The Western news. [volume] (Libby, Mont.) 1933-current, 1934-10-11
Tells How
To Handle
Farm Debts
H. j. Gordon, State Co-or
dinator, Gives Interview
On Important Matter.
SEVERAL ACTIONS
CAN BE TAKEN

H. J. Gordon state co-ordinator OF
the State Farm Debt Advisory COM
mittee, was in Libby last week and
while here gave the following inter
view to this newspaper:
The County Farm Debt Advisory
committees recently appointed by Gov
ernor F. H. Cooney for the state OF
Montana to avert foreclosures and Sc
cure voluntary settlement of farm debts
are fully organized and operating.
In Montana, there are 56 of these
local farm debt advisory committees
covering every county in the state
Heavily indebted farmers or their
creditors may obtain the services of
these committees without cost for the
purpose of working out acceptable ad-
iustment of debts.
The County Farm Debt Advisory
committees are made up of representa-
tive local men who have been appoint
ed by the governor and who know
local conditions. They are giving their
time voluntarily to this work At the
request of farmer or his creditors.
they will contact the parties concerned
and, if possible, work out a settlement
satisfactory to both debtor and creditor.
Some of the committees have settled
60 to 80 per cent of all cases brought
to them When a case can not be settled,
the farmer can obtain the advice OF
the committee as to further procedure
Four Methods.
The report Of the state committee
outlines four steps which distressed
lustment of their debts The first step
and this is the one being followed by
most farm debtors-is to try to arrange
settlement directly with their credit
ors through their own efforts.
Where this is impossible, the second
step for the farmer is to take his
troubles to the local farm debt advisory
committee This action gives the farm
err the benefit of the advice Of a re-
sponsible body of local men, and the
fact that they serve on voluntary
basis lends great weight to their recon-
mendations.
In most instances, creditors with
whom the debtor himself has been un-
able to settle, will be inclined to ac-
cept the impartial and practical advice
of a responsible farm debt advisory
committee. These committees have no
legal status and have no way OF en-
forcing their recommendations but. be-
cause of this situation, most debtors
and creditors are willing to give care
full consideration to their recommended
tons.
If distressed farmer is unable to
get a settlement with his creditors,
however, and the county farm debt ad-
visory committee is unable to secure
voluntary settlement, the next step is
for the debtor to apply to the federal
Cancellation commissioner in his county.
Under an amendment to the national
bankruptcy act federal judges are in
structed to appoint Cancellation COM
missioner in each agricultural county.
When farmer debtor applies to this
county Cancellation commissioner, the
latter attempts to work out settle
ment which will be satisfactory to a
majority of the creditors, both in num-
Der and amount. If the commissioner
secures their approval, the court may
then make the settlement binding on
unsecured creditors, even though they
disapprove of the basis of settlement.
This power of the court lends weight
to the recommendations of the COM
missioner, who may be able to settle
many cases previously held up because
of the objections of an unsecured
creditor holding minority interest.
The Final Step.
The final step which the debtor may
take as a last resort after all other
efforts have failed is to file petition
in bankruptcy under the recently
adopted Frazier-Lemke amendment
Under the provisions of this amend
ment the debtor may be allowed to
retain possession of his farm for a
period of either five or six years. Dur
ing this period, he may make certain
payments under a six year purchase
plan, including the payment of taxes
and one per cent interest on the prin-
cipal each year, in addition to certain
payments on the principal of the debt
This plan is followed provided the Sc
cured creditors give their consent. If
they do not accept the plan, the farmer
may retain possession by paying into
the court a fixed annual rental. At the
end of this five or six year period, or
before, the debtor may repurchase the
farm by paving a price set upon it by
three appraisers appointed by the fed
eral court.
The State Agricultural Conciliatory
Committee. Estate Farm Debt Advisory
Committed strongly recommends that
every effort be made by distressed
farmers to secure voluntary adjust
nent of their debts through the farm
debt advisory committees, or with the
aid of the county Cancellation commits
sioner, before resorting to bankruptcy
proceedings under the Frazier Lemke
amendment. This amendment requires
farming under the jurisdiction of the
court and gives the farmer no assur-
ance that he will be able to borrow
the money at the end of the five or 81,