discouraging membership and participation in cooperatives. We believe such acts cannot be condoned whether practiced by a co-op or a noncooperative organization. We presume that the best interests of the farmer are the interests which this bill intends to protect. If the farmer is to be assured of true freedom of choice-unrestricted by pressures or fears he should be protected from abusive competitive business practices whether engaged in by cooperative or noncooperative enterprises. We believe coercion, intimidation, and the like are just as reprehensible when practiced by cooperatives as by others and we urge that the proposed exemption be rejected by this committee. With respect to the enforcement provisions, we are particularly concerned that the injunction authority, as worded, will encourage expensive and unnecessary litigation and its enactment would create an unfair threat to legitimate business activity. The enforcement provisions generally raise serious questions of equity. To use an example, a cotton ginner invariably tries to lure customers from his competitors as part of normal and healthy business practice. If any such a competitor happened to be a co-op, our ginner friend could find himself $1,000 poorer and imprisoned for a year. If a co-op ginner believed our ginner was even considering soliciting one of the co-op customers, the first our ginner might know of it was when he was served with legal papers and his job then would be to prove his innocence. In conclusion, we find the present wording of S. 109 tantamount to outlawing the noncooperatives in the cotton industry. Since about 70 percent of the cotton farmers still elect to deal with noncooperatives to fulfill their requirements, we must register our complete and uncompromising opposition to the bill. The defects in the bill are, in our judgment, so fundamental that far more harm than good would result from its enactment, not only to the public interest generally, but to the true economic interests of farmers themselves. In the event that some new legislation along the proposed lines is adopted, however, we urge the inclusion of a specific proviso making it amply clear that nothing in the legislation should be interpreted as outlawing normal, healthy, vigorous, and legitimate competition between cooperative and noncooperative enterprises in their rivalry for a farmer's business. Senator JORDAN. Does that complete your statement? Mr. HELMBRECHT. That completes my statement. Senator JORDAN. Thank you very much. Senator Aiken, do you have any questions? Senator AIKEN. I am interested in your organization. About how many members do you have? Mr. HELMBRECHT. We have about 1,100 now. Senator AIKEN. 1,100 members. All members participate in the deliberations of your organization? Mr. HELMBRECHT. Yes, sir. Senator AIKEN. Each member has one vote? Mr. HELMBRECHT. No. We have a delegate system because we have more gin members than any other category. Senator AIKEN. I see. Mr. HELMBRECHT. And each of our segments has 5 delegates-10 delegates, excuse me and the various groups have an equal vote. Senator AIKEN. I see; and they are based on membership? Senator AIKEN. I am just wondering, you come awfully close to being a cooperative, do you not? Mr. HELMBRECHT. No; I do not think so. Senator AIKEN. In what way do you differ? You have a selected membership. You do not have open membership then. Mr. HELMBRECHT. We have an open membership to the extent that it applies to anyone who is not a cooperative. We do not have any co-op members. Senator AIKEN. I see. It is an anticooperative cooperative then. [Laughter.] Mr. HELMBRECHT. We do not consider ourselves even bordering on being a cooperative. Senator JORDAN. You would not prohibit a member of a cooperative from belonging to your organization? Mr. HELMBRECHT. No; not a grower if he wanted to join us. Senator AIKEN. I thought you just said your membership is open only to those who are not members of cooperatives. Mr. HELMBRECHT. Well, if a farmer who does business with a cooperative would want to join us, I think we would probably accept his membership. If a cooperative gin wanted to join I do not think we would. Senator AIKEN. But if you wanted to accept his membership it would be contingent upon his giving up his membership in the cooperative? Mr. HELMBRECHT. No, I do not think so. Senator AIKEN. I see. I have no more questions. Senator JORDAN. Fine. Thank you very much, Mr. Helmbrecht. Mr. HELMBRECHT. All right, sir. Senator JORDAN. Senator Aiken, I believe, so far as I know, that that takes care of all the witnesses we have present this morning. Senator AIKEN. We appreciate your having the meeting. We do have a real problem here, Mr. Chairman, and we do want to be fair to everybody in order to solve their problems. Senator JORDAN. At this point I would like to insert in the record a number of letters and telegrams that we have received. Here is a group in support of the substitute amendment, and I recommend that they be put in the record at this point. They are from Mr. Charles Paul, director of California Department of Agriculture; Mr. Jerry Voorhis, executive director of the Cooperative League of the United States; Mr. Ralph B. Bunje, general manager, California Canning Peach Association; B. I. Freeman, secretary manager, Great Lakes Cherry Producers Association: Mrs. Grace McDonald, executive secretary, California Farmer-Consumer Information Committee; and Mr. John W. Mitchell, President, Merced-Stanislaus Family Farmers. This group is in support. I also have letters and telegrams here in opposition to the amendment from Mr. Charles E. Connor, counsel, Independent Livestock Marketing