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on a light background, showing the full front view of the features of the applicant, and taken within six months of the date they are submitted. Snapshot, newspaper, magazine or full-length photographs will not be accepted.
(b) Witness-The application must be supported by an affidavit of at least one credible witness, who has known the applicant at least two years. In cases of persons who have not previously obtained passports, the applicant or the witness must be known to the clerk of court or passport agent, or must be able to establish identity by documentary evidence, otherwise the applicant must be required to obtain as a witness an American citizen having his place of business within the jurisdiction of the court or the passport agency.
The witness, in signing the application, should state the nature of his profession or business and his professional or business address. No lawyer or other person will be accepted as witness to a passport application if he has received or expects to receive a fee for his services in connection therewith.
A person born in the United States in a place where official records of birth were kept at the time of his birth must submit with the application a birth certificate under the seal of the official custodian of birth records. A certificate must show the date and place of birth and that the record was made at the time of birth or shortly thereafter. If a birth certificate is not obtainable, that fact should be shown, and the application should be supported by a baptismal certificate or a certified copy of the record of baptism under the seal of the church in which the applicant was baptized, giving the date and place of birth, the date of baptism, and the date on which the record of baptism was made. A baptismal certificate must show that the baptism occurred within a short time after the date of birth. If birth and baptismal certificates are not obtainable, an affidavit of the parent or of the physician, nurse, or midwife who attended the birth, or the affidavit of a reputable person having sufficient knowledge to be able to testify as to the place and date of the applicant's birth may be accepted.
In the case of a person born abroad prior to noon E.S.T. May 24, 1934, whose father was at the time a citizen and had previously resided here before the birth of his child, his application should be accompanied by evidence of his father's American citizenship.
Persons born abroad after May 24, 1934, of an American mother or father who had previously resided here may submit evidence of the citizenship of either of their parents.
Under the Act of, May 24, 1934, a child born abroad of an alien parent and an American parent who had previously resided in the U. S. is divested of American citizenship unless he resides here at least five years continuously immediately previous to his 18th birthday and unless, within six months after attaining the age of 21 years he takes an oath of allegiance to the U. S.
A naturalized citizen must transmit his certificate of naturalization, with his application. It will be returned to him after inspection. He must state in his application when he emigrated, where he has lived since his arrival, when and before what court he was naturalized, and that he is the identical person described in the certificate.
A woman applicant should state whether she has ever been married. A married woman should sign her own given name with the family name of her husband.
A person who is a national of the U. S., but not a citizen thereof, must state that he owes allegiance to the U. S. and that he does acknowledge allegiance to any other government, and must submit evidence in support of his claim. Under the Act of May 16, 1932, passports are valid for two years from date of issue unless limited to a shorter period, but may be renewed for a period of two years upon payment of a fee of $5. The Department of State has ruled that, during the state of uncertainty outside the Western Hemisphere, no passport which has heretofore been issued shall be valid for use in traveling from the U. S. to any country outside the Western Hemisphere unless it is submitted to the Department for validation for such use. Under the new regulations, before the Department of State will validate any passport heretofore issued or issue any new passports for use outside the Western Hemisphere, it will be required that documentary evidence be submitted to it showing the imperative necessity for traveling outside the Western Hemisphere. It is contemplated by the new regulations to restrict the use of passports only to those who can show an imperative necessity for traveling outside the Western Hemisphere and at the same time to take every possible precaution to assure the importance
of American passports as definitely identifying and
adopted a new procedure as to visa applications,
sity from the standpoint of the national defense In view of the declared emergency and the necesfor careful supervision over the entry of aliens into the United States, the following procedure. the submission of the cases of applicants for imeffective July 1, 1941, has been instituted to require migration visas and for nonimmigrant visas to the Department of State for preliminary examination before they are given final consideration b the consuls.
The procedure applies to the cases of all aliens seeking permanent residence, temporary entry, o who have not received visas prior to July 1, 1941. citizens of countries of the Western Hemisphere. transit to a foreign destination, except native bor.. officials of foreign governments, and seamen, where cases are subject to a different procedure.
The procedure with respect to applicants for immigration visas requires the submission to the Department of State of a Biographical Statement on form B and two affidavits of support and sponsorship on form C, or two affidavits of sponsorship on form D in the case of persons not requiring financial assurances of support.
