Comp. Stat. § 5947, 3 Fed. Stat. Anno., 2d ed. p. 1032, against enjoining the enforcement of taxes, we are of opinion that the contention here made, that there was no jurisdiction of the cause, since to entertain it would violate the provisions of the Revised Statutes referred to, is without merit. . .

"Aside from averments as to citizenship and residence, recitals as to the provisions of the statute, and statements as to the business of the corporation, contained in the first ten paragraphs of the bill, advanced to sustain jurisdiction, the bill alleged twenty-one constitutional objections specified in that number of paragraphs or subdivisions. As all the grounds assert a violation of the Constitution, it follows that, in a wide sense, they all charge a repugnancy of the statute to the 16th Amendment, under the more immediate sanction of which the statute was adopted.".

Mortgage, to Equalize Rates of Interest upon Farm Loans, to Furnish a Market for United States Bonds, to Create Government Depositaries and Financial Agents for the United States, and for Other Purposes."

The administration of the act is placed under the direction and control of a Federal Farm Loan Bureau established at the seat of government in the Treasury Department, under the general supervision of the Federal Loan Board, consisting of the Secretary of the Treasury and four members appointed by the President, by and with the advice and consent of the Senate. The United States is divided into twelve districts for the purpose of establishing Federal land banks. Each of the banks must have a subscribed capital of not less than $750,000, divided into shares of $5 each, which may be subscribed for by any individual, firm, or corporation, or The jurisdiction of this court is to be by the government of any state, or of determined upon the principles laid the United States. No dividends shall down in the cases referred to. In the be paid on the stock owned by the Unitinstant case the averments of the bill ed States, but all other stock shall share show that the directors were proceeding in dividend distributions without preferto make the investments in view of the ence. The Federal Farm Loan Board is act authorizing the bonds about to be to designate five directors, who shall purchased, maintaining that the act temporarily manage the affairs of each authorizing them. was constitutional, Federal land bank, and who shall preand the bonds valid and desirable invest-pare an organization certificate which, ments. The objecting shareholder avers in the bill that the securities were issued under an unconstitutional law, and hence of no validity. It is, therefore, apparent that the controversy concerns the constitutional validity of an act of Congress which is directly drawn in question. The decision depends upon the determination of this issue.

when approved by the Federal Farm Loan Board, and filed with the Farm Loan Commissioner, [203] shall operate to create the bank a body corporate. The Federal Farm Loan Board is required to open books of subscription for the capital stock of each Federal land bank, and if, within thirty days thereafter, any part of the minimum capitalization of $750,000 of any such bank shall remain unsubscribed, it is made the duty of the Secretary of the Treasury to subscribe the balance on behalf of the United States.

The general allegations as to the interest of the shareholder, and his right to have an injunction to prevent the purchase of the alleged unconstitutional securities by misapplication [202] of the funds of the corporation, give jurisdic- The amendment of January 18, 1918, tion under the principles settled in Pol- authorizes the Secretary of the Treasury lock v. Farmers' Loan & T. Co. and to purchase bonds issued by Federal Brushaber v. Union P. R. Co. supra. We land banks, and provides that the temare, therefore, of the opinion that the dis-porary organization of any such bank trict court had jurisdiction under the averments of the bill, and that a direct appeal to this court upon constitutional grounds is authorized.

We come to examine the questions presented by the attack upon the constitutionality of the legislation in question. The Federal Farm Loan Act is too lengthy to set out in full. It is entitled: "An Act to Provide Capital for Agricultural Development, to Create Standard Forms of Investment Based upon Farm

shall be continued so long as any farm loan bonds shall be held by the Treasury, and until the subscription to stock in such bank by national farm loan associations shall equal the amount of the stock held by the United States government. When these conditions are complied with, a permanent organization is to take over the management of the bank, consisting of a board of directors composed of nine members, three of whom shall be known as district direc

tors, and shall be appointed by the Farm Loan Board, who shall represent the public interest, six of whom, to be known as local directors, shall be chosen by, and be representative of, national farm loan associations.

upon the full payment of the mortgage loan. In such event, the national farm loan association must pay off at par and retire the corresponding shares of its stock which were issued when the land bank stock so retired was issued; but it is further provided that the capital stock of the land bank shall not be reduced to less than 5 per cent of the principal of the outstanding farm [205] loan bonds issued by it. The shares in national farm loan associations shall be of the par value of $5 each.

