Mr. PRESTON. It ought to be, but I was afraid that inasmuch as the intent to monopolize is the only way to determine oftentimes what a monopoly is, that, when you have admitted the authorization to combine, you have expressly acknowledged the intent to monopolize.

Senator WALSH of Montana. But suppose we say, "Nothing in this section contained shall be deemed to authorize the creation of a monopoly?"

Mr. PRESTON. That looks a little better.

Senator WALSH of Montana. Where is the difference?

Mr. PRESTON. I do not suppose there is any; but it looks a little different here. At any rate, that is the point I made, that I was afraid effective relief could not be given in a case of this sort. If I am wrong about it, there is nothing to say.

Senator DILLINGHAM. Supposing that no amendment is adopted to this bill; what effect will this legislation have upon the antitrust legislation, so far as it affects the persons and classes seeking relief in this bill?

Mr. PRESTON. It absolutely exempts a concern which has 100 per cent control and charges any kind of a price it wants to. It exempts it. It would not exempt it for a great many other kinds of illegal practices, I can imagine.

Senator WALSH of Montana. Proceed, Mr. Preston.

Mr. PRESTON. I do not want to take up any more time. Twelve o'clock has arrived.

Senator DILLINGHAM. I think we will go on for a little while, if you want to be heard, or if anybody else wants to be heard.

Mr. LINDSAY. I am the attorney for the Associated Raisin Co. My name is Carl E. Lindsay; residence, Fresno, Calif.

My visit to Washington at this time has nothing whatever to do with any consideration of the bill which is now before you. I did not learn, until this morning, that this committee was considering the measure; nor did I know that Mr. Preston was to testify before the committee.

I will state to you, Mr. Chairman, that Mr. W. M. Giffen, the president of the California Associated Raisin Co., came with me from Fresno, and he is now in New York, but will be here again to-morrow.

Since Mr. Preston, representing what we call the outside raisin packers of California, has seen fit to testify before your committee, particularly with reference to the operations of the California Associated Raisin Co., of course I would like that we should have an opportunity to give testimony also; and in that regard I would suggest, if it meets with the approval and the convenience of the committee, that a further hearing of this matter may be had on, say, Saturday of this week. I do not know whether that will suit your convenience or not.

Senator WALSH of Montana. No, I would not be able to be here. Senator DILLINGHAM. It appears that the president of the association which has been mentioned is in New York and that he would like to appear.

Mr. LINDSAY. I will say, Senator, that we are not here, and were not here, for the purpose of making any representations in regard to this bill, but on an entirely different matter, a matter in connection with

the suit that was instituted against the California Associated Raisin Co. by the United States and which is now pending in the district court of the United States for the southern district of California, and our errand here was with the Department of Justice. I was surprised to learn this morning that Mr. Preston was testifying before this committee, and particularly with reference to the activities of the California Associated Raisin Co.

Senator DILLINGHAM. The point is that you would like to have the matter continued until a somewhat later day?

Mr. LINDSAY. Yes, sir.

Senator WALSH of Montana. I will not be able to give any further attention to this matter this week, but I would be very glad to take it up on Tuesday morning, if we could do that.

Senator DILLINGHAM. Will that be satisfactory?

Mr. LINDSAY. We will make it satisfactory, Senator; but while I am here, was it your intent to continue the hearing?

Senator DILLINGHAM. Yes.

Mr. PRESTON. I was not through. I had not concluded.

Mr. LINDSAY. I beg your pardon. I had no intention of interrupting you.

Mr. PRESTON. I will finish in a few minutes. If you will allow me to file my observations on the bill, that goes into a few minor points that I have not mentioned before.

Mr. LINDSAY. Have you copies of the papers you are presenting to the committee?

Mr. PRESTON. No, but I have a copy here. Do you want my observations on the bill?

Mr. LINDSAY. Anything you present to the committee I would like to see.

Mr. PRESTON. I am not getting after you particularly, here. I am talking about what I think ought to be proper amendments to the bill.

Mr. LINDSAY. While we are not very much interested in that, we would like to have the benefit of these observations.

