LEGAL PHASES OF COOPEEATIVE ASSOCIATIONS 81 
which exemption, it contended, violated the fourteenth amendment to 
the Constitution, to wit, the equal-protection clause. The Federal 
district court, in which it originated, held that this was true, 
and the Supreme Court of the United States affirmed the decision. 
In 1889, Texas enacted an antitrust act which contained language 
exempting agriculture identical with that contained in the Illinois 
act. The legality of this provision in the Texas act was questioned 
in a Federal court, which held that it violated the equal-protection 
clause in the fourteenth amendment. 56 
The effect of the decision by the Supreme Court of the United 
States in the Connolly case and of the lower Federal court in the 
Texas case was to invalidate the antitrust statutes of each of the 
States, assuming that the court decisions in question are given full 
force and effect. On reflection it will be appreciated that this con- 
clusion is distinctly different from holding that farmers are barred 
from forming cooperative associations. On the contrary, the effect 
of the decisions referred to, and of any other similar decisions that 
might be rendered, is merely to leave a State without any antitrust 
legislation. It is believed that the decision of the United States 
Supreme Court, rendered in 1928, in a case involving the Burley 
Tobacco Growers' Cooperative Association indicates a change of atti- 
tude on the part of that court toward the right of States to provide 
expressly for the organization of cooperative associations. 57 
The so-called standard marketing act contains a provision 58 stating 
that associations organized thereunder: 
* * * Shall be deemed not to be a conspiracy nor a combination in restraint 
of trade nor an illegal monopoly ; nor an attempt to lessen competition or to fix 
prices arbitrarily or to create a combination or pool in violation of any law of 
this State ; and the marketing contracts and agreements between the association 
and its members and any agreement authorized in this act shall be considered 
not to be illegal nor in restraint of trade. * * * 
This form of statute has been enacted in more or less the same form 
in 42 States. Not all of the forms of this statute that have been 
enacted by the various States contain this provision. 
In a Texas case 59 decided by an intermediate court, it appeared 
that producers began the formation of an association with the inten- 
tion of incorporating under the cooperative act of Texas; but they 
failed to incorporate, and later sought to enjoin a member from 
violating his contract. The court held that the contract of the 
association violated the antitrust act of the State, but it also held 
that if the association had been incorporated under the cooperative 
act of Texas it would have been exempt from the antitrust act by 
reason of the exemption language contained in the act. 
Many large-scale cooperative associations have been formed in 
various States under the standard marketing act. The validity of 
this statute and the legality of the associations formed under it, 
56 In re Grice, 79 F. 627, (1897). 
67 Liberty Warehouse Co. v. Burley Tobacco Growers' Co-op. Marketing Ass'n, 276 U. S. 
71, 48 S. Ct. 291. 
68 See sec. 28 of the Bingham Cooperative Marketing Act of Kentucky on p. 125 of 
appendix. 
69 Fisher v. El Paso Egg Producers' Ass'n (Tex. Civ. App.), 278 S. W. 262. 
68118°— 29 6 
