I am therefore of the opinion that the Agricultural Marketing Act extends to the Territories of Alaska, Hawaii and Porto Rico, but does not extend to the Philippine Islands.

II

The next question submitted is as follows:

"A number of cooperative associations have applied to the Board for loans where the record showed that the cooperative in question was a truly cooperative association marketing agricultural products but that the association in question deals solely in intrastate as distinguished from interstate commerce. Is such a cooperative association qualified under the Act to borrow money from Federal Farm Boards?"

Section 15 (a) of the "Agricultural Marketing Act" defines "cooperative associations" authorized to receive loans under the provisions of the Act as follows:

"As used in this Act, the term 'cooperative association' means any association qualified under the Act entitled 'An Act to authorize association of producers of agricultural products,' approved February 18, 1922

The same section then provides :

66 * * * Whenever in the judgment of the board the producers of any agricultural commodity are not organized into cooperative associations so extensively as to render such cooperative associations representative of the commodity, then the privileges, assistance, and authority available under this Act to cooperative associations, shall also be available to other associations and corporations producer-owned and producer-controlled and organized for and actually engaged in the marketing of the agricultural commodity. No such association or corporation shall be held to be producer-owned and producer-controlled unless owned and controlled by cooperative associations as above defined and/or by individuals engaged as original producers of the agricultural commodity."

I am of the opinion that an association dealing solely in intrastate as distinguished from interstate commerce is not a "cooperative association" of the sort described in the Act

of February 18, 1922, referred to herein as the CapperVolstead Act (42 Stat. 388), and therefore not within the definition in the first sentence of section 15 (a).

66

Section 1 of the Capper-Volstead Act relates to producers acting together in associations, corporate or otherwise, “in collectively processing, preparing for market, handling, and marketing in interstate and foreign commerce, such products of persons so engaged." That marketing in interstate and foreign commerce " is an essential feature of associations which may be regarded as qualified under the Capper-Volstead Act is manifest not only from its language but from the purpose of that Act. Its object was primarily to insure cooperative associations that qualified thereunder immunity from prosecution under the Federal antitrust laws. Those laws apply only to persons engaged in interstate and foreign commerce. There would have been no reason for the enactment of a Federal law to protect persons engaged in the production of agricultural products and dealing solely in intrastate commerce from the operation of the anti-trust laws. Section 2 of the Capper-Volstead Act provides for proceedings by the Secretary of Agriculture against the associations described in section 1 if he "shall have reason 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 by reason thereof " and for the enforcement of orders made by the Secretary pursuant to such proceedings. The entire Act thus relates to the activities of such associations in interstate and foreign commerce. Agricultural associations and corporations engaged exclusively in intrastate business, such as the one described in this question, are not included in, nor affected by, the Capper-Volstead Act and therefore do not fall within the definition of cooperative associations contained in the first sentence of section 15 (a) of the Agricultural Marketing Act.

The question remains whether associations engaged solely in intrastate commerce are eligible for loans under the alternative provision contained in the second sentence of section 15 (a) in the event that "in the judgment of the Board the producers of any agricultural commodity are not organ

ized into cooperative associations so extensively as to render such cooperative associations representative of the commodity." This question is not free from doubt.

Both the title of the Act and the declaration of policy contained in section 1 specifically refer to interstate and foreign commerce. The title is "An Act To establish a Federal Farm Board to promote the effective merchandising of agricultural commodities in interstate and foreign commerce, and to place agriculture on a basis of economic equality with other industries." The policy declared in section 1(a) is "to promote the effective merchandising of agricultural commodities in interstate and foreign commerce, so that the industry of agriculture will be placed on a basis of economic equality with other industries, and to that end to protect, control, and stabilize the currents of interstate and foreign commerce in the marketing of agricultural commodities and their food products All that follows in section 1 (a) is subordinate to the principal clause, just quoted, which refers specifically to interstate and foreign commerce.

