Mr. WILLIAMS. No, sir. Senator WALSH of Montana. It exempts certain organizations from liability. If, then, these organizations were subject to peril under the Sherman Act, they are still in peril under the Sherman Act, notwithstanding section 6 of the Clayton Act; and we want to relieve them from that peril. That is the purpose of this. But your letter says that it does not do it; that they still are liable to all the pains and penalties of the Sherman Act, just the same as if this legislation was not enacted at all. Secretary WALLACE. I am not a lawyer, but let me approach it from my standpoint. As you say, section 6 of the Clayton Act takes certain organizations out from under the operation of the Sherman Act. It does not take out from under the operation of the Sherman Act farmers' organizations which have capital stock or which are conducted for a profit. Senator WALSH of Montana. Yes. Secretary WALLACE. They are still under it. Secretary WALLACE. The purpose of this bill, as we understand it, is to take them out from under it. Senator WALSH of Montana. That is my understanding. Secretary WALLACE. And it does that, as I understand; except that according to the opinion of the solicitor it does not authorize them to form a monopoly or to take up practices in restraint of trade. Is that your understanding of it? Senator WALSH of Montana. That makes it, perhaps, clearer. Secretary WALLACE. You are familiar, I assume, with the operation of a number of these farmers' cooperative associations? Senator WALSH of Montana. Yes. Secretary WALLACE. So that I need not go into that. Senator WALSH of Montana. And I want to do all that I can to encourage them. That is all, I think, Mr. Chairman. Senator DILLINGHAM. That is all. Senator WALSH of Montana. We are very much obliged to you gentlemen. (The letter to Senator Norris, referred to in this hearing, is here printed in full, as follows:) DEPARTMENT OF AGRICULTURE, Hon. G. W. NORRIS, Chairman Committee on Agriculture and Forestry, United States Senate. DEAR SENATOR NORRIS: I have your letter of recent date in which you bring to my attention a copy of H. R. 2373, which has passed the House of Representatives, and ask for my views on this bill in particular and, in general, upon the subject which it covers. Apparently, this is about essentially the same measure as S. 983 concerning which I wrote you at your request on April 30 last. I asked the solicitor of the department to give me his opinion on the legal questions covered by the bill. He advises me that he does not find anything in this bill that will permit agricultural associations to do any of those acts forbidden by the anti-trust laws and that apparently the only purpose of the bill is to free cooperative associations from the implied restrictions contained in section 6 of the Clayton Act and by thus freeing them putting them upon the same basis as corporations and associations engaged in any other line of business. As the bill passed the House it would not authorize an association of agricultural producers to engage in unlawful restraints upon trade or to form monopolies or to do any other things forbidden by the anti-trust laws. It simply permits farmers to form cooperative associations, with or without capital stock, for the purpose of collectively processing, preparing for market, handling and marketing in interstate and foreign commerce their agricultural products, and it authorizes such associations to have a common marketing agency. The propriety and desirability of removing any restrictions which stand in the way of famers organizing such cooperatve associations must be apparent to anyone who has made even a superficial study of our present systems of marketing farm crops. While many intemperate statements have been made as to excessive charges between the producer and the consumer, it is evident that our present system of distributing farm crops is more costly than it should be, and it is to the interest of both the producer and the consumer that unnecessary costs be eliminated. The organization of truly cooperative agricultural associations should result in more efficient methods of marketing and should therefore not only be permitted but encouraged. The fear which some people seem to entertain that such legislation as this might enable farmers to create a monopoly or unfairly advance prices of farm products is groundless, in my opinion. Any effort which even promises to result in the creation of monopoly or in the establishing of an unfairly high price would break down of its own weight through the inevitable stimulation of production beyond the point of normal consumption. It seems to me, therefore, that the enactment of some such legislation as this is highly desirable and will result in benefit to consumers as well as producers. Very truly, yours, HENRY C. WALLACE, Secretary. (At 3 o'clock p. m. the subcommittee adjourned subject to the call of the chairman.) |