4 BULLETIN 541, TJ. S. DEPARTMENT OF AGRICULTURE. 
of mutual help, and not having capital stock or conducted for profit, or to forbid or 
restrain individual members of such organizations from lawfully carrying out the 
legitimate objects thereof; nor shall such organizations, or the members thereof, be 
held or construed to be illegal combinations or conspiracies in restraint of trade, under 
the antitrust laws. 
It is obvious that if an association is to get the benefit of the sec- 
tion, it must comply with its requirements. It must be, first, a 
" labor, agricultural, or horticultural organization"; second, it must 
be " instituted for the purpose of mutual help"; third, it must be 
formed without " capital stock"; and, fourth, it must not be 
"conducted for profit." 
As to the first requirement, there may be some difference of opinion 
regarding the membership of an agricultural or horticultural organi- 
zation. Therefore it is safer that such an organization be composed 
only of persons engaged in or directly interested in farming. If it 
were not for this restriction it might be possible for a number of men 
engaged in some other line of business to organize, as an agricultural 
or horticultural organization, and claim the exemption provided by 
section 6 of the Clayton Act. 
The second requirement provides that the organization shall be 
formed for mutual help; that is, it must be a cooperative association 
formed for the benefit of all its members and patrons and not of a few 
only. An organization formed or conducted with a different motive 
than for the purpose of mutual help can not come within the terms 
of the letter or the spirit of the section. 
The third requirement is that the organization be formed without 
capital stock. Care must be taken to distinguish between the term 
"capital" and "capital stock." The qualification that an organiza- 
tion shall be without capital stock does not mean that it is not per- 
mitted to have any capital. Capital, or money needed to carry on 
the business, must be provided in some other way than by the 
issuance and sale of shares of stock. Capital stock is a common char- 
acteristic of the usual form of a profit-making corporation. The 
exclusion of capital stock serves further to differentiate organizations 
operating under section 6 from the ordinary profit-making corpora- 
tion. It is obvious that the elimination of the capital stock feature 
removes much of the temptation to convert a cooperative organiza- 
tion into a profit-making enterprise. 
The final requirement that the organization must not be con- 
ducted for profit, is in line with the second qualification, which pro- 
vides that the organization shall be mutual. A distinction must 
be made between profits and savings. While under section 6 of the 
Clayton Act only such organizations as are not conducted for profit 
are given the benefits of the exemption from the operation of the 
United States antitrust laws, this does not mean that an organization 
meeting the requirements of this section is not permitted to effect 
