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Frazier–Lemke Farm Bankruptcy Act

Frazier–Lemke Farm Bankruptcy Act
Great Seal of the United States
Other short titles
  • Farm Mortgage Moratorium Act
  • Federal Farm Bankruptcy Act of 1934
  • Frazier-Lemke Act
  • Frazier-Lemke Farm-Mortgage Act
Long title 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.
Enacted by the 73rd United States Congress
Effective June 28, 1934
Citations
Public Law 73-486
Statutes at Large 48 Stat. 1289, Chapter 869
Legislative history
United States Supreme Court cases
Louisville Joint Stock Land Bank v. Radford

The Frazier–Lemke Farm Bankruptcy Act was an Act of Congress passed in the United States in 1934 that restricted the ability of banks to repossess farms.[1]

The U.S. 73rd Congressional Senate bill S. 3580 was signed into law by the 32nd President of the United States Franklin Roosevelt.[2]

Contents

  • Background 1
  • Bankruptcy Law Amendments 2
  • The Frazier–Lemke Act 3
  • Court case 4
  • Modification and renewal 5
  • See also 6
  • References 7
  • External links 8

Background

Between 1933 and 1936, the United States Congress in conjunction with President Franklin D. Roosevelt passed several economic programs with the goals of giving work (relief) to the unemployed, reform of business and financial practices, and recovery of the economy during The Great Depression.

Roosevelt was interested in farm issues and believed that general prosperity would not return until farming was prosperous. Many different programs were directed at farmers. The first hundred days produced a federal program to raise farm incomes by raising the prices farmers received, which was achieved by reducing total farm output. The George Peek.

Bankruptcy Law Amendments

The U.S. 73rd Congressional session passed legislation during June 1934 which amended the Bankruptcy Act of 1898.[2]

The S. 3580 farm bankruptcy law Pub.L. 73–486, 48 Stat. 911 was enacted on June 7, 1934.[4]

The Frazier–Lemke Act

The Frazier–Lemke Farm Bankruptcy Act restricted the ability of banks to repossess farms.[1] The Act amended the previously voluntary Section 75, adding subsection (s).[5] Subsection (s) delayed foreclosure of a bankrupt farmers' property for five years, during which the bankrupt made rental payments. The farmer could then buy back the property at its currently appraised value over six years at 1 percent interest, or remain in possession as a paying tenant.[6]

The S. 3580 bill was named for North Dakota Senator Lynn Frazier and North Dakota Representative William Lemke.[7]

Court case

The law was challenged by secured creditors, and by May 1935, the Supreme Court reviewed the law in Louisville Joint Stock Land Bank v. Radford.[6][8][9] The Act was ruled unconstitutional because it deprived secured creditors of their property rights in violation of the Fifth Amendment to the United States Constitution to the Constitution.[9]

Modification and renewal

Congress responded by enacting the revised Frazier–Lemke Act, naming it the "Farm Mortgage Moratorium Act" in 1935.[6][9] The terms were modified, limiting the moratorium to a three-year period.[7] The revision also gave secured creditors the opportunity to force a public sale, although the farmer could redeem the sale by paying the same amount.

The law was challenged, but the Supreme Court upheld the law in Wright v. Vinton Branch of Mountain Trust Bank of Roanoke.[5][7][9]

After expiring in 1938, the act was renewed four times until 1949, when it expired.[1][5]

See also

References

  1. ^ a b c "Surviving the Dust Bowl".  
  2. ^ a b Peters,Gerhard; Woolley, John T. "Franklin D. Roosevelt: "Statement Approving Amendments to Bankruptcy Law," June 30, 1934". The American Presidency Project. University of California - Santa Barbara. Retrieved July 28, 2013. 
  3. ^ "S. 3580: Agricultural Compositions and Extensions". Federal Reserve Archival System for Economic Research (FRASER). Retrieved July 28, 2013. 
  4. ^ "H.R. 5884: Provisions for the Relief of Debtors, Additional Jurisdiction, Corporate Reorganizations". Federal Reserve Archival System for Economic Research (FRASER). Retrieved July 28, 2013. 
  5. ^ a b c Collier on Bankruptcy, 8-1200, P 1 b.
  6. ^ a b c (no login required to see necessary information)"Frazier–Lemke Farm Bankruptcy Act: A Dictionary of American History". Blackwell Reference Online. Retrieved 19 December 2008. 
  7. ^ a b c "Frazier–Lemke Farm Bankruptcy Act". US History Encyclopedia. Jeremy Bonner. Published on  
  8. ^ 295 U.S. 555 (1935)
  9. ^ a b c d "Chapter 12: Bankruptcy Relief for Family Farmers". National Bankruptcy Review Commission. Retrieved 19 December 2008. 

External links

  • Public Law 73-486, 73d Congress, 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. Amending section 75, entitled "Agricultural Compositions and Extensions" [Frazier–Lemke Farm Bankruptcy Act of 1934]
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