restraints of trade and restraints of competition which are harmful but which do not reach the dignity of monopoly; the object of amendment (n) is to make it clear that the law against monopoly operates upon associations organized under this bill and so do all other antitrust laws, except such exemptions as are specifically conferred by section 1 of the bill.

FURTHER SUGGESTION.

The sundry civil appropriation act of 1920 and the deficiency appropriation act of 1920 contain the following proviso:

Provided further, That no part of this appropriation shall be expended for the prosecution of producers of farm products and associations of farmers who cooperate and organize in an effort to and for the purpose to obtain and maintain a fair and reasonable price for their products."

This language is a stumbling block to the efforts of the Department of Justice to curb monopolies in farm products.

It is doubtful if this proviso was ever intended to encourage and foster such monopolies, but it may be well to consider the meaning of this language when compared to the provisions of this bill and a clause repealing or limiting the above proviso might be in order.

(At 1.30 o'clock p. m. the subcommittee adjourned until Tuesday, June 7, 1921, at 10.30 o'clock a. m.)

AUTHORIZING ASSOCIATION OF PRODUCERS OF AGRICULTURAL PRODUCTS.

TUESDAY, JUNE 7, 1921.

UNITED STATES SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON THE JUDICIARY,

Washington, D. C. The subcommittee met, pursuant to adjournment, at 10.30 o'clock a. m., Senator William P. Dillingham presiding.

Present: Senators Dillingham (chairman), and Walsh of Montana. Senator DILLINGHAM. Some arrangement has been made between those who are to be heard this morning, by which Mr. Miller is to be heard first, because it is necessary for him to go away, so that we will give you the floor, Mr. Miller. Will you give the stenographer your name and state whom you represent?

STATEMENT OF MR. JOHN D. MILLER, REPRESENTING THE NATIONAL MILK PRODUCERS' FEDERATION.

Mr. MILLER. My name is John D. Miller. My home office address is Susquehanna, Pa. The office address for the purpose of this hearing is care of the Dairyman's League, 333 Lafayette Street, Utica, N. Y.

I am here representing the National Milk Producers' Federation, whose Washington office is at 1731 I Street NW.

The National Milk Producers' Federation that I here represent is not in itself an organization. It is simply a federation or affiliation of milk marketing associations, about 20 in number, these different organizations each selling milk in their several localities. The membership of all these constituent organizations is somewhere from 200,000 to 300,000.

Mr. Chairman, I really appreciate the opportunity of presenting this case to the committee, and I also thank the gentlemen who so courteously waived their precedence this morning in order that I might be at liberty to leave.

Yesterday, knowing the time would be short this morning, I caused to be prepared in typewriting, very hastily, a statement of some of the things which I cared to say, covering three principal questions:

First, that this is not fiat legislation in the sense that that term is usually considered.

Second, the farmers, by reason of the economics of agriculture, cannot form an oppressive monopoly.

Third, that the present Federal laws are so uncertain, somewhat ambiguous, that these great farm marketing associations find themselves very, very doubtful as to investing the necessary funds to operate efficiently.

I present this typewritten memorandum, and if that might be copied into the record, it would be more in consecutive order than anything I could say.

Before taking up the discussion of this matter, may I call the attention of the committee to the platform declarations of the two great political parties last year, and consider for a moment the conditions in the light of which those platforms were written?

Within three years before those platforms were written the executive committees of five different farm organizations had been prosecuted under State antitrust laws that followed very closely the original Sherman law. At the time when those platforms were written there was pending in the Federal court at New Orleans, La., an indictment against three men who were the executive committee of a milk-marketing organization, and I hope a little later to explain those facts to you the facts of that case-but only mention it here to show the conditions in the light of which these platform declarations were written.

The Democratic platform is as follows:

We favor such legislation as will confirm to the primary producers of the nation the right of collective bargaining and the right of cooperative handling and marketing of the products of the workshop and the farm and such legislation as will facilitate the exportation of our farm products. We favor comprehensive studies of farm production costs and the uncensored publication of facts found in such studies.

The Republican platform is stronger, and I will only read that portion which concerns cooperative marketing. It is as follows: The crux of the present agricultural condition lies in prices, labor, and credit. The Republican Party believes that this condition can be improved by practical and adequate farm representation in the appointment of governmental officials and commissions, the right to form cooperative associations for marketing their products, and protection against discrimination.

I find that I do not have in my files to-day the letter of acceptance of Gov. Cox, but in his letter of acceptance he was just as unequivocal in his declaration of favoring cooperative marketing by farmers as was President Harding. From the letter of acceptance of President Harding I read as follows:

Let us facilitate cooperation to insure against the risks attending agriculture which the urban world so little understands and a like cooperation to market their products as directly as possible with the consumer in the interests of all.

Upon such association and cooperations should be laid only such restrictions as will prevent arbitrary control of our food supply and the fixing of extortionate price upon it. Our platform is an earnest pledge of renewed concern for this most essential and elemental industry, and in both appreciation and interest we pledge effective expression in law and practice.

We will hail that cooperation which again will make profitable and desirable the ownership and operation of comparatively small farms intensively cultivated and which will facilitate the caring for the products of farm and orchard without the lamentable waste under present conditions.

