We want to

Senator WALSH of Montana. Yes, exactly; they are. give them every facility. But how would they be in any peril of being accused of being a monopoly?

Mr. MARSH. You can make a charge without being required to substantiate it.

Senator WALSH of Montana. Anybody can go and make a charge. Mr. MARSH. And your action has got to be defended, has it not? For instance, you know the situation in your State, Montana; and Mr. Burlinghame, the president of the Society of Equity of Montana, wrote me last year about that little provision we got through for them for seeds. It was not much, but it was a godsend, he wrote, to the farmers. Those farmers, through three years of farm failures, had no seeds, and if they had gotten together to buy seeds it would have put them in danger of prosecution for organizing a monopoly.

Senator WALSH of Montana. That is what I asked, how could they be charged with being a monopoly? Take the equity association in my State; it deals in wheat and oats and all the cereal products of our State. How can anybody charge that that is a monopoly? How could a statute which forbids a monopoly of any kind be appealed to by anybody against that organization, when wheat is raised all over the country and all over the world?

Mr. MARSH. Well, if you put in the bill-I presume you meant by this reference to monopoly if you put into the bill-a provision that anyone who makes a charge that is not sustained by the court should be liable to a very high penalty to the person

Senator WALSH of Montana. So he is, if he institutes a malicious. prosecution.

Mr. MARSH. But you have to prove that it is malicious.

Senator WALSH of Montana. Of course, you have to prove that it is malicious. How, otherwise, could you do it?

Mr. MARSH. You have it there. The burden rests upon the farmers to put in the proof.

Senator WALSH of Montana. No, the burden rests upon anybody who charges that the farmers are a monopoly.

Mr. MARSH. The harassment of the farmer in having to defend himself is much more serious than the causing of a big monopoly. Senator WALSH of Montana. That is what I am trying to get at. What kind of a farmer is liable to be harassed?

Mr. MARSH. I would say that any farmer is apt to be harassed to-day, because the farmers have made up their minds that they have got to go into agricultural commerce; that they have got to follow their products through, possibly clear through to the consumer. Senator WALSH of Montana. Yes.

Mr. MARSH. Now, they are running up against the big established methods, which do not like the farmers' competition.

Now, the Nonpartisan League grew not out of any radical theories advanced, but out of the fact that the big producers' associations up in northern Minnesota were rigging the market, and the farmers did not have a look in. Minnesota is coming in on one line, State elevators, and so forth.

Now, either that method or the cooperative method, it seems to me, is the way that the farmers are going to have to adopt to work out their economic salvation, and because they are committed to that

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policy they are being pounded, and they will be, by these aggregations of capital all over the country. But I know the Congress realizes the very serious situation of the farmers, and I would say this, that if given a year or two of control under this bill, and an investigation and action of the Secretary of Agriculture of a kind, whatever it may be, if it does not prove satisfactory it would be amended, but it does seem to me that the farmers are entitled to an effort to help them, not by exempting them but by providing a more practical supervision than by court action.

Senator WALSH of Montana. Despite the comment of the solicitor of the Department of Agriculture, what they want is to be relieved from the fear of prosecution under the Sherman Act?

Mr. MARSH. Yes.

Senator WALSH of Montana. Now, the Sherman Act has two essential provisions. Section 1 forbids combinations. You want to take that away. You want to be permitted to organize associations and combinations of farmers, and we want to give that to you. We want to take away every danger of prosecution under section 1 of the Sherman Act, which relates to associations and combinations. That is the purpose of that. That is what you are trying to get at.

it

Let me call your attention to the fact that section 2 of the Sherman Act is not aimed at combinations as such, at all. It is aimed at monopolies, and it does not make any difference whether a monopoly exists created by one man or a hundred men or by 20 men, is penalized under section 2 of the Sherman Act. Now, inasmuch as all you want is the right to organize combinations, why are you not fully protected if we relieve you from the penalties under section 1 of the Sherman Act?

Mr. MARSH. Permitting combinations?

Senator WALSH of Montana. Forbidding combinations.

Mr. MARSH. Yes; to amend it so as to permit combinations? Senator WALSH of Montana. So as to permit combinations of farmers.

