58 THE AGRICULTURAL BLOC 



The Federal Farm Loan System had just be- 

 gun operations when the world war began in 

 Europe. The preliminary organization was 

 completed and loans began to be made available 

 to farmers in increasing amounts, public con- 

 fidence in the farm loan bank bonds was grow- 

 ing when opposition from land mortgage com- 

 panies suddenly took form. 



A test case was arranged and carried to the 

 ■Supreme Court of the United States, the effect 

 of which was to suddenly check the development 

 of the system at the very time when its benefits 

 were most needed because of the expansion that 

 was taking place due to the better market for 

 farm products. The case before the Supreme 

 Court was delayed and for a year and a half 

 the Federal Land Bank System stood still 

 awaiting a verdict. Although the decision was 

 favorable to the Banks and reassuring in the 

 end, the delay was very serious because it came 

 at a critical period when loans should have been 

 made regularly. 



When the Federal Land Bank System was 

 inaugurated the need for some form of short- 

 time rural credits was emphasized, but this fea- 

 ture was not added to the Land Bank System, 

 principally because the Federal Reserve Act, 



