company, affords no ground for complaint, by the latter."

Furthermore, it appears that under the charter of the city of Detroit, notwithstanding the alleged attempt to procure the property of the complainant at much less than its value, no such purpose could be effected by purchase without approval of the electors of the city. Section 8 of the charter provides:

"Any contract to purchase or lease herein contemplated, or any plan to condemn existing street railway property shall be void unless approved by three fifths of the electors [178] voting thereon at any regular or special election, and upon such proposition women taxpayers having the qualifications of male electors shall be entitled to vote."

No such contract has thus far been made, and there is nothing in the ordinance attacked which undertakes to acquire the property of the complainant without compliance with this charter provision.

The bill abounds in allegations that voters were misled by the fraudulent conduct of the officials of the city in their efforts to procure the property of the complainant at less than its value by misrepresenting in a circular, and otherwise, the purpose and effect of the vote to be taken upon the question of acquiring a municipal system of transportation. We think that the court below correctly held that the motives of the officials, and of the electors acting upon the proposal, are not proper subjects of judicial inquiry in an action like this so long as the means adopted for submission of the question to the people conformed to the requirements of the law. The principle has been declared by this court. Angle v. Chicago, St. P. M. & O. R. Co. 151 U. S. 1, 18, 38 L. ed. 55, 64, 14 Sup. Ct. Rep. 240; Soon Hing v. Crowley, 113 U. S. 703, 710, 28 L. ed. 1145, 1147, 5 Sup. Ct. Rep. 730. This feature of the bill is an attempt to inquire in a collateral way into the validity of an election which was held without steps being taken to enjoin, and which was vigorously contested to a final result.

The charter of the city of Detroit gave ample power to the city to acquire, construct, own, maintain, and operate a street railway system on the streets of the city within a distance of 10 miles from any portion of its corporate limits that the public convenience may require. Charter of Detroit, 1918, § 1, chap. 13. Section 6 of the charter makes it the duty of the board of street railway commissioners to promptly proceed to purchase,

acquire, and construct, own, and operate a system of street railways in and for the city, and as soon as possible [179] to make the system exclusive. Section 7 gives the board power to purchase, or lease, or by appropriate proceedings to acquire, any part of the existing street railway property in the city, and to make the necessary purchases for that purpose. Section 9 gives authority to issue bonds of the city.

Under the authority of the charter, the ordinance in question was passed. It directs the board of street railway commissioners to acquire, own, maintain, and operate a street railway system. It requires that the proposition to acquire, own, maintain the system and to issue bonds shall be submitted to a vote at a special election. It is contended, however, that the proposal submitted did not conform to the requirements of the ordinance.

We agree with the district court that the form of submission of the question was in substantial compliance with the law.

As to allegations of fraudulent and improper conduct of the common council in giving the electors information in advance of the election which misled them, the contention is that a sample ballot sent out to the electors did not definitely show the purpose to construct street railway lines where trackage already existed, and that the voters of the city were misled into believing that there was an intention not to construct the street railway lines where the same already existed, but to purchase at an estimated cost of $40,000 per mile. But we are of opinion that this so-called official information, no complaint being made of it before the election, cannot vitiate the election when the same was had upon a submission, within the authority of the city under its charter, and the ordinance passed in the form shown. Moreover, as we have already pointed out, this ordinance does not provide for acquisition at $40,000 per mile; nor can any purchase be made except by contract approved by the electors, [180] as provided by § 8 of the charter. Other considerations are urged, based upon lack of authority in the city, which we have examined and deem it unnecessary to discuss.

We find nothing in the allegations of this bill establishing that the city of Detroit, in proceeding by its officials in the manner alleged, has done things which are subversive of the rights of the city to establish its own municipal system of street railways and to issue bonds for that

or laws.

