S. 3580—An Act to amend an Act entitled "An Act to establish a uniform system of bankruptcy throughout the United States," approved July 1, 1898, and Acts amendatory thereof and supplementary thereto.
This is another bill on which many arguments pro and con have been made. There has been a serious lack of understanding of its provisions and it has been alleged that insurance companies and other mortgagees will suffer severely through the use of this law by farmers to evade the payment of debts that are within their capacity to meet.
I do not subscribe to these fears.
I have sufficient faith in the honesty of the overwhelming majority of farmers to believe that they will not evade the pay. ment of just debts.
Furthermore, contrary to the belief of many uninformed persons this is not a general or wholesale moratorium privilege. The provisions for appointment of appraisers under the Bankruptcy Act and for the judicial review of their appraisals furnish adequate checks against the possibility of unfair appraisals. The actual repugnance with which farmers, like other right-minded people, regard bankruptcy will prevent them from availing themselves of the provisions of this measure except under the force of necessity. The bill is intended to protect not only the farmers, but their creditors also.
In the actual operation of the law, I do not believe that losses of capital will greatly exceed, if they exceed at all, the losses that would be sustained if this measure were not signed.
On the other side of the picture, it is worth remembering that this act will stop foreclosures and prevent occasional instances of injustice to worthy borrowers. The mere threat of a use of this machinery will speed voluntary conciliation of debts and the refinancing program of the Farm Credit Administration. It will prevent deficiency judgments—a form of liability which, in the judgment of many thinking business men, ought to be abolished entirely.
The bill is in some respects loosely worded and will require amendment at the next session of Congress. Nevertheless, the reasons for signing it far outweigh the arguments on the other side.