Evening star., 1933-01-12
BANKRUPTCY LAWS
REVISION EXPECTED
Sentiment for Reform Grows
Following Recommended
tion by Hoover.
Rv the Associated Press-

By the Associated Press.
Strong sentiment for helping flnan-
cially embarrassed individuals and cor
porations through bankruptcy reform
measures developed in Congress today,
forecasting enactment this session of
such legislation
President Hoover recommended sweep
ing revision of existing laws to accom-
plish this end and today number Of
leaders gave support to the movement.
Two bills already drafted are to be
taken up by the House Judiciary Com
mittee tomorrow and speedy approval
Is expected.
The sponsors of those measures are
Representatives McKeown Democrat
Oklahoma) and La Guardia (Repub-
lican, New York;. Soon after Mr..
Hoover's special message urgently re-
questing the changes was received yes
terday, the House members met with
Senator Hastings Republican. Della
ware) and Solicitor General Thacher,
and general approval of the more I'M
portant details Of their proposals was
given.
Supported by House Leaders.
Speaker Garner and other House
leaders gave their support to the princi
Piles embodied in the bills and the Chief
Executives call for such legislation as
sures the backing of many Republicans.
Garner said that if the Judiciary
Committee reported the McKeown-La
Guardia bill tomorrow the measure
4 l., nx1rr Inr-a
ton.
He added that after congressional
action on the bankruptcy law, the
Democrats would determine whether
additional farm mortgage legislation
was to be had at this session. He said
there was considerable support for the
McKeown-La Guardia proposal.
Hastings, McKeown and La Guardia
were members of a joint committee
which studied general bankruptcy legis-
lation recommended by the administra-
ton last session.
McKeon's bill affects individuals and
corporations; La Guardia's railroad cor
porations. Persons unable to pay their
debts would be given either an exten-
sion of time on application to the Fed
eral courts, or sort of installment
plan arrangement with each creditor
SCIblll5 LID olldIc Qullll6 bA1C PChAOA
agreed upon. The consent of major
ity of the creditors would be necessary
to the arrangements and the debts
could not be scaled down. The ar
rangement would be binding on the
minority creditors.
Drastic Scaling Down Possible.
In the case of corporations, including
railroads the reorganization might re-
suit in the drastic scaling down Of these
Indebtedness. An application for sucn
a reorganization could be voluntary, or
it could be brought about by IS per cent
of the creditors provided their claims
amounted to at least 10 per cent.
The Interstate Commerce Commission
would supervise the reorganization OF
railroad corporations, with the Federal
courts aiding.
In his special message yesterday, Mr..
Hoover urged prompt overhauling Of the
bankruptcy laws, saying such action
would eliminate great losses in formal
bankruptcy proceedings under existing
law.
Text of Message.
The Presidents message follows in
full:
''On February 20 last addressed the
Congress on the urgent necessity for
revision Of the bankruptcy laws, and
presented detailed proposals to that
end. These proposals were based upon
most searching inquiries into the whole
subject which had been undertaken by
the Attorney General at my direction.
While it is desirable that the whole
matter should be dealt with, some por-
tons OF these proposals as an ameliora-
ton OF the present situation are proving
more urgent every day With view to
early action, the department, commit
tees and members of the Congress have
been collaborating in further develop
ment OF such parts of these proposals
as have, out of the present situation, be-
come OF most pressing need urge that
the matter be given attention at this
session, for effective legislation would
have most helpful economic and social
results in the welfare and recovery OF
the Nation.
THE process of forced liquidation
through foreclosure and bankruptcy
sale Of the assets of individual and cor
porate debtors, who through no fault
OF their own are unable in the present
emergency to provide for the payment
OF their debts in ordinary course as
they mature, is utterly destructive OF
the interest of the debtors and creditors
alike and II this process Is allowed 10
take its usual course misery Will be
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