Federal land banks are empowered to invest their funds in the purchase of qualified first mortgages on farm lands situated within the Federal land bank district within which they are organized or acting. Loans on farm mortgages are to be made to co-operative borrowers through the organization of corporations At least 25 per cent of that part of known as national farm loan associa- the capital of any Federal land bank for tions, by persons desiring to borrow which stock is outstanding in the name money on farm mortgage security under of national farm loan associations must the terms of the act. Ten or more nat- be held in quick assets. Not less than ural persons who are the owners of or 5 per cent of such capital must be investare about to become the owners of farmed in United States government bonds. land qualified as security for mortgage The loans which Federal land banks loans, and who desire to borrow money may make upon first mortgages on farm on farm mortgage security, may unite to lands are provided for in § 12 of the act. form a national farm [204] loan associa- By § 13, these banks are empowered, subtion. The manner of forming these as-ject to the provisions of the act, to issue sociations, and the qualifications for membership, are set out in the act.

A loan desired by each such person must be for not more than $10,000 nor less than $100, and the aggregate of the desired loans not less than $20,000. The application for loan must be accompanied by subscriptions to stock of a Federal land bank equal to 5 per cent of the aggregate sum desired on the mortgage loan. Provision is made for appraisal of the land, and report to the Federal Farm Loan Board. No persons but borrowers on farm loan mortgages shall be members or shareholders of national farm loan associations.

Shareholders in farm loan associations are made individually responsible for the debts of the association to the extent of the amount of the stock owned by them respectively, in addition to the amount paid in and represented by their shares.

When any national farm loan association shall desire to secure for any member a loan on first mortgage from the Federal land bank in its district, it must subscribe to the capital stock of the Federal land bank to an amount of 5 per cent of such loan, which capital stock shall be held by the Federal land bank as collateral security for the payment of the loan, the association shall be paid any dividends accruing and payable on the capital stock while it is outstanding. Such stock may, in the discretion of the directors, and with the approval of the Federal Farm Loan Board, be paid off at par and retired, and shall be so retired

and sell farm loan bonds of the kind described in the act, and to invest funds in their possession in qualified first mortgages on farm lands, to receive and to deposit in trust with the Farm Loan Registrar, to be held by him as collateral security for farm loan bonds, first mortgages upon farm lands, and, with the approval of the Farm Loan Board, to issue and to sell their bonds secured by the deposit of first mortgages on qualified farm lands as collateral, in conformity with the provisions of § 18 of the act. By the amendment of January 18, 1918, the Secretary of the Treasury was empowered, during the years 1918 and 1919, to purchase farm loan bonds issued by Federal land banks to an amount not exceeding $100,000,000 each year, and any Federal land bank was authorized at any time to repurchase at par and accrued interest, for the purpose of redemption or resale, any of the bonds so purchased from it and held in the United States Treasury.

It is also provided that the bonds of any Federal land bank so purchased and held in the Treasury one year after the termination of the pending war shall, upon thirty days' notice from the Secretary of the Treasury, be redeemed and repurchased by such bank at par and accrued interest. By § 15 it is provided that whenever, after the act shall have been in effect for one year, it shall appear to the Federal Farm Loan Board that national farm loan [206] associations have not been formed and are not likely to be formed, in any locality, be

cause of peculiar local conditions, the board may, in its discretion, authorize Federal land banks to make loans on farm lands through agents approved by the board, on the terms and conditions and subject to the restrictions prescribed in that section.

