Carrizozo outlook. [volume] (Carrizozo, N.M.) 1910-1945, 1921-03-11
FEDERAL FARM LOAN ACT
HELD TO BE CONSTITUTIONAL
WILL RELEASE MILLIONS
10 THE FARMERS
Loans Have Been Held Up Since suit
Was fIlcdj Court Finds Congress
Had Authority TO Establish RAnks.


The Federal Farm Loan Act was
held constitutional Monday, February
18th, by the Supreme Court Of the
United states This is the act under
which land banks were established u
extend loans 10 farmers.
Millions OF dollars In loans 10 farm
ers have been held up pending q do
cision of the court In this case. which
was brought by Chas. W. Smith. a
stoekholdor In the Kansas City Title
Trust company, who sought an In
unction to restrain that institution
rom investing its funds In bonds Is
sued by the farm loan banks.
The act was attacked on the ground
that congress was without constltu-
tlonal authority to establish farm loaD
banks and to exempt their bonds from
taxation. Justice Day, who rendered
the opinion, for the court. said the
power OF congress to establish the
banks had, In a broad sense been up
of Chief Justice Marshall
The court in sustaining the federal
court DEGREES dismlssing the iniune-
tion proceedings brought by Mr. Smith
also held that congress had the au-
thorlty to exempt the bonds OF the
bank from taxation.
Loans Held Up.
Farm loans aggregating more than
s500O0.OOO have been held up since
May. 1890, US u result OF the suit IN
sttuted by Charles h. Smith. a STOCK
holder In the Kansas Clty Title b
Trust company, to test the validity Of
the Federal Farm Loan act. Appli-
cations to this amount were pending
when Commissioner Lobdell announe-
ed at conference of farm loan ON
cials that official APPROVAL would be
withheld pending q decision OF the
court.
Omclsls placed the total amount OF
loans to farmers held In Rbeyance by
the suit at many times $50 900.
b
having stopped with Commissioner
Lobdell's announcement. On March
/, 1890 the farm loan board reported
that Sls3.s97 900 had been advanced
to 75,3S4 farmers and that spplIca-
tions from l79,79i persons then pend
, ding totallcd s47l 900 900
The suit IN the supreme court was
. Ia the form Of an appeal from lower
b court decisions refusing TO issue an
Injunction 20 restrain the Kansas CITY
Title & Trust company from invest
ng ita funds 20 bends issued by the
farm loan banks The goyernmt 4
the federal land bank OF Wichita
4, Eaneas ana the First Joint Stock
Land Bank OF Chicago, on their owr
a application. we're made defendants In
r order that the entire question NIGH
i be settled finally by one suit
i, Ground for Attack.
Council for Mr. Smith assorted II
!. substance that the farm loan act wa
!, an exercise OF power which congress
=, did not possess under the constitu
!, ton Further ground for attack wa
found IN tho exemption OF the farm
h, loan securities from taxation, as in
r strumentalllles OF the government"
:, William G, NIcAdoo. form secretA
B, ry OF the treasury. submitted the gov
y ernment brief az special assistant I
n tho attorney general in the argu
& ment OF the case. lie asserted tina
V. the banks we're created AZ "nses
IN agents" of the government and .hs
congress had tho clear right to ~
~ ND such institutions. Since assist
r. auce to agriculture pertains TO th
IS. general welfare. It was argued. col
nd gress could have made direct apprC
81 priations for the purpose IN view, bl
nd chose to create thoEo special agencie
nj 10 provide tho necessary funds.
to with regard 10 the tax exemptio
H. feature. Mr.. McAdoO contended thi
Il II was simply question for eoi
q gross 10 determine when the usefu
zee ness OF itB agencies would be enhsn
ed hy exemption