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have gone on record as favoring an amendment to the constitution of California whereby milk will be charged with a public use and held subject to control as to rates as a public utility.
Mr. IGOE. As far as export is concerned, I think you have a law that would include all the egg exporters in the United States.
Mr. SAPIRO. Under the Webb Act?
Mr. STEEL. Under the Munn decision, wouldn't that milk be charged with a public use, anyhow?
Mr. SAPIRO. It hasn't been. If that could be done in the city of San Francisco, and exclusive licenses granted to distribute in any one district, they calculate they could save 25 to 30 per cent of the cost of the milk to the consumer. We have 10 or 12 different deliveries made in a single block. They could not give a monopoly of distribution unless they did it under a licensing plan, fixing the price at which the milk would be sold to the consumer. They could not do that unless they made it, in some way, a public utility. Under the California laws, we concluded that it could not be done under existing conditions; but if a constitutional amendment were passed stating that certain necessities of life, specifying milk, were charged with a public use, then you could regulate the price and regulate distribution under license and save a great deal of money to the consumer and grauatee to the producer the cost of production, considering normal and abnormal risks, storms, etc., and a reasonable profit. The milk assiciations of California went on open record, practically unanimously, as favoring such a method.
Now, as to the other associations of California, they have often considered the problem as to what would happen were they to try to take advantage of the monopolies and make a price absolutely unreasonable or unwarranted or make combinations with the distributors, who would then hold up the retailers and the public. As to these California associations, they would not object to regulation. If they do anything wrong in that way, they should be punished. I know that some of these associations, I have not consulted with all of them at least five out of the nine I represent, have considered this point at their directors' meetings, and they would not object to any proper control by a Federal commission. Mr. MORGAN. As to price?
Mr. SAPIRO. As to practices and as to price; a maximum price that would give them the cost of production, considering normal and abnormal risks, plus a reasonable profit, provided, however, that that maximum price be the maximum price for the speculators in foodstuffs; and, further, that there be some law which will protect the association from the onslaughts made on their contracts by these speculators in foodstuffs. Because if they alone were to be regulated in price, and the speculators had a free field, they would get every one of our members and break up every cooperative association in the land. With these provisos, I believe that the majority of the associations in California and the Northwest would be perfectly willing to have any regulatory feature added to any of these acts.
They consider a monopoly or a tendency toward monopoly as essential. We have a great many of the grange members in the prune growers' and raisin growers and these other associations. Theretofore they had been compelled to sell on a market fixed by the specu
lators. We say that the only protection to the farmer is, not merely to act collectively and sell on the market but to have a voice in making that market; to have such control of the market that he does not have to sell on a market made by speculators in Chicago. He becomes one of the factors that make that market. On that basic theory we stand, that the growers have the right to create a monopoly. Our particular request is that you legalize our form, because it is absolutely necessary to have a capital stock form of organization in some instances. We frequently can not get along with a nonstock, nonprofit form of organization and satisfy our financing demands.
Mr. IGOE. You would permit rival cooperative associations to combine together!
Mr. SAPIRO. Yes. That would be essential if you are going to permit monopoly.
Mr. CHRISTOPHERSON. When you reduce that theory to the ultimate, you get a socialistic government, in which the state does everything
Mr. SAPIRO. No; in North Dakota they undertook to solve the farmers' problems by a straight political method—I don't say whether it is proper or improper. In the Northwest and in California they are trying to accomplish the thing for the farmer without changing a single existing political or economic institution.
Mr. CHRISTOPHERSON. You overturn the whole economic institution.
Mr. SAPIRO. We simply ask that it apply to corporations as well as any noncapital stock cooperative farmers' organizations.
Mr. CHRISTOPHERSON. You advocate no conflict in buying, no conflict in selling?
Mr. SAPIRO. I do not. I never mentioned anything about that.
Mr. CHRISTOPHERSON. I beg your pardon. You were talking about the distribution of milk.
Mr. SAPIRO. I said if you made that a public utility. Our State wouldn't do the business. It would have to be done by licensing; the same as the street car companies. That is certainly not having the State do the thing: It is allowing private capital to operate, but with safety to the public.
The CHAIRMAN. Is there anyone who wants to be heard this afternoon. If not, we adjourn until Friday morning at 10.30.
(Whereupon, at 12.35 o'clock p. m., the committee adjourned.)
COMMITTEE ON THE JUDICIARY,
HOUSE OF REPRESENTATIVES,
Washington, D. C., October 31, 1919. The committee met, at 10.50 o'clock a. m., Hon. A. J. Volstead (chairman) presiding. STATEMENT OF HON. DICK T. MORGAN, A REPRESENTATIVE FROM
OKLAHOMA AND A MEMBER OF THE JUDICIARY COMMITTEE.
