The Farm Credit System (FCS) has recovered from its lending fiascoes of the 1970s and early 1980s and, in the process, accumulated, through its largely tax-free earnings, a mountain of capital - $11.6 billion at the end of 1997 - that is burning a hole in its pocket. During the last 6 years, FCS's equity capital (including its insurance reserve) increased 91% while its loans increased a more modest 23%.