The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-01-24

The bill, backed by both
Democratic and Republican
leaders and having the earn
est Endorsement of President
Hoover, will be presented to
the house for passage Mon
day, under a drastic rule not
permitting amendments or ex-
tenSive debate.
The committee report, while en-
phasiAng that the measure will
bring substantial aid to all classes
OF debtors, including the farmer.
stressed the plight of the great
transportation systems.
Needs Speedy Action
Necessity for its immediate en-
actment (the railroad reorganization
section) results" the committee
said, from the fact that at the
present time many railroads of the
country confront necessity for reor-
ganization.
They have reached the limit Of
their ability to borrow from the
Reconstruction Finance Coronation.
'fhey either must reorganize under
some arrangement such as provided
for by this section, or be admins
tered in equity receiverships."
The report sharply criticised ordi-
nary procedure of receivership. at
lacking "the opportunity for ma
nipulations on the part of special
groups" which, it says, "are too well
known to require comment"
The bill, in addition to permit
ting railroads and other corpora
lions to reOrganize with Iessened
indebtedness, definitely gives the
interstate commerce commission au-
thority to fix compensation for
those engaged in the reorganiza-
ton.
Would Halt Plundering
This" the report adds definite
ly should put a stop to the whole
sale plundering by reorganization
managers, both by way of fees and
for commissions covering new secur-
tiles"
The McKeown-La Guardia bill. as
finally reported, is more liberal than
the form Of relief first proposed to
the committee.
For the individual ii provides:
He may go into court, declare
himself insolvent, have his possess
sions inventoried by a receiver, and
at a meeting of his creditors pro-
pose a plan for meeting his obliga-
ions IN part, or in full, over an
extended term of years.
If majority of the creditors an
prove, the court is asked to confirm
the proposal. If a majority does
not approve, the debtor still NAV
ask and receive from the court an
extension of time.
For the man against whom a
mortgage stands it provides:
He may go into court following
this same procedure, and if the
holder Of his mortgage does not
agree voluntarily to scale down the
cebt, the court may force him to
extend the life of the mortgage.
Provides for Corporations
For corporations it provides:
That a plan of reorganization pro-
posed by creditors holding 10 per
cent OF the claims may be presented
to the court and by it made binding
upon all but secured creditors. if
tWo-thlrds Of the creditors approve
and the court is convinced it is
equitable.
Secured creditors have the option
of taking the equity which would
be theirs in bankruptcy proceed
ings.
For railroads it provides:
That a plan Of reorganization
shall be drawn under direction of
the interstate commerce commits
sion. Plans submitted to the court
for approval could be rejected or
accepted, but not amended.
Approval of two-thirds of the
creditors in each class is to be
sought, but if two-thirds of any one
class Of creditors approves, reorga-
can proceed, with other
creditors retaining the status thew
would have in bankruptcy proceed
lngs.