M AGRICULTURAL DISCONTENT 



Fortunately, this unfavorable legal situation was not to endure un- 

 changed. In spite of the stand taken by the Supreme Court, the weight of 

 judicial opinion held that under the common law farmers had a perfect 

 right to organize for collective marketing and purchasing. There was 

 also a tendency to admit that the antitrust statutes "were enacted to correct 

 abuses which had developed in the collective activities of other groups" 

 and not among the farmers. While the Loewe v. Lawler decision was not 

 the last of its kind, the view that eventually won out was that not all com- 

 binations restricting competition were necessarily illegal, especially if 

 their object was to foster trade and increase business and not to "exercise 

 improper control or unduly and unreasonably restrict competition." The 

 test of illegality came to be whether they abused their power. By the time 

 the Clayton Anti-Trust Act of 1914 was passed, farmer and labor organiza- 

 tions were strong enough to obtain the exemption of nonstock, nonprofit 

 labor, agricultural, and horticultural organizations from the operation of 

 the national antitrust laws. But the cooperative leaders were not satisfied 

 with this victory; they also needed, and in some instances had already 

 obtained, the specific and positive legalization of farmer cooperative as- 

 sociations organized for mutual benefit. 16 



Two states of the western Middle West Wisconsin and Nebraska 

 took the lead in 1911 with the first really modern legislation on the sub- 

 ject of cooperatives. Needless to say, these laws were hardly the first 

 statutes to deal with the problem. Minnesota, for instance, had passed a 

 simple law on cooperatives as early as 1870, and had improved on it 

 steadily thereafter. Likewise California and Alabama had "nonstock laws," 

 and Kentucky had enacted a "pooling" statute. But the legislation of 

 Wisconsin and Nebraska was more nearly fundamental than any that 



Movement in the United States," The American Institute of Cooperation, American 

 Cooperation, 1935 (Washington, 1935), p. 16. 



1 6. Ibid., p. 15; Ballentine, in Minnesota Law Review, VIII (December, 1923), 

 pp. 9-10; Jones, in Journal of Political Economy, XXIX (July, 1921), pp. 595-96; 

 M. O. Tobriner, "Cooperative Marketing and the Restraint of Trade," Columbia 

 Law Review, XXVII (November, 1927), p. 827. Frequently cited were two Iowa 

 decisions which held that certain Iowa organizations were restraints in trade. Reeves 

 v. Decorah Farmers' Cooperative Society, 160 Iowa 194 (1913), 140 Northwestern 

 Reporter 844 (1913); Ludoewese v. Farmers' Mutual Cooperative Co., 164, Iowa 197 

 (1914), 145 Northwestern Reporter 475 (1914). 



