possible into three classes. The initial terms of the referees in the first class shall expire at the end of the second year, in the second class at the end of the fourth year, and in the third class at the end of the sixth year.

(3) Thereupon the Director shall report in writing to the judge or judges of the several courts of bankruptcy the number of referees to be appointed by them in each of the three classes above specified, the respective territories which such referees shall serve, and the respective salaries to be paid to them. The judge or judges shall thereupon appoint, pursuant to subdivision a of section 34 of this Act such referees in each of the specified classes for terms commencing sixty days after such promulgation of the determinations of the conference, and shall select them as far as practicable from the referees then in office within their respective judicial districts.

c. Except as otherwise provided in this Act, the conference may, from time to time, in the light of the recommendations of the councils, made after advising with the district judges of their respective circuits, and of the Director, change the number of referees and the extent of the respective territories to be served by them, as the expeditious transaction of the business of the several courts of bankruptcy may require.

As amended by the Referees' Salary Act, 1946. This section as amended by the Chandler Act (1938) read: "Number of Referees.-Such number of referees shall be appointed as may be necessary to assist in expeditiously transacting the bankruptcy business pending in the various courts of bankruptcy, but, insofar as possible, the number shall be limited with a view to employment of referees on a full-time basis." The full-time objective was then first declared.

Sec. 38. (11 U.S.C. § 66.)

Jurisdiction of Referees

Referees are hereby invested, subject always to a review by the judge, with jurisdiction to (1) consider all petitions referred to them and make the adjudications or dismiss the petitions; (2) exercise the powers vested in courts of bankruptcy for the administering of oaths to and the examination of persons as witnesses and for requiring the production of documents in proceedings before them, except the power of commitment; (3) exercise the powers of the judge for the taking possession and releasing of the property of the bankrupt in the event of the issuance by the clerk of a certificate showing the absence of a judge from the judicial district, or the division of the district, or showing his sickness or inability to act; (4) grant, deny, or revoke discharges; (5) confirm or refuse to confirm arrangements or wage-earner plans, or set aside the confirmation of arrangements or wage-earner plans and reinstate the proceedings or cases; (6) perform such of the duties as are by this Act conferred on courts of bankruptcy, including those incidental to ancillary jurisdic

tion, and as shall be prescribed by rules or orders of the courts of bankruptcy of their respective districts, except as herein otherwise provided; and (7) during the examination of the bankrupt, or during other proceedings, authorize the employment of stenographers for reporting and transcribing proceedings at such reasonable expense to the estate as the court may fix.

As Amended by the Chandler Act (1938). This subdivision was also amended in 1926. In 1938 "within the limits of their districts as established from time to time" which followed "judge," in the introductory clause was deleted. "By the clerks," which followed "them," in (1) was dropped, and (4) and (5) were inserted. "Except as to questions arising out of the applications of bankrupts for compositions or discharges" which followed "duties" in former (4) (now (6)) was deleted. The reference to ancillary jurisdiction in this clause was added. Former (5) is now (7).

Sec. 39. (11 U.S.C. § 67.) Duties of Referees

a. Referees shall (1) give notice to creditors and other parties in interest, as provided in this Act; (2) prepare and file the schedules of property and lists of creditors required to be filed by the bankrupts or cause the same to be done when the bankrupts fail, refuse, or neglect to do so; (3) examine all schedules of property, lists of creditors, and statements of affairs, filed as provided under this Act, and cause such as are incomplete and defective to be amended; (4) furnish or cause to be furnished such information concerning proceedings before them as may be requested by parties in interest; (5) declare dividends and cause to be prepared dividend sheets showing the dividends declared and to whom payable; (6) transmit to the clerks such papers as may be on file before them whenever the same are needed in any proceedings in courts and secure the return of such papers after they have been used, or, if it be impractical to transmit the original papers, transmit certified copies thereof by mail; (7) upon application of any party in interest, preserve the evidence taken, or the substance thereof as agreed upon by the parties before them when a stenographer is not in attendance; (8) prepare promptly and transmit to the clerks certificates on petitions for review of orders made by them, together with a statement of the questions presented, the findings and orders thereon, the petition for review, a transcript of the evidence or a summary thereof, and all exhibits; (9) transmit forthwith to the clerks all bonds filed with and approved by them, the originals of all orders made by them granting adjudications or dismissing the petitions as provided in this Act, and certified copies of all orders made by them, granting, denying, or revoking discharges or adjudging that bankrupts have waived their right to a discharge, confirming or refusing to confirm, or setting aside the confirmation of, arrangements or wage earner plans, and reinstating the proceedings or cases; and (10) safely keep, perfect, and transmit to

the clerks, when the cases are concluded, the records herein required to be kept by them.

(9) stands as amended July 7, 1952, P.L. 456, 82d Cong., 2d Sess., § 12, including for the first time a requirement of a report of waived discharges and making other formal changes. Otherwise the subdivision stands as amended by the Chandler Act (1938), which put the clauses in the chronological order of usual performance.

(1) corresponds to old (4), which read: "give notices to creditors as herein provided."

(2) corresponds to old (6).

(3) corresponds to old (2).

ed under this Act" was added.

"And statement of affairs, filed as provid

(4) corresponds to old (3). "Or cause to be furnished" is new.

(5) corresponds to old (1).

(6) corresponds to old (8). "secure."

(7) corresponds to old (9).

"In like manner" has been deleted before

(8) corresponds to old (5), which read: "Make up records embodying the evidence, or the substance thereof, as agreed upon by the parties in all contested matters arising before them, whenever requested to do so by either of the parties thereto, together with their findings therein, and transmit them to the judges."

(9) was added.

(10) corresponds to old (7).

