Mr. PANAYIDES. Mr. Chairman, if I may, this is not democracy in words but in action. This is what I feel here now.

Senator JORDAN. Thank you. I want to say again we are glad to have you with us.

Mr. PANAYIDES. Thank you.

(The statement of Tony T. Dechant, president, National Farmers Union follows:)

Mr. Chairman and Members of the Committee: We are appearing here in support of the bill introduced by the Senator from Vermont which would protect the rights of farmers as members of cooperatives. Although a number of statutes purporting to protect the rights of farmers to organize and belong to cooperative organizations have already been enacted, it is apparent that these laws do not go far enough in protecting farmers against blacklists and various discriminations which have been used against them over a period of many years. Special Federal legislation for cooperatives was enacted in 1916 when the Federal Farm Loan Act was passed. The enactment of this act was followed by the War Finance Corporation Act in 1918, which provided loans for agricultural cooperative organizations. In 1923 an amendment to the Federal Reserve Act was passed which provided for the discounting of notes and bills of exchange issued by agricultural cooperatives. The Agricultural Marketing Act of 1929 authorized the Federal Farm Board to make loans to cooperative associations. The Farm Credit Act of 1933 authorized the organization of 12 regional banks for cooperatives as well as a central bank for cooperatives. In 1934 the Federal Credit Union Act was passed and in 1936 the Rural Electrification Act provided for power loans to cooperatives.

Cooperatives have also been given special treatment because of their relation to antitrust legislation. The Clayton Act of 1914 contained language intended to exclude cooperatives from antitrust prosecution. To make doubly sure that farmers' cooperative activity would not be inhibited by fear of antitrust prosecution, the Capper-Volstead Act of 1922 was passed. Other Federal statutes providing for assistance to cooperatives were passed including authority for a division of cooperative purchasing and marketing in the Department of Agriculture. It is thus clear that Congress has been supporting the principle of cooperation among farmers over a period of 40 years.

Economic concentration in industry and agriculture have made protection of cooperatives by Federal laws more important than ever. Recently, the Federal Trade Commission has compiled statistics on the major movement in the food industry which has decreased an estimated number of food retail outlets from 460,913 in 1948 to 355,508 in 1958. Since that time retail outlets have decreased to 259,796. Concentration of economic power in industry, which also involved agriculture, was even more pronounced. For example, the great Textron Corporation has built an empire by the acquisition of hundreds of companies-many of them unrelated in function to each other. These conglomerate acquisitions include textiles, aircraft and parts; agri-chemicals, bathroom fixtures and even a poultry farm and a poultry processing plant. Economists now are thinking seriously of suggesting antitrust legislation which will restrict conglomerate acquisitions as well as interlocking directorates.

Confronted with mammoth corporations, the farmer, whether he buys or sells, has no alternative except to organize into cooperatives. The farmers, in theory, could pool their farms and act through large corporations that owned and controlled their farms on a basis comparable to large industrial corporations. We reject this alternative insisting that the farmer, through a family type operation, be enabled to stand on his own feet and support and build rural communities thus creating a climate for our most important crop of boys and girls who will constitute our citizens of tomorrow.

The entire program of the National Farmers Union is built around this concept. Attention is called to the 1956 policy of the National Farmers Union adopted by delegates in Denver, Colorado, on March 14-17 of this year. Attention is particularly called to pages 15 thru 18 in the Policy Statement which includes all of our resolutions relating to cooperatives. (Copy of this Policy Statement is attached to this statement.)

Historically, certain groups in the United States have opposed by every means possible the formation and operation of farm cooperatives. Attention is called to the organized opposition to Farmers' Elevators Associations. Early in the cen

tury when such associations were being formed, the activities of members of cooperatives resulted in threats and boycotting by those opposed to the farmer doing anything to bring him a fair price for his grain. In Iowa in 1904, two elevator associations were boycotted by the regular dealers. Independent and old line elevators systematically boycotted these new associations.

