Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1920-05-14
NO MORE BONDS CAN BE SOLD
UNTIL CASE IN COURT
is DECIDED.
CHAIRMAN LEVERS
LETTER EXPLAINS
Alleged That Suit Which Has Halted
Operation Of Governments Loan
System is Inspired by Mortgage
Bankers Because Of Loss of Rasi-
ness to Themselves.
rBy E. G. Dougherty.l

" o'shcNSht ~'''s
legislation by congress Is required to
release to the farmers of Iowa ana
the country generally the millions of
dollars IN farm loan funds now tied
up by litigation pending before the
United States supreme court, accord
ing to a letter written by Chairman
A. +. Lever. of the federal farm
loan board. to Representative Wilson.
of Louisiana.
The. Letter stresses the fact that. be-
cause of the supreme courts action
in ordering IA rearsument of the case
ut its fall term, the farmers, already
of farm labor and forced to curtain
their acreage. will find it impossible
to obtain any further advances from
the farm loan bangs in time for their
summer operations.
The litigation before the court was
brought at the, instance of the Farm
Mortgage Bankers Association OF
Kansas CITY,, it being charged by
friends of the farm loan system in
congress that the suit was inspired
by n desire of the old line MORTGAGE
companies to put the government
farm banks out of business as com
petitors. In his letter to Mr.. Wilson,
Chairman Lever said:
You are familiar with the fact
that the money which is loaned thru
this system to farmers on their
mortgages is derived from the sale
of farm loan bonds. based upon such
mortgages, and that. therefore,
whenever 1t becomes either unwise
or impossible. for any reason, to offer
for sale, or to SELL such bonds, the
system then finds itself without
funds and unable TO make loans.
The last sale of farm loan bonds
was made In June of last year, in
quantity sufficient to meet the an
ticipated borrowing of the farmers
until January of this year. Shortly
after the conclusion of. this first bond
sale. a suit was instituted at the In
stance Of the Farm Mortgage
Bankers Association. in the circuit
court Of appeals at Kansas City.
challenging the constitutionality of
the farm loan act and thereby the
legality Of the bonds issued under it's
authority. The circuit court of ap-
Eeals, after argument, promptly sus-
tanned its constitutionality. The case
then was appealed to the supreme
court Of the United States and was
argued before the court the first
week in January Of this year. An
early decision Of the case was hoped
for. but on Monday. April 26, the
court ordered rcargument of the
case, which can not be had until the
fall term of court next October. :
Funds Exhausted.
In the meantime the funds of the
banks arising out of the sale of
hausted, and their commercial credit
was called upon to the very limit. 1t
Is unnecessary to say to you that
with this case pending and especially
after it had been ordered for re-
argument, it would have been impos-
sible to have sold farm loan bonds
with which to make further loans.'
There is already bill pending hi
congress to meet the situation by en-
tending the war time amendment to
the farm loan act authorizing the
secretary of the treasury to purchase
farm foam bonds and placing funds
at his disposal for that purpose. The
$4,000 600 which would thus be made
available would be used to take up
the loans approved and accepted by
the farm loan banks up to March 1.
1920, in SO far as this amount will
suffice for that purpose. The bill
has been reported favorable to the
house by the banking and currency
committee and it's prompt passage is
being urged by members from rural
districts.
Secretary of War Baker. chairman
of the advisory council of national
defense. it has developed, has been
unable to arrange as he had hoped
for a meeting of the council this
week to consider the proposal OF
Daniel Willard, president of the Bal
timore and Ohio railroad, that the
government undertake to bring about
a curtailment of some Of the nom
essential Industries, including road
building, in order to release labor for
the farms. This was another method
Of relieving the precarious condition
in which farmers of the country find
themselves. Mr.. Baker explained
that the council would be limited in
it's function to advising the govern
ment on the question. He said he
had not looked into the question as
to whether the president still pos
sessed the war time power to curtail
arbitrarily production In any in
dustry in favor of another. Such