The opinion
Steinert, J.
(dissenting) — The basis of the majority opinion is that the respondent,
production credit association,
is an “instrumentality of the United States.” If that premise be accepted as an indisputable postulate, then the conclusion reached by the majority must likewise be recognized as unerringly correct, because it is fundamental in our system of government that “the states have no power to tax, impede, or control in any way the operation of laws constitutionally enacted by Congress to carry out the power vested in the National Government.”
Assuming, for present purposes, that the farm credit administration, the Federal land banks, and the production credit corporations, spoken of in the majority opinion, are “instrumentalities of the United States,” I am unable to agree that production credit
associations,
such as respondent herein, are also such Federal instrumentalities. While it is true that the farm credit act of 1933 (12 U. S. C. A., § 1131
et
seq.) authorizes the creation of production credit associations, the actual organization of such associations is brought about, as declared in § 1131d of the act, by the filing of articles of incorporation “by ten or more farmers desiring to borrow money under the provisions of this section [and other sections]” of the act. The loans made by the associations to the farmers are “for general agricultural purposes.”
Whether the transaction involving the particular loan be viewed from the standpoint of the government or from the standpoint of the farmers, in either event it is, in my opinion, simply a commercial transaction such as that involved between an ordinary bank and a borrower, and is in no sense the exercise of a sovereign power or governmental activity on the part of the Federal government. In short, I am of the opinion that in such transactions the government steps down from its plane of sovereignty and enters the domain of ordinary commercial business, and for that reason the agency employed therefor by the gov
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ernment is amenable to state laws governing individuals and corporations engaged in a similar business.
I am aware that, as stated in the majority opinion, Congress itself has declared, in the act, that such production credit associations are “instrumentalities of the United States.” But the mere assertion by Congress that a particular organization is a Federal instrumentality does not of itself make it so, when the method of operation of the particular agency or activity indicates the contrary. And such assertion by Congress is the. very element in this case which gives me the greatest concen, for if the
ipse dixit of
Congress forestalls all further inquiry or consideration, then by the simple device of creating an agency or bureau and labeling it an “instrumentality of the United States,”' the various states can, and in time will, be shorn of every function and activity in which they have immemorially and traditionally engaged. The slow, but gradual, progress of Congressional assertion of exclusive authority may not at any one point reveal its ultimate objective or result, but even now it appears to me to be discernible that ere long the “sovereign states” themselves will be regarded as no more than “instrumentalities of the United States.”
I dissent from the majority opinion on the ground that the respondent production credit association is not, in fact, an instrumentality of the United States.
Simpson, C. J., concurs with Steinert, J.
September 22, 1944. Petition for rehearing denied.