prevent the effectuation of the declared policy of this title with respect to such commodity or product, and

(B) That the issuance of such order is the only practical means of advancing the interests of the producers of such commodity pursuant to the declared policy, and is approved or favored:

(i) By at least two-thirds of the producers [Sec. 15 (3)] [(except that as to citrus fruits produced in any area producing what is known as California citrus fruits said order must be approved or favored by three-fourths of the producers)] who, during a representative period determined by the Secretary, have been engaged, within the production area specified in such marketing agreement or order, in the production for market of the commodity specified therein, or who, during such representative period, have been engaged in the production of such commodity for sale in the marketing area specified in such marketing agreement, or order, or

(ii) By producers who, during such representative period, have produced for market at least two-thirds of the volume of such commodity produced for market within the production area specified in such marketing agreement or order, or who, during such representative period, have produced at least two-thirds of the volume of such commodity [Sec. 7] [sold] produced for sale within the marketing area specified in such marketing agreement or order.

Section 7 of the amending bill amends sections 8c (8) (B), 8c (9) (B) (ii), and 8c (16) (B) of the act by striking out the word "sold" wherever it appears and inserting in lieu thereof the words "produced for sale." The text of section 8c (16) (B), as amended by this section, is set forth later in connection with the explanation of sections 9, 10, and 11 of the amending bill, which make other changes in section 8c (16) (A) and (B) of the act. The effect of section 7 is to designate the producers, whose approval or disapproval is to be determined in terms of the volume of milk represented, in the same language as that now used to designate the producers whose approval or disapproval is to be determined in terms of the number of producers represented. In view of the manner in which milk is assembled, particularly in large markets, it has been found to be impossible to determine which producer's milk is actually "sold" in a specified marketing area, but it is possible to ascertain what producers are "producing for sale" in a specified marketing area.

Section 15 of the amending bill amends section 8c (8) and (9) of the act by eliminating the clauses thereof which require a greater percentage of handler signatures to the marketing agreement and producer approval of the issuance of an order in the case of California citrus fruit than is the case of any other commodity. The act now provides that an order may be issued for California citrus fruit if the marketing agreement is signed by handlers who handle at least 80 percent of the fruit and if the issuance of the order is approved by at least 75 percent of the producers. In the case of all other agricultural commodities, the order may be issued if the marketing agreement is signed by handlers who handle at least 50 percent of the product involved, and the issuance of the order is approved by at least two-thirds of the producers. The amendment would require the same percentage of handler signatures to the marketing agreement and producer approval of the issuance of an order for California citrus fruits as is now required for all other agricultural commodities.

This special requirement in respect to the issuance of an order for California citrus fruits was made in 1935 when the issuance of orders in the place of licenses was first authorized. The apparent purpose of this provision was to prevent the issuance of an order for California citrus fruits, unless the marketing agreement was signed, and

S. Repts., 76-3, vol. 3— -16

the issuance of the order approved, by handler and producer representation well in excess of that represented by the California Fruit Growers Exchange. This exchange is a cooperative federation of nearly 200 local associations and shippers which market about 70 percent of the California citrus fruit crop.

The act does not permit any group of handlers or producers to determine the provisions of a marketing order. Such determinatiors must be made by the Secretary of Agriculture upon the basis of the evidence submitted at public hearings. Handler-signature to the marketing agreement and producer-approval of the issuance of the order are ascertained after the hearings are held and in respect to an agreement and order developed on the basis of the hearing record. The requirements of the act in respect to the signing of the marketing agreement and approval of the order, before it can be issued, are merely secondary safeguards. These safeguards, however, do not permit handlers or growers to dictate the provisions of the order or to force the issuance of an order by the Secretary.

The special requirement of the act in respect to orders for California citrus fruits appears to be inconsistent with the recognized policy of Congress in dealing with cooperatives and discriminatory in respect to cooperative organization for California citrus fruits. It has long been the policy of Congress to promote the development of cooperatives. This policy is recognized in other provisions of the amending bill. The development of cooperative organizations for California citrus fruits is no greater than for several other agricultural commodities produced or marketed within areas to which marketing orders are applicable.

