46 BULLETIN 1106, U. S. DEPARTMENT OF AGRICULTURE. 



in any case to the following: Third, that the association shall not 

 deal in products of nonmembers to an amount greater in value than 

 such as are handled by it for members. 



Associations must comply with either the first or second condition 

 and may comply with both. As the first condition embodies the one- 

 man one- vote principle, all associations operating on this basis, or 

 which elect to operate on this basis, need not, unless they wish to do 

 so, give consideration to the second condition. Of course, an associa- 

 tion, if it desires, may operate in accordance with both of these con- 

 ditions, but it will come within the scope of the act by complying 

 with only one of them, if it complies with the other conditions of 

 the act. 



If an association elects to operate under the second condition, divi- 

 dends on stock or membership capital are limited to 8 per cent per 

 annum. This does not mean that stock may be owned by or sold to 

 nonproducers so far as this act is concerned. Only associations 

 whose stock is entirely held by or whose membership is entirely made 

 up of prociiciTs can come within the act. It is not necessary for 

 associations operating under the act to pay dividends in any amount 

 unless they elect to do so. It is entirely a matter of choice with them. 

 If, however, an association elects to operate under the second con- 

 dition, dividends, if paid, must not exceed 8 per cent per annum. 



All associations desiring to operate under the act must meet the 

 third condition, which is that the value of the products handled for 

 nonmembers shall not exceed the value of those handled for members. 

 This condition does not mean that an association shall handle any 

 business for nonmembers. It may do so or not, as it sees fit. If it 

 does handle such business, however, the act specifically provides that 

 the value of the products handled for nonmembers must not exceed 

 the value of the products handled for members. 



Under section 2 of the act it is the duty of the Secretary of Agricul- 

 ture, if he believes that any association operating under it monopo- 

 lizes or restrains trade in interstate or foreign commerce to such an 

 extent that the price of any agricultural product is unduly enhanced 

 by reason of such monopoly or restraint of trade, to serve upon such 

 association a complaint with respect to such matters, requiring the 

 association. to show cause why an order should not be issued directing 

 it to cease and desist from monopolization or restraint of trade. 

 After a hearing, if the Secretary of Agriculture believes that such an 

 association monopolizes or restrains trade in interstate or foreign 

 commerce to such an extent that the price of any agricultural pro- 

 duct is unduly enhanced thereby, the act provides that he shall issue 

 an order reciting the facts found by him and directing such associa- 

 tion to cease and desist from monopolization or restraint of trade. 

 If such order is not complied with by the association within 30 days,. 



