Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1913-04-28
FARMER COOPERATIVE soci.
ErIEs COMPELLED TO CHANGE
BUSINESS METHODS.
RECENT COURT DECISION
coMPELs CHANGE OF BYLAWS
enforcement Of Penalty Against Men,
bers Who Sell to Rival Concerns
Held illegal and in Conflict With
Anti Trust Law. Of stats-Restraint
Of Trade Held as a Fact.
Special to Times Republican.

Special to Ilnes- RePuDllcaH.
Des Moines, April 2S.-Complete re-
Of many Of the farmers
co-o operative societies of Iowa will fol-
low the recent decision Of the supreme
court holding that where members are
penalized for dealing with competitor
of the cooperative the antitrust laws
Of the state. are violated. 1t was the
NEST far reaching decision on that
subject yet made of record in this
state.
The case is one in which Henry
Reeves, a hog buyer, secured an order
Of court by Judge Hobson in which
the DEBORAH Farmers Cooperative and
its officers and employees are "perpetu-
ally restrained and enjoired from ex-
acting, collecting. receiving or in any
manner accepting any sum or amount
from any bid made by any
upon the general market at
DEBORAH and vicinity, as an induce
ment or condition upon which said
sellers shall or may sell or dispose OF
livestock TO plaintiff Which injunc-
ton the supreme court says is all right.
The defendant society is an organ1-
cation Of farmers with $4,000 of its
$50, 900 capital stock paid for in cash,
with $50 members or stockholders, and
after two years of business it had pur-
chased 24,62S hogs. paying therefor
s433.62S.9S. No dividends had been de-
clared and there We're practically no
profits. -
In Restraint Of Trade.
10 I h1,l ra1
that where member sold produce or
livestock to competitor on the mar
ket he shall pay over to the society o
cents for every hundred pounds weight
sold Reeves was a competitor. Inc
evidence showed that members VINO
sold their hogs to Reeves did, In tact.
pay the society 5 cents hundred OF
what they got. that the agent OF the
society bought in competition with
Reeves, sometimes overpidding MN on
stuff from outsiders and sometimes
Reeves getting stock from the cooper
atives. The supreme court, Justice
Deemer writing, said:
$50 long as competition is regarded
as the life Of trade all combinations
contracts, arrangements or agreements.
made to stif1e it or which may have that
effect are regarded as unlawful. save
as heretofore stated. where connected
with some other contract
as of purchase or sale Or with con-
tracts of employment etc, so long as
their restraints are reasonable ana
Just. But, where disconnected with
some other contract and made en-
forcible by fine or penalty, we think
they come within the ban of the law
True it is that each of the members Oh
this association might have concluded
not to sell any of his hogs to the
plaintiff and, perhaps. all might have
agreed in advance not to do So: This
would have been freedom. of trade. But
here there is freedom Of trade in form
but annexed to that freedom is fine
or penalty for exercising such freedom
This is restraint of trade, or rather,
restraint Of competition. That such
fine or penalty made the society an IL
legal one is to our minds too clear for
argument. Plaintiff was placed at
and could not compete
with the society in purchasing nogs
from its members and the members
We're not free to deal with plaintiff. II
they dealt with him, he either forfeited
his profits. by reason Of having to pay
too much for hogs or they forfeited
part of the purchase price as penalty
for selling to another To our minds
this was undue restraint Of compete
ton. or as the term is now understood.
restraint of trade"
1t is said that most of cooperative
handling the grain of the
farmers are founded upon this same
theory and have the penalty clause in
their bylaws under which the members
forfeit something in case they deal
with a ooYnnefitor