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cepted within such reasonable period as the judge may fix, or, if proposed and accepted, is not confirmed, may, after hearing, whether the proceeding be voluntary or involuntary, either extend such period or dismiss the proceeding under this section or, except in the case of a railroad or other public utility or of a debtor which has not been found by the judge to be insolvent, direct the estate to be liquidated, or direct the trustee or trustees to liquidate the estate, appointing a trustee or trustees if none shall previously have been appointed, as the interests of the creditors and stockholders may equitably require; (9) may allow a reasonable compensation for the services rendered and reimbursement for the actual and necessary expenses incurred in connection with the proceeding and the plan by officers, parties in interest, depositaries, reorganization managers and committees, or other representatives of creditors or stockholders, and the attorneys or agents of any of the foregoing and of the debtor, but appeals from orders fixing such allowances may be taken to the Circuit Court of Appeals independently of other appeals in the proceeding and shall be heard summarily; (10) in addition to the provisions of section 11 of this Act for the staying of pending suits against the debtor, may enjoin or stay the commencement or continuation of suits against the debtor until after final decree; and may, upon notice and for cause shown, enjoin or stay the commencement or continuance of any judicial proceeding to enforce any lien upon the estate until after final decree; and (11) may refer any matters to a special master, who may be one of the referees in bankruptcy, for consideration and report, either generally or upon specified issues, and allow such master a reasonable compensation and reimbursement for his services and actual and necessary expenses. The debtor shall have the right to be heard on all questions. Any creditor or stockholder shall have the right to be heard on the question of the permanent appointment of any trustee or trustees, and on the proposed confirmation of any reorganization plan, and upon filing a petition for leave to intervene, on such other questions arising in the proceeding as the judge shall determine. In case a trustee is not appointed, the debtor shall continue in the possession of its property, and, if authorized by the judge, shall operate the business thereof during such period, fixed or indefinite, as the judge may from time to time prescribe, and shall have all the title to and shall exercise, consistently with the provisions of this section, all the powers of a trustee appointed pursuant to this section, subject at all times to the control of the judge, and to such limitations, restrictions, terms, and conditions as the judge may from time to time impose and prescribe. While the debtor is in possession (a) its officers shall be entitled to receive only such reasonable compensation as the judge shall from time to time approve, and (b) no person shall be elected or appointed to any office, to fill a vacancy or otherwise, without the prior approval of the judge.


1st Session

No. 915


JUNE 1, 1937.—-Committed to the Committee of the Whole House on the state of the Union and ordered to be printed

Mr. COOLEY, from the Committee on Agriculture, submitted the



[To accompany H. R. 6762]

The Committee on Agriculture, to whom was referred the bill (H. R. 6762) to amend the act known as the "Perishable Agricultural Commodities Act, 1930", approved June 10, 1930, as amended, having considered the same, report thereon with a recommendation that it do pass with the following clarifying amendments:

Page 2, following the word "broker" at the end of line 20 and preceding the word "to" at the beginning of line 21, add the following wording", for a fraudulent purpose,".

Page 10, line 4, at the beginning of the line, change the word "if" to the words "In case".

Page 11, lines 8 and 9, strike out the wording "or the judgment of the court".

Page 11, lines 9 and 10, strike out the wording "or within ten days from the date of the judgment,".


The Perishable Agricultural Commodities Act was enacted in 1930 to suppress certain unfair and fraudulent practices in the marketing of fresh fruits and vegetables in interstate or foreign commerce. It was strengthened by amendments approved in 1934 and 1936. The act is enforced through a system of licensing commission merchants, dealers, and brokers. It has proved to be a stabilizing influence in the fresh fruit and vegetable industry. It has protected producers and buyers and sellers of these important products from certain unfair practices which were costly and demoralizing to that industry. Since the act was passed, more than 15,000 complaints have been handled. by the Department of Agriculture. The additional amendments provided for in H. R. 6762 have grown out of the experience of the

Department in the administration of the act and are for the purpose only of further increasing the benefits resulting from this legislation. The annual license fees collected have made the act fully self-supporting since its enactment. These additional amendments will not increase the cost of administration.

Following is a brief explanation of each section of the bill:

Section 1: This section is intended to amend the definition of the term "dealer" as now set forth in the Perishable Agricultural Commodities Act in such a way as to carry out the intent of Congress when the act was originally passed and make it clear that packers of fruits or vegetables that are frozen or packed in ice are required to be licensed.

Section 2: This section strengthens existing provisions of the act dealing with misrepresentation and will enable the Department to reach practices which cannot now be handled satisfactorily, particularly misbranding as to grade and the tagging of seed potatoes as "certified" when in fact they have not been certified under authority of any State law.

