.svg) | |
| Other short titles |
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|---|---|
| Long title | An Act to amend an Act entitled "An Act to establish a uniform system of bankruptcy throughout the United States", approved 1 July 1898, and Acts amendatory thereof and supplementary thereto. |
| Enacted by | the73rd United States Congress |
| Effective | 28 June 1934 |
| Citations | |
| Public law | Pub. L. 73–486 |
| Statutes at Large | 48 Stat. 1289, Chapter 869 |
| Legislative history | |
| |
| United States Supreme Court cases | |
| Louisville Joint Stock Land Bank v. Radford | |
TheFrazier–Lemke Farm Bankruptcy Act was anAct of Congress passed in the United States in 1934 that restricted the ability of banks torepossess 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]
Between 1933 and 1936, theUS Congress in conjunction withUS PresidentFranklin D. Roosevelt, passed several economic programs with the goals of giving work (relief) to the unemployed, reforming business and financial practices, and causing economic recovery during theGreat 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 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. TheAgricultural Adjustment Act created theAgricultural Adjustment Administration (AAA) in May 1933 and reflected the demands of leaders of major farm organizations, especially theFarm Bureau and debates among Roosevelt's farm advisers such as Secretary of AgricultureHenry A. Wallace,Rexford Tugwell, Lewis C. Gray andGeorge Peek.
The Frazier–Lemke Farm Bankruptcy Act restricted the ability of banks torepossess farms,[1] amended the previously voluntary Section 75, and added subsection (s),[3] 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.[4]
The S. 3580 bill was named forNorth DakotaSenatorLynn Frazier and North DakotaRepresentativeWilliam Lemke.[5]
The73rd Congress passed legislation in June 1934 to amend theBankruptcy Act of 1898.[2]
Congressional Amendments for U.S. Bankruptcy Laws | |||||||||||||||
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The law was challenged bysecured creditors, and by May 1935, theUS Supreme Court reviewed the law inLouisville Joint Stock Land Bank v. Radford.[4][8] The Act was ruled unconstitutional because it deprived secured creditors of their property rights, in violation of theFifth Amendment.[9]
Congress responded by enacting the revised Frazier–Lemke Act and naming it the "Farm Mortgage Moratorium Act" in 1935.[4][9] The terms were modified to limit the moratorium to a three-year period.[5] 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 inWright v. Vinton Branch of Mountain Trust Bank of Roanoke.[3][5][9]
After expiring in 1938, the act was renewed four times until 1949, when it expired.[1][3]
