LEGAL PHASES OF COOPERATIVE ASSOCIATIONS 87 
not be entitled to the benefits thereof. Owing to this fact and for the 
further purpose of making the status of associations of producers 
under the Federal antitrust laws more clear than was done by sec- 
tion 6 of the Clayton Act, the Capper- Volstead Act was passed. 
The reports of the committees of Congress that reported out the 
measure and the debates in Congress with reference thereto show 
that it was the intention of Congress that the Capper- Volstead Act 
should exempt associations of farmers, when they operate along nor- 
mal business lines, from the Federal antitrust statutes. In other 
words, the fact that an association that meets the conditions of the 
act controls the handling and marketing of all of a given agri- 
cultural product would not of itself, standing alone, cause the organi- 
zation to be in violation of such statutes, and the restraint of trade 
caused thereby would not cause the association to violate the law. 
Moreover, it should be remembered that the Capper-Volstead Act 
was passed subsequent to the antitrust statutes and in so far as there 
is any conflict it should control. An association that meets the con- 
ditions of the Capper-Volstead Act is not free to engage in any 
course of conduct which it might see fit to adopt. For instance, if it 
should engage in unfair competition, that would subject it to the 
jurisdiction conferred upon the Federal Trade Commission by the 
act 77 creating it. Again, abnormal conduct on the part of an associa- 
tion might subject it to the jurisdiction of the Department of Justice 
of the United States for a violation of the antitrust laws. 
So far as the price at which an association offers its products for 
sale is concerned, its reasonableness, if a question with reference 
thereto should arise, is to be determined by the Secretary of Agri- 
culture. If he " shall have reason to believe that any such associa- 
tion monopolizes or restrains trade in interstate or foreign commerce 
to such an extent that the price of any agricultural product is un- 
duly enhanced thereby ? " he may, following a hearing, issue an order 
directing such association to cease and desist from monopolization or 
restraint of trade. 
This act has no application to purely purchasing associations or to 
cooperative stores, for the reason that it relates only to associations 
that are composed of farmers, planters, ranchmen, dairymen, nut or 
fruit growers who are engaged in collectively processing, preparing 
for marketing, handling, and marketing in interstate and foreign 
commerce the products of persons so engaged, and then only with 
such associations as have complied with the conditions of the statute. 
The question of whether an association is liable for income taxes 
is one that is not resolved by this act. Whether an association is 
liable for income taxes is to be determined by the income-tax statutes 
and the regulations issued under them. 
This act does not provide for the incorporation of cooperative 
associations, and it makes no provision for their formation. Those 
interested in organizing or incorporating such associations should 
look to the laws of their respective States relating thereto. 
Congress, under the Constitution, has control over interstate and 
foreign commerce, and this act deals only with the operations of co- 
operative associations in such commerce, and then only with such 
associations as comply with certain conditions prescribed therein. 
"38 Stat. 717. 