One of those associations, called the Equity Cooperative Exchange, a parent of the existing Farmers Union Grain Terminal Association, was not only boycotted by the Minneapolis Chamber of Commerce, acting as a grain exchange, but was persecuted, embarrassed, libeled, and in part put out of business. The Federal Trade Commission in 1924 charged the Minneapolis Chamber of Commerce with violation of the antitrust laws and issued an order which directed the Chamber of Commerce to cease and desist from all its activities which interfered with the operation of the cooperative in any way, including the maintenance of a monopoly and imposition of arbitrary charges on grain in the guise of commissions. We have a particular interest in this action of the Federal Trade Commission since in all probability if the FTC had not taken action it would have been impossible to establish the Farmers Union Grain Terminal Association.

Files of the Department of Justice, the Federal Trade Commission and the Packers and Stockyards Division of the United States Department of Agriculture, are filled with the records of the activities of large corporations in regard to violations of our antitrust laws. The National Farmers Union last year compiled a brief summary of cases involving these agencies and companies in violation of the law. This study titled, "Competition in the Food Industry" is available to members of this Committee and others who may be interested in the predatory acts of great corporations.

One of the most notorious antitrust cases involved the Great Atlantic and Pacific Tea Company. Although this litigation occurred some years ago we think that it is pertinent to this legislation since it is one of the most flagrant examples of law violation that we know of. The A&P actually, by bribery, by intimidation and other coercive acts actually got control of a cooperative. Its various activities set forth in a brief of the Department of Justice, titled: "No. 16153 (Criminal) in the District Court of the United States For the Eastern District of Illinois. 1944 Term. United States of America vs. The New York Great Atlantic & Pacific Tea Company, Inc., et al. Brief for the United States. Filed March 2, 1946. pp. 534–562—(5) 'Control of growers' cooperatives and contact committees'."

The A&P monopolized the marketing of vegetables and fruit to the detriment of farmers who, it was alleged, were forced to sell their products at less than cost. A quotation from the Department of Justice's brief follows:

"By such ruthless methods as these the Atlantic Commission Company has gained control of the potato market and driven out independent buyers from what was a free market, selling them cheaper than they could buy on the scene of digging. By just such ruthless methods the A&P purchasing Agency (which is the A&P itself) has manipulated so that when a man puts a crop of potatoes in the ground he is only raising something to give to the richest chain of grocery stores in the country."

The Department of Justice also quoted from an account written by an Elizabeth City, N.C. newspaper reporter:

"I have observed, as has everyone else in these parts, and am still observing what amounts to the virtual stealing of the potato crop again this year by the big monopolies.

This year of all years, when we have only about a 70 per cent of a normal ten-year average and unmistakably and undeniably improved economic conditions throughout the country, when potato prices should by all laws of economics be soaring the market has gradually declined until today they are selling at ruinous prices and the crop is being taken away from the growers without any profit to them for their time, labor, land and trouble. It's nothing short of a crime, and in my opinion the criminals should be brought to justice. But how?

Now, who are dictators in the potato market? So far as this section goes this newspaper has pointed out time and time again, that the Atlantic Commission Company, purchasing agent for the Great Atlantic & Pacific Tea Company, dominates the market and fixes prices at anything it feels like paying. Conditions this year proved the accusations pretty near correct."

According to our information instances of intimidations against cooperatives are not uncommon. One of our informants reported that market producers

were discriminated against in the State of Iowa and that a few years ago farmers in Idaho who attempted to negotiate, what is referred to as contract pricing of potatoes, were boycotted.

Our organization has followed closely the situation in the State of Arkansas involving broiler producers. We have affidavits in our files indicating that the large poultry integrators set up a blacklist and refused to purchase broilers from those who were active in organizing a cooperative.

