bad debts upon
business has been studied. The history
of bankruptcy legislation and admin
istration in this country and In Great
Britain, Canada and other countries has
been reviewed.
The inquiry has now been completed.
It's result is embodied in a report which
is transmitted herewith for the consid-
Grafton CT the Congress. Thorough and
exhaustive in detail, it presents the in
formation necessary to enable the Con-
Tn OF ha farIltS i'm the