Old (10) was deleted. It related to the routine of getting papers from the clerk, adequately covered by present section 51(4).

b. Referees shall not (1) act in cases in which they are directly or indirectly interested; or (2) purchase, directly or indirectly, any property of an estate in any proceeding under this Act. Active full-time referees shall not exercise the profession or employment of counsel or attorney, or be engaged in the practice of law. Active part-time referees, and referees receiving benefits under paragraph (1) of subdivision d of section 40 of this Act, shall not practice as counsel or attorney in any proceeding under this Act.

As Amended by the Referees' Salary Act (1946). As amended by the Chandler Act (1938), section 39b read: "Referees shall not (1) act in cases in which they are directly or indirectly interested; (2) practice as attorneys and counselors at law in any proceeding under this Act; or (3) purchase, directly or indirectly, any property of an estate in any proceeding under this Act."

The most important change is thus to prohibit full-time referees from practicing law. The 1938 amendment introduced "under this Act" to cover debtor relief proceedings under the legislation of 1933-35.

C. A person aggrieved by an order of a referee may, within ten days after the entry thereof or within such extended time as the court may for cause shown allow, file with the referee a petition for review of such order by a judge and serve a copy of such petition upon the adverse parties who were represented at the hearing. Such petition shall set forth the order complained of

and the alleged errors in respect thereto. Upon application of any party in interest, the execution or enforcement of the order complained of may be suspended by the court upon such terms as will protect the rights of all parties in interest.

The National Bankruptcy Conference has approved a proposal that sec tion 39c be amended to read:

"If written notice of the entry of such order is served upon such adverse parties and proof of such service is filed with the referee within 3 days after service thereof, the time within which such petition for review may be filed shall expire 10 days after the date of such service; but if such notice is not so served or proof of such service is not so filed, then the time within which' such petition for review may be filed shall expire 15 days after the date of entry of such order. Provided, however, That the time for filing such petition to review may be extended for cause shown by order entered upon application filed before the expiration of the times hereinabove set forth, and in such event the petition for review may be filed within the extended time allowed by such order. If a petition for review is not so filed, the order of the referee shall become final.

"The petition for review shall set forth the order complained of and the alleged errors in respect thereto. Upon application of any party in interest, the execution or enforcement of the order complained of may be suspended by the court upon such terms as will protect the rights of all parties in interest."

Sec. 40. (11 U.S.C. § 68.) Compensation of Referees; Referees' Salary and Expense Funds; Retirement of Referees

a. Referees shall receive as full compensation for their services salaries to be fixed by the conference, in the light of the recommendations of the councils, made after advising with the district judges of their respective circuits, and of the Director, at rates not more than $15,000 per annum for full-time referees, and not more than $7,500 per annum for part-time referees. In fixing the amount of salary to be paid to a referee, consideration shall be given to the average number and the types of, and the average amount of gross assets realized from, cases closed and pending in the territory which the referee is to serve, during the last preceding period of ten years, and to such other factors as may be material. Disbursement of such salaries shall be made monthly by or pursuant to the order of the Director.

b. The conference, in the light of the recommendations of the councils, made after advising with the district judges of their respective circuits, and of the Director, may increase or decrease any salary, within the limits prescribed in subdivision a of this section, if there has been a material increase or decrease in the volume of business or other change in the factors which may be considered material in fixing salaries: Provided, however, That during the tenure of any full-time referee his salary shall not be reduced below that at which he was originally appointed under this amendatory Act, and during any term of any such referee his salary shall not be reduced below the salary fixed for him at

the beginning of that term: And provided further, That no salary fixed under the provisions of this section for a full-time referee shall be changed more often than once in any two years or in an amount of less than $250.

C. (1) Except as otherwise provided in this Act, there shall be deposited with the clerk, at the time the petition is filed in each case, and at the time an ancillary proceeding is instituted, (a) $17 for each estate for the referees' salary fund, and (b) $15 for each estate for the referees' expense fund, as hereinbelow established: Provided, however, That in cases of voluntary bankruptcy such fees, as well as the filing fees of the clerk and trustee, may be paid in installments, if so authorized by General Order of the Supreme Court of the United States.

(2) Additional fees for the referees' salary fund and for the referees' expense fund shall be charged, in accordance with the schedules fixed by the conference (a) against each estate wholly or partially liquidated in a bankruptcy proceeding, and be computed upon the net proceeds realized; (b) against each case in an arrangement confirmed under chapter XI of this Act, and be computed upon the amount to be paid to the unsecured creditors upon confirmation of the arrangement and thereafter, pursuant to the terms of the arrangement, and, where under the arrangement any part of the consideration to be distributed is other than money, upon the amount of the fair value of such consideration; and (c) against each case in a wage-earner plan confirmed under chapter XIII of this Act, and be computed upon the payments actually made by or for a debtor under the plan. Such schedules of fees may be revised by the Director, with the approval of the conference, not more than once during each calendar year, so that the total amount of fees, allowances and charges collected and to be collected from all sources for the referees' salary fund and for the referees' expense fund will, as near as may be, equal for each fund, respectively, the total amount of salaries paid and to be paid to referees in active service, and the total amount of their expenses: Provided, however, That such schedules of fees shall not be so revised for any year that the total collections estimated by the Director for such year shall exceed by more than 10 per centum the total collections in the preceding year. The Director, with the approval of the conference, may make, and from time to time amend, rules and regulations prescribing methods for determining net proceeds realized in asset cases, fair value of considerations, other than money, distributable in arrangement cases, and payments actually made by or for a debtor under the plan in wage-earner cases; prescribing the procedure for collection by the clerk of fees and allowances for the referees' salary fund and the referees' expense fund; and providing for the effective administration of the provisions of this paragraph (2).