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all times take advantage of State insolvency laws. Building and loan associations are of a peculiar nature, associations functioning almost exclusively in local communities. The deposits received are from local depositors and the securities taken are local securities. Therefore, it seems the part of wisdom to leave the administration of these matters in the local courts.
The only change which this bill makes in existing law is to include building and loan associations in the same category with municipal, railroad, insurance, and banking corporations so far as bankruptcy is concerned.
As the law now is, it is possible for a disgruntled stockholder in a building and loan association under certain conditions to file a petition against the association invoking the bankruptcy law. While the courts have been considerate in protecting the interests of these associations, yet in these times of uncertainty the filing of a petition virtually ruins the association and destroys the savings and ofttimes seriously impaire the securities of the association.
It is the opinion of the committee that this bill should be enacted into law at an early date.
There follows, in compliance with the rule, copy of the law, showing the new language in italics:
SEC. 4. Who may become bankrupts: (a) Any person, except a municipal, railroad, insurance, banking corporation, or a building and loan association shall be entitled to the benefits of this act as a voluntary bankrupt.
(b) Any natural person, except a wage earner or a person engaged chiefly in farming or the tillage of the soil, any unincorporated company, and any moneyed, business, or commercial corporation (except a municipal, railroad, insurance, or banking corporation, or a building and loan association) owing debts to the amount of $1,000 or over, may be adjudged an involuntary bankrupt upon default or an impartial trial, and shall be subject to the provisions and entitled to the benefits of this act.
The bankruptcy of a corporation or association shall not release its officers, directors, or stockholders, as such, from any liability under the laws of a State or Territory or of the United States.
ISSUE OF MUNICIPAL BONDS OF PETERSBURG, ALASKA
JANUARY 15, 1932.-Referred to the House Calendar and ordered to be printed
Mr. Kemp, from the Committee on the Territories, submitted the
[To accompany H. R. 6487)
The Committee on the Territories, to whom was referred the bill (H. R. 6487) to authorize the incorporated town of Petersburg, Alaska, to issue bonds in any sum not exceeding $100,000 for the purpose of improving and enlarging the capacity of the municipal light and power plant, and the improvement of the water and sewer systems, and for the purpose of retiring or purchasing bonds heretofore issued by the town of Petersburg, report it to the House with the recommendation that it do pass.
This bill is supplemental to two bills heretofore enacted into law by Congress, but does not repeal or amend either of said acts-it is merely supplemental and additional thereto. The first of the acts is entitled "An act to authorize the incorporated town of Petersburg, Alaska, to issue bonds in any sum, not exceeding $75,000, for the purpose of constructing and installing a municipal electric light and power plant, and for the construction of a public school building.” (Ch. 68, 41 Stat. L. 289, approved Sept. 29, 1919, 66th Cong., 1st sess., H. Rept. No. 245.)
The second act is entitled “An act to amend an act entitled 'An act to authorize the incorporated town of Petersburg, Alaska, to issue bonds in any sum not exceeding $75,000, for the purpose of constructing and installing a municipal electric light and power plant and for the construction of a public school building,' approved September 29, 1919"; this amending act was approved June 5, 1920. (Ch. 244, 41 Śtat. L. 981, 66th Cong., 2d sess., H. Rept. No. 1013.)
The provisions of the present bill, H. R. 6487, Seventy-second Congress, first session, does not repeal any part of the two former acts or amend any provisions therein, its provisions are both supplemental and additional thereto, though part of the proceeds of the bonds authorized will be used in improving and enlarging the capacity of the municipal light and power plant, the improvement of the water and sewer system, and for retiring or purchasing bonds heretofore issued by the town of Petersburg, all of said municipal projects having been authorized by the two preceding acts.
The officials of the incorporated town of Petersburg have filed a statement to show the good condition of the town's finances, but as this is better disclosed in the letter of the town's attorney, the letter is given in this report instead of the more lengthy financial statement:
JUNEAU, ALASKA, December 10, 1931. Hon. James WICKERSHAM, Delegate to Congress from Alaska,
Washington, D. C. DEAR JUDGE: I enclose herewith three copies of a bill which I have drawn authorizing the city of Petersburg, Alaska, to issue bonds in a sum not exceeding $100,000 for the improvement of the electric light and power plant, the improvement of the water system, and the retirement of bonds already issued. It is desired to use the funds derived from the sale of the bonds as follows: $40,000 for necessary improvement of the electric light and power plant, including improvements to the dam and pipe line, the driving of a tunnel and doubling the capacity of the plant; $25,000 for improvements to the water system; and $35,000 to retire other bonds of the city or purchase the same.
While the bill as drawn is for the purpose of authorizing the city to issue $100,000 worth of its 6 per cent bonds, it would increase the indebtedness of the city only $65,000 for we are providing that $35,000 of the total authorized issue will be used for the retirement of bonds already authorized and issued. The reason for this is that the present bonds bear interest at 7 per cent and if $35,000 worth of them can be purchased or retired by the city, it will be a saving of interest of 1 per cent on the $35,000 or whatever portion thereof is needed.
On September 29, 1919, Congress passed an act authorizing the city of Petersburg to issue bonds in the sum of $75,000, of which the sum of $50,000 was to be expended for the construction of the electric light and power plant, and the sum of $25,000 in the construction of a public school building.