Mr. PRESTON. And I have here a short history of the California Associated Raisin Co., which may be useful to the committee. Senator WALSH of Montana. I think it would be helpful. Mr. PRESTON. I will give you a copy of that.

Senator DILLINGHAM. Is it your purpose now to propose amendments to the bill? If you have those, you may proceed.

Mr. PRESTON. I had proposed that an amendment be made to the effect that a certain percentage of interstate and foreign commerce in an article be restricted; but, of course, if that is unnecessary I have no amendment outside of the ones that were formerly proposed.

Senator DILLINGHAM. If there is anything you would like to have considered and will put it in form, the committee will be glad to have it. I do not mean at this moment, but at your convenience. Mr. PRESTON. I do not think it is my province that I should detain you any further I think you understand this much better than I do.

STATEMENT OF MR. CARL E. LINDSAY, ATTORNEY FOR THE CALIFORNIA ASSOCIATED RAISIN CO.

Mr. LINDSAY. Gentlemen, I did not hear all of Mr. Preston's testimony, and I am not going to attempt to answer any of the statements he has made relative to the operations of the California Associated Raisin Co., at this time, except in a general way; but we will give to the committee further evidence on Tuesday next, covering all the matters that you may think of importance.

Mr. Preston, of course, as you know, is the attorney for the outside raisin packers in California, and I take it that his interest in this proposed measure is because of his interest in the cause of his clients.

I will state to you very frankly that my opinion is that the present bill, the Capper-Volstead bill, if that is what it is called, can not affect in any material way, if it becomes law, the activities of the California Associated Raisin Co. I do not think that we will fall within the provisions of the bill, and I am quite sure that it will give to us no greater protection than we have at the present time, under the law.

Nevertheless, the fact remains that not only at this time, but when the last bill was under consideration, the operations of the California Associated Raisin Co., its organization and its method of doing business, were held up before this committee as a striking illustration of the reason why the bill should not be passed as it left the House, and as a reason for the enactment of this amendment which was inserted by this committee last year relative to the creation of or the attempt to create monopolies. There is no question about that in my mind, at all. I am not here as an advocate for the adoption of this measure as it left the House. It is not intended for the protection of the California Associated Raisin Co. We have never taken any particular interest in the passage of this law. It is intended for the protection of the cooperative associations throughout the United States, of which there are very, very many. I really believe that it should not be considered by the committee in the light of the effect that it may have on the operations of the California Associated Raisin Co., since, as I said before, I believe it will have no effect at all on the operations of that company.

Senator WALSH of Montana. Let me inquire. You say you have not been particularly interested in the legislation. Have you been interested at all?

Mr. LINDSAY. Yes. I used the word "particularly" because I was here in Washington in February of this year, at which time the measure was in conference, and at that time, together with other representatives of cooperative associations, I did interest myself in the measure to the extent of arguing with Senator Nelson at one time, and also talking with Mr. Volstead, with reference to what I considered would be the effect of the monopoly amendment. But, nevertheless, then I felt as I do now, that the life of our association did not depend upon the measure.

Senator WALSH of Montana. Just what was your view with respect to the monopoly amendment, as you expressed it to Senator Nelson? Mr. LINDSAY. My views as expressed to Senator Nelson were these. I agree with Mr. Preston in one thing that he said, and that is that there is a sort of haziness surrounding or engulfing, as it were, the

meaning of the word "monopoly." Suppose, just for an illustration, that in a certain section of the country reaching over, we will say, the State boundary lines, there are many farmers who are engaged in the production of potatoes, and that they, deeming it for their best interests, organize an association in order to control the production and the marketing of the potatoes raised in that particular and circumscribed district; and all of the farmers in that particular district who raise potatoes enter that association, and so the association controls the entire product of potatoes in that particular district. Of course that association is not a monopoly, if you mean by that term as used in that connection, an association which controls the entire output of potatoes raised in the United States. But nevertheless, it is a monoply in one sense of the word, in that it controls all of the potatoes which are raised in that particular district, and which supplies, we will say, a certain market.