The procedure with respect to applicants for visitors' visas and transit certificates requires the submission to the Department of State of a Biographical Statement on form B and two affidavits of sponsorship on form D.
The names of children under eighteen years of age may be included in forms covering an accompanying parent. Affidavits on forms C or D may together to the United States. The affidavit form cover immediate members of a family proceeding C must be prepared by American citizens or by aliens lawfully admitted into the United States for permanent residence and forms B and D should also be submitted by American citizens or by aliens lawfully admitted for permanent residence unless there are no such persons in a position to offer the requisite information or sponsorship.
The forms referred to are prescribed by regulation and will be furnished upon request addressed to the Visa Division, Department of State, Washington, D. C. The forms must be fully completed Notary Public or other person authorized by law to by typewriter and signed under oath before a administer oaths. Substitute documents will not be accepted in 'lieu of any of the forms listed. The corroboratory documents and evidence referred to in the forms must be submitted with the forms.
When all of the required forms and supporting documents have been assembled, completely filled out by typewriter and signed under oath, they should be sent to the Immigration Section, Visa Division, Department of State, Washington, D. C.. in an envelope so addressed.
The cases will be considered in proper turn by Interdepartmental Committees acting in an advisory capacity with reference to the national defense program.
After examination of each case in the Department an appropriate communication will be sent to the consul concerned for further consideration of the case. If an interested person should wish, consideration will be given to a request to have the notification sent by telegraph at his expense to the consul. The consul will advise the alien appropriately regarding his case and the procedure to be followed in making formal application for a visa. In a case given preliminary approval by a consul, the visa will not be granted until satisfactory evidence is submitted to show that the alien will be able to proceed to the United States within the period of the validity of the visa and in this connection that he has transportation reservations and reasonable expectation of obtaining an exit permit and transit visas to the port of embarkation.
When the cases are referred to the consuls the interested persons will be notified immediately. As cases will be considered and action taken by the consuls under the law strictly according to the facts of the cases, special consideration may not be accorded and should not be requested.
The President's Advisory Committee on Political Refugees, 122 E. 22nd St., New York, N. Y., has volunteered to act in an advisory liaison capacity between the social service organizations offering their services to sponsors and the Department of State.
The United States Immigration Law
Source: The Federal Statutes and Executive Orders
President Roosevelt on June 3, 1941, signed an Executive order in connection with the Alien Registration Act of 1940. The order provides as follows:
1. Non-immigrants must present unexpired passports or official documents in the nature of passports issued by the governments of the countries to which they owe allegiance or other travel documents showing their origin and identity as prescribed in regulations issued by the Secretary of State, and valid passport or other non-immigrant
2. A non-immigrant alien who is passing in transit through the United States may present a transit certificate granted by an authorized officer of the United States.
3. A non-immigrant alien who enters the United States for a period not exceeding ten days, landing temporarily while the vessel on which he is a passenger is in port, or crossing the border, entering and departing via the same port of entry, may present a limited entry certificate granted by an authorized officer of the United States.
4. A non-immigrant alien who is a citizen of Canada, Newfoundland or Mexico, or who is a British subject domiciled in Canada or Newfoundland, may present a non-resident alien's bordercrossing identification card issued by an authorized officer of the United States, if he is entering the United States for a period of less than thirty days.
5. The Secretary of State is authorized to define cases of emergency in which the passport and visa requirements may be waived for a non-immigrant alien.
6. No passport visa, transit certificate, limited entry certificate or non-resident alien's bordercrossing identification card shall be granted to an alien whose entry would be contrary to the public safety, nor to an alien who is unable to establish a legitimate purpose or reasonable need for the proposed entry.
1. Immigrants must present unexpired passports. or official documents in the nature of passports, issued by the governments of the countries to which they owe allegiance, or other travel documents showing their origin and identity. prescribed in regulations issued by the Secretary of State, and valid immigration visas granted by the consular officers of the United States in accordance with the requirements of the Immigration Act of 1924 and the regulations issued thereunder.
2. An alien immigrant who has previously been legally admitted into the United States for permanent residence, has departed therefrom and has returned from a temporary visit abroad, may
present, in lieu of an immigration visa, an unexpired permit to re-enter, issued pursuant to Section 10 of the Immigration Act of 1924. The bearer of such a permit to re-enter is not required to present a passport.