On June 5, 1920, the act above mentioned was amended so as to make the total bond issue $150,000, of which $115,000 was to be expended for the construction of the electric light and power plant and $35,000 for the construction of the public school building. These bonds were issued, and $15,400 of them have been already retired leaving the total bonded indebtedness at the present time $134,600, of which $99,600 are power bonds and $35,000 schoolhouse bonds.
At the time of the passage of this $150,000 bond bill the town had a population of 879 and the total assessed valuation of all taxable real and personal property in the town was $598,780. In 1930 the population was 1,252 and the assessed valuation of property was $1,514,000. Some little adjustments were made later so that the assessed value in 1931 was $1,497,000. So you will see the assessed valuation of the property for the purposes of taxation in 1931 is more than two and one-half times the value in 1920 at the time the former bond act was passed.
The total outstanding bonds at the present date are $134,600. The new issue will make an actual increase of $65,000, which will make the total issue $199,600. You will see, therefore, that the bonded indebtedness in 1920 was a little more than 25 cents on the dollar of the assessed valuation of taxable property. If this bill should be passed and the city should increase its bonded indebtedness to $199,600, as I have stated, then the bonded indebtedness based on the present assessed valuations of property will be only a little more than 14 cents on the dollar as against more than 25 cents in 1920. I inclose herewith, in duplicate, the following:
Statements of receipts and expenditures for each of the years ending March 31, in 1928, 1929, 1930, and 1931.
Statements showing result of operation of municipal light plant for years ending March 31, 1930, and March 31, 1931.
Statement showing assessed valuation of property of the city of Petersburg for the years 1925 to 1931, inclusive. This also shows bank deposit of $430,000.
I went down to Petersburg last week and the mayor and city council took the matter up with me and instructed me to prepare the necessary bill to authorize the issuance of these bonds and to take the matter up with you and furnish you the necessary data and request that you introduce the bill which I have prepared, after making any changes that you deem essential.
It may be of interest to you to know that after the passage of the act of June 5, 1920, authorizing the issuance of the present outstanding bonds, a suit was filed in he discrict court here by Paul Lund, a taxpayer, asking that the city be enjoined from issuing these bonds. This was in the nature of a test suit and it was actually brought at the suggestion of the city. Judge Reed refused to grant the injunction and sustained a general demurrer to the complaint. An appeal was taken to the circuit court of appeals and Judge Reed's opinion was affirmed,
I thoughi you might be interested in having a copy of the record in that case and you will find, commencing on page 12 of the record, a copy of the original act of September 19, 1919, and commencing on page 15 you will find a copy of the &ct approved June 5, 1920, amending the former act and increasing the amouno of bonds to be issued. I have referred to the bond issue as being necessary for the purpose of enlargement and improvement of the light plant and water system, but you will note I have also included the sewer system as the council is very anxious to have the bonds cover the sewer system also.
I think you are probably somewhat familiar with the present light plant and distributing system at Petersburg: The present capacity of the plant is not sufficient to supply all the demands and the result is that the community does not have efficient service. In addition to that fact, if they had sufficient power they would be able to give cheaper rates and the use of power and electric current would greatly increase. The cold-storage plant has recently increased its capacity and consequently its demand for electricity, and wherever any new demand is supplied under the present conditions it is necessary to supply it at the expense of other consumers. It is very necessary, therefore, that the capacity of the power plant be increased.
The city council has given this matter very careful consideration for more than two years and has come to the conclusion that the town will save money and be greatly benefited by the passage of the act. If there is anything further which you deem necessary to be presented to the committee, please let me know. Thanking you, I am, Very sincerely yours,
H. L. FAULKNER. The town of Petersburg is situated at the northern end of Wrangell Narrows in southeastern Alaska. The census report for 1930 shows the Petersburg recording district has a population of 2,004 inhabitants, the incorporated town 1,252 inhabitants. The electric light and power plant has its central power plant some 4 or 5 miles south of the town, and supplies power to enterprises along the route from the source of power to the town and environs. The town is inhabited largely by fishermen who own their boats and homes. Their houses are well built; they have a large school building with 12 teachers, an enrollment of 260 scholars with an average daily attendance of 226, and last year expended on schools $20,850.41 for school purposes; the United States maintains a native school in this town, where there are some 200 natives with an enrollment of 54 native scholars; they have good wharves, two weekly and one monthly papers, a bank, several general stores carrying large stocks of goods, a large cannery, machine shops, shipways, hotels, restaurants, bakeries, wireless station, customs office, and it is a subport of entry. It has one of the largest and most successful shrimp canneries on the Pacific coast, is located adjacent to the halibut fishing banks, and is headquarters for a large number of herring, halibut, shrimp, and salmon fishing vessels.
The organic act passed by Congress August 24, 1912 (37 Stat. L. 512, sec. 9), prohibits towns in Alaska from levying a tax in excess of 2 per cent on the assessed valuation of property and forbids incurring any indebtedness by municipalities in excess of the annual revenue; it is therefore legally impossible for the town to improve its local plants for light, water, sewers, etc., except by an additional act of Congress, such as this act is.