The U.S. Supreme Court case Federal Intermediate Credit Bank of Columbia, South Carolina v. Mitchell et al., 1927 revolved around the issue of whether or not a federal intermediate credit bank could sue in state courts to recover on notes given for loans made under the provisions of the Federal Farm Loan Act. The defendants argued that these banks were federal agencies and thus had no right to use state courts for such purposes. However, the court ruled in favor of the plaintiff (the bank), stating that while these banks are indeed federally created entities, they have been granted express permission by Congress to utilize any competent court - both state and federal - for legal proceedings related to their operations. Therefore, it was held that a suit brought by a Federal Intermediate Credit Bank in a State court is within its rights as per Congressional authorization.

In the dissenting opinion for Federal Intermediate Credit Bank of Columbia, South Carolina v. Mitchell et al., Justice Stone disagreed with the majority's interpretation of the Agricultural Credits Act. He argued that Congress intended to provide a special privilege or immunity to federal intermediate credit banks by exempting them from state taxation on their notes and debentures. The exemption was not meant as an absolute prohibition against all forms of state taxation but rather only those taxes directly imposed upon these securities themselves. Therefore, he believed that a tax levied on the income derived from such securities should be permissible under law because it is not a direct tax on the security itself but rather its yield or profit. He also pointed out inconsistencies in previous court rulings regarding similar issues involving other types of federally chartered financial institutions which further supported his argument against an absolute prohibition against all forms of state taxation for federal intermediate credit banks.