3. An alien immigrant who has previously been legally admitted into the United States for permanent residence and who has frequent occasion to cross the land borders of the United States may present, in lieu of an immigration visa or a permit to re-enter, a resident alien's border-crossing identification card. The bearer of such a bordercrossing identification card is not required to present a passport.
4. An immigrant Spanish national who on April 11, 1899 (whether adult or minor) was a bona fide resident of Puerto Rico or adjacant islands which comprised the Province of Puerto Rico, and who, in accordance with Article IX of the treaty between the United States and Spain of April 11, 1899. has preserved his allegiance to Spain, may present a passport visa, in lieu of an immigration visa, for entry into Puerto Rica. Such aliens may be admitted into Puerto Rico with regard to the provisions of the Immigration Act of 1924, except Section 23. (Act of May 26, 1926, ch. 400, 44 Stat. 657.)
5. The Secretary of State is authorized to define cases of emergency in which the passports and immigration visa requirements may be waived for an immigrant alien.
The Executive Secretary of the Panama Canal is hereby authorized to issue passport visas, transit certificates, limited entry certificates and immigration visas to aliens coming to the United States from the Canal Zone.
The Governor of American Samoa is hereby authorized to issue passport visas, transit certificates, limited entry certificates and immigrant visas to aliens coming to the United States from American Samoa.
The Governor of Guam is hereby authorized to issue passport visas, transit certificates, limited entry certificates and immigration visas to aliens coming to the United States from Guam.
The documentary requirements for aliens applying for admission into American possessions outside the United States are to be prescribed by the competent authorities in such possessions.
The definitions contained in Section 28 of the Immigration Act of 1924 shall be regarded as applicable to this order, except as otherwise specified herein.
GENERAL PROVISIONS OF THE IMMIGRATION STATUTES The general provisions of the Federal immigration laws, except where there is conflict, if any, with the Executive order of June 3, 1941, are, in brief, as follows: American Consuls abroad are directed to examine the information given on questionnaires and eliminate applicants who are feeble-minded and whose prison records make them inadmissible, as well as all others of the classes excluded by law. The principal United States consular officer in each foreign country is designated as quota-control officer, and it is his duty to see that the quota is not exceeded. The Consular service is under the Department of State.
Under the Quota Law proclaimed in operation, as of July 1, 1929, there may be admitted yearly about 153,900 alien immigrants.
The quota does not apply to Canada, Mexico, or independent countries of Central and South America. Natives of those countries can come without quota.
If an alien obtains a certificate and later changes his mind about emigrating his place cannot be taken by another.
The Act of March 24, 1934, granting conditional independence to the Philippine Islands (accepted by concurrent resolution of the Philippine Legislature on May 1, 1934) converted into the status of aliens such of the Filipinos as were not already American citizens. The Philippines thus have become, for U. S. Immigration purposes, a foreign country. The islands have for each fiscal year a quota of 50 who may be admitted into this country as immigrants.
Alien Japanese laborers (skilled or unskilled) in Hawaii are not permitted to emigrate to the mainland of continental United States, by reason of the President's proclamation of Feb. 24, 1913.
There are certain excepted classes of the yellow races that may enter the United States either permanently or temporarily, such as the Chinese wife of an American citizen who was married prior to the approval of the Immigration Act of 1924, as amended. She may be admitted for permanent residence; ministers and professors and their wives and unmarried children under 18 years of age; merchants and their wives and children under the age of 21 years; students of at least 15 years of age; travelers, government officials, their families and suites, etc.; and persons previously lawfully admitted to the U. S. for permanent residence, who are returning from a temporary visit abroad, and are otherwise admissible under the immigration laws.
A non-quota immigrant is:
(a) An immigrant who is the unmarried child under 21 years, or the wife, of a citizen of the U. S. or the husband of a citizen of the United States by a marriage occurring prior to July 1, 1932.