1. Where it appears from the bill or statement of the plaintiff that the right to relief depends upon the construction or application of the Constitution or laws of the United States, and that such Federal claim is not merely colorable, and rests upon a reasonable foundation, a Federal district court has jurisdiction under Judicial Code, § 24, without diversity of citizenship. [For other cases, see Courts, V. c, 2, a, in Digest Sup. Ct. 1908.] Federal courts case arising under Federal Constitution or laws direct appeal from district court.

jurisdiction

2. A bill filed by a stockholder to enjoin the corporation from investing the funds of such corporation in farm loan bonds issued under the authority of the Federal Farm Loan Act of July 17, 1916, as amended by the Act of January 18, 1918, on the ground that these acts were beyond the constitutional power of Congress, and that the securities issued there-1 under were consequently of no validity, sets forth a cause of action arising under the Federal Constitution or laws of which a Federal district court has jurisdiction under Judicial Code, § 24, without diversity of citizenship, and from the decree of the district court dismissing the bill a direct appeal lies to the Federal Supreme Court. [For other cases, see Courts, V. c, 2, a Appeal, 938-989, in Digest Sup. Ct. 1908.] Constitutional law • power of Congress extent of exercise. 3. The existence of congressional power under the Federal Constitution is not de

-

termined by the extent of the exercise of the authority conferred under it. [For other cases, see Constitutional Law, II. a, in Digest Sup. Ct. 1908.]

Note. On direct review in Federal Surpeme Court of judgments of district or circuit courts-see notes to Gwin v. United States, 46 L. ed. U. S. 741; B. Altman & Co. v. United States, 56 L. ed. U. S. 894; and Berkman v. United States, 63 L. ed. U. S. 877.

5. The creation of Federal land banks and joint stock land banks by the Federal Farm Loan Act of July 17, 1916, as amended by the Act of January 18, 1918, and the grant of authority to them to act for the government as depositaries of public moneys and purchasers of government bonds, brings them within the creative power of Congress although they may be intended, in connection with other privileges and duties, to facilitate the making of loans [For other cases, see Banks, III.; IV. a, in upon farm security at low rates of interest.

Digest Sup. Ct. 1908.] Taxes exemptions

power of Congress farm loan bonds.

6. Federal land banks and joint stock land banks, having been created by Congress in the exercise of its legitimate authority by the Federal Farm Loan Act of July 17, 1916, as amended by the Act of January 18, 1918, the power to make the farm loan bonds issued by them under the authority of those acts on the security of farm mortgages and notes exempt as to principal and interest from Federal, state, municipal, and local taxation, necessarily follows. [For other cases, see Taxes, I. c, 2, in Digest Sup. Ct. 1908.]

APPEAL from the District Court of

the United States for the Western District of Missouri to review a decree which dismissed the bill in a suit by a stockholder to enjoin the corporation tion in Federal farm loan bonds. from investing the funds of the corporafirmed.

Af

The facts are stated in the opinion.

Messrs. William Marshall Bullitt and Frank Hagerman argued the cause and filed a brief for appellant:

There not having been, expressly or by fair implication, surrendered by the Constitution to Congress the power to create land and joint stock banks, such power must be deemed not to have been in it, but reserved to the states or to the people.

United States v. Harris, 106 U. S. 629, 630, 636, 27 L. ed. 290-292, 1 Sup. Ct. Rep. 601; Collector v. Day (Buffington

v. Day) 11 Wall. 113, 124, 20 L. ed. 122, 125; M'Culloch v. Maryland, 4 Wheat. 316, 4 L. ed. 579; Osborn v. Bank of United States, 9 Wheat. 738, 6 L. ed. 204; Farmers' & M. Nat. Bank v. Dearing, 91 U. S. 29, 23 L. ed. 196; First Nat. Bank v. Fellows, 244 U. S. 416, 61 L. ed. 1233, L.R.A.1918C, 283, 37 Sup. Ct. Rep. 734, Ann. Cas. 1918D, 1169; Hammer v. Dagenhart, 247 U. S. 251, 62 L. ed. 1101, 3 A.L.R. 649, 38 Sup. Ct. Rep. 529, Ann. Cas. 1918E, 724; Chisholm v. Georgia, 2 Dall. 419, 435, 1 L. ed. 440, 447; Martin v. Hunter, 1 Wheat. 304, 325, 4 L. ed. 97, 102; Dobbins v. Erie County, 16 Pet. 435, 10 L. ed. 1022; Ableman v. Booth, 21 How. 506, 521, 16 L. ed. 169, 175; License Tax Cases, 5 Wall. 462, 470, 18 L. ed. 497, 500; Slaughter-House Cases, 16 Wall. 36, 62, 21 L. ed. 394, 404; United States v. Cruikshank, 92 U. S. 542, 549, 23 L. ed. 588, 590; Claflin v. Houseman, 93 U. S. 130, 136, 137, 23 L. ed. 833, 838; Leisy v. Hardin, 135 U. S. 100, 127, 34 L. ed. 128, 138, 3 Inters. Com. Rep. 36, 10 Sup. Ct. Rep. 681; Cooley, Const. Lim. 7th ed. 831; Farmers' & M. Sav. Bank v. Minnesota, 232 U. S. 516, 521, 58 L. ed. 706, 709, 34 Sup. Ct. Rep. 354; Kansas v. Colorado, 206 U. S. 46, 87, 91, 51 L. ed. 956, 970, 972, 27 Sup. Ct. Rep.

