Capper–Volstead Act

United States federal agriculture law

Capper–Volstead Act (P. L. 67 146), the Co operative Marketing Associations Act (7 U. S. C. 291, 292) was adopted by the United States Congress on February 18, 1922. It gave “associations” of persons producing agricultural products certain exemptions from antitrust laws. It is sometimes called the Magna Carta of cooperatives.

The law was passed in response to challenges made against cooperatives using 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.). As a consequence of the depression of agricultural prices subsequent to World War I, farm organizations intensified their drive for government aid and managed to get a farm bloc established in Congress. Senator Arthur Capper was a member of this bloc and the Capper–Volstead Act was a part of the farm legislative program. (The law carries the names of its sponsors, Senator Arthur Capper of Kansas and Representative Andrew Volstead of Minnesota.)

The act authorized various kinds of agricultural producers to form voluntary co operative associations for purposes of producing, handling, and marketing farm products. It therefore exempted such associations from the application of the antitrust laws. The United States Secretary of Agriculture was given power, on his own motion, to prevent such associations from achieving and maintaining monopolies. He could hold hearings, determine facts, and issue orders, which were ultimately subject to review by federal district courts.