Page images
PDF
EPUB
[ocr errors]

tional fee for such services not to exceed $25, as allowed by the court. It also provides that all additional fees or costs of administration shall be charged to the bankrupt's estate, and provides that the reasonable rental to be charged the farmer debtor under paragraph 7 of subsection (s) shall not exceed 5 percent of the appraised value of the property, or amount of the encumbrances. In other words, if the debt is equal to the appraised value of the property, then the rental must not exceed 5 percent of the appraised value, but if the encumbrance is less than the appraised value, then the rental must not exceed 5 percent of the encumbrances.

It provides further that if a receiver is in charge of the property, the receiver shall be divested of possession, and the property turned over to the farmer under the provisions of section 75, as amended. It also provides that section 75 shall apply to partnerships; common, entirety, joint or community ownership, and that any such parties may join in one petition. It further provides that the term “farmer”, as defined in subsection (r) of section 75, shall include any person who is engaged in the production of poultry or poultry products, livestock, and dairy products, as well as products of the soil.

The amendments proposed in section 3 of H. R. 5452 are simply to clarify the present section 75 with amendments, and to bring about a uniform procedure in all courts. On nearly every amendment of amended paragraph 3 of subsection (s), there has been a diversity of rulings and decisions by United States District Courts. Some have held that if a husband and wife were jointly interested, or had interests in common, or were partners in the farming operations, that then neither of them could take advantage of the act, nor could they join. Obviously such was not the intention of Congress.

Others have held that the conciliation commissioner was through when the petition of conciliation was amended to a petition of bankruptcy. Again, some have held that the farmer would have to pay the regular bankruptcy filing fees and referee's fees when he amended. In some cases, the rentals were fixed so high as to actually defeat the purposes of the act, while the amendment under section 3 of H. R. 5452 fixes the maximum limit at 5 percent of the appraised value of the property, or encumbrances. Finally, some courts have given a very technical construction and meaning to the word "farmer”, holding that a farmer was one who actually tilled and cultivated the soil, and excluded poultry and livestock farmers from the act.

Of course, this is new legislation, but the intention of Congress was that it was to be liberally construed, to afford the protection given in the act to the farmer debtor during this depression.

NECESSITY OF H, R. 5452

The necessity for enacting H. R. 5452 is more clearly brought out by numerous letters received by Members of Congress from conciliation commissioners, referees, attorneys, attorneys general, farm organizations, and judges, as to the great good that this act has done to date, and as to the necessity of having it clarified, because of the diversity of rulings and decisions, and the financial inability of the farmer debtor to finance appeals from these decisions to the higher courts.

CHANGES IN EXISTING LAW

[ocr errors]
[ocr errors]

In compliance with paragraph 2 of Rule XIII of the Rules of the House of Representatives, new matter proposed to be added by H. R. 5452 to section 75 of the Bankruptcy Act is printed below in italics, existing law is shown in roman.

That subsection (n) of section 75 of the Act of July 1, 1898, entitled "An Act to establish a uniform sustem of bankruptcy throughout the United States”, as amended, is amended as follows:

"(n) The filing of a petition or answer with the clerk of court, or leaving it with the conciliation commissioner for the purpose of forwarding same to the clerk of court, praying for relief under section 75 of this Act as amended, shall immediately subject the farmer and all his property, wherever located, for all the purposes of this section, to the exclusive jurisdiction of the court, including all real or personal property, or any equity or right in any such property, including, among others, contracts for purchase, contracts for deed, or conditional sales contracts, the right or equity of redemption where the period of redemption has not or had not expired, or where the sale had not been confirmed, at the time of filing the petition; or where, siz months prior to the date that this amendment becomes effective, the conciliation commissioner or court dismissed, refused to accept and file the petition, or take jurisdiction of such property, prior to the expiration of the period of redemption or confirmation of sale: Provided, That such property has not been conveyed to an innocent purchaser, other than a creditor or lien holder.

