The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1934-09-26
bt-Scaling Laws

The Frazier-Lemke bill was rushed
through the last congress by Senator
Long in the final hours Of the ses-
sion. It provides that II any farmer
feels aggrieved" by q settlement he
might otherwise obtain Of his debts,
he can ask to be adjudged q bank
rupt; that thereupon his property
shall be appraised "at its fair and
reasonable value not necessarily the
market value" and that he can buy
back his farm from his creditors at
this valuation over q period Of six
years by paying only ~ per cent Of
the principal within the first two
years, and Is per cent within five
years, with interest at only per cent
on the unpaid principal. II q credi-
tor objects to this, the farmer may
retain possession of his premises un-
der . reasonable" rental for five
years, during which all bankruptcy
proceedings are to be stayed.
Judge Chestnut Of the federal dis
trict court Of Baltimore has declared
this amendment to the National
Bankruptcy Act to be unconstitution-
al on two grounds: first, that it de-
prives . creditor Of the protection
which the laws Of the state provide
for him. while 1t doubles the protec-
ton given to q farmer debtor; Sec
ondly, that It tends to supersede the
right retained by each state in the
operation Of its courts and tends to
ahr00atA LEGAL contracts
The result Is obviously q par
tial cancellation Of the debt" and
necessarily the impairment Of
the integrity and terms Of the
mortgage Indebtedness. : The
substantial effect is to transfer
the property Of one person to an
other by requiring the mortgage
to sell his interest in the prop
erty to the mortgagor at price
which the former has no part
or influence In fixing.
In asking whether the supreme
court will sustain this decision II 1t
comes before it, two Of its own pre-
vious decisions are Of special inter-
est. One Is that Of Jan. 8 Of this year
UNFOLDING the validity Of the Min
nesota moratorium law, by a five-to-
four vote, in which Chief Justice
Hughes, writing for the majority,
said:
Il state power exists to give
temporary relief from the en-
forcement Of contracts in the
presence Of disasters due to phys
1cal causes such as fire, flood or
earthquake, that power cannot be
said to be nonresident when the
urgent public need demanding
such relief is produced by other
and economic causes.
On May %, however, the supreme
court declared unconstitutional an
Arkansas law which granted I mora
torium on liens on life insurance pol
icies. This decision was unanimous.
The court drew the distinction that
the Minnesota law was temporary
and conditional" while this could not
be said Of the Arkansas measure.
Such an exemption applied in the
case Of debts owing before the exemp-
ton was created by this legislation
constitutes IN unwarrantabel inter-
ference with the obligation Of con-
tracts in violation Of the constitu-
tional provision" While the Frazier
Lemke bill is to apply "only to debts
existing at the time this act becomes
effective" it has no other limiting
condition.
The president. in signing It. de-
clared It to be loosely worded," and
expressed the belief that it would
require amendment at the next ses-
sion Of congress" Apart from the
question Of its constitutionality, the
measure Is Of doubtful utility even
to the farmer in the long run. II the
principle Of scaling down debt at the
initiative Of the individual debtor
should become legally established, 1t
Is not difficult to guess what its ef-
feet would be on those who in the
future were invited to become credi-