44 BULLETIN 1106, U. S. DEPARTMENT OF AGRICULTURE, 
to believe that any such association monopolizes or restrains trade in 
interstate or foreign commerce to such an extent that the price of any 
agricultural product is unduly enhanced thereby," he may, following 
a hearing, if he finds that the. price of any agricultural product has 
been unduly enhanced from either of the causes specified, issue an 
order directing such association to cease and desist from monopoliza- 
tions or restraint of trade. 
This act has no application to purely purchasing associations or 
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 asso- 
ciations and makes no provision for their formation. Those inter- 
ested in organizing or incorporating such associations should look to 
the laws of their respective States relating thereto. The act does not 
change nor supersede laws of the various States affecting or relating 
to the regulation of cooperative associations. So far as this act is 
concerned, such State laws are all in effect. Compliance with the con- 
ditions set forth in this act does not relieve an association from the 
operation of State laws. 
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. 
The test which those interested in an association should apply to 
learn if their association comes within the scope of the act is — does 
the association meet the conditions set forth therein? These condi- 
tions are : 
A. " That persons engaged in the production of agricultural prod- 
ucts as farmers, planters, ranchmen, dairymen, nut or fruit growers 
may act together in associations, corporate or otherwise, with or 
without capital stock, in collectively processing, preparing for mar- 
ket, handling, and marketing in interstate and foreign commerce 
such products of persons so engaged." This and other language 
which appears in the act makes it plain that a cooperative association 
to come within the act must be composed of or made up of pro- 