The act also authorizes the incorporation of joint stock land banks, with capital provided by private subscription. They are organized by not less than ten natural persons, and are subject to the requirements of the provisions of § 4 of the act so far as applicable. The board of directors shall consist of not less than five members. Each shareholder shall have the same voting privileges as the holders of shares in national banking associations, and shall be held individually responsible, equally and ratably, and not one for another, for all contracts, debts, and engagements of such bank to the extent of the amount of stock owned by them at the par value thereof, in addition to the amount paid in and represented by their shares. The joint stock land bank is authorized to do business when capital stock to the amount of $250,000 has been subscribed, and one half paid in cash, the balance remaining subject to call by the board of directors, the charter to be issued by the Federal Farm Loan Board. No bonds shall be issued until the capital stock is entirely paid up. Except as otherwise provided, joint stock land banks shall have the powers of and be subject to all the restrictions and conditions imposed on Federal land banks by the act, so far as such conditions or restrictions | are applicable.

joint stock land banks; in each case the issue is made subject to the approval of the Federal Farm Loan Board. The farm loan mortgages, or United States bonds, which constitute the collateral security for the bonds, must be deposited with the Farm Loan Registrar.

Section 26 of the act provides as follows:

"That every Federal land bank and every national farm loan association, including the capital and reserve or surplus therein and the income derived therefrom, shall be exempt from Federal, state, municipal, and local taxation, except taxes upon real estate held, purchased, or taken by said bank or association under the provisions of section eleven and section thirteen of this act. First mortgages executed to Federal land banks, or to joint stock land banks, and farm loan bonds issued under the provisions of this act, shall be deemed and held to be instrumentalities of the government of the United States, and as such they and the income derived therefrom shall be exempt from Federal, state, municipal, and local taxation.

"Nothing herein shall prevent the shares in any joint stock land bank from being included in the valuation of the personal property of the owner or holder of such shares, in assessing taxes imposed by authority of the state within which the bank is located; but such assessment and taxation shall be in manner and subject to the conditions and limitations contained in section fifty-two [208] hundred and nineteen of the Revised Statutes (Comp. Stat. § 9784, 6 Fed. Stat. Anno. 2d ed. p. 796), with reference to the shares of national banking associations.

"Nothing herein shall be construed to exempt the real property of Federal and joint stock land banks and national farm loan associations from either state, county, or municipal taxes, to the same extent, according to its value, as other real property is taxed."

Federal land banks may issue farm loan bonds up to twenty times their capital and surplus. Joint stock land banks are limited to the issue of farm loan bonds not in excess of fifteen times the amount of their capital and surplus. Joint stock land banks can only loan on first mortgages upon land in the state where located, or in a state [207] con- Since the decision of the great cases tiguous thereto. No loan on mortgage of M'Culloch v. Maryland, 4 Wheat. 316, may be made by any bank at a rate ex- 4 L. ed. 579, and Osborn v. Bank of Unitceeding 6 per cent per annum, exclusive ed States, 9 Wheat. 738, 6 L. ed. 204, it of amortization payments. Joint stock is no longer an open question that Conland banks shall in no case charge a rate gress may establish banks for national of interest on farm loans which shall exceed by more than 1 per cent the rate established by the last series of farm loan bonds issued by them, which rate shall not exceed 5 per cent per annum. Provisions for the issue of farm loan bonds secured by first mortgages on farm lands or United States bonds, as collateral, are made for Federal land banks and

purposes, only a small part of the capital of which is held by the government, and a majority of the ownership in which is represented by shares of capital stock, privately owned and held; the principal business of such banks being private banking, conducted with the usual methods of such business. While the express power to create a bank or incorporate one

