Show FAR FARM LOAN LOUl ACT VALID The farm loan act designed to as as- as slit SIH agricultural development de by providing providing pro pro- viding readily accessible credits t to o farmers through federal banks was wa s declared valid by the U. U S. S supreme se e court In an opinion which Commissioner r C. C E. E E Lobdell of the farm loan board boar d declared rem removes ayes every shadow o of at f question as to the legality of th tho e banks or their bonds the court held congress had authority to establish h the land banks and the tho correlative authority to exempt the bonds from state taxation taxation Commissioner Lobdell announced there would be an immediate Issue of farm loan bonds to finance the hundreds of millions of dollars in loans which had been approved bythe by bythe bythe the board A bond offering will be made as soon as the bonds can be made ready he he- said and immediately the distribution of funds begun 1 It will be at least thirty days however before funds are available The farm loan board is hopeful that the market may absorb farm loan bonds equal to the borrowing demands of the farms The case was an appeal from lower lower lower low low- er court decrees es refusing ap ag Injunction Injunction Injunction tion sought by C. C W. W Smith a stockholder stockholder stockholder stock stock- holder in the Kansas City Title Trust company to restrain that institution In Institution Institution In- In from investigating funds Inland in inland n land bank securities The contention conten tion was was was' made that the farm loan ac t was Invalid as congress had no authority authority au au- authority au- au either to establish banks o oto or orto orto r to exempt their securities from state stat e taxation c CI The court in a practically unanimous unanimous unanimous opinion upheld the authority of the government The power to designate fiscal agencies has been conceded congress since the days of o oChief f Chief Justice Marshall the opinion held and the tax exemption provision provision provis provis- ion fon was a necessary protection Justices and Holmes dissenting explained that they took exception to the courts court's assumption of jurisdiction rather than to the findings The case should have been bee n nr dismissed they said as a matter matte r within the scope of at Missouri laws and the state courts Justice Day who delivered th the e courts court's opinion said it had been contended contended contended con con- tended that the power to designate these joint stock land banks as depositories had not been exercised by the government but added that the existence of the power under the constitution is s not determined bythe by bj bythe the extent of the tho exercise of the authorIty authority au au- au- au conferred under It Congress declared it necessary to create reate these fiscal agencies hp add add- to make them authorized depositories depositories depositories de de- of public moneys Its power to do so is no nu longer open to q question |