(b) An immigrant previously lawfully admitted to the U. S., who is returning from a temporary visit abroad for permanent residence:
(c) An immigrant who was born in Canada, Newfoundland, Mexico, Cuba, Haiti, Dominican Republic, the Canal Zone, or an independent country of Central or South America, and his wife, and his unmarried children under 18 years, if accompanying or following to join him;
(d) An immigrant who continuously for at least
two years immediately preceding the time of his application for admission to the U. S. has been, and who seeks to enter the U. S. solely for the purpose of carrying on the vocation of minister, or professor and his wife, and his unmarried children under 18 years, if accompanying or following to join him; (e) An immigrant who is a bona fide student at least 15 vears of age and who seeks to enter the U. S. solely for the purpose of study at an accredited school:
(f) Women who were citizens of the U. S. and who lost their citizenship by reason of marriage to aliens, or through the loss of U. S. citizenship by their husbands, or by marriage to aliens and residence in a foreign country.
A quota immigrant is any other than a non-quota immigrant or a non-immigrant.
(1) All idiots, imbeciles, feeble-minded epileptics, insane persons; persons of constitutional psychopathic inferiority; persons with chronic alcoholism: paupers; professional beggars, vagrants, persons afflicted with tuberculosis in any form or with a loathsome or dangerous, contagious disease; persons who are found to be and are certified by the examining surgeon as being mentally or physically defective; persons who have been convicted of a felony or misdemeanor involving moral turpitude; polygamists.
(2) Anarchists, or persons who believe in or advocate the overthrow by force or violence of the Government of the United States or of all forms of law or who disbelieve in or are opposed to organized government, or who advocate the assassination of public officials, or who advocate or teach the unlawful destruction of property; prostitutes, or persons coming for the purpose of prostitution or for any other immoral purpose.
(b) Any admissible alien or any allen heretofore U. S. may bring in or send for his father or grandor hereafter legally admitted, or any citizen of the father, over 55 years of age, his wife or mother, his grandmother, or his unmarried or widowed daughter, who, if otherwise admissible, may be admitted whether such relative can read or not.
(e) Persons seeking admission to avoid religious persecution in the country of their last permanent residence.
(d) Persons previously residing here who were lawfully admitted, resided continuously therein for 5 years, and return thereto within 6 months from the date of their departure.
(e) Persons in transit through the United States. in transit through foreign contiguous territory (the (f) Persons lawfully admitted and who later go period an alien may remain in foreign contiguous territory while in transit under this exemption shall be limited to 60 days; an alien may leave and enter at the same port and still be in transit within the meaning hereof).
(g) Exhibitors and employees of fairs and expositions authorized by Congress.
(h) Aliens whose ability to read can be readily determined by any ordinary method approved by the department may be excused from the actual taking of the test.
CONTRACT AND SKILLED LABOR
Skilled labor, if otherwise admissible, may be imported if labor of like kind unemployed cannot be found in this country.
The provisions of law applicable to contract labor shall not be held to exclude professional actors, artists, lecturers, singers, nurses, ministers, prolearned profession, or domestic servants. fessors, persons belonging to any recognized
VIOLATIONS AND PENALITIES
(3) Contract laborers who have been induced, assisted, encouraged, or solicited to migrate to this country by offers or promises of employment, skilled or unskilled; persons likely to become a public charge, persons who have been excluded from admission and deported in pursuance of law, and who may again seek admission within one year from the date of such deportation, unless prior to their re-embarkation at a foreign port or their attempt to be admitted from foreign contigu-prisonment up to two years. Violations of the ous territory the Secretary of Labor shall have consented to the reapplying for admission.
Persons whose ticket or passage is paid for with the money of another, unless such persons do not belong to one of the foregoing excluded classes; persons whose ticket or passage is paid for by any corporation, association, society, municipality, or foreign government, stowaways, except that any such stowaway, if otherwise admissible, may be admitted in the discretion of the Secretary of Labor, all children under sixteen years of age unaccompanied by or not coming to one or both of their parents, except that any such children may be admitted if they are not likely to become a public charge and are otherwise eligible.
THE YELLOW RACES
(4) Unless otherwise provided for by existing treaties, and with certain exceptions the so-called Yellow Races.
(5) Aliens who have been arrested and deported in pursuance of law, as distinguished from persons excluded and deported, regardless of when such deportation occurred. He cannot land even as a seamen, except to go to a hospital. Such aliens, however, may be given permission by the Secretary of Labor to reapply for admission after they have remained out of the United States for at least one year from the date of deportation.