SEC. 8c [Sec. 8] [(12) Whenever, pursuant to the provisions of this section, the Secretary is required to determine the approval or disapproval of producers with respect to the issuance of any order, or any term or condition thereof, or the termination thereof, the Secretary shall consider the approval or disapproval by any cooperative association of producers, bona fide engaged in marketing the commodity or product thereof covered by such order, or in rendering services for or advancing the interests of the producers of such commodity, as the approval or disapproval of the producers who are members of, stockholders in, or under contract with, such cooperative association of producers.]

(12) Whenever, pursuant to the provisions of this section, the Secretary is required to determine the approval or disapproval of producers with respect to the issuance of any order, or any term or condition thereof, or the termination thereof, the Secretary shall consider the approval or disapproval by any bona fide producer-owned and producer-controlled cooperative association of producers, operated for the mutual benefit of the members thereof and conforming to the requirements of the Act of Congress of February 18, 1922, as amended, known as the Capper-Volstead Act, as to voting, dividends, and dealing in products of nonmembers, and bona fide engaged in marketing the commodity or product thereof covered by such order, as the approval or disapproval of the producers who are members of, or stockholders in, and under contract with, such cooperative association of producers. For the purpose of determining the status of any cooperative association of producers under this paragraph, the Secretary may require such cooperative association to furnish such information as he may consider necessary or desirable.

Section 8 of the amending bill amends section 8c (12) of the act by striking out the entire subsection and inserting in lieu thereof a provision which preserves the existing right of cooperative associations to express approval or disapproval of producers who are members of, stockholders in, or under contract with, such association, in regard to the issuance of any order or any term or condition thereof, but which sets forth the qualifications of such association in greater detail. It confines the exercise of this privilege to associations which are

genuinely producer owned and producer controlled, and excludes associations which are found to be controlled by, or under the domination of, handlers or other nonproducer interests. This appears necessary in order to assure the expression of genuine producer views when voiced by cooperative associations and to discourage practices which have developed under the existing statute.

SEC. 8c (16). (A) The Secretary of Agriculture shall, whenever he finds that any order issued under this section, or any provision thereof, obstructs or does not tend to effectuate the declared policy of this title, terminate [Sec. 9] [or suspend the operation of such order or such provision thereof, [Sec. 9] or suspend such order or such provision thereof until such time as he finds that the reinstatement of such suspended order or suspended provision thereof will tend to effectuate such declared policy.

(B) The Secretary shall terminate any marketing agreement entered into under section 8b, or order issued under this section, at the end of the then current marketing period for such commodity, specified in such marketing agreement or order, whenever he finds that such termination is favored by a majority of the producers who, during a representative period determined by the Secretary, have been engaged in the production for market of the commodity specified in such marketing agreement or order, within the production area specified in such marketing agreement or order, or who, during such representative period, have been engaged in the production of such commodity for sale within the marketing area specified in such marketing agreement or order: Provided, That such majority have, during such representative period, produced for market more than 50 per centum of the volume of such commodity produced for market within the production area specified in such marketing agreement or order, or have, during such representative period, produced more than 50 per centum of the volume of such commodity [Sec. 7] [sold] produced for sale in the marketing area specified in such marketing agreement or order, but such termination shall be effective only if announced on or before such date (prior to the end of the then current marketing period) as may be specified in such marketing agreement or order. (C) [Sec. 10] [The termination or suspension] The termination, suspension, or reinstatement of any order or amendment thereto or provision thereof, shall not be considered an order within the meaning of this section.

[Sec. 11] (D) Any order issued in accordance with section 8c shall not be affected by the withdrawal from the marketing agreement by any or all signers thereof in accordance with the provisions of such marketing agreement or by the termination or suspension of the marketing agreement by the Secretary with respect to any or all signers.

