Evening star., 1933-02-17
CONGRESS PUSHES
FARM DEBT RELIEF
Emergency Bankruptcy Act,
Passed by House, Faces
Senate Action.
BY MARK SULLIVAN.

BY MARK SULLIVAN.
The farm relief which takes the form
OF facilitating reduction of farmers
debts has more momentum in Congress.
N1an any other legislation on any sub.
ject. OF the measures for bringing
about reduction of farm debts the one
closest to enactment is the one givine
to farmers unable to meet these debts
as they mature" an opportunity fol
! legalized compromise under supervision
of the courts. It Is called an "emerg-
ency bankruptcy" act. Actually, it is an
act to avert bankruptcies.
This bill has passed the House by a
vote of POI to 43. In the Senate 1t has
been reported out of the Judiciary Com
mittee and Is ON the floor for action.
Senator Borah has made an urgent plea
that this measure should have right of
way.
The bill as passed by the House en-
ables not only farmers but corporations
and railroads to make compromises
with their creditors under supervision
Of the courts. The central features of
the measure are that debtor can 60
into court ana show that he is unable
to meet his debts as they mature" The
court will thereupon take charge of his
situation. This action of the court
amounts in effect to a moratorium pre-
venting all creditors from haraSsing the
debtor The bringing about of a mora
torium will of course have an important
effect in easing situations now acute in
many parts of the country.
Compromise in Order.
The next step in the process is that
= meeting of creditors is arranged and
a compromise is proposed. The COM
promise will be confirmed by the court
provided ut has been accepted in writ
ing by a majority in number of all
creditors including secured cred
itors, which number shall represent a
majority in amount of claims" The
compromise is binding upon the minor
ity of creditors. The language here
quoted applies to farmer debtors. For
ent provisions are made.
This Is the gist, partial and much
condensed, of the bill as it passed the
House. The other version of the bill
written by the Senate Judiciary Com
mittee on1its corporations and railroads
and deals with farmers only. On the
Senate floor. effort viii be made to re-
store provisions for compromising the
debts Of corporations and railroads as
In the House bill.
The Senate version Of the bill as it
now stands came originally IN large
part from Democratic Leader Robinson
eI Arkan5a8. In the Senate version,
Courts are authorized upon pc
tition Of at least Is farmers within any
county to appoint one or more ref
erees to be known as conciliation COM
miSsioners." These Cancellation COM
Mi iccir
and under the supervision of the courts,
take charge Of the work of arranging
compromises between farmers and their
creditors. The remainder Of the Senate
bill largely parallels the House bill
already passed.
1t seems probable that this measure
should pass the Senate fairly soon.
Thereafter there will be conference be-
tween Senate and House to merge the
two versions into one. Final passage by
both Houses should be readily possible
before March 4.
Another Proposal Weighed.
Another proposal having strong mo-
mentum in Congress aims at relief for
farmers somewhat differently situated.
1t deals with farmers as well as home
owners who have failed to pay interest
s>&kA edACo 4oA tWO yCdIo. 0uCLl QGOIOIS
are OF course in imminent danger of
foreclosures. At the same time the
holder of the mortgage in such cases Is
Obliged to pay out money for taxes.
To take care of these cases, the bill
Just reported to the Senate by the
Banking Committee provides $500, ,0OO,-
OUO OF government credit. The govern
ment, acting through its Reconstruction
Finance Corporation, would in effect
say to the parties concerned, I'VE (the
governmenD will advance money to paw
the overdue taxes and part of the over
Que interest" The creditor would be
Obliged to agree that the new money
advanced by the government would take
priority in lien over the mortgage. BY
the governments action, immediate
foreclosure would be averted and the
farmer or home owner would be left in
possession. Thereafter it is contem-
plated that the debtor should GO about
making compromise with his creditors
under the emergency bankruptcy act
described above.
The concrete object Of these meas
ures Is to facilitate and legalize COM
promises of debt. The compromises
may take any form, reduction of princi-
pal, reduction of rate OF interest. or ex-
tension OF time, or all three. The meas
ures reflect a policy OF bringing debts
down into reasonable relation to the
fall OF prices of land, crops and goods
of all kinds
1t is significant that relief through
reduction OF debt has strong momentum
IN Congress and meets widespread ap-
proval. The measures show in a
broader way that scaling down of debt
as a way out of the depression has
much more momentum than the other
path, which would attempt to raise
prices OF goods by imitation of currency.
Copyright. 1880
Street fatalities in Edinburg. Scot
land. are decreasing in number