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Mr. SMYTHE. For handling the individual's product. These profits are being use—for instance, at a meeting held two weeks ago, they appropriated a very large amount of money for the purpose of building a community cannery, which will of necessity eliminate a large amount of waste, because if you have beans or cucumbers in large quantities and the market is such that it is impossible to ship, very often we are faced with the condition that the goods won't bring the cost of carriage. It is the intention to can these and put them on the market as canned goods. Furthermore, the association engages in cooperative purchasing, in that it buys fertilizer on which we are tremendously dependent down there, and seed, at advantageous times and at advantageous prices, which it subsequently distributes to the individual desiring to use them at prices very much less than could be enjoyed individually at the time.

Mr. IGOE. Do the producers make contracts with the association, or do the shareholders send in any amount?

Mr. SMYTHE. There is no legal obligation upon the shareholder exclusively to patronize the association. There is a certain moral obligation resting upon him and a certain amount of community unpopularity if he fails to do that.

Mr. IGOE. You practically represent him in his dealings with the brokers?

Mr. SMYTHE. Absolutely. He does nothing except to notify the management that he has a car of cabbage or potatoes on a certain siding, and the association sells it for him to the best advantage that day.

Mr. MORGAN. Are you the attorney for this corporation?
Mr. SMYTHE. Yes, sir.

Mr. MORGAN. Who are the managers of this corporation? Are they farmers or business men?

Mr. SMYTHE, Active farmers.

Mr. MORGAN. Do they give their time exclusively to this association?

Mr. SMYTHE. They do not. With the exception of one individual, who occurs to me now, there is not a member of the board of directors who doesn't operate a farm for his livelihood.

Mr. YATES. Does your organization favor this particular bill?

Mr. SMYTHE, It does. It favors the amendments which have been suggested by Mr. Sapiro.

Mr. IGOE. I was about to ask you whether in your association it is necessary to have capital stock.

Mr. SMYTHE. The capital stock was originally subscribed to to give the association a financial basis on which to start its operations.

Mr. MORGAN. What is the capital stock?

Mr. SMYTHE, I think it is only a $100,000, but we feel that the activities of the association, as I originally stated, have not resulted in any increase in cost to the consumer, but have resulted in a great elimination of loss for the reason that the farmers, being left to themselves, frequently find themselves confronted with a situation in which they can not ship their products and receive a price that would pay the freightage on it.

Mr. ÍGOE. Has there been any threat of prosecution or any investigation by Federal or State authorities?

Mr. SMYTHE. None in the world.

Mr. MORGAN. You think you need this legislation, then ?

Mr. SMYTHE. Well, sir; the legislation having been suggested and the activity set in motion, we came up here because it redounds to our advantage to have the doubt eliminated. Our district attorney has not come into the matter, but there is no knowing at what moment the spirit will move him, and, the matter being open, it seemed to us the time for it to be set at rest.

Mr. MORGAN. You incorporated under the State laws?
Mr. SMYTHE. Yes, sir.

Mr. Morgan. What would you think of legislation that would authorize incorporation under national law?

Mr. SMYTHE. An organization of this character?
Mr. MORGAN. Under national law.

Mr. SMYTHE. No objection occurs to me to such legislation at this inoment. I do not want to go into any organization presentation, because the gentlemen who have preceded me and who follow me handle that better than I could. I merely wanted to speak for the section from which I come.

Mr. WHALEY. Are there any similar organizations in your State?

Mr. SMYTHE. There are two of them-the Buford and the Chelton—and then they have the Eastern Shore of Virginia Association.

Mr. WHALEY. Do they deal in the same products?
Mr. SMYTHE. In the same products-cabbages and potatoes.

Mr. John D. MILLER. The clerk of the committee suggested that I come in this morning, and I can not be here to-morrow morning.

Mr. W. C. MARSH. I also can not be here to-morrow morning, and I would ask if I might not appear on Friday morning, if that would be agreeable to you. I just want to explain this because I can not be here to-morrow.

Mr. MORGAN. Can we finish up this afternoon?

The CHAIRMAN. Suppose we take a recess and try to get some of chem back this afternoon.