Association; Mr. John A. Killick, executive secretary of the National Independent Meat Packers Association; and Mr. John C. White, counsel, American Cotton Shippers Association. They will be incorporated in the record at this point. (The documents referred to follow :) SACRAMENTO, CALIF., September 26, 1966. Hon. EVERETT JORDAN, The California State Board of Agriculture today reaffirmed its previous position on S. 109 (Aiken), to prohibit unfair trade practices affecting producers of agricultural products and associations of such producers. In taking this action the board endorsed the revised version of the bill as drafted August 1, 1966. California State Board of Agriculture and the California Department of Agriculture respectfully urge the subcommittee to give favorable consideration to this important bill. CHARLES PAUL, The Director, California Department of Agriculture, STATEMENT OF JERRY VOORHIS, EXECUTIVE DIRECTOR, THE COOPERATIVE LEAGUE OF THE USA, CHICAGO, ILL. On June 24 I submitted a statement on behalf of The Cooperative League in support of S. 109 as orignally introduced. I am glad to have opportunity to express even stronger support for the Amended version of the bill, which, I understand, will be proposed by Senator Aiken and which is designated as Amendment No. 933. All the arguments which I set forth in my June 24 statement are of equal force when applied to the amended version of the bill. S. 109 is a measure that should be enacted promptly as a matter of simple equity and justice to the nation's farmers. The percentage of the consumer's dollar spent for food, which has found its way into the farmer's pocket has been declining almost steadily for a period of years. This is but one evidence of the fact, so dramatically brought out by the report of the National Commission on Food Marketing, that farmers standing alone possess negligible bargaining power in the marketplace. That Commission urged the further use of cooperatives, and the further growth of cooperatives, as the best means of enabling farmers to gain a measure of the market strength which they must have and are entitled to have, but which they, alone among all the elements in the food business, at present lack. S. 109 seeks to protect the farmer in his elemental rights-recognized specifically in many acts of Congress stretching over half a century. We stand today on the very threshold of a world crisis of widespread hunger and even threatening famine in certain parts of the world. American farmers are being called upon to increase their production in order to help meet that crisis. Congress itself has asked for this in the recently enacted "Food for Peace" legislation. It is therefore utterly indefensible to find all too abundant evidence of attempts by handlers and buyers of food crops to intimidate and discriminate against farmers who join cooperatives and who seek thereby to bolster their otherwise almost helpless position in the marketing of their crops or the procurement of their in-puts. S. 109 is aimed to put an end to such nefarious practices. All it really says is that no one shall with impunity, attempt to deny to a farmer the rights guaranteed to him by the Capper-Volstead Act and a long series of subsequent legislative acts. The amendment in the nature of a substitute is an improvement on the original version of the bill. This is true, in the opinion of the Cooperative League for the following reasons: (1) Instead of attempting to amend previous legislation, the amended version of S. 109 stands on its own unassailable ground. It is therefore simpler and more direct. For (2) The substitute provides better and surer means of enforcement. either an injured farmer or farmers' cooperative or the Secretary of Agriculture could seek an injunction against the practices prohibited by the bill. Furthermore, the district courts are given direct jurisdiction over cases arising under the act. (3) The substitute makes clear that even those agricultural products which do not actually cross state lines do, nonetheless affect interstate commerce and are therefore subject to the act. (4) And finally section 2 of the substitute contains the following clear and forceful statement of the intent of Congress: "Because agricultural products are produced by numerous individual farmers, the marketing and bargaining position of individual farmers will be adversely affected unless they are free to band together in cooperative organizations as authorized by law. Interference with this right is contrary to the public interest and adversely affects the free and orderly flow of goods in interstate and foreign commerce." For all the foregoing reasons the Cooperative League of the U.S.A. supports wholeheartedly the amended version of S. 109 and urges its prompt enactment into law. Once again we wish to thank Senator Aiken for his introduction of this legislation. COTYS M. MOUSER. SAN FRANCISCO, CALIF., September 27, 1966. Chief Clerk, Senate Committee on Agriculture and Forestry, Senate Office Building, Washington, D.C.: Re proposed substitute S. 109 dated September 21, 1966. This is a vastly improved bill and conforms with suggestions contained in my statement made to the committee in June. The new proposal has the enthusiastic support of the members of the California Canning Peach Association because if made into law will be a constructive approach to strengthen the marketing power of individual producers and their voluntary cooperative marketing and bargaining associations. We urge the committee to act favorably upon the proposal and hasten the time when producers and their associations may be freed from the price depressing unfair