12 BULLETIN 541, TJ. S. DEPABTMENT OF AGEICULTUEE. 



Where two organizations are maintained, one in conformity with 

 section 6 and the other in the form of a capital-stock organization, 

 care should be taken to preserve the bona fide and absolute independ- 

 ence of the two organizations. Otherwise, under such circumstances 

 there is danger that this plan might be held to be a subterfuge. 



SECTION 6 ORGANIZATIONS AND STATE INCORPORATION LAWS. 



Many of the State laws relating to the incorporation of associations 

 do not provide for the form of organization which is required by 

 section 6 of the Clayton Act. While a large number of States have 

 special laws for the incorporation of cooperative associations, only a 

 few of them provide for the incorporation of cooperative sales agen- 

 cies without capital stock. It is not unlikely, however, that more of 

 the States will enact appropriate incorporation laws in the near 

 future. 1 It is possible to organize as a voluntary association — that is, 

 without incorporation — but by so doing the organization loses the 

 advantages to be gained from being incorporated. 



SECTION 6 AND THE STATE ANTITRUST LAWS. 



While section 6 of the Clayton Act confers exemptions upon organi- 

 zations, which live up to its requirements, from the operation of 

 the United States antitrust laws, it must be kept in mind that that 

 act neither supersedes nor affects the antitrust laws of the various 

 States. The United States antitrust laws deal with interstate and 

 foreign commerce only, while the State laws regulate commerce 

 exclusively within the State. It is essential for everyone contem- 

 plating the formation of an association, to secure information in 

 regard to the State laws which have a bearing on the method of organi- 

 zation and operation. 



ADOPTING THE BY-LAWS. 



When the organization of a cooperative association is taken up, 

 it is well to have several preliminary meetings at which the advisa- 

 bility of organizing and the best form of organization can be dis- 

 cussed. It is advisable to have an organization committee to con- 

 sider and develop the plan of organization and method of operation 

 suited to the needs of the community. This committee may also be 

 of service in drawing up a set of by-laws for consideration. In this 

 work the committee should avail itself of all the suggestions' that 

 can be obtained in regard to the form and contents of the by-laws. 

 It is thought to be indispensable that thia committee should have 

 the benefit of competent legal advice in the performance of its duties, 

 in order that there may be no question as to the legality of the con- 



1 Service and Regulatory Announcements No. 20 of the Office of Markets and Rural Organization, TJ. S. 

 Department of Agriculture, suggests an appropriate State law for the incorporation of section 6 cooperative 

 sales agencies. 