Mr. MORGAN. Mr. Chairman, I ask the consent of the committee to place in the record of these hearings a statement which made in the House of Representatives when the Clayton antitrust bill, which
the bill now pending seeks to amend, was being considered by the House of Representatives.
The CHAIRMAN. How long is it?
The CHAIRMAN. If there is no objection, it may be inserted as a part of the record.
Mr. IGOE. Did you have a solution then?
Mr. MORGAN. The Committee on the Judiciary of the Sixty-third Congress had before it for consideration H. R. 15657, known as the Clayton antitrust bill. It was reported favorably to the House. This bill finally became a law and it is this act which the bill now before this committee proposes to amend. The whole question involved in this hearing before our committee was discussed before the House at that time. This was more than five years ago. As a member of the Judiciary Committee at that time, and as a Member of the House, I discussed the various subjects that we have now under consideration. I would like to have the remarks which I made on the question at that time made a part of these hearings. I do not feel bound absolutely by anything I said five years ago, but in the main the views I expressed then are the views I entertain at this time.
The CHAIRMAN. I criticized it, but I do not care to have any particular record made of it at this time. There is no objection, and it may be inserted in the record.
(The Congressional Record of June 1, 1914, pp. 9577 and 9578, 63d Cong., 2d sess, contains the following:)
Mr. MORGAN of Oklahoma. Mr. Chairman, I should not impose further remarks on the House if I did not really believe that there is great merit in the amendment proposed by the gentleman from Minnesota. The first paragraph of section 7 of the bill as reported by the committee and as amended by the amendment offered by the gentleman from North Carolina is as follows:
“ SEC. 7. That nothing contained in the antitrust laws shall be construed to forbid the existence and operation of fraternal, labor, consumers', agricultural, or horticultural organizations, orders, or associations, instituted for the purposes of mutual help, and not having capital stock or conducted for profit, or to forbid or restrain individual members of such organizations, orders, or associations from carrying out the legitimate objects thereof, nor shall such organizations or orders or associations, nor the members thereof, be held or construed to be illegal combinations or conspiracies in restraint of trade under the antitrust laws."
Now, I have prepared what I think would be a proper substitute for the first paragraph of section 7, as quoted above. It is as follows:
“ SEC. 7. That nothing contained in the antitrust laws shall be construed to prevent the existence or operation of labor organizations; or to forbid such labor organizations or persons belonging thereto from entering into any contract, agreement, or arrangement with a view to lessening the hours of labor; or of increasing their wages; or of bettering their conditions; or to forbid the existence and operation of consumers' organizations; or to forbid such organizations or members thereof from entering into any contract, agreement, or arrangement with a view to lessening the cost to them of goods
wares, and merchandise, or of any agricultural or horticultural product. or to forbid the existence or operation of any farmers' organization or any agricultural or horticultural organization; or to forbid such organizations or the members thereof from entering into any contract, agreement, or arrangement with a view to reducing the cost to them of tools, implements, machinery, fertilizers, or of any other supplies needed by persons engaged in agriculture or horticulture; or with a view to collective bargaining in the sale of their products or to obtain better credit or lower interest; nor shall such organizations or orders or associations, nor the members thereof, be held or construed to be illegal combinations or conspiracies in restraint of trade under the antitrust laws."
My objection to section 7 as it has been amended is that under it only farmers' organizations without capital stock and not conducted for profit would be legal under this section. In other words, it exempts from anti-trust laws only farmers' organizations organized for mutual help along social, literary, and educational lines. There has been no attempt to dissolve such farmers' organizations, so that the provisions of section ī really give the farmers nothing. While we are considering this question we should in plain language give the farmers the right to organize, even with capital stock or for Profit, so long as their organizations are along legitimate lines, to aid them in marketing their products as cheaply as possible and in purchasing their supplies as cheaply as possible.
Now, the amendment offered by the gentleman from Minnesota [Mr. Nelson] is broad enough to give the farmers what they need and should have. I think it was Sir Horace Plunkett, who made a thorough study of Amer can agriculture, and who has devoted his life largely in an effort to improve agricultural conditions in Ireland, who said that improvement in agr culture must come through better farming, better business, and better living, and that the first of these was better business in farming. Improvement in farming—the making of the farm what it should be in this country-must come through better transportation facilities, better educational advantages, and better organization among our farmers.