Section 9 of the amending bill amends section 8c (16) (A) of the act by specifically authorizing the Secretary to reinstate either a suspended provision or a suspended order whenever he finds that such reinstatement will tend to effectuate the declared policy of the act. This does not authorize the Secretary to reinstate a terminated order or a terminated provision of an order. It recognizes the necessity of a temporary suspension of a provision of an order or an order which has heretofore been occasioned, in some instances, by litigation, and definitely confirms the action taken by the Secretary in considering that the power to suspend includes the power to reinstate a suspended order or a suspended provision of an order.

Section 10 of the amending bill amends section 8c (16) (C) of the act by making the procedure involved in a reinstatement of a suspended order or a suspended provision of an order identical with that now provided for the termination or suspension of an order or a provision of an order. This procedure is set forth in section 8c (16) (A).

Section 11 of the amending bill amends section 8c (16) of the act by adding a new subparagraph (subparagraph (D)). The purpose of this provision is to make certain that once an order or an amendment to an order has been made effective pursuant to the provisions of section 8c (8), the withdrawal of handlers from the marketing agree

ment which regulates the commodity in the same manner as the order does not operate to automatically discontinue or invalidate such an order or amendment. This is in entire harmony with section 8c (9), which provides a method of making an order effective even if the handlers of 50 percent of the volume of the product covered by the order fail or refuse to approve a marketing agreement.

[Sec. 12] [Sec. 8c. In connection with the making of any marketing agreement or the issuance of any order, if the Secretary finds and proclaims that, as to any commodity specified in such marketing agreement or order, the purchasing power during the base period specified for such commodity in section 2 of this title cannot be satisfactorily determined from available statistics of the Department of Agriculture, the base period, for the purposes of such marketing agreement or order, shall be the post-war period, August 1919-July 1929, or all that portion thereof for which the Secretary finds and proclaims that the purchasing power of such commodity can be satisfactorily determined from available statistics of the Department of Agriculture.]

SEC. 8e. In connection with the making of any marketing agreement or the issuance of any order, if the Secretary finds and proclaims that, as to any agricultural commodity or product thereof specified in such marketing agreement or order, the purchasing power during the entire base period specified in section 2 of this title cannot be satisfactorily determined from available statistics of the Department of Agriculture, the base period, for the purpose of such marketing agreement or order, shall be all that portion thereof for which the Secretary finds and proclaims that the purchasing power of such agricultural commodity or product thereof can be satisfactorily determined from available statistics of the Department of Agriculture. Such proclamation shall remain in full force and effect until amended or revoked by the Secretary.

Section 12 of the amending bill amends section 8e of the act in harmony with the amendment to section 2 of the act contained in section 1 of the amending bill. Section 8e, as amended by this section, eliminates only the necessity of issuing a proclamation when the post-war period is used as the base period, and preserves the existing right of the Secretary to use a portion of the post-war period if and when he finds and proclaims that satisfactory statistics are available. [Sec. 13) (3) The Secretary, in the administration of this title, shall accord such recognition and encouragement to producer-owned and producer-controlled cooperative associations as will be in harmony with the policy toward cooperative associations set forth in existing Acts of Congress, and as will tend to promote efficient methods of marketing and distribution. The Secretary of Agriculture is authorized to make available to producers of agricultural, dairy, or horticultural commodities or the products thereof, where such service is requested by a cooperative association, which is in good faith owned or controlled by producers or associations of producers of any such commodities or the products thereof, the facilities of the Department in helping such cooperative associations to establish stable market conditions.

Section 13 of the amending bill adds a paragraph (paragraph (3)) to section 10 (b) of the act. The first sentence of this paragraph constitutes a reenactment of a part of subsection (b) of section 10 of the Agricultural Adjustment Act, as amended by section 16, Public, No. 320, Seventy-fourth Congress, approved August 24, 1935, which was not reenacted by the Agricultural Marketing Agreement Act of 1937. The second sentence gives further expression to the policy of Congress toward cooperative associations and authorizes the Secretary of Agriculture to use the facilities of the Department for general assistance to such associations in establishing stable marketing conditions. Without such a clause, some doubt exists as to whether this might be done, even though such assistance might serve to assist in the effectuation of the declared policy of the act.