is not found in the Constitution, the | Secretary of the Treasury, and has aucourt, speaking by Chief Justice Marshall, thorized their employment as financial in M'Culloch v. Maryland, found author-agents of the government, and the banks ity so to do in the broad general powers are required to perform such reasonable conferred by the Constitution upon the duties, as depositaries of public moneys Congress to levy and collect taxes, to bor- and financial agents, as may be required row money, to regulate commerce, to pay of them. The Secretary of the Treasury the public debts, to declare and conduct shall require of the Federal land banks war, to raise and support armies, and to and the joint stock land banks, thus provide and maintain a navy, etc. Con- designated, satisfactory security, by the gress, it was held, had authority to use deposit of United States bonds or othersuch means as were deemed appropriate wise, for the safe-keeping and prompt to exercise the great powers of the gov- payment of the public money deposited ernment by virtue of article 1, § 8, clause with them, and [210] for the faithful 18 of the Constitution, granting to Con- performance of their duties as the finangress the right to make all laws necessary cial agents of the government. and proper to make the grant effectual. In First Nat. Bank v. Fellows, 244 U. S. 416, 419, 61 L. ed. 1233, 1237, L.R.A. 1918C, 283, 37 Sup. Ct. Rep. 734, Ann. Cas. 1918D, 1169, the Chief Justice, speaking for the court, after reviewing M'Culloch v. Maryland and Osborn v. Bank of United States, and considering the power given to Congress to pass laws to make the specific powers granted effectual, said:

"In terms it was pointed out that this broad authority [209] was not stereotyped as of any particular time, but endured, thus furnishing a perpetual and living sanction to the legislative authority within the limits of a just discretion enabling it to take into consideration the changing wants and demands of society, and to adopt provisions appropriate to meet every situation which it was deemed required to be provided for."

That the formation of the bank was required, in the judgment of the Congress, for the fiscal operations of the government, was a principal consideration upon which Chief Justice Marshall rested the authority to create the bank; and for that purpose, being an appropriate measure in the judgment of the Congress, it was held not to be within the authority of the court to question the conclusion reached by the legislative branch of the government.

Upon the authority of M'Culloch v. Maryland and Osborn v. Bank of United States, the national banking system was established, and upon them this court has rested the constitutionality of the legislation establishing such banks. Farmers & M. Nat. Bank v. Dearing, 91 U. S. 29, 33, 34, 23 L. ed. 196, 198, 199.

Congress has seen fit in § 6 of the act to make both classes of banks, when designated for that purpose by the Secretary of the Treasury, depositaries of public money, except receipts from customs, under regulations to be prescribed by the

Section 6 also provides that no government funds deposited under the provisions of the section shall be invested in mortgage loans or farm loan bonds.

It is said that the power to designate these banks as such depositaries has not been exercised by the government, and that the Federal land banks have acted as Federal agents only in the case of loans of money for seed purposes, made in the summer of 1918, to which we have already referred. But the existence of the power under the Constitution is not determined by the extent of the exercise of the authority conferred under it. Congress declared it necessary to create these fiscal agencies, and to make them authorized depositaries of public money. Its power to do so is no longer open to question.

But, it is urged, the attempt to create these Federal agencies, and to make these banks fiscal agents and public depositaries of the government, is but a pretext. But nothing is better settled by the decisions of this court than that, when Congress acts within the limits of its constitutional authority, it is not the province of the judicial branch of the government to question its motives. Veazie Bank v. Fenno, 8 Wall. 533, 541, 19 L. ed. 482, 485; McCray v. United States, 195 U. S. 27, 49 L. ed. 78, 24 Sup. Ct. Rep. 769, 1 Ann. Cas. 561; Flint v. Stone Tracy Co. 220 U. S. 107, 147, 153, 156, 55 L. ed. 389, 411, 414, 415, 31 Sup. Ct. Rep. 342, Ann. Cas. 1912B, 1312, and cases cited.