We urge the approval of this legislation. As indicated, we believe that existing statutes are insufficient. More drastic penalties such as are provided in this bill are needed to prevent discrimination and intimidation of working farmers by off-farm interests. The legislation is needed particularly in regard to the broiler industry. This industry has been largely taken over by integrated companies who dictate contract terms which in many instances result in the farmer realizing little or nothing for his labor and investment. Something must be done to assure farmers bargaining power. The only hope we feel for the farmer to obtain an adequate income lies in farm legislation, the enforcement of the antitrust laws and in the organization of marketing and supplying cooperatives. (The attachment is as follows:)

EXCERPT FROM THE 1966 POLICY OF THE NATIONAL FARMERS UNION

COOPERATIVES

The cooperative is an extension of the farmer's business and should be treated as such in the administration of farm programs. Therefore, the policy of the Department of Agriculture should be to give bona fide farmer-owned cooperatives the key role in assembling and handling of farm commodities.

We favor the practice of on-the-farm storage and as surpluses are reduced, we recommend that government-owned bins be offered for sale or lease only to farmers and to farmer cooperatives at rates or prices reflecting their depreciated value.

Expand cooperatives

The promotion and encouragement of farm cooperatives should be given top priority emphasis as an effective means to increase farmers' bargaining power. Consistent with long-established cooperative principles, voting rights should be rigidly restricted to one vote for each member. Farmers Union cooperatives and other cooperatives supported by our members are urged to maintain their aims and operating policies, consistent with the income improvement programs of National Farmers Union.

Rural telephone and electrification cooperatives

We recommend legislation authorizing a factual study of the rural electrification program which would determine the economic feasibility of all areas, particularly those in areas of sparse population. Loan repayments to the Rural Electrification Administration should be used as a revolving fund for the purpose of making loans to cooperatives. Additional funds needed should be appropriated by the Congress.

We favor legislation which would result in reduced rates in states where regulatory commissions have been negligent or have cooperated with power companies in bringing about exorbitant rates.

We are opposed to allowing power companies to charge up to consumers the cost of their propaganda campaigns. We are opposed to subsidies to power companies whether they be in the form of excessive depreciation allowances, rapid tax write-offs or other subsidies.

We urge that every effort be made to bring about the benefits to electric consumers suggested by the National Power Survey.

Uniform regional rates should be extended wherever possible. Relatively inaccessible areas should be electrified.

We urge continuation of the 2-percent interest rate.

The established right of rural electric cooperatives to serve patrons other than farmers should be fully protected from encroachment by private power companies.

Taxation of cooperatives

We affirm our position that the net savings of a cooperative, when distributed within pre-existing agreements with patrons, are the property of the patron

and not income of the cooperative. We regard it as unprecedented and discriminatory for the government to stipulate by law or regulations the time and the manner of returning cooperative patronage earnings or refunds to patrons. Such action is an invasion of the right of patrons to conduct the business of their cooperatives by democratic processes and in accordance with the articles and by-laws of their associations. We oppose the provision in the law which requires a written consent agreement by the patron authorizing investment in the cooperative. Farmers Union members and organizations should make clear to the general public the tax position of cooperatives and thus combat the efforts of the National Tax Equality Association and similar groups to destroy cooperatives by imposing punitive taxation.

Farmer cooperative service

Significant expansion should be made in the technical research and services of the Farmer Cooperative Service of the Department of Agriculture. Cooperative farm credit

The service and resources of the cooperative institutions of the Farm Credit Administration and of credit unions should be supported and strengthened. These institutions should not make loans to finance farm production operations owned or controlled by non-farm interests nor those of larger-than-family units. Strengthen cooperatives

Expansion and consolidation of farmer-owned supply, service and marketing cooperatives should be undertaken where such action better equips cooperatives to provide additional services to patrons. Legislation should be provided to enable cooperatives to develop greater marketing power.

The Capper-Volstead Act should be amended to make certain that cooperatives have the legal right both to build and to acquire additional facilities to carry out the purposes for which they are organized.

We deplore efforts to make bonafide farmer cooperatives enter into agreements contrary to Federal statute and against their best interests.