SEC. 10. (b) (2) Each order issued by the Secretary under this title shall provide that each handler subject thereto shall pay to any authority or agency established

under such order such handler's pro rata share (as approved by the Secretary) of such expenses as the Secretary may find will necessarily be incurred by such authority or agency, during any period specified by him, for the maintenance and functioning of such authority or agency, other than expenses incurred in receiving, handling, holding, or disposing of any quantity of a commodity received, handled, held, or disposed of by such authority or agency for the benefit or account of persons other than handlers subject to such order. The pro rata share of the expenses payable by a cooperative association of producers shall be computed on the basis of the quantity of the agricultural commodity or product thereof covered by such order which is distributed, processed, or shipped by such cooperative association of producers. Any such authority or agency may maintain in its own name, or in the names of its members, a suit against any handler subject to an order for the collection of such handler's pro rata share of expenses. The several District Courts of the United States are hereby vested with jurisdiction to entertain such suits regardless of the amount in controversy.

[Sec. 14.] Nothing in this Act shall be construed as invalidating any marketing agreement or order, or any regulation relating thereto, or any provision thereof, or any act of the Secretary of Agriculture in connection with any such agreement or order which has been executed, issued, approved, or done under the Agricultural Marketing Agreement Act of 1937, or any amendment thereof, or under the Agricultural Adjustment Act, or any amendment thereof, but such marketing agreements, orders, regulations, provisions, and Act or any amendments thereto are hereby expressly ratified, legalized, and confirmed.

Section 14 of the amending bill is similar in content and purpose to section 4 of the Agricultural Marketing Agreement Act of 1937. This section negatives any implication that the effect of the amending bill is to invalidate or cast doubt on action heretofore taken under the marketing agreement and order provisions. This section also expressly ratifies, legalizes, and confirms such action. The judicial sanction for such a provision is found in Mattingly v. District of Columbia ((1878), 97 United States 687, 690); United States v. Heinzen ((1907), 206 United States 370, 382); Tiaco v. Forbes ((1913), 228 United States 549, 556); Rafferty v. Smith, Bell & Co. ((1921), 257 United States 226, 232); Isbrandtsen-Moller Company, Inc. v. United States et al. (No. 307, October term, 1936, United States Supreme Court, decided February 1, 1937); and Swayne & Hoyt, Ltd., et al. v. United States (No. 494, October term, 1936, United States Supreme Court, decided March 1, 1937).

SEC. 8c (2) [Sec. 16 (a)] [Orders issued pursuant to this section shall be applicable only to the following agricultural commodities and the products thereof (except products of naval stores and the products of honeybees), or to any regional, or market classification of any such commodity or product: Milk, fruits (including pecans and walnuts but not including apples, other than apples produced in the States of Washington, Oregon, and Idaho, and not including fruits, other than olives, for canning), tobacco, vegetables (not including vegetables, other than asparagus, for canning), soybeans, hops, honeybees, and naval stores as included in the Naval Stores Act and standards established thereunder (including refined or partially refined oleoresin)].

SEC. 8c (2). Orders issued pursuant to this section may be applicable to any agricultural, dairy, or horticultural commodity or product thereof, or to any regional, or market classification of any such commodity or product: Provided, That in no event shall such orders apply to apples except apples produced in the States of Washington, Oregon, and Idaho.

SEC. 8c (6) [Sec. 16 (b)] [In the case of fruits (including pecans and walnuts but not including apples, other than apples produced in the States of Washington, Oregon, and Idaho, and not including fruits, other than olives, for canning) and their products, tobacco and its products, vegetables (not including vegetables, other than asparagus, for canning) and their products, soybeans and their products, hops, honeybees, and naval stores as included in the Naval Stores Act and standards established thereunder (including refined or partially refined oleoresin),] In the case of agricultural or horticultural commodities and the products thereof, other