Mr. Chairman, the House have done their part to redeem that pledge; and the closing paragraph of the report of the House Judiciary Committee accompanying this bill is as follows:

Both the great political parties in their last national platform pledged their support to this legislation.

This bill, or a bill almost identical in its terms, was pending when these two platform declarations were written and the nominations accepte

May I now, as briefly as possible, Mr. Chairman, attempt to show to you that this is not fiat legislation. For the experience of farm organizations before legislative bodies and in public discussion have taught them that many people who earnestly desire to advance the interests of agriculture believe that this is pernicious class legislation; that it confers upon one group of citizens privileges and immunities not enjoyed by other groups.

There are laws and I am sure that this committee will agree with that statement-which establish equality by statute that does not result in equality in fact, and this is one of them. It can hardly be claimed that a law which is applicable to 40,000,000 people is class legislation in the ordinary sense of that term. As a fact, this legislation is required to place farmers upon a competitive level with those who make steel.

May I just discuss, not in its chronological order but rather in the order of its evolution, if I may use that term, the development of the great industries of this country?

In the early days nearly every commodity was produced individually; consequently, sold individually. The village shoemaker made shoes. The blacksmith made horseshoes and horseshoe nails and harrows and sometimes hoes. A local foundry made the plows which supplied the comparatively small section of the country. An individual stage coach provided means of transportation and

communication.

As manufactures every one of these has disappeared. All these utensils and commodities, speaking generally and of course not with minute accuracy, are now made by large aggregations of men in plants covering many acres, owned by thousands of men. The individual stage coach has disappeared and 130,000 men have combined to own and operate the Pennsylvania Railroad-and of course are doing it lawfully, although it is a combination. Herein lies the difference, and this is the point I would desire to make clear, that it is not class legislation to give every group of citizens laws and marketing agencies adequate to their needs.

In the beginning of this evolutionary process, which resulted in the aggregation of all the great industries except farming, the first step was from the individual to the partnership. But it was soon found that the partnership was not an adequate agency, for the reason that there was a personal liability for debt, while the partnership would be dissolved at any time by the death of a member, and so the State, speaking figuratively, said to these men who wanted to combine in these great industries: "We will create for you an agency that will be adequate to your needs. We will create for you an agency in which you will not be liable for the debts of the concern, that will not die with the death of any member, and by vesting the titles of all of your plants and products in that agency you will be immune from the common-law prohibitions of monopoly, because that agency will have a distinct legal entity, a person in law, and being a person in law it can not combine with itself, although its beneficial operations may be for hundreds of thousands of part

owners.'

If it were expedient for 100,000 or 50,000 farmers to deed their farms and their herds to a stock corporation so as to collectively produce, they could then collectively sell without any clarification

of the Federal antitrust law. May I, right there, quote again from the report of the House Judiciary Committee? I do not turn to it, and I will not take your time; but I will file the whole report if I may. But it is this point that I desire to impress upon the committee: In every instance these large corporations are merely combinations of many men engaged in collective buying, collective manufacturing, and collective selling.

Here are the two groups, one great group engaged in collective buying, manufacturing and selling; another great group, to wit, the farmers, who by reason of the nature of their industry must continue to produce individually. But from that step on they should have the same clear right to combine to market their products as have those engaged in any other great industry.

Sometimes it has been said-and I am hastening through with this "If this right is given to farmers, why should it not be given to manufacturers?" I have already attempted to answer that question, but may I now give the answer of the manufacturers themselves?

Some time ago, in the City of Chicago, a conference was held under the auspices of the Illinois Manufacturers' Association. The committee on resolutions consisted of 28. There was invited as the guest of that conference a gentleman who is present here to-day, Mr. Milo D. Campbell, the president of the Milk Producers' Federation, whom I here represent. He was there as an invited guest, and was assigned to the committee on resolutions, being one of the 28, and being the only representative of farmers at that convention. It was entirely a manufacturers' convention. This page that I will file with the committee gives the names, and you will at once notice that they are men of national reputation in the manufacturing and industrial world-such men as Alba B. Johnson, president of the Railway Business Men's Association, etc. I will not read all of the resolution reported by that committee and unanimously adopted, but only that part which refers to cooperative marketing by farmers: We believe the time has come when the millions of farmers, not only in their own interest but in the interest of consumers, should have the clearly expressed right by both State and Federal laws to buy, sell, and bargain collectively concerning their own products, and we ask for such clarifications of existing statutes that this cooperation will be permitted without fear of prosecution.

Passing that, now, Mr. Chairman, may I take up and discuss very briefly the reasons why we think that the economics of agriculture are such that farmers can not form an appressive monopoly?

Farmers can not quit work for a week, a month, or three months, and then resume work, losing only the wages for the idle period. Theirs is a yearly business. They must plant in due season or they can not harvest. Cattle and hogs must be fed. Fruit trees will bear fruit in due season and cows must be milked daily. To form oppressive monopolies so as to ask unreasonable prices requires that the market must be cornered. To corner the market will require not only the control of production and marketing of the principal product, but of all products that can be used as substitutes therefor. If the price of one product is too high as related to the price of other products, economic laws will in a brief period force such price down until it is again on a relative level with the prices of other foods.