LEGAL PHASES OF COOPERATIVE ASSOCIATIONS. 39 
that they shall not resell except at prices named by him.** This is 
based on the theory that such agreements destroy competition. An 
unincorporated association ** of hardwood-lumber manufacturers of 
various States conducted for the purpose, so it was ascertained, of 
limiting production and increasing prices through the circulation 
of reports setting forth facts concerning lumber on hand, sale prices, 
and rate of production, was held by the Supreme Court to con- 
stitute a combination and conspiracy in restraint of interstate com- 
merce and was therefore unlawful. The method employed was called 
the “ Open Competition Plan.” Under it each member of the asso- 
ciation made daily, weekly, and monthly reports giving minute 
details of their business. Later these reports were sent out in a 
condensed form to each of the members of the association. 
A conspiracy to “run a corner” in the available supply of a 
staple commodity such as cotton, normally a subject of interstate 
commerce, and thereby to enhance artificially its price throughout 
the country is within the terms of section‘*1 of the Sherman Act, 
which is quoted earlier in this discussion.*° 
STATE STATUTES EXEMPTING FARM ORGANIZATIONS. 
A large number of the States have statutory provisions which pro- 
vide that the antitrust laws of the State shall not be applicable ta 
associations of farmers or that associations of farmers incorporated 
under the statute in which this provision appears shall not be subjeet 
to such laws. The following paragraph on this subject, from the 
act of 1921 of North Carolina providing for the incorporation of 
cooperative associations, is similar to that found in a number of 
the States: 
No association organized hereunder shall be deemed to be a combination 
in restraint of trade or an illegal monopoly; or an attempt to lessen com: 
petition or fix prices arbitrarily, nor shall the marketing contracts or agree 
ments between the association and its members, or any agreements authorized 
in this act be considered illegal or in restraint of trade. 
In California the antitrust act provides that, 
“No agreement, combination, or association shall be deemed to be unlawful 
* * * the object and business of which are to conduct its operations at a 
reasonable profit or to market at a reasonable profit those products which 
can not otherwise be so marketed.” 
In Ohio a statute was enacted in 1921 which places jurisdiction 
over cooperative associations which have met certain requirements 
of the law under the public utilities commission of that State. It 
#8 Dr. Miles Medical Co. v. Park & Sons Co., 220 U. S. 373; United States v. A. 
Schrader’s Son, Inc., 252 U. S. 85; Federal Trade Commission v. Beech-Nut Packing 
Co., 42 Sup. Ct. Rep. 150. 
*American Column & Lumber Co. v. United States, 66 L. Ed. 159. 
% United States v. Patten, 226 U. S. 525. ~ 
