Memorandum of Disapproval of Bill Amending the Bankruptcy Act.

[ Released September 9, 1960. Dated September 8, 1960 ]

I HAVE WITHHELD my approval of H.R. 7242, "To amend sections 1,57j, 64a(5), 67b, 67c, and 70c of the Bankruptcy Act, and for other purposes."

I recognize the need for legislation to solve certain problems regarding the priority of liens in bankruptcy, but this bill is not a satisfactory solution. It would unduly and unnecessarily prejudice the sound administration of federal tax laws. In some cases, for example, mortgages would be given an unwarranted priority over federal tax liens even though the mortgage is recorded after the filing of the tax lien.

This and other defects of the bill can, I believe, be corrected without compromising its primary and commendable purpose. The Treasury Department and the proponents of H.R. 7242 have been working toward solution of recognized problems in present law. further cooperative effort should produce satisfactory legislation that would avoid the undesirable effects of this bill.

DWIGHT D. EISENHOWER