Mr. MILLER. Might I just make this suggestion before you adjourn? As I stated yesterday, I, with Dr. Atkinson, a representacive of the State Grange—the National Grange-represent the millions of farmers from many localities, and so far we have been unable to present to the committee the arguments that we desire to present in favor of this bill, this bill which has been drawn by cooperation with the legal and the practical advisers of the men of the large cooperative farmers' associations of the country, and unfortunately yesterday the committee had to adjourn before we could reach a real discussion of this bill, and I only arise to state that we would appreciate it very much if the committee would give us an opportunity, when as many of the committee can be here as is convenient, for us to present the reasons why we favor this bill, granting that there are many similar organizations in different parts of the country that may desire a general law to be drawn to comply with the particular requirements of their local association.

We have those in our locality, but the thought of Gov. Deneen, who represents one of the large organizations of Chicago, and Mr. Campbell, the president of the milk producers' association, and my assistant and myself in going over this bill, and since the bill was prepared, in conference with Mr. Sutherland, who represents the Raisin Growers' Association of California, and agrees with this bill,

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that this bill has been prepared in an attempt to meet nation-wide conditions as they are and provide a fair remedy without opening the doors for entrance into these organizations of any so-called producing organizations in which the packers or other middlemen are interested, and, as I said, I would be very glad, with Dr. Atkeson, to have an opportunity to present our views on this bill.

Mr. YATES. Will Gov. Deneen be here!

Mr. MILLER. I am very much disappointed that Gov. Deneen can not be here, because he is now engaged in court in defending a farmers' organization in Chicago in a trial under the antitrust act of the State.

Mr. YATES. You are in favor of this particular bill without the amendments suggested? Mr. Miller. Yes, sir. By the way, I have had no particular

MILLER opportunity to study the amendments suggested. It is possible that there might be something in the amendments that it might be well to incorporate; but what I am trying to explain to the committee is that the bill as drawn is no one man's bill but a bill resulting from a conference of several men.

Mr. YATES. Mr. Chairman, I do not think we can get an attendance this afternoon.

Mr. WHALEY. I think so. The chairman was about to ask how many are here who desire to be heard yet.

The CHAIRMAN. I would like to know how many there are that desire to be heard. Mr. MARSH. I would like to be heard. The CHAIRMAN. How long will it take? Mr. MARSI. I think about a half or three-quarters of an hour. Mr. WHALEY. How much time would Dr. Atkeson want?

Mr. ATKESON. It would depend upon how much time the committee will take up in asking questions.

Mr. WHALEY. How much time would you take in your general statement ?

Mr. ATKESON. I would like an opportunity to-morrow morning rather than this afternoon. I have made an engagement I do not like to break. Mr. Marsh wants to speak this afternoon, and if it suits the committee just as well I would rather be heard to-morrow morning. As to the question of time, 30 minutes will be enough if you do not ask questions.

Mr. MILLER. I would be very glad to have Dr. Atkeson's convenience consulted. As to myself, it would be a convenience to me if I could get done this afternoon. I have been awaiting this hearing and am expected in New York, and my associates have informed me that I am needed there. How much time I will take, I do not know. As Dr. Atkeson states, it depends somewhat upon the discussion; but I have some material things that I want to present to you. Possibly it might take me an hour.

Mr. WHALEY. And you would like to appear this afternoon?
Mr. MILLER. I would like to.

Mr. SAPIRO. From the remarks just made, I would like to have the privilege of 10 minutes after these men are through.

Mr. MORGAN. To close the argument !

Mr. SAPIRO. No; not close the argument, but to present any facts that may be pertinent.

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Mr. LYMAN. It seems to me only fair that the National Board of Farm Organizations, which Mr. Miller represents, should have the privilege of bringing members of its board, or the people who have come to work with him, and it is possible that I should like to say a few words, as secretary of the organization.

Mr. WHALEY. How much time do you want?

Mr. Lyman. It all depends on the developments. I suppose that when section 6 of the Clayton amendment was before Congress some years ago a good many days were taken in the consideration of the claims of labor.

Mr. MILLER. Mr. Hall is here, from Maine. The potato growers' association. I would be very glad if he could have a little time.