655.

Debates and committee reports may be resorted to, not to vary, limit, or broaden the construction of the language, but to advise the court of the intention of Congress, in order that such intention shall indicate the scope and purpose of the act and the subject sought to be dealt with.

United States v. St. Paul, M. & M. R. Co. 247 U. S. 310, 318, 62 L. ed. 1130, 1134, 38 Sup. Ct. Rep. 525; McLean v. United States, 226 U. S. 374, 380, 57 L. ed. 260, 263, 33 Sup. Ct. Rep. 122; Standard Oil Co. v. United States, 221 U. S. 1, 50, 55 L. ed. 619, 641, 34 L.R.A. (N.S.) 834, 31 Sup. Ct. Rep. 502, Ann. Cas. 1912D, 734.

The act cannot, as contended by exSecretary McAdoo and ex-Attorney General Wickersham, be sustained on the theory of the joint stock banks, that it was an exercise of the power to establish agencies to perform necessary and essential governmental functions.

South Carolina v. United States, 199 U. S. 437, 50 L. ed. 261, 26 Sup. Ct. Rep. 110, 4 Ann. Cas. 737; Baltimore Shipbuilding & Dry Dock Co. v. Baltimore, 195 U. S. 375, 382, 47 L. ed. 242, 244, 25 Sup. Ct. Rep. 50; Second Em

ployers' Liability Cases (Mondou v. New York, N. H. & H. R. Co.) 223 U. S. 1, 56 L. ed. 327, 38 L.R.A.(N.S.) 44, 32 Sup. Ct. Rep. 169, 1 N. C. C. A. 875; M'Culloch v. Maryland, 4 Wheat. 316, 4 L. ed. 579; Osborn v. Bank of United States, 9 Wheat. 738, 863, 6 L. ed. 204, 234; Farmers' & M. Nat. Bank v. Dearing, 91 U. S. 29, 33, 23 L. ed. 196, 198; First Nat. Bank v. Fellows, 244 U. S. 416, 425, 61 L. ed. 1233, 1239, L.R.A. 1918C, 283, 37 Sup. Ct. Rep. 734, Ann. Cas. 1918D, 1169; Beveridge's Life of John Marshall, vol. 4, pp. 171, 176, 195; Holdsworth & Dewey's First & Second Banks of the United States; McMaster, History of the People of the United States, vol. 2, p. 29; Id. vol. 4, pp. 280 et seq.; especially pp. 300-318; Hamilton's Report on a National Bank; Lincoln's Veto Message of June 23, 1862, Six Messages & Papers of the Presidents, pp. 87, 88; Lincoln's Second Annual Message, Dec. 1, 1862; id. pp. 126, 129, 130; Rhodes, History of the United States, vol. 4, pp. 237-239; Noyes, History of National Banking Currency, p. 41; Davis, Origin of National Bkg. System, pp. 79, 80, 89, 106, 109; Veazie Bank v. Fenno, 8 Wall. 533, 536, 548, 19 L. ed. 482, 484, 487; 3 Enc. U. S. Sup. Ct. Rep. pp. 5–7; Bank for Savings v. Collector (Bank for Savings v. Field) 3 Wall. 495, 512, 18 L. ed. 207, 211; Oulton v. German Sav. & L. Soc. 17 Wall. 109, 21 L. ed. 618; Warren v. Shook, 91 U. S. 704, 23 L. ed. 421; Selden v. Equitable Trust Co. 94 U. S. 419, 24 L. ed. 249; Knickerbocker L. Ins. Co. v. Pendleton, 115 U. S. 339, 29 L. ed. 432, 6 Sup. Ct. Rep. 74; Mercantile Nat. Bank v. New York, 121 U. S. 138, 156, 30 L. ed. 895, 902, 7 Sup. Ct. Rep. 826; Guthrie v. Harkness, 199 U. S. 148, 157, 50 L. ed. 130, 133, 26 Sup. Ct. Rep. 4, 4 Ann. Cas. 433; State v. Reid, 125 Mo. 43, 28 S. W. 172; Jenkins v. Neff, 186 U. S. 230, 46 L. ed. 1140, 22 Sup. Ct. Rep. 905; Wells, F. & Co. v. Northern P. R. Co. 23 Fed. 469; State v. Louisiana Sav. Co. 12 La. Ann. 568; New York Loan & T. Co. v. Helmer, 77 N. Y. 64; Pratt v. Short, 79 N. Y. 437, 35 Am. Rep. 531; People ex rel. Atty.-Gen. v. River Raisin & L. E. R. Co. 12 Mich. 390, 86 Am. Dec. 64; State v. Granville Alexandrian Soc. 11 Ohio, 1; State v. Stebbins, 1 Stew. 299; State ex rel. Crow v. Lincoln Trust Co. 144 Mo. 562, 46 S. W. 593; Illinois Trust & Sav. Bank v. Arkansas City, 34 L.R.A. 518, 22 C. C. A. 171, 40 Ù, S. App. 257, 76 Fed. 271, 22 C. C. A. 171; Bank of United States v. Planters'

