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Senator WALSH of Montana. Yes, but you know we abandoned that 10 years ago. No; it was more than that, it was 12 or 13 years ago. Having tried it, we found that it would not work at all. Now, we must do one thing or the other; we must declare these monopolies illegal and have them dissolved, or else regulate prices which they can charge. Years ago, you know, there was a great deal of agitation. Indeed, some high authorities in this country contended that these great aggregations of capital, and combinations, were the regular development of industry and finance in this country, and that we ought not to get in the way of them; and that the real solution was to let them go on and organize as much as they cared to, and make as many combinations as they cared to, but fix the prices they could charge. Mr. George W. Perkins was the protagonist for that idea.
Mr. MILLER. I know he was.
Senator Walsh of Montana. Now, you have to take one horn or the other of the dilemma. You have either to prohibit these things, or else you have to regulate the prices they may charge.
Mr. MILLER. I think the line diverges between your thought and mine in that you consider it possible and probable that the farmers, if this bill were enacted into law, can and will establish an oppressive monopoly.
Senator Walsh of Montana. On the contrary, I do not assert anything of the kind, at all. I assert that the general body of farmers throughout the country can not possibly organize a monopoly; and what is more, they have no desire to organize a monopoly; and that accordingly we should not put in a statute an authority for them to organize a monopoly. They do not want it. I know what I am talking about. They do not want it.
Mr. MILLER. I used the word-
Senator WALSH of Montana. Whenever you get a commodity that is produced within a very restricted area, like raisins in California, there you can organize a monopoly?
Mr. MILLER. Yes.
Senator WALSH of Montana. And I wonder why you should be permitted to. I assure you that the farmers in my Štate do not want to organize a monopoly in wheat or oats or barley or live stock or sheep, or anything of the kind; but they want to be permitted to throw their products together and establish a marketing organization.
Take the apple producers in the Bitter Root Valley: they would like to throw in together and organize an association by which they could get their products to market, and I want to help them to do it. But why should I, in order to help them to do that, permit the raisin growers in the State of California to organize a monopoly which will permit them to charge anything they see fit to charge for their product?
Mr. MILLER. Senator, would it be entirely proper for me to ask you a question, in order to get your thought a little further on that?
Senator WALSH of Montana. Certainly.
Mr. MILLER. I would be glad if you would inform me how the farmers can combine to cooperatively market, without such an organization having monopolistic-exercising to some extent monopolistic-functions?
Senator Walsh of Montana. There is no trouble about that, at all. Mr. MILLER. How ?
Senator Walsh of Montana. They are doing it now. There are farmers' elevator companies all over the United States. The farmers all throw in together, and they build an elevator and they send all their stuff to the elevator, and the elevator sends it to the terminal market and sells it. There is no trouble about it. Nobody will assert that the farmers' elevators of my State constitute a monopoly.
Mr. Miller, you are a lawyer; you ought to know that the Sherman Act deals with two things. It deals in its first section with combinations to restrain trade, not constituting a monopoly: That is, they may or may not. Section 2 deals exclusively with monopolies, whether they are combinations or whether they are individuals.
Mr. MULLER. Monopolies or attempts to monopolize.
Senator Walsh of Montana. Or attempts to monopolize. My idea is that we ought to give farmers entire exemption from any prosecution or fear of prosecution under section 1 of the Sherman Act, allowing them freely to combine for the purpose of marketing their products. But I can not see how any man can stand up and argue in favor of giving any organization exemption from prosecution under section 2 of the Sherman Act as constituting a monopoly.
Mr. MILLER. Senator, it is not an exemption from the antitrust act that we are seeking. It is the power and the right to cooperatively market.
Now, may I repeat what I said at the hearing over two years ago ? It is utterly immaterial to farm organizations what language is used absolutely immaterial—if it only grants the clear right for them to combine and cooperatively process and market their products in sufficiently large units so that they can do it efficiently.
Senator Walsh of Montana. You and I stand on exactly the same platform. That is all I want.
Mr. MILLER. That is all that we want. This discussion as to monopoly has been figurative and declaratory more than anything else. I think I should apologize, Mr. Chairman, for taking so much of
Senator DILLINGHAM. I want to ask you one question as to the provisions of this act, and how this bill differs from the one of last year.
