SEC. 2. That whenever the parties to any maritime transaction or any transaction involving commerce shall agree that a controversy thereafter arising between them out of such transaction shall be settled by arbitration, or they shall submit in writing a controversy which has arisen out of such transaction, such agreement or submission shall be valid, enforceable and irrevocable, save upon such grounds as exist at law or in equity for the revocation of any contract.

SEC. 3. If any suit or proceeding be brought in any of the courts of the United States upon any issue otherwise referable to arbitration under a contract or submission, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such a contract or submission, shall stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement or the submission.

SEC. 4. A party aggrieved by the failure, neglect or refusal of another to perform under a contract providing for arbitration or a submission to arbitration may petition the District Court of the United States which, save for such contract or submission, would have jurisdiction under the Judicial Code at law, in equity or in admiralty of a suit arising out of the controversy between the parties, for an order directing that such arbitration proceed in the manner provided for in such contract or submission. Eight days' notice in writing of such application shall be served upon the party in default. Service thereof shall be made in the manner provided by law for personal service of a summons. The court shall hear the parties, and upon being satisfied that the making of the contract or submission or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the contract or submission. If the making of the contract or submission or the default be in issue, the court shall proceed summarily to the trial thereof. If no jury trial be demanded by either party, or if the matter in dispute is within the admiralty jurisdiction, the court shall hear and determine such issue. Where such an issue is raised, any party may, except in cases of Admiralty, on or before the return day of the notice of application, demand a jury trial of such issue, and if such demand be made, the court shall make an order referring the issue or issues to a jury in the manner provided by law for referring to a jury issues in an equity action. If the jury find that no written contract providing for arbitration was made or submission entered into, as the case may be, or that there is no default, the proceeding shall be dismissed. If the jury find that a written contract providing for arbitration was made or submission was entered into and there is a default in the performance thereof, the court shall make an order summarily directing the parties to the contract or submission to proceed with the arbitration in accordance with the terms thereof.

SEC. 5. Provision in case of failure to name arbitrator or umpire. If, in the contract for arbitration or in the submission, described in section two, provision be made for a method of naming or appointing an arbitrator or arbitrators or an umpire, such method shall be followed; but if no method be provided therein, or if a method be provided and any party thereto shall fail to avail himself of such method, or for any other reason there shall be a lapse in the naming of an arbitrator or arbitrators or umpire, or in filling a vacancy, then, upon application by either party to the controversy, the district court shall designate and appoint an arbitrator or arbitrators or umpire, as the case may require, who shall act under the said contract or submission with the same force

and effect as if he or they had been specifically named therein; and unless otherwise provided, the arbitration shall be by single arbitrator.

SEC. 6. Applications to be heard as motions. Any application to the court hereunder shall be made and heard in the manner provided by law for the making and hearing of motions, except as otherwise herein expressly provided.

SEC. 7. If the basis of jurisdiction be diversity of citizenship between citizens of several states or one of the parties be a foreign state, citizen or subject, the district court or courts which would have jurisdiction if the matter in controversy exceeded, exclusive of interest and costs, the sum or value of three thousand dollars, shall have jurisdiction to proceed hereunder notwithstanding the amount in controversy is unascertained or is to be determined by arbitration; provided, however, that the contract or submission out of which such controversy arises exceeds in whole or in part exclusive of interest and costs the sum or value of three thousand dollars.

SEC. 8. If the dispute relates to a matter which except for the arbitration agreement would be within the admiralty jurisdiction and would give a right to the party aggrieved to sue in rem, then notwithstanding anything herein to the contrary, the party aggrieved by failure, neglect or refusal to proceed with arbitration may begin his proceeding hereunder by libel and seizure of the vessel or other property of the party in default subject to such action in rem and the court shall then have jurisdiction to direct the parties to proceed with the arbitration and shall retain jurisdiction in rem to make its proceedings effective.

The committee submits but a tentative draft as it desires further time to complete a bill as it desires further light on the subject.

XIV.

AMENDMENTS TO THE NATIONAL BANKRUPTCY ACT.