Section 3: This section strengthens existing provisions of the act dealing with the removal of evidence of grade on containers and makes it possible to reach those who tear off of sacks of potatoes, for example, tags showing United States No. 2 grade in order that without such evidence they might be able to market them as of a higher grade.

Section 4: This section adds a new provision to the act and makes it a violation to substitute or otherwise change the contents of a carload or lot of fruits or vegetables after it has been officially inspected by a Federal inspector unless the consent to such change is obtained from an authorized inspector.

Section 5: This is a new provision which will enable the Department to allow persons found to be operating without licenses as required by the act to settle their liability without court proceedings. This method of effecting compliance with the licensing provisions of the act is intended to apply only to persons who have not willfully refused to apply for licenses. The act now provides for the collection by civil suit of a maximum penalty of $500 for operating without a license and $25 for each day it continues. This section would make it unnecessary to file many civil suits in small cases and enable persons who have not willfully refused to comply with the law to settle their liability by paying all license fees due and not more than $25 in addition.

Section 6: This section revises section 4 of the act by amending paragraphs (a), (b), and (d), transferring paragraphs (c) and (e) to section 8 and inserting a new paragraph (c).

Paragraph (a): This paragraph of the act now provides that a license once issued shall remain in force until suspended or revoked or until automatically terminated by nonpayment of fee. Section 7 (d) of the act was amended April 13, 1934, to provide for the automatic suspension of licenses for nonpayment of reparation awards. This amendment takes cognizance of the provision for automatic suspension. It also makes it clear that the life of a license is limited to 12 months unless the renewal fee is received before the end of that period. It also provides that when a license terminates because of nonpayment of fee, the same license may be renewed within 30 days by paying the regular fee and $5 in addition.

Paragraph (b): The changes in this paragraph are only those necessary because of the transfer of paragraphs (c) and (e) to section 8.

Paragraph (c): This is a new provision which provides for the refusal of a license to an applicant who at any time within 2 years has been found guilty in a Federal court of having violated the Produce Agency Act or section 14 (b) of the Perishable Agricultural Commodities Act.

Paragraph (d): This paragraph incorporates a new provision in the act so the Department may make an investigation of an applicant for a license and deny him a license if after hearing it is found that the applicant is unfit to engage in business under the act. The Department has been granted similar authority in section 502 (b), title 5, of the Packers and Stockyards Act.

Section 7: The act now limits the filing of complaints for reparation awards to violations of paragraphs 1, 2, 3, and 4 of section 2. This amendment removes this limitation and permits the filing of such complaints for any violation of section 2.

Section 8: This section removes a limitation in section 6 (b) of the act which now permits the filing of disciplinary complaints-complaints which may result in the suspension or revocation of licensesonly for violations of section 2. This amendment permits the filing of such complaints for any violation of the act.

Section 9: The act now requires nonresidents of the United States to furnish a bond in double the amount of their claim to take care of costs and attorney's fees of the respondent if he prevails. This amendment also makes the bond cover any reparation award which may be issued against such complainant on any counterclaim by the respondent. The amendment also allows the Department to waive a bond by a complainant who is resident of a country which permits residents of the United States to file complaints in that country without furnishing bond. Canada has a law similar to this act which does not require bonds from residents of the United States who may file complaints against residents of Canada. Canadian officials have protested this unequal treatment, and this amendment will permit the same requirements in both countries.

Section 10

Paragraph (a): This is a technical amendment to make clear the authority of the Secretary of Agriculture to render a decision in a case in which a hearing is not required (hearings are not required if claim is for $500 or less), or when the party complained against has failed to answer the complaint or has failed to appear at a hearing. Paragraph (b): This amendment extends from 1 to 3 years the time in which suit may be brought to enforce payment of a reparation award issued by the Secretary of Agriculture.

Paragraph (c): This amendment requires that when an appeal is taken from a decision of the Secretary, the appellant shall file a bond in double the amount of the reparation award. The intent of this provision is to discourage frivolous appeals taken for the purpose of delaying payment and thereby tending to defeat the purpose of the


Paragraph (d): This amendment is intended to discourage those who appeal from decisions of the Secretary of Agriculture in order to escape the automatic suspension of license provided by the act for nonpayment of a reparation award. It provides that such automatic suspension shall become effective if the appeal is dismissed or if the Secretary's decision is sustained.

Section 11: Paragraph (a) of this section amends the act by conferring authority to suspend and revoke the license of any licensee

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