Mr. WHALEY. How much time does he want?
Mr. HALL. Perhaps 10 minutes.

Mr. WHALEY. We could finish all these things, in all probability, this afternoon, with the exception of Dr. Atkinson.

Mr. ATKINSON. I can be here, if the committee insists.

Mr. MILLER. Then, Mr. Chairman, may I go on first, if you meet this afternoon?

The CHAIRMAN. I think so. We will meet, then, this afternoon at 2 o'clock.

(Whereupon, at 12.50 o'clock p. m., the committee took a recess to reconvene at 2 o'clock p. m.)


The committee met at 2.30 o'clock p. m., pursuant to the taking of recess.



The CHAIRMAN. Proceed, Mr. Miller,

Mr. MILLER. Mr. Chairman, I appreciate the courtesy of the committee in granting us so much time as we are taking in this matter, but we view it as the most important matter for agriculture that will be presented to Congress.

There was some discussion this morning as to the phraseology of the bill. Now, permit me to say that there is no pride of authorship here anywhere. The principles and all of the principles that are embodied in this bill are believed by the vast majority of the farmers to be essential to their efficiently cooperating in marketing their products. The verbiage in which Congress grants or preserves to them that power is utterly immaterial to us. Something was said to us this morning as to the words “ not intended for profit." which appear in section 6, but do not appear in this bill.

In the bill that is introduced into the Senate, a companion bill, of Senator Capper, which was introduced several weeks before Congressman Hersman introduced this bill in the House-I think I am right in this-I know that the original typewritten draft of the bill, and I think the bill as introduced by Senator Capper, has in those words, "not intended for profit." The reason that they were eliminated from the present bill in the House was because my associates

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and myself—who for several months have been giving considerable sittention to the formation of the bill by corresponding with people all over the country and by conferences—the reason why we consented to the elimination of those words and the insertion in lieu of them the provision that now appears, namely," and that pay annually no greater dividends on stocks or membership capital investment than the minimum legal rate of interest in the State where organized," were inserted at the request of a California association, the raisin growers' association.

The CHAIRMAN. Supposing there is no minimum?

Mr. MILLER. I take it that that word “ minimum might be stricken out. The legal rate of interest would cover all cases.

The CHAIRMAN. In some States it would not be even that.

Mr. STEELE. Apparently, it is your thought to deal only with State incorporations.

Mr. MILLER. With State incorporations or with voluntary associations. I simply mention that in passing.

Mr. STEELE. They would be local, not national?

Mr. MILLER. We are not particular as to the verbiage of this bill, only we do want to impress upon the committee, with all the emphasis at our command, that all of the essential things provided for in this bill the farmers do want, but it may be expressed any way that Congress may think best, if it can conclude that they should be entitled to this privilege.

Mr. IGOE. What was the thought back of this limitation as to the amount of dividends?

Mr. MILLER. The thought was this, Congressman, that it seems that in some farm organizations the farmers contribute to the capital invested in unequal proportions. Some of the more able farmers may contribute $1,000, and some tenant farmers may contribute only $5, and therefore that there should be a dividend on stock in order that the larger contributor to the capital might receive some return, and they thought that the words "not intended for profit,” would mean that there could be no dividends paid.

Mr. IGOE. What I am trying to get at, Mr. Miller, is this: Are you undertaking to limit the amount of dividends that will be paid ?

Mr. MILLER. Yes, sir.
Mr. IGOE. What is the reason for that limitation ?

Mr. Miller. In order that there may be no possible temptation for the association to become, as an association, a profit making one, but that the entire revenues of the association shall be enough and only enough to pay the operating expenses, and that every cent of the proceeds of the sales beyond that should go back to the producer in the exact proportion he has contributed the commodity.

Mr. IGOE. To follow that up thoroughly, it would be necessary for Congress, would it not, as suggested, perhaps, in railroad legislation, to control the stock issues and the value that might be put in for which stock would be returned ?

Mr. MILLER. Congressman, would it be entirely satisfactory to you if I touch upon that a little later in my argument? I think I will save the time of the committee, because I want to touch upon that in explanation of an organization the operation of which I want to explain to you.

Mr. IGOE. All right.

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