Violations of the immoral-women clause punishable, on conviction, by imprisonment up to ten years and a fine up to $5,000. Violations of the contract-labor clause are punishable, on conviction, by $1,000 fine in each case and (or) im
Anarchist clause carry prison up to five years. Other violations carry various penalties. It is unlawful for any person or concern engaged in bringing immigrants to give fare rebates or to solicit immigration; penalty $1,000 fine or not more than 2 years in jail in criminal proceedings, or $400 fine in administrative proceedings. The penalty for smuggling immigrants is fine up to $2,000 and prison up to five years.
Any alien who has been excluded from admission for any cause and who again seeks admission unless the Secretary of Labor has consented to his reapplying for admission.
Any alien who, after March 4, 1929, enters the U. S. at any time or place other than as designated by immigration officials or who eludes or has eluded examinations or inspection by immigration officials, or who obtains or has obtained entry by a willfully false or misleading representation or the willful concealment of a material fact, shall be guilty of a misdemeanor punishable by imprisonment for not more than two years or by a fine of not more than $1,000, or by both.
LAW ON DEPORTATION Any alien sentenced to imprisonment shall not be deported under any provision of law until after the termination of the imprisonment.
In general, aliens excluded by a board of special inquiry, under the immigration laws are entitled to the right of appeal to the United States Department of Justice, which, on June 14, 1940, took over control and administration of the Bureau of Immigration and Naturalization.
Interest Laws and Small Loan Interest Rates Source: Department of Consumer Credit Studies, Russell Sage Foundation The regulation of interest rates is a form of police power which is generally exercised by state legislatures. Interest laws may be divided for convenience into four classes.
1. Statutes fixing the legal rate of interest. Every state has established a legal or conventional rate of interest which applies on judgments, on matured obligations, and in loan contracts in This rate is which no interest rate is stated. usually 6 per cent a year, but in some states it is 5 per cent, 7 per cent, or 8 per cent a year.
2. Laws fixing the maximum contract rate of interest. Five states-Arkansas, California, Oklahoma, Tennessee, and Texas-have constitutional provisions restricting the maximum contract rate of interest. All other states, except Colorado, Maine, Massachusetts, and New Hampshire, have statutory restrictions upon the maximum rate of interest which may be contracted for in the absence of specific statutory authorization to the contrary. They are generally known as the usury statutes. The most common maximum contract rates are 6 per cent and 8 per cent a year, but a few states permit rates as high as 12 per cent a Penalties for infraction range from forfeiture of excess interest to loss of the entire principal and even to imprisonment. Corporations are usually exempted from the protection of these laws.
3. Regulatory small loan statutes. These statutes apply only to loans of small sums, but within this area they apply to all lenders not specifically exempted. Thirty-eight jurisdictions have comprehensive small loan statutes, most of which are modeled
Russell Sage Foundation. The Uniform Law reafter the Uniform Small Loan Law drafted by the quires those engaged in the business of lending sums of $300 or less at rates in excess of those fixed by the usury statutes to be licensed, bonded, Rates of charge permitted licensees generally and supervised by the state banking department. range from 212 to 312 per cent a month, and both criminal and civil penalties are provided for infraction. Unlike the rates fixed by the first two classes of statutes which permit the lender to obtain, in addition to interest, reimbursement for certain expenses incident to making and collecting the loan, regulatory small loan statutes impose an all-inclusive limitation upon charges. Fourteen states have no comprehensive small loan laws.
4. Specific enabling acts. Most states specifically exempt certain types of lending agencies from the and authorize these agencies to make higher regulations of the small loan and usury statutes, charges than those allowed by the usury statutes. Among these are pawnbrokers, whose rates are restricted in some states by statute and in other states by municipal ordinances to charges ranging generally from 211⁄2 to 10 per cent a month: industrial banks or discount companies, which are authorized to make charges ranging generally from are generally authorized to charge 1 per cent a 12 to 212 per cent a month; credit unions, which month; and banks and building and loan associations. In a few instances, such statutory authorization has been granted to single institutions.
The states with small loan laws, the dates of as of October, 1941, follow: the enactment of the laws and the rates of interest.
1927; new act 1932.
Numerous acts since 1913; present act
1919: frequently amended.