That Congress has seen fit, in making these banks fiscal agencies and depositaries of public moneys, to grant to them banking powers of a limited character, in nowise detracts from the authority of Congress to use them for the governmental purposes named, if it sees fit to do so. A bank may be organized with or without the authority to issue currency. It may be authorized to receive deposits in only a limited way. Speaking generally, a bank is a moneyed insti

tution to facilitate the borrowing, lending,, the tax exemption so as to restrain the and caring for money. But whether power of the state. Of a similar conten[211] technically banks, or not, these tion made in M'Culloch v. Maryland, organizations may serve the governmental Chief Justice Marshall uttered his often purposes declared by Congress in their creation. Furthermore, these institutions are organized to serve as a market for United States bonds. Not less than 5 per cent of the capital of the Federal land banks, for which stock is outstanding to farm loan associations, is required to be invested in United States bonds. Both kinds of banks are empowered to buy and sell United States bonds.

In First Nat. Bank v. Fellows, supra, this court sustained the power of Congress to enable a national bank to transact business, which, by itself considered, might be beyond the power of Congress to authorize. In that case it was held to be within the authority of Congress to permit national banks to exercise, by permission of the Federal Reserve Board, when not in contravention of local law, the office of trustee, executor, administrator, or registrar of stocks or bonds.

quoted statement: "That the power to tax involves the power to destroy; that the power to destroy may defeat and render useless the power to create; that there is a plain repugnance, in conferring on one government a power to control the constitutional measures of another, which other, with respect to those very measures, is declared to be supreme over that which exerts the control, are propositions not to be denied." 4 Wheat. 431.

The same principle has been recognized in the National Bank Cases, declaring the power of the states to tax the property and franchises of national banks only to the extent authorized by the laws of Congress. Owensboro Nat. Bank V. Owensboro, 173 U. S. 664, 43 L. ed. 850, 19 Sup. Ct. Rep. 537, involved the validity of a franchise tax in Kentucky on national banks. In that case this court declared (pp. 668, 669) that the states We therefore conclude that the creation were wholly without power to levy any of these banks, and the grant of authority tax directly or indirectly upon national to them to act for the government as banks, their property, assets, or frandepositaries of public moneys and pur-chises, except so far as the permissive chasers 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 upon farm security at low rates of interest. This does not destroy the validity of these enactments any more than the general banking powers destroyed the authority of Congress to create the United States bank, or the authority given to national banks to carry on additional activities destroyed the authority of Congress to create those institutions.

In the brief filed upon reargument, counsel for the appellant seem to admit the power of Congress to appropriate money for the direct purposes named, and in that brief they say: "Tax exemption is the real issue sought to be settled here." Deciding, as we do, that these institutions [212] have been created by Congress within the exercise of its legitimate authority, we think the power to make the securities here involved tax exempt necessarily follows. This principle was settled in M'Culloch v. Maryland, 4 Wheat. 316, 4 L. ed. 579, and Osborn v. Bank of United States, 9 Wheat. 738, 6 L. ed. 204. That the Federal government can, if it sees fit to do so, exempt such securities from taxation, seems obvious upon the clearest principles. But it is said to be an invasion of state authority to extend

legislation of Congress allowed such taxation; and the court declared that the right granted to tax the real estate of such banks, and the shares in the names of the shareholders, constituted the extent of the permission given by Congress, and any tax beyond these was declared to be void.

[213] In Farmers' & M. Sav. Bank v. Minnesota, 232 U. S. 516, 58 L. ed. 706, 34 Sup. Ct. Rep. 354, this court held that a state may not tax bonds issued by the municipality of a territory; that to tax such bonds as property in the hands of the holder is, in the last analysis, an imposition upon the right of a municipality to issue them.

The exercise of such taxing power by the states might be so used as to hamper and destroy the exercise of authority conferred by Congress, and this justifies the exemption. If the states can tax these bonds, they may destroy the means provided for obtaining the necessary funds for the future operation of the banks. With the wisdom and policy of this legislation we have nothing to do. Ours is only the function of ascertaining whether Congress, in the creation of the banks, and in exempting these securities from taxation, Federal and state, has acted within the limits of its constitutional authority. For the reasons stated, we think the contention of the government, and of the ap