(1) to create a series of corporations (Federal land banks and joint stock land banks) to engage in the business of lending private capital on farm mortgages, and (2) to exempt them from all state control, by the mere expedient of calling such corporations "banks," and endowing them with the possibility of acting as depositaries of public money or financial agents.

McCulloch v. Maryland, 4 Wheat. 316, 4 L. ed. 579; Osborn v. Bank of United States, 9 Wheat. 738, 6 L. ed. 204; First Nat. Bank v. Fellows, 244 U. S. 416, 61 L. ed. 1233, L.R.A.1918C, 283, 37 Sup. Ct. Rep. 734, Ann. Cas. 1918D, 1169.

The farm mortgages executed to the Federal land banks and to the joint stock land banks, and the farm loan bonds issued by them respectively, and held by the general investing public, are subject to state taxation.

M'Culloch v. Maryland, 4 Wheat. 316, 4 L. ed. 579; Osborn v. Bank of United States, 9 Wheat. 738, 6 L. ed. 204.

Mr. Charles E. Hughes argued the cause and filed a brief for appellees: The court will not assume to restrain the exercise of the lawful power of Congress upon the ground that Congress has had a wrongful motive or purpose.

McCray v. United States, 195 U. S. 27, 53-55, 49 L. ed. 78, 94, 95, 24 Sup. Ct. Rep. 769, 1 Ann. Cas. 561; Hamilton v. Kentucky Distilleries & Warehouse Co. 251 U. S. 146, 161, 64 L. ed. 194, 202, 40 Sup. Ct. Rep. 106.

So far as the matter of policy is concerned, Congress, in the exercise of its prerogative, has settled it.

Legal Tender Cases, 12 Wall. 457, 539, 20 L. ed. 287, 308; United States v. Fisher, 2 Cranch, 358, 2 L. ed. 304; M'Culloch v. Maryland, 4 Wheat. 316, 421, 4 L. ed. 579, 606; Julliard v. Greenman, 110 U. S. 421, 440, 441, 28 L. ed. 204, 210, 212, 4 Sup. Ct. Rep. 122.

Congress had power directly to use the public moneys for the purpose of stimulating agricultural development. Congress was not limited to the use of public moneys by outright appropriations, but, having that authority, could create a revolving fund to be used through loans. The purpose thus subserved through the provisions of the act was a public pur

pose.

