Antitrust Status of Farmer Cooperatives: - USDA Rural Development ...

to 800,000 members. One of the Grange's accomplishments was the
stimulation of cooperative development. As early as 1868, Kelley
began urging members to develop a network of marketing cooperatives
as a shield against business monopolies and a way for farmers to
establish the price for their products.
Many local farm supply and general stores were started in rural
areas, also following the cooperative principles of user ownership,
democratic control, and returning earnings to members based on
patronage. But many of these stores were under-capitalized and poorly
managed. When the Grange began to decline in the late 1870s, so did
most of the cooperatives it founded.
The Grange also recognized the importance of political
involvement. Western farmers, now organized through the Grange,
elected a number of their member s to midwestern State governor ships.
Their supporters became forces in several State legislatures. Grange
support helped enact state laws regulating the services and rates of
businesses perceived as abusing farmers, primarily the railroads and
grain elevators. The impacted businesses reacted with a series of legal
challenges questioning the constitutionality of these "Granger" laws.
Several cases were argued before the U.S. Supreme Court in late
1875 and January 1876. After more than a year of deliberation,
separate opinions were issued in each case, as a group, on March 1,
1877. All were written by Chief Justice Morrison Waite and all found
the challenged laws constitutional.
The lead opinion concerned a provision in the Illinois constitution,
adopted in 1870, and an implementing law enacted the next year.
Among other things, the law (1) set maximum rates grain elevators in
a city of more than 100,000 population (Chicago) could charge and (2)
required elevator operators to be licensed. 6 The other cases involved
laws regulating rail rates in Iowa, 7 Wisconsin, 8 and Minnesota. 9
6 Munn v. Illinois, 94 U.S. 113 (1877).
7 Chicago, Burlington, and Quincy RR Co. v. Iowa, 94 U.S. 155 (1877).
8 Peik v. C hicago and North-western Railway Co., 94 U.S. 164 (1877);
Chicago, M ilwaukee, and St. Paul RR Co. v. Ackley, 94 U.S. 179 (1877).
10
9 Winona and St. Peter Railroad Com pany v. Blake, 94 U.S. 180 (1877).