Imperial Valley press., 1933-01-12
DEBT BURDEN
To Be EASED
BY CONGRESS
Rush Preparations Of Legisla-
ton Designed To Lighten Load
Borne By Nation.
GIVEN UNANIMOUS SUPPORT
Special Message From President
Brings About Unanimity Of
Agreement Among Leaders.
BY WILLIAM F. KERRY
United Press Staff Correspondent

by WILLIAM r. hEhbf
United Press Staff Correspondent
WASHINGTON. Jan. IL. = Con-
gress today rushed preparation for
drastic legislation TO tighten the
crushing burden of debt under
which the nation has struggled
through three long years of alb
normal economic conditions.
1t was spurred to action by a
special message from President
Hoover and by the unqualified en-
dorsement of leading Democratic
spokesman.
With unusual unanimity and
non-partisan accord, leaders Of all
creed and schools of thought rail-
lied behind the LaGuardia Nc
Keown bill.
This legislation would enable in
dividuals and corporations to OBJ
tain postponement and, in some
cases scaling down of debts.
Techically, the measure is a
liberalization of the federal bank
ruptcy procedure.
Actually it contemplates reyolu-
tionary revision to bring relief
from the top-heavy burdens of
debts which were contracted when
prices were high and dollars cheap,
and which many cannot pay now
that dollars are dear. 1t was
hailed in congressional circles as
a direct frontal attack on the de-
pression-a bold attempt to adjust
business to change circumstances.
The measure proposes tremen-
dous reorganization of industrial
finance; and real moratorium for
individuals caught beneath mount
ing debts.
It contemplates relief for the
factory worker unable to pay for
his installment bought radio; for
the farmer staggering beneath the
load of a mortgage contracted on
the basis of boom times and dollar
wheat; for the great railroad
threatened with bankruptcy through
inability to obtain refinancing.
The proposed bill, to be present.
ed to the house judiciary commit-
tee for action Friday, is divided
into three sections. One deals with
individuals and small businesses;
the second with larger corpora
tions; the third with railroads.
Relief In Court
The average citizen, struggling
with salary reductions, or no salary
at all, would obtain the debt re-
lief by application to a federal
court.
He would propose a general seal
ing down Of payments, postpone
ment, or perhaps both. If credi-
tors holding a majority of his OBJ
legations agreed, and the court ap-
proved, he would then proceed on
reduced paying basis, paying
what he could.
The theory of the bill is that it
is better for everybody, including
creditors, to save something when
a debtor is hard pressed rather
than to have him go into bank
ruptcy and lose everything. A
high point of this section Is that
a minority of stubborn or recall
citrant creditors could not break
up the orderly process.
The scene as it would deal with
great corporations is somewhat
more complex, but follows along
the same general outline.
AS applied to railroads, at pres
ent source of great concern to
the administration and to DEM
ocratic leaders, the corporation or
combination of its debtors, in
cluding stock and bondholders,
could force a complete reorgan-
ization. This process could, and
in many cases would, imply re-
issue of stocks and bonds based
on greatly reduced net capitaliza-
ton. Losses would follow; but ad-
vocates of the plan believe it pre-
ferable to forced and expensive re-
ceiyerShiDS.