The courier-index., 1921-03-04
Farm Loan Act Valid
 Rules Supreme Court

Washington, March 3.-The farm loan act, designed to assist the ag- ricultural development of the Unit ed States by providing readily ac- cessible credits to farmers through federal land banks, was declared valid by the supreme court today.
 In ap opinion which Commissioners Chas. E. Lobdell of the farm loan board declared "clears away every legal question and removes every shadow of question as to the legal ity of the banks or their bonds," the court held that Congress had full authority to establish the land banks and the cor-relative authority to exempt their bonds from state tax ation
 Commissioner Lobdell announced there would be an immediate issue of farm loan bonds ito an unde- terminate amount" to finance the hundreds of millions of dollars in loans which already had been ap- proved by the board and which were held up pending the courts decision.
 "A bond offering will be made as soon as the bonds can be made ready" Mir Lobdell said, "and im- mediately thereafter the distribu- tion of funds begun. 1t will be at least 30 days, however, before funds are available for actual loaning.
 ''The farm loan board is hopeful that the market may absorb farm loan bonds equal to the borrowing demands of the farmers of the country, but no>, one can predict with safety, the result of a financial. operation of this magnitude"
 The case decided today was an appeal from lower court decrees refusing an injunction sought by Chas. W. Smith, stockholder in the Kansas City Title and Trust Company, to restrain that institu- tion from investing it's funds in the securities of the land banks. The contention was made that farm loan act was invalid as Congress had neither the authority under the con stitution to establish banks or to exempt these securities from state taxation.
 The court in practically unapi- nous opinion, upheld the authority of the government. in both in- stances. The power to designate fiscal agencies has been conceded to Congress since the days of Chief Justice Marshal, the opinion held, and the tax exemption provision was necessary protection.
 Justices McReynolds and Holmes, dissenting from the majority opin- ion. explained that they took ex- ception to the courts assumption of jurisdiction rather than to the find ings themselves. This case should have been dismissed they said, as a matter entirely without the scope of the Missouri laws and the state courts.
 Justice Day who delivered the opinion for the court, said it had been contended that the power to designate these (the joint stock land banks) as Repositories. has not been exercised by the government " but added that the existence of the power under the constitution, is not determined by the extent of the exercise of the authority con ferred under it.
 Congress declared it necessary to create these fiscal agencies" he added. "and to make them authoriz- ed Repositories of public moneys. Its power to do so is no longer open to question"
 Declaring that the contention that the attempt to create these agencies was only a "pretext" could have no weight in court, Justice Day said, there was nothing better settled by the decisions of this court than that when Congress acts within the limits of it's constitutional authority, it is not the province of the judical branch of the government to ques- ton it's motive"