The bill of last year gave the different classes mentioned in it the power to "act together in associations corporate or otherwise, with or without capital stock, in collectively processing, preparing for market, handling, and marketing in interstate and foreign commerce, such products of their members; and such producers may organize and operate such associations and make the necessary contracts and agreements to effect that purpose, any law to the contrary notwithstanding."
The bill of this year has left out the clause, “any law to the contrary notwithstanding."
I would like your opinion as to how that changes the legal intent and scope of the bill of this year.
Mr. MILLER. My offhand impression would be that it would not change it at all; that this being a later statute, the former statutes would be construed, this and that, pari materia, and that this would not result in any change. But I may be mistaken in that.
Senator DILLINGHAM. Last year the Senate committee recom-mended an amendment that it was not the purpose of this bill to exempt these organizations from the antitrust laws, and on that rock the advocates of the bill in the Senate committee split. We had a great many conferences with the House committee, and they never were willing to have any declaration such as that proposed by the Senate committee, put into the bill; and the bill failed on that account. Now, it was evidently their thought that this bill did take these organizations entirely out from under the operation of the antitrust laws, was it not?
Mr. MILLER. No, I do not think so, Senator; only just far enough to permit them to do efficiently everything mentioned in paragraph 1.
Senator DILLINGHAM. Then why was it not possible for the advocates of the bill, and the Senate committee, to come to a common understanding? We never got any concessions at all in any of the conferences with any of the House conferees, in our construction of this bill.
Mr. MILLER. The proviso was attached by the Senate as appears on page 4 of the bill. [Reading:]
Nothing herein contained shall be deemed to authorize the creation of, or attempt to create, a monopoly, or to exempt any association organized hereunder from any proceedings instituted under the act entitled "An act to supplement existing laws against unlawful restraints and monopolies, and for other purposes.” approved October 15, 1911, on account of unfair methods of competition in commerce.
In the judgment, I think, of all the representatives of the farm organizations—and I assume that it was the view of the House conferees—that substituted a worse uncertainty for the present uncertainty of the law; so that only repeated decisions of the Supreme Court of the United States, taken up to them under different angles and under different facts, would finally clarify the law. What we are seeking for is to make the law so plain that he who runs may read.
Farmers are unable, Senator, to employ the best legal counsel in the country. They must work very economically. They can not afford to fight a case in the Supreme Court of the United States. They would like to have the law made clear. Their opinion was that this in some measure, while probably not so intended, nullified the act itself.
I am glad you asked the question, Senator. It is the judgment, I believe, of most of the lawyers who have given this a careful investigation, that without that amendment, standing exactly as this bill now pending stands, it will mean that farmers through their organizations can do everything necessary to operate as described in section 1; but if they want to go outside of that and do things restrictive of trade or commerce, they will still be subject to the pains and penalties of the antitrust act. This proviso attached by the Senate brought them back under all the provisions of the antitrust act, taking away, as the legal advisers fear, the protection and powers given in section 1.
Without that proviso, Senator, it is apparent that taking the Federal antitrust law and construing it with this bill pending, under the general rule that acts upon the same subject must be construed together, being pari materia, the construction of the court will be that these organizations can do everything mentioned in paragraph 1. But if they want to go outside of that and commit acts restrictive of commerce, they are then punishable under the antitrust act.
Senator DILLINGHAM. And yet you take away by other provisions in this bill the power of the courts to proceed against them as they would in other cases of monopoly under the second section of the act. You put the prosecution in the discretion of the Secretary of Agriculture, and the court would seem to have no jurisdiction whatever until he has made his order and the association has refused to obey his order; and then he calls upon the court simply to see that the order to cease and desist shall be carried out, but with no punishment for the grossest violation of the second section of the act.
Mr. MILLER. I would concur in the opinion
Senator DILLINGHAM. That is the point that is troubling me about thiş bill, and I am seeking advice from you as legal counsel.
Mr. MILLER. I would concur with the Committee on the Judiciary of the House, which has stated it somewhere in this report, and substantially as I have stated it.
Mr. PRESTON. It is about the middle of page 2, I think.
Mr. MILLER. I will ask Mr. Holman if he will find the place in that report where the Committee on the Judiciary discussed the efiect of the antitrust act.
