The Ocala evening star. [volume] (Ocala, Fla.) 1895-1943, 1920-08-17

at high rate OF interest IN comDe-
tition with these 1ow-interest, long
time federal loans. We cannot make
good commission in buying and sell
ing farm mortgages. We have to
stop this federal system or it will
put us out of business. The vulner-
able point is their bonds. Why
should they be tax-exempt?
"It is true that the act says they
shall be called sinstrumentalities Of
the government, but that does not
make them 20. Come, now, as an as
sociation, let US have suit brought
to test whether or not their bonds
should be exempt from taxation. and
while the suit Is pending they will be-
unable to make loans. Nobody win
buy farm loan bonds when In doubt
as to whether they have to pay back
taxes on them"
And this is just what they did. The
suit was begun in the name of Chas.
E. Smith VS.. Kansas City Title and
Trust Company ct al. But no one could
from the title of this case that it had
anything whatever to do with the
Federal Farm Loan System How
ever, it does and that most seriously
so far as the farmers throughout the
country are concerned. as we'll as the
general public, who will also be af-
fetced by the high cost of farm pro-
ducts If farmers are handicapped for
the lack of capital or the high cost of
capital used in their production. To
/ show how this case rings in the
! the farmers and the Federal Farm
!. Loan System, let me quote the fol-
Lowing paragraph from the state
ment Of the case i'm the brief of one
4 attorney for Mr.. Smith:
"The Kansas Title and Trust Com
pany was about To invest a large
amount Of It's corporate and fduciary
4 funds i'm the purchase OF farm loan
A bonds issued respectively by joint
stock land banks and by federal land
banks, because the company believed
the bonds to be tax-exempt.
! "Charles e. Smith. director and
large stockholder IN the company
objected to the proposed Investment
upon the ground that the tax exemp-
ton was void and that the bonds
were taxable; he voted against The
resolution Of purchase, and then filed
this suit in the ditrict court TO enjon
the company from purchasing the
bonds.
A federal land bank and joint.
4 stock land bank intervened, and were
made parties defendant; the attorney
| general of the United States appear
ed as amicus curiae; motion wa:
} made to dismiss for want Of equity
! the motion was sustained; the plain
: tiff declined to plead further; TIL
J bill was dismissed; the appeal taken
i Now, in al probability. Mr. Charles
: r.. Smith did not care q straw wheth
er OF not il was constitutional TO OK
} empt farm loan bonds from taxation
He was not the moving spirit in bring
e ing the action. The Farm Mortgag,
Bankers Association Of America wa
' the great enemy lying under cover
ei When the mischief had been done, an,
. the Federal Farm Loan System ha,
= been halted IN its work of bringin,
e credit and financial relief to hundred
t of thousands of farmers, the associa
e ton came out IN the open and Shove
e its hand. This is made plain by th
i. fact that. in q letter dated May Il
e 1920, which accompanied bulletin NJ
e &c, the chairman of the membershi
a committee said that the Farm Mort
: gage Bankers Association is direcs
II responsible for the federal Ian
It bank and the joint-stock land ban
ell not being in operation today and nc
" being able TO operate until some tim
l. next year"
isl Here, then. are the main facts ho1