Mr. MARSH. That, I think, would be the more important thing, because I do not believe, as I say, that the farmers want to create a monopoly.

Senator WALSH of Montana. I agree with you about that.

Mr. MARSH. But sometimes the implication is more serious than the charge. You know that story of the seaman and the captain. The captain wrote in the log that a certain seaman "was drunk today." The seaman read the entry and he got back by writing in the log that the captain "was sober to-day.' The implication was just as bad in the second case as the charge in the first.

Not everybody has the sympathetic attitude toward the farmer that you have; and I think that is the great danger, that they will use that statement in there, which would read, "nothing herein contained shall be deemed to authorize a monopoly"-I believe that was the expression-and they will at once proceed not to follow this action before the Secretary of Agriculture, but to institute court proceedings. I think that will be a danger, and a danger that will scare farmers off from starting these associations.

Mr. PRESTON. Let me ask you some questions.
Mr. MARSH. Oh, I am not a lawyer.

Mr. PRESTON. No, I just want to ask one question. How would it suit you if the interstate commerce in an object should be limited in the bill, so that they could not go beyond 50 per cent of an article in the United States?

Mr. MARSH. I do not see why you should do that any more than any other

Mr. PRESTON. Would not that relieve you from harassment and embarrassment easier than any other way?

Mr. MARSH. I do not want to indorse any amendment to the bill until those who have been working on it have a chance to thrash it out and see what the effect will be. What we want is to give the farmers a chance to get together and to get a supervision which no big business in the country is going to ask the Governemnt to organize over them, to try and trade directly without fear of being molested; not that they try to evade any punishment for any wrongdoing, but they want a different procedure.

You may remember that Mr. Hoover last week came out with practically a similar suggestion for big business; that the Federal Trade Commission should have its powers extended to what he asserted was the original purpose of the Federal Trade Commission— I did not know that that was the purpose, before so that the Federal Trade Commission could pass upon the legality and propriety of the procedure of big combinations of capital. That did not emanate from these corporations but from Mr. Hoover. That is the proposition from the farmers' organizations themselves. They put their cards on the table. If the Secretary of Agriculture finds any improper conduct he shall make his order, and if they do not comply with it in 30 days, then the Attorney General takes jurisdiction, if I understand the bill.

Mr. PRESTON. Do you not realize also that in any annual crop, like apples, the Secretary of Agriculture could not make his examination in time to affect the price of that season, for the reason that it would take him from 4 to 8 or 10 months to make his investigations and make his order and get a decision upon it?

Mr. MARSH. It happens that I know a majority of the labor leaders of America of the outstanding labor leaders and hundreds and thousands of the members of labor. I do not think that they are going to worry at all over the farmer getting a living off that plan. They would like to see him get more. I do not think you need to worry about the consumer. What the American people want is the elimination of the parasitic elements.

Mr. PRESTON. We are thoroughly in sympathy with that, despite the charges made here; but in California there are six or eight crops that are grown in restricted areas, and they are being monopolized, and can be monopolized thoroughly, and what I am here for, and all that I am interested in, is to see that the law is so framed that immunity is not granted to corporations if they do that, and enter into unjust practices.

Mr. MARSH. What is the object of the law? It is to prevent unduly enhancing prices and to prevent unfair methods. It seems to us that you achieve that purpose through this bill. And it is asserted that there has been a monopoly in the market. We have had the antitrust laws in operation, and they have not prevented that.

I am taking this position because when this bill was up as the original Volstead bill, I told the Committee on the Judiciary of the House something along this line. I said, "If you are going to make these exemptions, I think it is necessary that there should be on the board of directors of such an organization a representative of the Federal Trade Commission and the Secretary of Agriculture, or that they should be subject to their review. This provides for it in perhaps a more feasible way, not having the Government represented on the board of directors and having less formal opportunity for review.

Senator WALSH of Montaña. In the Clayton Act, you recall we exempted labor organizations not having capital stock, absolutely, from the operation of the Sherman Act; no conditions at all; no review of any kind. If that provision there permits the Secretary of Agriculture only to determine what is an unreasonable price, and does not give him any power to fix what is a reasonable price, of course it is useless to the consumer. You appreciate that. You appreciate that it means three or four different trials before the Secretary of Agriculture, until you eventually get to the reasonable price; so that it really means nothing whatever.