Citizens' Sav. & L. Asso. v. Topeka, 20 Wall. 655, 22 L. ed. 455; Parkersburg v. Brown, 106 U. S. 487, 27 L. ed. 238, 1 Sup. Ct. Rep. 442; Cole v. LaGrange, 113 U. S. 1, 28 L. ed. 896, 5 Sup. Ct. Rep. 416; Fallbrook Irrig. Dist. v. Brad

ley, 164 U. S. 112, 161, 164, 41 L. ed. 369, 389, 390, 17 Sup. Ct. Rep. 56; Clark v. Nash, 198 U. S. 361, 49 L. ed. 1085, 25 Sup. Ct. Rep. 676, 4 Ann. Cas. 1171; Strickley v. Highland Boy Gold Min. Co. 200 U. S. 527, 50 L. ed. 581, 26 Sup. Ct. Rep. 301, 4 Ann. Cas. 1174; Hairston v. Danville & W. R. Co. 208 U. S. 598, 606, 52 L. ed. 637, 640, 28 Sup. Ct. Rep. 331, 13 Ann. Cas. 1008; O'Neill v. Leamer, 239 U. S. 244, 60 L. ed. 249, 36 Sup. Ct. Rep. 54; Houck v. Little River Drainage Dist. 239 U. S. 254, 60 L. ed. 266, 36 Sup. Ct. Rep. 58; 3 Hamilton, Works, p. 458; Hamilton, Report on Manufacturers, Dec. 5, 1791, 4 Hamilton's Works, 151, 152; Gibbons v. Ogden, 9 Wheat. 199, 6 L. ed. 70; 1 Story, Const. §§ 922-924, 991; Willoughby, Const. § 269; 4 Jefferson's Correspondence, 524, 525; Mr. Adams' Letter to Mr. Stevenson, July 11, 1832; 2 Elliot, Debates, 170, 183, 195, 328, 344; 3 Elliot, Debates, 262, 290; 4 Elliot, Debates, 226; Miller, Const. pp. 229-231, 235; United States v. Realty Co. 163 U. S. 427, 440, 41 L. ed. 215, 219, 16 Sup. Ct. Rep. 1120; United States v. Gettysburg Electric R. Co. 160 U. S. 668, 681, 40 L. ed. 576, 581, 16 Sup. Ct. Rep. 427; Allen v. Smith, 173 U. S. 389, 394, 402, 43 L. ed. 741, 746, 19 Sup. Ct. Rep. 446; Lottery Case (Champion v. Ames) 188 U. S. 321, 363, 47 L. ed. 492, 504, 23 Sup. Ct. Rep. 321, 13 Am. Crim. Rep. 561; Juilliard v. Greenman, 110 U. S. 444, 28 L. ed. 213, 4 Sup. Ct. Rep. 122; Wilson v. New, 243 U. S. 332, 61 L. ed. 755, L.R.A.1917E, 938, 37 Sup. Ct. Rep. 298, Ann. Cas. 1918A, 1024; McCray v. United States, 195 U. S. 55, 49 L. ed. 94, 24 Sup. Ct. Rep. 769, 1 Ann. Cas. 561; Cooley, Taxn. 3d ed. pp. 188, 189; M'Culloch v. Maryland, 4 Wheat. 316, 401, 4 L. ed. 579, 600.

Having this power, with respect to the use of money, Congress could exercise the power by the adoption of appropriate means to that end and the creation of instrumentalities for that purpose.

3 Hamilton's Works, pp. 452-454, 475, 476; M'Culloch v. Maryland, 4 Wheat. 316, 415, 421, 4 L. ed. 579, 603, 605; 4 Hamilton's Works, 151, 152; Osborn v. Bank of United States, 9 Wheat. 863, 864, 6 L. ed. 234; Juilliard v. Greenman, 110 U. S. 437, 28 L. ed. 210, 4 Sup. Ct. Rep. 122; Second Employers' Liability Cases (Mondou v. New York, N. H. & H. R. Co.) 223 U. S. 1, 48, 56 L. ed. 327, 345, 38 L.R.A. (N.S.) 44, 32 Sup. Ct. Rep. 169, 1 N. C. C. A. 875; Caliornia v. Central P. R. Co. 127 U. S. 1, 39, 32