*

* "

On the other hand, the end to be attained, as set forth in this declaration of policy, is "that the industry of agriculture will be placed on a basis of economic equality with other industries." The promotion of effective merchandising of agricultural commodities in interstate and foreign commerce and the protection, control and stabilization of the currents thereof are the primary means selected to attain that end, but there may be other subsidiary means. The Act is not limited to the regulation of interstate and foreign commerce under the Commerce Clause of the Constitution. It also provides for the use of Government funds for the assistance of citizens engaged in activities of public and national concern and therefore for the general welfare of the United States. Several of the powers and functions of the Board relate to matters not necessarily connected with interstate and foreign commerce (sec. 5). The description in the second sentence of section 15 (a) of the associations and corporations to which loans are thereby authorized in the circumstances specified contains no express reference to interstate and foreign commerce but describes the associa

tions and corporations to which the benefits of the Act may then be extended broadly as "other associations and corporations producer-owned and producer-controlled and organized for and actually engaged in the marketing of the agricultural commodity."

Certain statements made on the floor of the Senate by Senator McNary who, as chairman of the Committee on Agriculture and Forestry, was in charge of the bill in that body, lend some support to the view that it was the intention of Congress that associations need not be engaged in interstate and foreign commerce in order to be within the alternative provision of section 15 (a). These remarks were made in the course of a debate upon an amendment offered by Senator Shortridge (Cong. Rec. Vol. 71, pt. 2, p. 1254) which would have stricken out certain of the provisions of the section of the Senate bill which was identical with section 15 (a) as enacted, and to substitute therefor a new definition of the term "cooperative association." Senator Shortridge stated as one of the primary purposes of his proposed definition the elimination of the requirement that such associations must be qualified under the Capper-Volstead Act and thus engaged in interstate and foreign commerce. The definition proposed in the amendment, however, contained other features which were controversial and provoked active opposition. So far as the debate related to the question here involved, there was substantial agreement among the Senators who spoke that only associations engaged in interstate and foreign commerce could be regarded as qualified under the Capper-Volstead Act. (Id. pp. 1254-1267.) Toward the end of the debate, however, Senator McNary said with respect to the section of the Senate bill corresponding to the present section 15 (a) (id. p. 1267):

"Now, as to meeting the situation: In my opinion this language, properly construed and equitably applied, would meet the situation described by the Senator from California, namely, that if cooperative associations do not come within the provisions of the Capper-Volstead Act, then the provision which permits the board, in its judgment, when cooperatives are not sufficiently organized, to deal with groups who are farm owned and farm controlled, would meet the

condition in California or in any other section of the country. There is nothing in the world, if an organization in California or anywhere else is cooperative in character and is farm owned and farm controlled, that would prevent it having the benefits of the bill. If I did not have that supreme confidence, I would go a long way to meet the conditions suggested by the Senator from California."

Senator Shortridge's amendment was rejected (id. p. 1267).

Though the question is a doubtful one, the language of the second sentence of section 15 (a) is broad enough to cover associations not engaged in interstate and foreign commerce and the Act does not, in my judgment, contain sufficient evidence of a contrary intent to justify a conclusion that, in the circumstances described in this alternative provision, they are not eligible to the benefits of the Act.

I am therefore of the opinion that associations dealing solely in intrastate as distinguished from interstate commerce are not "cooperative associations" within the definition in the first sentence of section 15 (a) but that the Federal Farm Board is authorized to loan money to them in case the conditions specified in the second sentence of that section exist.

III

The next question submitted is as follows:

"The proposed federal grain marketing association is composed of producers of grain. It is to be formed under the general corporation laws of the State of Delaware and is not formed under a cooperative marketing act,' such as are in force in various States in the United States. It will have a capital stock. It will market in interstate commerce the products of its members. It will not pay dividends on its stock in excess of 8% per annum. It represents that it will not deal in the products of nonmembers to an amount greater in value than such as are handled by it for members.

"The persons eligible to subscribe for and to hold its stock are farmer-owned grain elevators, grain sales agencies, and grain pools meeting the conditions of the Act of Congress of February 18, 1922, commonly called the Capper-Volstead