The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-12-27
BANKERS HOLD
UP CHANGE IN
BANKRUPT ACT
Block Proposed Revision of
Laws Urged by Justice
Department.
BY RUTH FINNEY
Times staH Writer

WASHINGTON, Dec. 27.-General
revision Of the bankruptcy law ur-
gently recommended by the depart
ment Of justice after its investiga-
ton Of conditions under the present
law. is being blocked in this congress
Chiefly by the opposition of lawyers
The American Bar Association
went on record against the measure
last spring, and Jacob M. LASTLY.
chairman Of its bankruptcy COM
mittee, was the principal witness
against it.
The department Of justice re-
port, signed by Solicitor General
Thomas Day Thatcher, charged that
existing bankruptcy law does not
attain its detectives 1t encourages
and facilitates fraud on the part of
h1solvent debtors. It permits the
exploitation Of its own process. It's
administration is expensive, slow
moving and unsatisfactory to the
business community.
Ban Fee System
1t has demoralized the integrity
Of large numbers of people who have
been discharged from debts which
they might have paid without hard
ship had the law Disseminated be-
tween those who, through mis-
fortune, are overwhelmed with debts
and those needing only temporary
relief and an opportunity to deal
fairly with their creditors" saws the
report.
1t proposed doing away with the
fee system, under which referees in
bankruptcy receive payment in pro-
portion to the net amount dis
tributed to creditors.
Lloyd K. Garrison, special depart
ment Of justice assistant, pointed
out to the senate judiciary sub
committee in testifying on the bill
that everything the receiver passes
on that affects the amount of as
sets in that estate, directly and
necessarily affects his own pocket
book"
Salaries for Receivers
The proposed reform act would
place receivers on an annual salary
basis, the amount to be fixed by the
attorney general, but not in excess
of $4,000.
It at the same would create ten
administrators at maximum salaries
of $500 a year to serve in different
districts in an advisory capacity to
federal judges on bankruptcy mat
ters, observing the work of referees,
investigating alleged abuses, and
acting as executive head Of eXamin-
ers in their territories.
Creation of 200 examiners to in
vestigate disposition of a debtors
assets, and examine him before the
referee, in the presence of his cred
itors is another new phase of the
proposed act.
Lawyers Like Present Plan
The department calculated that
the cost of this more elaborate
structure .or administration of
bankruptcy law would be $2,882, 1877
a year, but that collection of fees
hitherto received by referees with
percentage charges against estates,
would yield the government $3,183,-
949 a year, making the act self
sustaining
LASTLY told the senate subcom-
mittee that the American Bar As
ISOLATION is not at all interested in
the protection of any group of
lawyers in a vested interest or re-
numerative practice in connection
with the bankruptcy law" but urged
that "our bankruptcy law is sound
in its conception, that it has made
a tremendous contribution to the
commercial and economic life of the
country" and that long study
should be made before any altera-
ton of the act