The Frazier–Lemke Farm Bankruptcy Act was an

Act of Congress An Act of Congress is a statute enacted by the United States Congress. Acts may apply only to individual entities (called Public and private bills, private laws), or to the general public (Public and private bills, public laws). For a Bill (law) ...

passed in the United States in 1934 that restricted the ability of banks to

repossess Repossession, colloquially repo, is a " self-help" type of action, mainly in the United States, in which the party having right of ownership of the property in question takes the property back from the party having right of possession without i ...

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

Background

Between 1933 and 1936, the

US Congress The United States Congress is the legislature of the federal government of the United States. It is bicameral, composed of a lower body, the House of Representatives, and an upper body, the Senate. It meets in the U.S. Capitol in Washingto ...

in conjunction with

US President The president of the United States (POTUS) is the head of state and head of government of the United States of America. The president directs the executive branch of the federal government and is the commander-in-chief of the United Stat ...

Franklin D. Roosevelt Franklin Delano Roosevelt (; ; January 30, 1882April 12, 1945), often referred to by his initials FDR, was an American politician and attorney who served as the 32nd president of the United States from 1933 until his death in 1945. As the ...

, passed several economic programs with the goals of giving work (relief) to the unemployed, reforming business and financial practices, and causing economic recovery during the

Great Depression The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...

. 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 100 days of his presidency produced a federal program to raise farm incomes by raising the prices farmers received, which was achieved by reducing total farm output. The Agricultural Adjustment Act created the

Agricultural Adjustment Administration The Agricultural Adjustment Act (AAA) was a United States federal law of the New Deal era designed to boost agricultural prices by reducing surpluses. The government bought livestock for slaughter and paid farmers subsidies not to plant on part ...

(AAA) in May 1933 and reflected the demands of leaders of major farm organizations, especially the Farm Bureau and debates among Roosevelt's farm advisers such as Secretary of Agriculture

Henry A. Wallace Henry Agard Wallace (October 7, 1888 – November 18, 1965) was an American politician, journalist, farmer, and businessman who served as the 33rd vice president of the United States, the 11th U.S. Secretary of Agriculture, and the 10th U.S. S ...

Rexford Tugwell Rexford Guy Tugwell (July 10, 1891 – July 21, 1979) was an American economist who became part of Franklin D. Roosevelt's first "Brain Trust", a group of Columbia University academics who helped develop policy recommendations leading up to R ...

, Lewis C. Gray and

George Peek George Nelson Peek (November 19, 1873 – December 17, 1943) was an American agricultural economist, business executive, and civil servant. He was the first administrator of the Agricultural Adjustment Administration (AAA) and the first preside ...

Amendments to bankruptcy law

The

73rd Congress The 73rd United States Congress was a meeting of the legislative branch of the United States federal government, composed of the United States Senate and the United States House of Representatives. It met in Washington, D.C. from March 4, 1933, ...

passed legislation in June 1934 to amend the

Bankruptcy Act of 1898 The Bankruptcy Act of 1898 ("Nelson Act", July 1, 1898, ch. 541, ) was the first United States Act of Congress involving bankruptcy to give companies an option of being protected from creditors. Previous attempts at federal bankruptcy laws had ...

. S. 3580 , was enacted on June 28, 1934. H.R. 5884 , was enacted on June 7, 1934.

Content

The Frazier–Lemke Farm Bankruptcy Act restricted the ability of banks to

farms, amended the previously-voluntary Section 75, and added subsection (s),Collier on Bankruptcy, 8-1200, P 1 b. which delayed foreclosure of a bankrupt farmer's property for five years during which the farmer made rental payments. The farmer could then buy back the property at its currently-appraised value over six years at 1% interest or remain in possession as a paying tenant._{(no login required to see necessary information)} The S. 3580 bill was named for

North Dakota North Dakota () is a U.S. state in the Upper Midwest, named after the Native Americans in the United States, indigenous Dakota people, Dakota Sioux. North Dakota is bordered by the Canadian provinces of Saskatchewan and Manitoba to the north a ...

Senator A senate is a deliberative assembly, often the upper house or chamber of a bicameral legislature. The name comes from the ancient Roman Senate (Latin: ''Senatus''), so-called as an assembly of the senior (Latin: ''senex'' meaning "the el ...

Lynn Frazier Lynn Joseph Frazier (December 21, 1874January 11, 1947) was an American educator and politician who served as the 12th Governor of North Dakota from 1917 until being recalled in 1921 and later served as a U.S. Senator from North Dakota from 192 ...

and North Dakota

Representative Representative may refer to: Politics *Representative democracy, type of democracy in which elected officials represent a group of people *House of Representatives, legislative body in various countries or sub-national entities *Legislator, someon ...

William Lemke William Frederick Lemke (August 13, 1878 – May 30, 1950) was an American politician who represented North Dakota in the United States House of Representatives as a member of the Republican Party. He was also the Union Party's presidential cand ...

Court case

The law was challenged by secured creditors, and by May 1935, the

US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...

reviewed the law in ''

Louisville Joint Stock Land Bank v. Radford ''Louisville Joint Stock Land Bank v. Radford'', 295 U.S. 555 (1935), was a decision by the Supreme Court of the United States that ruled the Frazier–Lemke Farm Bankruptcy Act unconstitutional in violation of the Fifth Amendment. This unanimo ...

''. The Act was ruled unconstitutional because it deprived secured creditors of their property rights, in violation of the Fifth Amendment.

Modification and renewal

Congress responded by enacting the revised Frazier–Lemke Act and naming it the "Farm Mortgage Moratorium Act" in 1935. The terms were modified to limit the moratorium to a three-year period. The revision also gave secured creditors the opportunity to force a public sale, but 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''. After expiring in 1938, the act was renewed four times until 1949, when it expired.

References

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]
{{DEFAULTSORT:Frazier-Lemke Farm Bankruptcy Act New Deal legislation United States federal agriculture legislation United States federal banking legislation Dust Bowl 1934 in American law United States bankruptcy legislation Agricultural finance