There is no question at all in my mind that the amendment which was inserted in the bill last year would have, or probably might have, this effect. If that particular case came before the courts for consideration, Congress would hold that as the bill expressly declares that nothing therein contained shall be construed as an organization of or attempt to organize a monopoly, that association was acting in contravention of the law.

Of course we all know that there has not been a crystallization, as yet, of judicial declarations which will allow any of us to definitely understand or determine what is or what is not a monopoly. Monopoly may be, to my mind, perfectly innocent under the law, even though it does control the entire output of a certain district. It is not the fact that an association or an individual has control of the entire output of a certain commodity, which is vicious. The viciousness which it is the purpose of the law to prevent is the unjust use which that association or that man makes of that power. I have no

doubt that this bill as it is now written will be of great benefit to associations generally.

Senator WALSH of Montana. Just before you go to that, Mr. Lindsey, will you give us some concrete case in which, in your judgment, it would be advisable in the public interest to permit the creation of a monopoly under this bill.

Mr. LINDSAY. Well, yes. Of course this is only my opinion, Senator.

Senator WALSH of Montana. That is what I am asking you for. Mr. LINDSAY. I may be entirely wrong about it.

Senator WALSH of Montana. I want to get your view of it.

Mr. LINDSAY. Take, for instance, the milk producers of a certain district.

Senator WALSH of Montana. Take the country tributary to the city of Washington, for instance.

Mr. LINDSAY. Yes; the country tributary to the city of Washington. Of course, there can be no object in people associating themselves together unless it is going to be in some way for their benefit. Suppose the milk producers of the city of Washington, in the District of Columbia, deeming it to be for their best interests and for their benefit, form themselves into an association in which they all join, in order to regulate, we will say, the milk industry here. I can not go into the details of how they would be benefited by different methods

of regulation. It might have to do with the sanitary conditions surrounding the milk.

Senator WALSH of Montana. Let us take the thing in a practical way. The States tributary are Maryland and Virginia?

Mr. LINDSAY. Yes.

Senator WALSH of Montana. We had a witness before us here who told us that the milk producers in Virginia marketing their product in Washington have an association. It is a mere voluntary association for consultation and conference. They do not handle their product at all. Each of them sells his product to distributors in the city here, of whom there are several. But let us assume that they do not like that system, and they extend their organization so that all of the milk producers over in Virginia may join in an association and they set up a central agency here for the distribution of their entire product and distribute the avails after the manner of your association or the California Fruit Growers' Association.

Mr. LINDSAY. Yes, sir.

Senator WALSH of Montana. Over here in Maryland they have another organization of the same character, of the milk producers in Maryland marketing their product in the city of Washington. These two organizations are here competing in the District of Columbia; the Maryland organization has its central distributing point and the Virginia organization has its central distributing point, and the two are competing.

Now, however, they combine and eliminate all competition, so that the consumers of milk in the city of Washington have just one association from which they can supply themselves. What I want to know from you is how the public is benefited by permitting these two associations thus to combine.

Mr. LINDSAY. Unless the public may be benefited; and, of course, when we consider the benefit which is flowing to the public generally, we must consider the interests of the ultimate consumer-there is no question about that at all-as well as the interests of the producer. Yet, nevertheless, it is likewise the fact that the interest of the producer is a factor in the determination of the problem. Unless, in the wisdom of the Congress, the general interests of the public as a whole, both the producer and the consumer, may be advanced by the passage of a law like this, then it should not be passed.

This act is intended to permit association of producers. There is no question about that. If it is the wisdom of the Congress that absolute free competition without the permission of association is the best plan to pursue, then the bill should not be passed at all.

Senator WALSH of Montana. That is what I want to know from

Senator WALSH of Montana. In the case we spoke of, these producers of milk over in the Virginia section sell their product to distributors here in the city, and they are complaining that these distributors in the city gather together and have a common understanding, and that they fix the price, and the producers have got to take whatever they give them. Now, that is not to the public interest.

Mr. LINDSAY. No; it is not.