Municipal Debt Adjustment and the Supreme Court

Abstract

LAST May the Supreme Court of the United States once again entered what has been described as "a vast arena . . . filled with special interests which conflict and contradict and clamor."' This is the scene of local government defaults- and of the struggles and negotiations to which they give rise. Their frequency and wide geographical distribution since 1926 have become common knowledge.2 Our institutional unpreparedness to cope with such situations in a manner wholly compatible with the public interest has likewise been demonstrated. Not that this unpreparedness should have been news; but so few were the defaults between 1900 and 1926 that this particular field of controversy with its sui generis playing rules and tactics had until 1926 been but a colorful legend handed down to a relatively small group of legal and financial specialists in municipal bonds by their forbears.