Well, Mr. Chairman, in relation to that matter I again state, and emphasize, that this bill is supported by every national farm organization in this country; they all have gone upon record for it.
Senator DILLINGHAM. As I understand you, they do not want any advantage under the second clause of the act that we refer to. They do not want to form monopolies. They do not ask for the privilege of forming monopolies. Is that your position?
Mr. MILLER. They should be permitted to form monopolies so far as is necessary to efficiently do the things provided in paragraph 1.
Now, a monopoly, Senator, in my mind, is very difficult to define. I would doubt if many men would agree upon a definition of
monopoly:" But, taking it in the usually accepted sense, organizations of this character must have, if they are going to efficiently operate, some of the factors that enter into monopolies.
Senator DilliNGHAM. Yes, but now supposing that that is all true, and we grant that for the sake of argument, do you claim the right to commit monopolistic acts, having formed a monopoly?
. Mr. MILLER. If by "monopolistic acts" is meant undue oppression by undue prices, absolutely not.
If by “monopolistic acts" is meant the combination of many men to do things mentioned in section 1 of the bill, then, yes. .
Senator DILLINGHAM. Then, do I understand you to say that the right is to form monopolies, clearly and distinctly, but that they shall be controlled by the action of the Secretary of Agriculture ?
Mr. MILLER. Again my answer would be that this association must of necessity combine. It must be a combination of many men. That is one of the factors that usually accompanies a monopoly, but absolutely necessary if farmers are to cooperatively market at all. So that, so far as that particular factor of monopoly is concerned, they must be permitted to combine for the purposes of cooperatively marketing, and in organizations large enough to do that efficiently.
Now, if by “monopolies" is meant the odious monopolies, that are just as odious to farmers, and perhaps more so than to any other class of people, absolutely not, Senator.
Senator DILLINGHAM. Under the terms of this bill, even in that instance the relief that the public would have would be in the action of the Secretary of Agriculture, would it not?
Mr. MILLER. Yes.
Senator DILLINGHAM. Is it the purpose in that case to relieve this monopoly in its actions which can not be separated, from the natural operations of the courts, and to put the remedy of the people in the hands of the Secretary of Agriculture ?
Mr. MILLER. Senator, may I say this as a general answer, not only to that question but to the general thought underlying it, that if you leave these cooperative associations subject to the tender mercy of city district attorneys, Federal or State, they will by unwarranted prosecutions break down and destroy these organizations.
Down in New Orleans they indicted, a year ago, a little company of 300 men supplying a part of the milk that entered into the city of New Orleans. They had a milk war with the dealer that was the large milk distributing agency.
Senator Walsh of Montana. What became of that prosecution ?
Mr. MILLER. A demurrer to the indictment was granted and the defendants were discharged; but that litigation disrupted and destroyed the market, and the consumers are suffering from that condition.
Senator DILLINGHAM. Then I understand your contention is that they should be relieved from the ordinary operation of the law as it is administered by the Department of Justice of the United States ?
Mr. MILLER. I think, Senator, that by substituting a supervision like this, the Congress of the United States can safely trust the farmers; and if they find that they are abusing that power, every subsequent Congress has just as much power as this and can correct it; and why not give the farmers an opportunity to try to work out their problem?
Senator DILLINGHAM. You want to have that problem tried out? Mr. MILLER. Yes.
Senator DILLINGHAM. By excusing them from the natural operation of the law as it is enforced by the Department of Justice, by putting a regulatory remedy in the hands of the Secretary of Agriculture ? Mr. Miller. Yes; exactly so. Senator DILLINGHAM. Now I think I understand you.
Senator Walsh of Montana. I want to ask one more question. Have you any competition within the field in which you operate?
Mr. MILLER. I do not know that I am just catching your thought.
Senator Walsh of Montana. I understand that you supply the city of New York with milk?
Mr. MILLER. We sell milk to distributors. We represent, so far as we can tell, about 60 per cent of the farmers whose milk supplies New York City.
Senator WALSH of Montana. How do the others handle their supplies?
Mr. MILLER. They sell individually, generally, to the same dealers. But let us be very frank
Senator Walsh of Montana. So that you have competition to the extent of 40 per cent ?
Mr. MILLER. Let us be very frank about this, because I never think that we make anything by concealing, that the influence of our