We urge steps be taken to clarify statutory rights of cooperatives in regard to contracts involving the purchasing and marketing of farm commodities.

We believe that application of the Sherman Act, which prohibits conspiracy, activities which result in monopoly and acts of coercion or intimidation, to be quite sufficient to protect the public interest.

Cooperative processing and marketing facilities

We advocate legislation which would lead to the building of farmer-consumer yardstick cooperative processing plants and retail facilities. We urge the creation of a revolving fund which would make possible long-term low-interest loans to cooperatives and consumer groups for the purpose of building retail outlets which would compete with chain stores and enable the producer to earn a larger portion of the consumer dollar.

Teamwork of cooperatives and farmers union

We urge maximum use of cooperatives in handling reserves of farm commodities for the Nation's domestic food and fiber needs and in implementing the Food for Peace program and our foreign trade.

Farm cooperatives have historically shown their efficiency and effectiveness in assembling and distributing agricultural production and supplies.

Mutual advantages and benefits accrue to the Farmers Union membership organization and the farm cooperatives, when the membership organization maintains a strong educational program on behalf of cooperatives, and when the cooperatives, in turn, contribute educational funds to the Farmers Union for this purpose, and also foster membership stability through a dues checkoff. We commend those cooperatives who do so, and we urge our members to give their loyalty and patronage to these institutions.

Senator JORDAN. Mr. Healy I believe is going to be late in getting here. He is the assistant secretary, National Milk Producers Federation.

Mr. Ferry, do you have Mr. Hale with you also?

Mr. FERRY. Yes; I do.

Senator JORDAN. You want to be together?
Mr. FERRY. Yes.

Senator JORDAN. Again we want to say we are glad to have you with us. You all take these two seats right here and we will be glad to hear from you at this time.

Mr. Dal Ferry is executive director, United States Poultry & Egg Producers Association, and Mr. Hale is from Waldron, Ark. I presume that you are in the poultry and egg business also?

Mr. HALE. Yes, sir.

Senator JORDAN. We are glad to have you with us. We will be glad to hear from either or both of you.

STATEMENT OF DAL FERRY, EXECUTIVE DIRECTOR, UNITED STATES POULTRY & EGG PRODUCERS ASSOCIATION

Mr. FERRY. Thank you, Mr. Chairman. Now that you have introduced me I will leave that part of it out and commence and say that our organization since its inception in 1956 in Dallas, Tex., has been plagued with most of the troubles that this bill seeks to prevent; namely, coercion, intimidation, blacklisting, misrepresentation, and interference with the right to assemble and even to vote.

There is one exception, however: to my knowledge no one has offered to pay or loan any money to growers as an inducement or reward for refusing to or ceasing to belong to our association. Financial rewards are not necessary when those who wish to suppress an organized effort have the factors of production in their hands. The reverse is true though, many growers have been told by representatives of certain concerns that they would no longer be able to obtain growout contracts if they became members of the United States Poultry & Egg Producers Association. And in some cases local associations.

The reason for the past trouble is readily apparent. Our association is strictly a growers or producers organization and their interest is our first concern. I would like to digess and say I, too, have been a broiler producer producing 45,000 broilers on a growout basis and my family has been in the poultry industry since my early childhood. I have also been associated with hatcheries and feed companies and I think I know both sides of this vertically integrated poultry industry pretty well. The feed dealers, manufacturers, processors, and integrators have their own association to represent their interests. No one tries to prevent them from joining their trade association; they can meet when and if they please without interference. They can express their opinions without fear, in most cases, of coercion, intimidation, or discrimination. This is as it should be and we will defend their constitutional right to associate and assemble; in fact, we want them to assemble, discuss their problems, exchange ideas, develop new ways, and promote the industry. But the rights we defend for them have been denied in numerous cases to grower-members of this association and others. freedom of speech is denied to one or if the right to assemble is interfered with, then our whole system of democracy and our Republic is threatened.

If