80 BULLETIN 110 6, U. S. DEPARTMENT OF AGRICULTURE 
In each of the States in which decisions were rendered that were 
adverse to cooperation, later cases have been decided favorably to 
cooperation. In Iowa 51 the supreme court of that State upheld the 
right of an association formed under the cooperative act passed in 
1921, which provided that associations formed under it might provide 
for liquidated damages in their contracts. In upholding the liqui- 
dated-damages clause in the contract of the association and the val- 
idity of the association in general, the court apparently was of the 
opinion that the association was legal at common law, but in response 
to the argument that the cooperative act under which the association 
was organized violated an earlier statute of the State prohibiting pools 
and trusts, in that it authorized associations to provide for liquidated 
damages, the court said that the cooperative act "is as much a 
declaration of public policy as the earlier statute referring to pools 
and trusts." 
In Colorado the supreme court of that State in upholding coopera- 
tive associations held that the public policy of the State had been 
expressly changed by the cooperative act enacted in 1923. 52 
In Illinois, New York and Alabama 53 it was held, apparently in 
pursuance of common-law principles, that the associations involved 
were not operating in restraint of trade even though their contracts, 
or by-laws, provided for liquidated damages. 
Not all of the early cases involving cooperation were adverse to 
the associations concerned. In Indiana 54 the supreme court of that 
State, applying common-law principles, upheld the cooperative asso- 
ciation and held that it was not operating in restraint of trade. 
Nearly all of the States, comparatively early in their history, 
included provisions in their constitutions or statutes against monopo- 
lies, trusts, and restraint of trade. Efforts were made to except coop- 
erative associations of farmers from these prohibitions, either by 
including an exception in the statute or by a provision in the constitu- 
tion. For instance, in 1893, the State of Illinois passed an antitrust 
act, which declared that " the provisions of this act shall not apply to 
agricultural products while in the hands of the producer or raiser." 
This provision was later made the basis for a decision by the Supreme 
Court of the United States in the famous Connolly case. 55 
Briefly, the facts in the case were these : Connolly was indebted to 
the Union Sewer Pipe Co. on two notes given on account of the 
purchase by him of some sewer pipe. When sued on the notes, 
Connolly claimed that the plaintiff was a trust, and as the antitrust 
act specifically stated that any purchaser of any article from any 
corporation operating as a trust was not liable for the purchase price, 
that he could not be held for the purchase price of the pipe. The 
Sewer Pipe Co. claimed that the antitrust act of Illinois was 
void because it exempted products in the hands of the producer, 
n Clear Lake Co-op. Live Stock Shippers' Ass'n v. Weir, 200 Iowa 1293. 206 N. W. 297. 
62 Rifle Potato Growers' Ass'n v. Smith. 78 Colo. 171, 240 P. 937 ; Austin v. Colorado 
Dairymen's Co-op. Ass'n. 81 Colo. 546, 256 P. 640. 
68 Milk Producers' Marketing Co. v. Bell. 234 111. App. 222 ; Bullville Milk Producers' 
Ass'n v. Armstrong, 178 N. Y. S. 612 ; Castorland Milk and Cheese Co. v. Shantz. 179 
r«. Y. S. 139: Ex parte Baldwin County Producers' Corporation. 203 Ala. 345. 83 So 69 
M Burley Tobacco Society v. Gillaspy, 51 Ind. App. 583. 109 N. E. 89 (1912). 
" Connolly v. Union Sewer Pipe Co., 184 U. S. 541 ; a similar conclusion was reached 
InGeorgtfa in a like case > Brown & Allen v. Jacobs' Pharmacy Co., 115 Ga. 429, 41 S. E. 
553, 57 L. li. A. 547. 