Mr. MARSH. I could not quite agree to that, Senator, because I am pretty sure that when the facts come out the farmers would accept a reasonable proposition. I can not rid myself of that belief, because I know the farmer.

Senator WALSH of Montana. You are speaking about the farmer who raises crops?

Mr. MARSH. Yes.

Senator WALSH of Montana. I am not speaking about that fellow at all. I am speaking about the fellow who has organized a monopoly and runs a monopoly of the milk of the city of Chicago or the city of Boston; or the California Raisin Growers' Association which has almost a monopoly of the production of raisins. I am speaking of that kind of fellow.

Now, he is brought before the Department of Agriculture and the Secretary of Agriculture finds that the price he is charging is unreasonable. I do not agree with you that that fellow will go back and will reduce his price to what the consumer is satisfied is a reasonable price. He will try another way, They will never agree on what is reasonable. The consumer will still be insisting that his price is not reasonable, until it is eventually determined what is reasonable. So that if that means that he fixes an unreasonable price and does not fix any other, I would just as leave have that whole thing go out, and just give them permission to organize these associations. Now, what would you say to making this, with respect to farmers' organizations, just exactly the same as we did with respect to labor organizations, exempt them absolutely without any conditions whatever, only to put in there that they shall not organize a monopoly; just merely provide that the farmers' organizations are perfectly free to combine?

Mr. MARSH. But not to establish a monopoly?

Senator WALSH of Montana. Exactly; without any review whatever?

Mr. MARSH. How would you determine; who would determine what constitutes a monopoly?

Senator WALSH of Montana. Of course that is a legal question.

Mr. MARSH. There is where you put it right up. To my mind the procedure is more important than whether it is a monopoly

or not.

Senator WALSH of Montana. You never can get rid of lawsuits. Mr. MARSH. No, but you can minimize them.

Senator WALSH of Montana. When a corporation is organized it has a certain scheme of organization. Now, some fellow will contend that that scheme of organization does not give them immunity. Some fellow is going to contend that that corporation is not entitled to the protection of this act. You can not get rid of lawsuits. My idea is if you will pardon me--that I would not put any restriction. I would not give the power to fix prices or to designate some reasonable price, because we have demonstrated already, under the interstate commerce act, that that is useless. It does not do any good at all. It is just a waste of money to determine that some price is unreasonable, without determining a reasonable price. I would wipe out the whole thing. I would give them perfect liberty to organize associations as freely as they care to organize them, simply saying to them, "You must not organize a monopoly." Now, think about that.

Mr. CAMPBELL. Senator, I do not know whether I seemed to evade your question or not in my interpretation of the order or your desire to get at the kind of an order that the Secretary of Agriculture could make.

I do not believe, Senator, that it would be necessary to go through the successive phases that you speak of. As you know, the cost of all farm products varies almost daily on the board of trade, and everything indicates it. The farmers' market is not the same in any two months in the year. It changes constantly.

I can see that the Secretary of Agriculture possibly could adopt a formula. I find the formula that has been adopted by the Department of Agriculture here a reasonable one, as to the cost of milk. That formula has been adopted, has been gotten together, by the best experts in the United States.

The Secretary of Agriculture could say, "I find 10 cents a quart would have been ample to have given a reasonable price and a profit for your milk, and you charged 15 cents for it. I think that 10 cents would have been a reasonable price, and I order you to desist;" not that he needs to say "I order you to charge 10 cents," because it may change next month. It might change, so that it would be away off; so that it might necessitate possibly another hearing. But I can see how he could say "Under those circumstances 10 cents would have been ample," and they would not come down merely 13 cents or 14 cents or 12 cents. If they did, the Secretary of Agriculture would know at once-now, I am talking about the practical working of itand he would turn them over to the Department of Justice. The Department of Justice would then be practically a court of equity, as it is in all cases. They have put nobody in jail.

Senator WALSH of Montana. But that is not the proceeding. The proceeding is that they would just do what the order required them to do.

Mr. CAMPBELL. But they can initiate further inquiries, and make any orders that justice may require, under this bill.

Now, that is so far as the reasonable price is concerned.