The Committee on Commerce, Trade and Commercial Law (formerly the Committee on Commercial Law) of the American Bar Association has for a period of more than a dozen years given most careful consideration to the subject of the National Bankruptcy Act. It has been the opinion of the committee that the National Bankruptcy Act was the wisest piece of bankruptcy legislation ever put upon the statute books. The committee has always been reluctant to lend its endorsement to any amendments to the National Bankruptcy Act unless the amendments appeared clearly necessary in the interest of right and justice. The committee reaffirms its view that the National Bankruptcy Act should be continued.

Various amendments have been proposed from time to time in the House and Senate and also proposed to the committee.

At the public meeting of the committee held in the Assembly room of the Merchants' Association of New York, Woolworth Building, New York City, April 26 to April 29, 1920, suggested

amendments to the National Bankruptcy Act were considered and many able addresses of lawyers and commercial men were made before the committee. As a result of said hearing the committee in its report dated June 21, 1920, pages 14 to 16, both inclusive, set forth a first tentative draft of suggested amendments to the National Bankruptcy Act for the purpose of receiving suggestions and criticisms.

The committee prepared a second tentative draft of amendments to the National Bankruptcy Act which was printed in full at pages 204 to 205 of the JOURNAL of the American Bar Association for April, 1921. This second tentative draft thus reached the desks of the 12,000 members of the American Bar Association. The committee at its public meeting held at the same place on Tuesday, May 3, 1921 gave full consideration to the said second tentative draft and also listened to oral suggestions made by Mr. J. H. Tregoe, Executive Secretary of the National Credit Men's Association and many others. The committee likewise had the benefit of written suggestions of Hon. John R. Harper, Referee in Bankruptcy (520 Post Office Building, Milwaukee, Wis.) and of others.

The committee now reports and recommends the passage of a bill to amend the National Bankruptcy Act as follows:

A BILL

TO AMEND AN ACT ENTITLED "AN ACT TO ESTABLISH A UNIFORM SYSTEM OF BANKRUPTCY THROUGHOUT THE UNITED STATES," APPROVED BY THE PRESIDENT JULY 1, 1898, AND ACTS AMENDATORY THEREOF AND SUPPLEMENTARY THERETO.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That Section 22-a-(1), Section 29 (a), (b), subdivision one and (d), Section 48 (a), (d) and (e), Section 57 (n) and Section 64 (a) of an act entitled "An Act to Establish a Uniform System of Bankruptcy Throughout the United States," approved by the President July 1, 1898 and acts amendatory thereof and supplementary thereto be and the same are hereby amended and supplemented so as to read as follows:

SEC. 22-a-(1) After a person has been adjudged a bankrupt the judge may cause the trustee to proceed with the administration of the estate, or refer it (1) generally to the referee of the district in which was the principal place of business, or specially with only limited authority to act in the premises or to consider and report on specified issues; or (2) to any referee within the territorial jurisdiction of the court, if the convenience of parties in interest will be served thereby, or for cause, or if the bankrupt does not do business, reside or have his domicile in the district.

SEC. 29 (a) A person shall be punished by imprisonment for a period not to exceed five years upon conviction of the offense of having knowingly and fraudulently appropriated to his own use, embezzled, spent or unlawfully transferred any property or secreted or destroyed any document belonging to a bankrupt estate, which came into his charge as trustee, receiver, custodian or officer of court.

(b) A person shall be punished by imprisonment for a period not to exceed two years upon conviction of the offense of having knowingly or fraudulently (1) concealed any property belonging to the estate of a bankrupt.

(d) A person shall not be prosecuted for any offense arising under this Act, unless the indictment is found or the information is filed in court within three years after the commission of the offense, except where the person is absent from the jurisdiction, in which case, the time during which the said person is so absent from the jurisdiction shall not be a part of the period of limitation prescribed herein.