1925; amended 1941
1917; new act 1935
1913; new act of 1917; revised 1933
1921; new act of 1934.
1928; amended 1940.
1917; frequently amended.
1912; new act of 1918; amended.
1915: new act of 1921; revised 1925
1913; new act 1927; amended..
1913; new act 1915, amended 1941..
(Monthly, unless otherwise stated)
8% per annum
10% per annum
2% % to $100: 2% on remainder. 2% on all loans where security is insured
10% per annum plus 10% fee plus other charges
3% to $100; 2% on remainder
314% to $100; 21% on remainder
3% to $150; 1% on remainder plus 50c
3% to $150, 24% on remainder
Unsecured loans, 3% to $150; 24% on
3% to $100, 214% on remainder
3% on loans of $100 or less, 24% on loans
9% per annum plus 10% fee plus exam-
1910: new act 1914: new act 1932; amended 21%
1915; new act 1932; amended 1941.
1913: new act 1915; new act 1931; amended
1913; new act 1915; revised 1937
1917; new act 1925; amended 1937.
Regulatory small loan laws usually provide a
per annum plus 10% fee plus other charges
24% to $100; 2% on remainder
3% to $150; 2% on remainder
16% per annum plus fee of 1% per month
214% to $125; 2% on remainder
up to $300; 1% on remainder to $500, minimum charge of $1
3 %% to $150; 24% on remainder
usury laws are frequently evaded by discounting a
The statutes of limitation of action for recovery or enforcement in civil actions on debts vary from 1 to 20 years in the different States, according to the kind of case.
Federal Bankruptcy Laws
Source: Max Isaac, Editor, Corporate Reorganizations-American Bankruptcy Review, New York
On June 22, 1938, the President approved the Chandler Bankruptcy Act, which became effective September 22, 1938. This law represents the most complete revision of the bankruptcy statutes since the approval of the original Act, July 1, 1898. Only a remnant of the old Act remains. Section 16 (relating to the liability of co-debtors of bankrupts), section 30 (authorizing the promulgation of practice rules by the Supreme Court), section 33 (creating the offices of referees and trustees), section 36 (prescribing the oath of referees), section 43 (relating to referees' absence or disability), section 54 (statistical information required to be furnished to the Attorney-General), section 77 (railroad reorganization), and sections 81-84 (municipal debt readjustment law) were all that remained unchanged.
While the purpose of the new law is in general to modernize and bring up to date the bankruptcy law of the country, the drastic changes upset many fixed principles of bankruptcy jurisprudence and will require time for judicial interpretation of novel phraseology. Some of the procedural changes include the filing of schedules with voluntary petitions instead of later in the proceedings. The court may, for cause shown, authorize a departure from the usual rule. "Statement of Affairs" in form as prescribed by the Supreme Court must now be filed by the bankrupt. This form may require the bankrupt to disclose his history, cause of bankruptcy, nature and location of his property. A cost inventory is required to be filed by the bankrupt. Applications for discharge are dispensed with, except in corporation cases, the adjudication in bankruptcy operating as such application. Examination of the spouse of a bankrupt as to financial transactions with the bankrupt may be had, despite State laws to the contrary. Adverse witnesses may be examined, as if under cross-examination notwithstanding any Federal or State law to the contrary. Procedure has been materially speeded up. Creditors cannot file answers in involuntary cases. Committees of three creditors may be elected to consult with and advise the trustee, thus obviating the necessity of sending notices and losing time awaiting expiration of notice dates. Tax claims and governmental debts must be filed within a fixed period. Creditors may file claims after the expiration of six months under
A new provision is that claims of less than $50 are eliminated, except as to amount, in voting for the trustee. Previously such claims figured both as to number and amount.
Another provision is that the trustee in bankruptcy shall take title to any property which the bankrupt inherits "within six months after bankruptcy. The bankrupt cannot transfer or assign any such inherited acquisition after bankruptcy.
New definitions of preferences, new provisions for specific recovery of fraudulently transferred assets, and improved procedure for setting aside liens are among the important changes.
The criminal provisions of the new Act have been materially strengthened.
Section 77B is no more. That part of the old law is Chapter X in the new law.