practices so frequently indulged in by the employees of the buyers of farm commodities. Please include our endorsement in the record. RALPH B. BUNJE, General Manager, California Canning Peach Association. GRAND RAPIDS, MICH., September 22, 1966. COTYS M. MOUSER, Chief Clerk, Senate Committee on Agriculture, Washington, D.C.: Would Re your telegram: Unable to attend hearing on September 28, 1966. like to consider this telegram as testimony favoring substitute for S. 109 as submitted by National Council of Farmer Cooperatives. B. I. FREEMAN, Secretary-Manager, Great Lakes Cherry Producers Association. Hon. EVERETT JORDAN, SANTA CLARA, CALIF., September 19, 1966. Chairman, Subcommittee on Research and General Legislation, Senate Committee on Agriculture and Forestry, Washington, D.C. DEAR SENATOR JORDAN AND MEMBERS OF THE SUBCOMMITTEE: We have carefully reviewed the hearings on S. 109, Aiken, Lausche, McCarthy and Young of North Dakota dated June 14, 15 and 16, 1966 and more recently the draft of a revised S. 109 sent us by Senator George Aiken to more nearly conform to suggestions made at the hearings, more particularly taking out reference to the Capper-Volstead Act, and more specifically defining the categories of agricultural producers and handlers to be covered. We have conferred with representatives of the State Department of Agriculture, which, along with the California State Board of Agriculture, endorsed S. 109 in its original form. We agree that the substitute measure will go a long way to provide essential protection to producers whose commodities move in large volume in interstate and international trade. There seems no need to repeat our own testimony which appears on page 39 of the hearings; that of Richard Black, Manager, Calif. Freestone Peach Ass'n., Modesto and Ralph Bunje, Gen'l Mgr., Calif. Canning Peach Ass'n., San Francisco, pages 156, 157 and 158 through 160 of the record. California's experience with a similar statute, but, of course, confined to intrastate commerce, is documented on pg. 153 by State Senator Robert D. Williams, Hanford, the author of S. 127 signed by Governor Edmund G. Brown on May 27, 1961. My letter of Sept. 14, 1966 to Secretary of Agriculture Orville L. Freeman, enclosed, was written before we received the new draft from Senator Aiken. However, receipt of this draft in no way minimized to our members the urgency of getting on with prompt action by your Subcommittee or else let it come before the full Committee on Agriculture and Forestry as soon as possible. The statement in this letter to Secretary Freeman quoting Jerry Voorhis, Exec. Director, Cooperative League of the USA, expresses our convictions absolutely: "For many years Congress has been enacting legislation to protect the right of wage earners to collective bargaining. Every element of the food industry except the producer has achieved a high degree of organization. This is true of handlers, processors, retailers and suppliers. Only the farmer, the primary producer, finds himself in a weak bargaining position . . ." Although supported wholeheartedly by producer organizations in California, S. 109 should not in any way be considered a sectional measure. The balance of payments of the entire nation is enhanced by the sale of the fruits and vegetables grown and processed in California. Moreover, consumers, nationwide, require these products for a balanced diet. Under present economic conditions, there is no assurance that production will continue at an adequate volume. Actually the term "surplus" refers to a lack of purchasing power or proper balance year by year in line with weather conditions and economic factors over which the primary producer has no control. For example, what was forecast as a surplus canning peach tonnage turned out to be no more than normal, due to weather conditions in central California this year. Looking forward to your cooperation in this matter, Mrs. GRACE MCDONALD, California Farmer-Consumer Information Committee. COTYS M. MOUSER, SANTA CLARA, CALIF., September 22, 1966. Chief Clerk, Senate Committee on Agriculture and Forestry, DEAR MR. MOUSER: Thank you for your telegram of yesterday informing us that the Subcommittee on Research and General Legislation, of which Senator Everett Jordan is Chairman, will hold hearings on the proposed substitute for S. 109, Aiken, Lausche, McCarthy and Young of North Dakota. Your wire states that a copy of the substitute bill would follow, but at this writing we have not received it. We have, however, received a draft, dated August 1, 1966, from Senator Aiken, which we assume, is this substitute. On the basis of this assumption we sent Senator Jordan and Senator Milton Young, with a copy to Senator Aiken, the enclosed statement, dated September 19th, 1966, which we would like to have made part of the September 28th Subcommittee hearing. We have sent you ten copies. We have also sent you, for the use of the members of the sub-committee, five copies of the September issue of the California Farmer-Consumer Reporter, on page 1 of which there is an appeal for support of S. 109. This was before the new subcommittee hearings were scheduled. In addition to the statement to Senator Jordan, we would like to have the following paragraph added to our statement: "On page 2 of our statement to Senator Jordan in support of the revised bill, S. 109, which the Sub-committee on Research and General Legislation is hearing on September 28, 1966, the California Farmer Consumer Information Committee referred to the impact of continuing export of California canned fruits and vegetables in improving the 'Balance of Payments' position of the United States. |