The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1921-03-05
United States Supreme Court
Passes Upon Constitutionality
of Land Bank Act
GOVERNMENT WILL BE
ABLE TO AID FARMERS
Attempt to Prevent Extension Of
Legitimate Credits to Land
Owners Defeated in Highest
Tribunal


Washington. Feb. 2S.-Thc farm
loan act, designed to assist the asri-
cultural development of the United
states by providing readily accessi-
BILE credits To farmers through fed
ersl land banks, was declared valid
today by the supreme court.
In an opinion which Commissioner
Charles IL. %. Lobdell of the farm
loan board declared clears away
every legal question and removes
every shadow OF question as to the
legality of the banks or their bonds"
the court held that congress had fun
authority to establish the land banks
AMI the correlative authority to cx-
empt their bonds from the state taxa
ton. Commissioners Lobdel an
nonnccd that there would be an i'm
mediate issue OF farm loan bonds Ito
an undctcrminat q amount" to fin
anre the hundreds of millions OF dol
lars I'm loans which already had been
approved by the board aud which
were held up pending the court de-
cision.
a bond Offering will be made as
soon ms the bonds can be made
ready" Mr. I'cbdcll said. "and imme-
dhtely thereafter the distribution OF
bonds begun. II will bc at least 80
days, however, before funds are avail.
able for actual loaning.
THE farm loan board is hopeful
thht the market may absorb farm
loan bonds equal to the borrowing
demands OF the farmers Of the coun-
try, but no one can predict with safe
IS the result of a financial operation
OF this masnitude.
The case decided today was an an
peni from lower court decrces rcfus-
ina an injunction sought by Charles
~. Smith, a stockholdcr i'm the Kan
sH City Title and Trust Co. to re-
lrnin that institution from investing
funds In the securities of the land
enks. The contention was made that
f farm loan act was invalid. as con-
S'ss hadeneither the authority under
constitution to- establish banks
To exempt these securities from
te taxation.
Thc court, In n practically unani-
opinion, upheld the authority of
government i'm both instances.
trm loans aSgregating more than
10000 have been held up since
1870, as a result of the suit in
cd by Charles H.. Smith n stock
I'm the Kansas City Title and
Co. TO test the validity of the
farm loan act. Applications
amount We're pending when
lssioner Lobdcll announced at
erencc of farm loan officials
hat official approval would Inc
td pending u decision OF the
Halls placed the total amount of
% farmers held in Allowance hv
lt at many times $4,000. 600,
". the receipt of applications
stopped with Commissioner
Us announcement. on March /.
hc farm loan board reported
S2.s97.O00 had been advanced
si farmers, ana that applica-
rom 11@,734 persons then pen
ptallcd 7l.OOO. 900.
suit In the supreme court was
form of an appeal from lower
iecisions refusing TO issue an
ON 10 restrain the Kansas city
nd Trust Co, from investing
Is I'm bonds issued by the farm
inks. The government. the
hnd bank OF Wichita, Kan.
~ First Joint Stock Land bank
rago, on their own application
made defendants i'm order that
tire question might bc settled
in one suit.
1sscl for Mr.. Smith asscr.cC in
pee That the farm loan aC. WAS
rciSc OF power which CUG;r ".
possess under the Conat IL
'urthcr ground for attack WIS
in the exemption of the farm
HcurticS from taxation as in
ntalitics OF the governments" f"
mn g. McAdOO. former sccrc-
the treasury, Submitted tho
ncnt brief as special assistant
attOrncy general. in the argu.
~ the case. lie asserted that
inks were created fiscal
OF the gOvCrnm,ut aud that
~ had the clear right to set
D Institutions. Since assistance
rulturc pertains tu the general
II was argued Cun@rcsS
lavc made direct Hpprupria-
the purpose In view, but
create these special agcucirs
h the necessary funds.
gard TO the tax exemption
III MCAdoo COntcndcd thlt
1hply n question for con
@rrminc when the useful
agencies would be- Gu
Rmption."
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