SEC. 48, Compensation of Trustees.-(a) Trustees shall receive for their services, payable after they are rendered, a fee of five dollars deposited with the clerk at the time the petition is filed in each case, except when a fee is not required from a voluntary bankrupt, and such commissions on all moneys disbursed or turned over to any person, including lienholders, by them, as may be allowed by the courts, not to exceed six per centum on the first five hundred dollars or less, four per centum on moneys in excess of five hundred dollars and less than fifteen hundred dollars, two per centum on moneys in excess of fifteen hundred dollars and less than ten thousand dollars, and one per centum on moneys in excess of ten thousand dollars. And in case of the confirmation of a composition after the trustee has qualified the court may allow him as compensation, not to exceed one per centum of the amount to be paid the creditors on such composition;

(d) Receivers or marshals appointed pursuant to section two, subdivision three, of this act shall receive for their services, payable after they are rendered, compensation by way of commissions upon the money disbursed or turned over to any person, including lienholders, by them, and also upon the moneys turned over by them or afterwards realized by the trustees from property turned over in kind by them to the trustees, as the court may allow, not to exceed six per centum on the first five hundred dollars or less, four per centum on moneys in excess of five hundred dollars and less than one thousand five hundred dollars, two per centum on moneys in excess of one thousand five hundred dollars and less than ten thousand dollars, and one per centum on moneys in excess of ten thousand dollars: Provided, that in case of the confirmation of a composition such commissions shall not exceed one per centum of the amount to be paid creditors on such composition: Provided further, that when the receiver or marshal acts as a mere custodian and does not carry on the business of the bankrupt, as provided in clause five of section two of this act, he shall not receive nor be allowed in any form or guise more than two per centum on the first thousand dollars or less, and one per centum on all above one thousand dollars on moneys disbursed by him or turned over by him to the trustee and on moneys subsequently realized from property turned over by him in kind to the trustee; Provided further, that before the allowance of compensation notice of application therefor, specifying the amount asked,

shall be given to creditors in the manner indicated in section fiftyeight of this act; and

(e) Where the business is conducted by trustees, marshals, or receivers, as provided in clause five of section two of this act, the court may allow such officers additional compensation for such services by way of commissions upon the moneys disbursed or turned over to any person, including lienholders, by them, and, in cases of receivers or marshals, also upon the moneys turned over by them or afterwards realized by the trustees from property turned over in kind by them to the trustees; such commissions not to exceed six per centum on the first five hundred dollars or less, four per centum on moneys in excess of five hundred dollars and less than one thousand five hundred dollars, two per centum on moneys in excess of one thousand five hundred dollars and less than ten thousand dollars, and one per centum on moneys in excess of ten thousand dollars: Provided, that in case of the confirmation of a composition such commissions shall not exceed one per centum of the amount to be paid creditors on such composition: Provided further, that before the allowance of compensation notice of application therefor, specifying the amount asked, shall be given to creditors in the manner indicated in section fifty-eight of this act.

SEC. 57 (n) Claims shall not be proved against a bankrupt estate subsequent to six months after the adjudication; or if they are liquidated by ligation and the final judgment therein is rendered within thirty days before or after the expiration of such time, and then within sixty days after the rendition of such judgment: Provided, that the right of infants and insane persons without gardians, without notice of the proceedings, may continue six months longer.

SEC. 64 (a) The Court shall order the trustee to pay all taxes legally due and owing by the bankrupt to the United States, state, county, district or municipality in advance of the payment of dividends to creditors, and upon filing the receipts of the proper public officers for such payment he shall be credited with the amount thereof, and in case any question arises as to the amount or legality of any such tax the same shall be heard and determined by the court, provided, that such payment shall not be made out of the general assets of the estate where the property against which the taxes are assessed or levied is not an asset for distribution among creditors, or the taxes can be satisfied from the property, or such taxes as were levied or assessed prior to the bankrupt acquiring title thereto, or is exempt from sale under execution, nor shall such payment be made to any purchaser, assignee or transferee of any claim for taxes unless it should appear to the court that such purchaser, assignee or transferee, because of the benefits derived by, or sought to be conferred upon, the estate by the payment of taxes or the purchase of tax claims by the claimant, is justly entitled to subrogation.

SEC. 2. That no rights, actions, prosecutions or proceedings or causes thereof, under said act, approved July 1, 1898, and acts amendatory thereof or supplementary thereto shall be affected by this act and the same are fully preserved to all intents and purposes as if this act had not been passed.

SEC. 3. This act shall take effect and be in force on and after the first day of January next after its passage.