"In all cases where, at the time of filing the petition, the period of redemption had not or has not expired, or where the sale has not or had not been confirmed, or where, six months prior to the time this amendment becomes effective, the conciliation commissioner of court dismissed, refused to accept and file the petition or to take jurisdiction of such property, prior to the expiration of the period of redemption or prior to confirmation of sale, the period of redemption shall be extended or the confirmation of sale withheld for the period coincident with the period provided by this Act for the purchase of the property by the farmer debtor, if he so desires or elects, under the terms and provisions of subsection (s) of section 75 of this Act as amended. The word redemption' shall include any State moratorium, whether established by legislative enactment or executive proclamation, or where the period of redemption has been extended by a judicial decree. In proceedings under this section, except as otherwise provided herein, the jurisdiction and powers of the courts, the title, powers, and duties of its officers, the duties of the farmer, and the rights and liabilities of creditors, and of all persons with respect to the property of the farmer and the jurisdiction of the appellate courts, shall be the same as if a voluntary petition for adjudication had been filed and a decree of adjudication had been entered on the day when the farmer's petition, asking to be adjudged a bankrupt, was filed with the clerk of court or left with the conciliation commissioner for the purpose of forwarding same to the clerk of court."

Sec. 2. That section 75 of said Act be further amended by amending paragraph (3) of subsection (s) to read as follows:

“(3) If the debtor's exemptions are encumbered by mortgages or liens, he shall pay the appraised value to the lien holders, as their interests may appear, in full satisfaction and in discharge of the liens, upon the terms and conditions herein stated: Provided further, That upon request of the debtor, unless written objections are filed as provided for in paragraph 7 of subsection (s) of section 75 of this Act as amended, the conciliation commissioner, or the trustee, if one has been appointed, shall sell to the debtor any part, parcel, or all of the remainder of the bankrupt's estate, at the appraised value, upon the following terms and conditions, and upon such other conditions as in the judgment of the court shall be fair and equitable:

“(a) Payment of 1 per centum interest upon the appraised price within one year from the date of said agreement.

(b) Payment of 2% per centum of the appraised price within two years from the date of said agreement.

"(c) Payment of an additional 242 per centum of the appraised price within three years from the date of said agreement.

“(d) Payment of an additional 5 per centum of the appraised price within four years from the date of said agreement.

*(e) Payment of an additional 5 per centum of the appraised price within five years from the date of said agreement.

"() Payment of the remaining unpaid balance of the appraised price within six years from the date of said agreement.

[ocr errors]

“Interest shall be paid on the appraised price and unpaid balances of the appraised price yearly as it accrues at the rate of 1 per centum per annum, and all future taxes shall be paid by the debtor.

After all court costs and administration charges have been paid, the proceeds of such payments on the appraised price and interest shall be paid to the lien holders as their interests may appear, and to the trustee of the unsecured creditors, as their interests may appear, if a trustee is appointed.”

Sec. 3. That section 75 of said Act, as amended, be further amended by adding a new paragraph to subsection (s) to read as follows:

"(8) The conciliation commissioner, appointed under subsection (a) of section 75 of this Act, as amended, shall continue to act, and act as referee, when the farmer debtor amends his petition or answer, asking to be adjudged a bankrupt under the provisions of subsection (s) of section 75 of this Act, and continue to so act until the case has been finally disposed of. The conciliation commissioner, as such referee, shall receive such an additional fee for his services as may be allowed by the court, not to exceed $25 in any case, to be paid out of the bankrupt's estate. No additional fees or costs of administration of any kind shall be charged to the farmer debtor when or after he amends his petition or answer, asking to be adjudged a bankrupt, under subsection (s) of section 75 of this Act, but all such additional filing fees or costs of administration shall be charged against the bankrupt's estate, and paid out of the estate when and as installment or rental payments are made. The reasonable rental to be charged the farmer debtor, under paragraph (7) of subsection (8) of section 75 of this Act as amended, shall in no case annually exceed 5 per centum of the appraised value of the property or of the amount of the encumbrance. If, at the time that the farmer debtor amends his petition or answer, asking to be adjudged a bankrupt, a receiver is in charge of any of his property, such receiver. shall be divested of possession, and the property returned to the possession of such farmer, under the provisions of this Act. The provisions of this Act shall be held to also apply to partnerships, common, entirely, joint or community ownerships, and any such parties may join in one petition. The term "farmer', as defined in subsection (r) of section 75, shall include any person who is engaged in the production of poultry and poultry products, livestock and dairy products, as well as products of the soil.

This Act shall be construed as interpretative of section 75, as amended, and shall apply to all existing cases now pending in any federal court, under said section, as well as to future cases. It shall be liberally construed, so as to give full effect to the intent and purposes of Congress, as expressed in this Act.

)

[ocr errors]

ALASKAN AIR MAIL SERVICE

APRIL 1, 1935.--Committed to the Committee of the Whole House on the stato

of the Union and ordered to be printed

Mr. BRUNNER, from the Committee on the Post Office and Post

Roads, submitted the following

REPORT

[To accompany H. R. 5159)

The Committee on the Post Office and Post Roads, having had under consideration the bill (H. R. 5159) to authorize the Postmaster General to contract for air-mail service in Alaska, reports the same back to the House with the recommendation that the bill do pass.

