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 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, legislative branch of the federal government of the United States. It is a Bicameralism, bicameral legislature, including a Lower house, lower body, the United States House of Representatives, ...

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. The president directs the executive branch of the federal government and is the commander-in-chief of the United States Armed For ...

Franklin D. Roosevelt Franklin Delano Roosevelt (January 30, 1882April 12, 1945), also known as FDR, was the 32nd president of the United States, serving from 1933 until his death in 1945. He is the longest-serving U.S. president, and the only one to have served ...

, 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 was a severe global economic downturn from 1929 to 1939. The period was characterized by high rates of unemployment and poverty, drastic reductions in industrial production and international trade, and widespread bank and ...

. 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 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 Subsidy, subsidies not to plant ...

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,

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 ...

, Lewis C. Gray and George Peek.

Content

The Frazier–Lemke Farm Bankruptcy Act restricted the ability of banks to repossess 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 indigenous Dakota people, Dakota and Sioux peoples. It is bordered by the Canadian provinces of Saskatchewan and Manitoba to the north and by the U.S. states of Minneso ...

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

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 1921 North Dakota gubernatorial recall election, recalled in 1921 and later serv ...

and North Dakota Representative William Lemke.

Amendments to U.S. Bankruptcy Law

The 73rd Congress passed legislation in June 1934 to amend the Bankruptcy Act of 1898.

Court case

The law was challenged by

secured creditor A secured creditor is a creditor with the benefit of a security interest over some or all of the assets of the debtor. In the event of the bankruptcy of the debtor, the secured creditor can enforce security against the assets of the debtor and avo ...

s, 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 Federal tribunals in the United States, U.S. federal court cases, and over Stat ...

reviewed the law in '' Louisville Joint Stock Land Bank v. Radford''. 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