The Capper–Volstead Act, officially the Co-operative Marketing Associations Act, was adopted by the

United States Congress The United States Congress is the legislature, legislative branch of the federal government of the United States. It is a Bicameralism, bicameral legislature, including a Lower house, lower body, the United States House of Representatives, ...

on February 18, 1922. It gave associations of agriculturalists broad exemptions from antitrust laws. It is therefore sometimes called the

Magna Carta (Medieval Latin for "Great Charter"), sometimes spelled Magna Charta, is a royal charter of rights agreed to by King John of England at Runnymede, near Windsor, on 15 June 1215. First drafted by the Archbishop of Canterbury, Cardin ...

of the American farming cooperatives.

Origins

The law was passed in response to increasing legal challenges made against cooperatives on the grounds they violated federal antitrust legislation, particularly the Sherman Act (15 U.S.C. 1 et seq.), the Clayton Antitrust Act (15 U.S.C. 12 et seq.), and the Federal Trade Commission Act (15 U.S.C. 41 et seq.). Amid the devastating slump in agricultural prices that followed the

First World War World War I or the First World War (28 July 1914 – 11 November 1918), also known as the Great War, was a World war, global conflict between two coalitions: the Allies of World War I, Allies (or Entente) and the Central Powers. Fighting to ...

, farm organizations in the United States intensified their drive for government relief and managed to get a farm bloc established in Congress to advance their interests, including protection against what they argued was the misapplication of antitrust laws against cooperatives. Such legislation, they complained, was intended to break up the powerful amalgamations of industrial and financial firms that acted to drive out competition and ratchet up the prices of manufactured goods (which, unlike those of crops, soared after the First World War, leading to the infamous Scissors Crisis of the 1920s), not voluntary partnerships among struggling farmers. Senator Arthur Capper of Kansas belonged to the farmer bloc, and Representative Andrew Volstead of Minnesota allied himself with it. Both played central parts in the formulation and promotion of the Act, which became one of the bloc's most notable and consequential political achievements.

Content

The Act authorized various kinds of agriculturalists to form voluntary co-operative associations for purposes of organizing, handling, and marketing their produce. It thereby exempted such associations from most antitrust laws. Nevertheless, to quell concerns that these cooperatives would seek to increase agricultural prices grossly and artificially, the Act included provisions to empower the

United States Secretary of Agriculture The United States secretary of agriculture is the head of the United States Department of Agriculture. The position carries similar responsibilities to those of agriculture ministers in other governments The department includes several organi ...

to prevent cooperatives from instituting and maintaining

monopolies A monopoly (from Greek and ) is a market in which one person or company is the only supplier of a particular good or service. A monopoly is characterized by a lack of economic competition to produce a particular thing, a lack of viable sub ...

, albeit purely at his own discretion. To this end, the Agriculture Secretary got the authority to hold hearings, gather information, and issue orders for the breakup of any monopolies judged to have resulted from the formation and activities of the cooperatives. Such decisions, in turn, were made subject to review by federal district courts.

References

*Dictionary of American History by James Truslow Adams, New York: Charles Scribner's Sons, 1940
CRS Report for Congress: Agriculture: A Glossary of Terms, Programs, and Laws, 2005 Edition - Order Code 97-905

External links

* Capper-Volstead Act, as amended, i
HTMLPDFdetails
in the GPObr>Statute Compilations collectionUS Code Title 7, Section 291

292
(from GPOaccess.gov)

by Donald M. Barnes and Christopher E. Ondeck—a paper on the Act from the University of Wisconsin Center for Cooperatives site {{DEFAULTSORT:Capper-Volstead Act 1922 in American law 67th United States Congress United States federal agriculture legislation United States federal antitrust legislation Agricultural economics