The Securities and Exchange Commission exerts a marked influence in corporate reorganization proceedings and a new division for the handling of bankruptcy and reorganization matters, coming before the Commission under the terms of the Act, has been established. Other new chapters of the Act are: Chapter XI, relating to arrangements: Chapter XII, real property arrangements by persons other than corporations; Chapter XIII, wage earners' plans and Chapter XIV, maritime commission liens. Under the wage earners' plan, those earning less than $3,600 a year may invoke the provisions of the law to arrange the payment of debts by applying a percentage of future earnings.
This latter procedure obviates bankruptcy proceedings to free wage earners from attachment and garnishment of salaries or wages. The old "composition" by debtors has been abandoned and "arrangement" now takes its place.
On August 16, 1937, the Municipal Debt Adjustment Act was approved to replace the Act of May 24, 1934, held unconstitutional by the Supreme Court. It provides procedure by which the indebtedness of insolvent taxing agencies, such as local
drainage, levee, irrigation, reclamation, road, and sewer districts, as well as towns, boroughs and municipalities, may effect compositions with their creditors. These compositions would be approvable only when the districts or agencies filed voluntary proceedings in bankruptcy accompanied by plans approved by 51 per cent of all of the creditors of the district or town. The plan of composition could not be confirmed unless accepted in writing by creditors holding at least 66 2-3 per cent of the aggregate amount of the indebtedness of the petitioning district or taxing agency, unless the judge ized by law to carry out the plan, and there had was satisfied that the taxing district was authorbeen a finding by the court that the plan was fair, equitable and for the best interest of the creditors.
On March 4, 1940, the Municipal Debt Adjustment Act was amended so that local improvement districts may avail themselves of the benefits, June 28, 1940 a further amendment included "any without involving the municipalities as such. On county or parish", and the act and the amendments were extended to June 30, 1942.
The Frazier-Lemke Farm Mortgage Act was approved by the President August 29, 1935.
It was written to conform to the Supreme Court's decision, holding the original Frazier-Lemke Act invalid. The new Act provides, that any farmer failing to obtain a composition or extension, or if he feels aggrieved by a composition or extension proposal, may ask to be adjudged a bankrupt. He may also ask the court that all his property be appraised, that his exemptions be set aside to him, and that he be allowed to retain possession under supervision and control of the court, of all the remainder of his property, including his encumbered exemptions under terms and conditions set forth in the Act.
The court is authorized to stay all proceedings for three years, during which time the debtor is permitted to retain possession of his property under the supervision and control of the court provided he pays a reasonable rental for that part of the property which he retains. The rental is used to pay taxes and upkeep; the remainder is distributed among the secured and unsecured creditors and applied on their claims. At the end of three years, or prior thereto, an appraisal is made, and the debtor can regain unencumbered possession by paying into court the amount of the appraisal of the property of which he retains possession. including the amount of encumbrances on his exemptions, up to the amount of the appraisal, less the amount paid on the principal. Upon request in writing by any secured creditor or lien creditor. the court shall order a sale of the property affected. at public auction.
The debtor is allowed ninety days in which to redeem any property sold at such a sale by paying the amount for which the property is sold, with interest at five per cent, to the court and he may then apply for his discharge in bankruptcy. The Act is declared to be an emergency measure. in the judgment of the court, such emergency ceases to exist in its locality, the court, in its discretion, may shorten the stay of proceedings and proceed to liquidate the estate.
The Frazier-Lemke Act was extended to March by farmers under the provisions of that statute. 4, 1944, during which period petitions may be filed
The Railroad Reorganization Act of March 3, 1933, was approved by the President, August 27, 1935. This Act is known as Section 77, and its provisions are too intricate and complicated for this analysis. Any railroad engaged in interstate commerce is amenable to the law, and the Interstate Commerce Commission wields much authority and influence in the entire proceedings. The legal action is taken, however, in the courts of bankruptcy, as is the case in other proceedings under the bankruptcy law.
The Chandler Railroad Adjustment Act, (Chapter XV) approved July 28, 1939, permits railroads in financial difficulties to enter into voluntary agreements with their creditors to postpone maturity dates, and reduce interest rates on securities. The Act may be invoked in behalf of railroads not in equity receivership or in reorganization under Section 77 and have not been in equity receiverships under Section 77 within 10 years prior to filing the adjustment petition.