This bill authorizes the Postmaster General to contract, after advertisement in accordance with law, for the carriage of all classes of mail within the Territory of Alaska by airplane, payment therefor to be made from the appropriation for star-route service in Alaska.

The Post Office Department is handicapped by lack of legal authority to contract for air-mail service as it is unable to write into star-route contracts the requirement that service be given by airplane. About 20 companies are operating airplanes in Alaska, and some air-mail service is now being provided under star-route contracts and is materially expediting the mails; it is also proving cheaper than service by dog sleds. Twenty-five to fifty days are required to make the trip from Fairbanks to Nome by dog team, but less than 2 days by airplane.

The Department believes that any legislation along this line should permit the Postmaster General to contract for all classes of mail, as the prompt delivery of parcel post is equally important to the patrons who depend upon it for the delivery of their household supplies, clothing, food, and medicines.

Development of the air-mail service will prove of vast importance in developing the Territory and will provide a speedier method of communication between the business centers and the remote places of Alaska and also between the Territory and the United States.

The bill (H. R. 5159) meets with the approval of the Post Office Department, whose report reads as follows:

OFFICE OF THE POSTMASTER GENERAL,

February 20, 1935. Hon. James M. MEAD, Chairman Committee on the Post Office and Post Roads,

House of Representatives. MY DEAR MR. MEAD: The receipt is acknowledged of your letter of the 13th instant, requesting a report on H. R. 5159, a bill to authorize the Postmaster General to contract for air-mail service in Alaska.

Prior to the development of the airplane, the interior of Alaska was dependent almost wholly on the transportation facilities furnished by the rivers in the summer and by dog team in winter. At the present time, some 20 companies are operating airplanes in the Territory. These are mostly small concerns, having only limited facilities for fying. The largest company is the Pacific Alaska Airways, Inc., a subsidiary of the Pan American Airways. At present a small number of these companies hold star-route contracts for the carriage of the mails between certain designated points. In most instances the service is being performed by airplane and has proven generally satisfactory, the mails being materially expedited in delivery.

For example, mails are now transported from Fairbanks to Nome in less than 2 days, making all necessary stops enroute, while by dog team 25 to 30 days were required to make the trip, the length of time depending on the condition of the trails.

While it has been possible to provide some air-mail service under star-route contract authorizations, the Department has been greatly handicapped due to the lack of legal authority to contract for the class of service which would best meet the needs of the Territory. Under the law governing the authorization of star routes we are unable to definitely write into the contract the requirement of service by airplane, and the companies now providing that class of service cannot be required to do so under the terms of their contracts.

On account of the rather limited population and the comparatively small amount of postal business in the Territory, there appears to be no justification for the establishment of air-mail routes such as provided in the United States proper for the carriage of first-class mail only at air-mail rates of postage. It is believed that the Postmaster General should be given authority to contract, in his discretion, for the carriage of all classes of mail in the Territory of Alaska by airplane. Under such law an improved service could be authorized as the contracts would definitely define the class of service to be performed. While prompt delivery of firstclass mail is important to the business interests of the Territory, the prompt delivery of parcel post is equally important to the patrons of the smaller post offices who depend to a large degree on the parcel post for household supplies, clothing, and often foodstuffs.

Due to the climatic conditions and the rough nature of the terrain, the building and maintenance of roads on an extensive scale is prohibitive in cost and on that account it is believed that the development of a dependable airplane service will do more to aid in the development of the Territory as a whole than any one thing that can be done. The Department, therefore, favors the enactment of this Very truly yours,

W. W. Howes, Acting Postmaster General. A comparison of existing law with the provisions of the pending bill is shown below.

Existing law (act of Feb. 21, 1925; 43 Stat. 960; 39 U. S. C. 488) showing in stricken-through type the words stricken out, and in italics the new matter inserted by the pending bill (H. R. 5159):

The Postmaster General is authorized to may provide difficult or emergency mail service in Alaska, including the establishment and equipment of relay stations, in such manner as he may think advisable, without advertising therefor; and he is authorized, in his discretion, to contact, after advertisement in accordance with law, for the carriage of all classes of mail within the Territory of Alaska, by airplane, payment therefor to be made from the appropriation for star-route service in Alaska.

O

measure.

« PreviousContinue »