As a member of the Judiciary Committee, I filed a minority report to this bill, in which I said :
“The law not only should not probibit but should encourage farmers to organize with a view to purchasing implements, machinery, and other farm supplies at less cost and with the view to collective bargaining in the sale of their products and in the purchase of supplies. In France, Germany, and other European countries farmers' organizations are authorized by law. The line along which these organizations can act is definitely defined. Governmental aid, direction, and assistance is given. Such organizations are encouraged to engage in a wide field of purely business transactions. These organizations have contributed immensely to the expansion of the agricultural interests of these countries. It would be exceedingly unfortunate at this time, when we are about to enter upon the important task of providing our farmers with better credit facilities, to enact a law which may be construed to make all farmers' organizations unlawful except such as are organized for mutual benefit of members alorg literary, insurance, and social lines.
“ Practically every other business is highly organized but the business of farming. There are about 6,500,000 farmers. Something like 12,000,000 persons over 10 years of age toil on the farm. The farmers are at a great disadvantage. Labor is organized. Business is organized. Concentration, combination, cooperation everywhere except among the farmers. With the most intelligent farmers of the world, in business cooperation our farmers are far behind the less intelligent farmers of other countries. To aid our farmers in the line of greater cooperation has now become a natior al duty, and it would be hardly short of a public calamity to enact a statute which on its face restricts and limits to a narrow sphere the purposes for which agricultural associations may be formed."
I know the gentlemen constituting the leadership on this committee have no desire to neglect the farmer. I know the gentleman from Maryland [Mr. Lewis), who is the champion in the interest of labor, has no desire to do an injustice to the farmer, and yet, as I have studied this question, I believe that the National Government ought not only to permit farmers to organize but that the National Government should make appropriation to encourage the farmers to organize.
The United States is doing more and has done more along the line of education for the farming interests than any nation on earth, but along the lines of teaching our farmers to organize for better business we are a quarter of a century behind the great European Governments. There is no question about that.
Mr. WEBB. Will the gentleman yield?
Mr. WEBB. Wherein do the farmers get more in the Nelson amendment than we have given them in the amendment just adopted ?
Mr. MORGAN of Oklahoma. I think there is some question of whether there can be a farmers' organization to aid the farmers in marketing the crops more cheaply, or in purchasing their supplies at a less price than the committee amendment which has been adopted. To carry on this kind of an organization it may be necessary to have capital stock, and it may be necessary that these organizations shall be for the purpose of profit. As long as we do not permit the farmer to organize trusts to elevate prices of cotton, wheat, or some other staple product, we are doing the country no injury.
We passed the tariff act, but we all know that under that act the farmer is largely placed in competition with the farmers of the world, however ignorant they may be, or however cheap the labor they employ may be, or however cheaply they may be able to produce farm products. We passed the currency act, but you postponed the bill to give our farmers cheaper interest. What have you done for the farmer? Now, when you are passing a third-grade bill you are about to place therein a section which, in my judgment, does not do the farmers of this country justice. I believe that it is in the interest not only of the farmer but in the interest of the great consuming masses of the country that we should encourage the farmers to organize to market their crops and in buying supplies.
Gentlemen who pose here as champions for labor are indirectly pleading against labor when they oppose the organization of farmers. We want the farmers to organize so that the products of the farm can come more directly to consumers with less cost and with a fewer number of middle men. [Applause.]
STATEMENT OF MR. BENJAMIN C. MARSH, SECRETARY AND DI
RECTOR OF LEGISLATION, FARMERS' NATIONAL COUNCIL.
The CHAIRMAN. How much time do you require, Mr. Marsh?
Mr. Marsh. I should say probably a half or three-quarters of an hour, Mr. Chairman.
The CHAIRMAN. Is there anyone else that wants to be heard this morning?
Mr. NEELY, Mr. Chairman, before he proceeds, it is with the understanding that interruption can be made so as to take up the other matter.
The CHAIRMAN. We have another matter to take up, and we are going to try and be over in the House at 12 o'clock, so that we will ask you to husband your time as much
as possible. Mr. MARSH. My name is Benjamin C. Marsh, secretary and director of legislation of the Farmers' National Council, of which Mr. George P. Hampton is managing director, with headquarters here in the Bliss Building.
The CHAIRMAN. What organizations do you represent?
Mr. MARSH. I was going to state that for the record. The Farmers' National Council is a special union of a number of National and State farmer organizations, which met here in January this year, and adopted, after a preliminary meeting in November, program for economic reconstruction in America.
The CHAIRMAN. How many members were present at that congress?
Mr. MARSH. Forty or 45 member delegates, representing farm organizations with a total membership of about three-quarters of a million.
The CHAIRMAN. Can you give us the names of the organizations they represented ?
Mr. Marsh. Yes; I will just read a statement prepared by Mr. Hampton. It was attended by representatives of the American Society of Equity, the National Gleaner Federation, the National Nonpartisan League, several State Granges, State farmers' unions, the stock growers', wheat growers', and dairymen's associations.