LEGAL PHASES OF COOPERATIVE ASSOCIATIONS. 39 



that they shall not resell except at prices named by him.^^ This is 

 based on the theory that such agreements destroy competition. An 

 unincorporated association^* of hardwood-lumber manufacturers of 

 various States conducted for the purpose, so it was ascertained, of 

 limiting production and increasing prices through the circulation 

 of reports setting forth facts concerning lumber on hand, sale prices, 

 and rate of production, was held by the Supreme Court to con- 

 stitute a combination and conspiracy in restraint of interstate com- 

 merce and was therefore unlawful. The method employed was called 

 the " Open Competition Plan." Under it each member of the asso- 

 ciation made daily, weeklj^, and monthly reports giving minute 

 details of their business. Later these reports were sent out in a 

 condensed form to each of the members of the association. 



A conspiracy to " run a corner " in the available supply of a 

 staple commodity such as cotton, normally a subject of interstate 

 commerce, and thereby to enhance artificially its price throughout 

 the country is within the terms of section 1 of the Sherman Act, 

 which is quoted earlier in this discussion.^^ 



STATE STATUTES EXEMPTING FARM ORGANIZATIONS. 



A large number of the States have statutory provisions which pro- 

 vide that the antitrust laws of the State shall not be applicable ta 

 associations of farmers or that associations of farmers incorporated 

 under the statute in which this provision appears shall not be subject 

 to such laws. The following paragraph on this subject, from the 

 act of 1921 of North Carolina providing for the incorporation oi 

 cooperative associations, is similar to that found in a number oi 

 the States: 



No association organized hereunder sliall be deemed to be a combination 

 in restraint of trade or an illegal monopoly ; or an attempt to lessen com 

 petition or fix prices arbitrarily, nor shall the marketing contracts or agree- 

 ments between the association and its members, or any agreements authorized 

 in this act be considered illegal or in restraint of trade. 



In California the antitrust act provides that, 



" No agreement, combination, or association shall be deemed to be unlawful 

 * * * the object and business of which are to conduct its operations at a 

 reasonable profit or to market at a reasonable profit those products which 

 can not otherwise be so marketed." 



In Ohio a statute was enacted in 1921 which places jurisdiction 

 over cooperative associations which have met certain requirements 

 of the la,w under the public utilities commission of that State. It 



"3 Dr. Miles Medical Co. v. Park & Sons Co., 220 U. S. 373; United States v. A. 

 Schrader's Son, Inc., 252 U. S. 85 ; Federal Trade Commission v. Beech-Nut Packing 

 Co., 42 Sup. Ct. Rep. 150. 



^American Column & Lumber Co. v. United States, 66 L. Ed. 159. 



«s United States v. Patten, 226 U. S. 525. 



