The Abbeville press and banner. [volume] (Abbeville, S.C.) 1869-1924, 1921-03-02
FARM LOAN ACT WINS
SUPREME COURT TEST

IMMEDIATE ISSUE OF FARM
LOAN BOND TO COME TO Fl.
NANCE HUNDREDS OF MIL
LIONS OF DOLLARS IN LOANS
ALREADY APPROVED BY
BOARD. LEGALITY OF BONDS
ESTABLISHED BEYOND oUEs-
TON BY DECREE
Washington, Mar. 1.-The farm
loan act, designed to assist the agrl-
cultural development of the United
States by providing readily accessl'
BILE credits to farmers through fed
eral land banks, was declared valid
today by the supreme court. 4.
In an opinion which Commission
er Charles E. o. Lodbell OF the farm
loan board declared "clears away
every legal question and removes
every shadow or question as to the
legality of the banks or their bonds,
the court held that congress had full
authority to establish the land banks
and the correlative authority to ex-
empt their bonds from state taxa
tion. Commissioner Lodbell an
nounced that there would be an I'M
mediate issue of farm loan bonds
."to an undeterminate amount" to fl
nance the hundreds of millions OF
dollars in loans which already had
been approved by the board and
which were held up pending the
court decision.
"A bond offering will be made as
soon as the bonds can be made
ready" Mr.. Lodbell said, "and I'M
mediately thereafter the distrlbu-
ton of bonds begun. 1t will be at
least 80 days, however, before
funds are available for actual loan
ing.
"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 financial
operation of this magnitude.
Many Loans Held Up
The case decided today was an ap-
peal from lower court DEGREES re-
fusing an injunction sought by
Charles w. Smith, stockholder in
the Kansas City Title & Trust Co.,
to restrain that institution from in
vesting it's funds in the securities OF
the land sbanks.. The contention was
made that the farm loan act was In
valid, as congress had neither the
authority under the constitution to
establish banks nor to exempt these
securities from state taxation.
The court, in a practically unani-
nous opinion, upheld the authority
of the government in most instances
Farm loans aggregating more than
s50,O0O,OO0 have been held up since
May, 1920, as a result of the suit
instituted by harles E. Smith, a
stockholder in the Kansas City Title
G. Trust Co., to test the validity OF
the federal farm loan act. Applica-
tions to this amount were pending
when Commissioner Lodbell an
nounced at a conference Of farm
loan officials here that official ap-
proval would be withheld pending
decision of the court.
Officials placed the total amount
of loans to farmers held IN abeyance
by the suit at many times $50,00O,-
900, however, the receipt Of apph-
cations having stopped with Com
missioner ,Lodbell's announcement.
On March /, 1920, the farm loan
board reported that, $1s2,s97, 900
had been advanced tor 1884 farm
ers, and that application from 179,-
734 persons then pending totalled
SAT-, 100000. -
Appeal From Lower Court ~
The suit in the supreme court was
in the form of an appeal from low
er court decisions refusing to issue
- :a:,,oot;op to 1.astrain tho Kan