Capital journal. (Salem, Or.) 1919-1980, 1921-02-28
CourtHoIds
Farm Loan
ActIsValid.
Decision Will Place
Thousands of Dol
lars at Disposal of
Farmers Here

Washington, Feb. 28.-The fed
eral farm loan act was held con-
stitutional today by the supreme
court. This is the act under which
land banks were established to ex-
tend loans to farmers.
Millions of dollars in loans to
farmers have been held up pend
ing a decision of the court in this
case, which was brought by Charles
w. Smith, a stockholder in the
Kansas City Title & Trust com
pany, who sought an Injunction to
restrain that institution from in
vesting its funds in bonds issued by
the farm loan banks.
Old Case Cited.
The act was attacked on the
ground that congress was without
constitutional authority to estab-
lish farm loan banks and to exempt
their bonds from taxation. Justice
Day, who rendered the opinion for
the court, sad the power of con-
gress to establish banks had in a |
broad sense been upheld by the su-
preme court in the days of Chief
Justice Marshall.
The court, sustaining federal |
court DEGREES dismissing injunction |
proceedings brought by Mr., Smith, |
also held that congress had the au-
thority to exempt the bonds of the
bank from taxation. i
Court Is Divided.
The court divided, to 2, Justice |
Holmes and McReynolds dissent |
ing. Justice Brandeis took no part |
in considerating the case, Justices
Holmes and McReynolds held that 1
1.-The cause" should have been dis
missed by the court as being solefyl
within the scope of the Missouri
courts.
Marion Farmers Benefit.
Regarding the effect of the Uni
ted States supreme court decision,
declaring the federal farm loan act !
constitutional, upon the situation IN |
this vicinity, A. C. Bohrnstedt made I
the following statement this morn
ing:
AT tie lliilt ll6 ltuNI al L
bank ceased loaning we were left
with $15O,OOO of approved and un.
completed applications on hand
and which we will now be able to
complete and distribute the money /
to about fifty different applicants
We had more uncompleted appli-
cations than any other assocfationj
in the Willamette valley, but un-
doubtedly the associations tributary
to Salem had at least 100000 of
uncompleted applications which
can now be completed Since the
time the federal land banks ceased
loaning, we have had approximate
ly 1000 inquiries for farm loans and
from 5 to 10 per cent Of these in
duiries were from men who intend
ed to purchase land with the pro-
ceeds of their loans. Interest rates +
have been so high and money so
hard to get during the past year
that farmers have been afraid to
buy and have been waiting for the
of business of the fed !;
eral land banks therefore there will
be an immediate resumption of
buying of farm lands by actual till
ers of the soil and not by specula-
tors, because only those who live
on the farms or who have 1t TILED
at their expense can secure fed
eral farm loan. From the inquiries
we have no hand we do not doubt
that inside of thirty days after we
are authorized to take applications
by the federal land banks, which
will undoubtedly be within ten days
we will without doubt have half
million dollars of applications on
hand. and l am sure there will be
as much more loaned by other as
sociations tributary to this terri
tory.
Means Big Saving.
"Close to 5000, 900 was loaned
in the Willamette valley during the |
three years that the federal land j
hanks were in operation and this !
means an annual saving to the q
on loans already made of I
At least s15O.OO0 a year. Without [
A doubt. with the resumption of z
business inside Of another two year g
period there will be sufficient mon h
" loaned in the valley that the an v
lual saving TO the farmers will be
1aIf million dollars. The saving in n
interest, however, is one Of the least \
# the benefits, because stabilzing /
influence Of longtime loans is of c
,reater benefit 20 the agricultural 4
interests than the immediate saw S
ng in interest. c
"A favorable decision also means
hat the joint stock land banks,
which are also a part Of the federal
arm loan system and which had F
ust entered oregon will again be G
oaning in the state. and they take A
are of the larger class Of business. p
rhich will mean a like saving to
he large farmers OF the district"
Wilbur Clayborn Doak. for many G
ears a resident Of Lane county. / Il
led suddenly on his farm near Co 2
.@-.- r-HfIa faaTfuu the hCrr lie