Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1908-07-24
Government Turns Searchlight
on Methods Of Creamery
Combines Of Middle West
MONOPOLY FORCES PRICE DOWN
Once Control of a Field Is Gained, Far
mers Receive What They Can Get
for Their Cream-Co-o operative In
stitutions Most Profitable and Make
Best Butter - Centralized System
Bad.

oil the middle west, anu III oiie VI ."S
warmest documents issued from Wash
ington for some time the centralized
The report bristles with strong argu-
ments in favor of the cooperative con-
Germs and condemns In strong Lam
guage the System" that has built up
monopoly In many sections, notably
southern Iowa, Nebraska and Kansas
The report is from the chief of the
bureau of animal industry and is as
follows:
"A special investigation has been
made of economic and commercial con-
ditions in the creamery business and
information has been secured showing
that there is practically monopoly Of
this industry in some sections, while In
others the business is largely con-
Quoted on a cooperative basis or there
is fair competition, the result being
that under the latter conditions the
farmers are receiving from 6 to cents
a pound more for their butter fat than
in territory controlled by the monopoly
In territory controlled by the monopoly.
This difference is due partly to the
methods of the so-called "centraliZers"
and partly to the inferior quality of
the butter produced by those concerns,
because the cream is collected over
wide territory and much of 1t is re-
ceved in a stale condition.
THAT a very large percentage of the
butter found In the market Is below
grade. selling for less than market
prices for fine butter, and that the far
mers in a very large area of butter
producing territory receive much less
than a fair price for their product. are
both matters of record. That the losses
from these sources amount to millions
of dollars annually to the farmers OF
the country is easily demonstrated.
Four Glasses of Creameries.
For convenience in designation, the
creameries are divided into four
classes. Cooperative creameries are
owned and operated by the patrons
that Is, the persons who supply the
Greenland the entire receipts. less
actual running expenses and sinking
fund, are divided among the farmers
fat delivered by each. Individual
creameries are those owned and OPP
Grated by private interest and doing
local business. When three or more In
dividual creameries are owned or con-
trolled by, the same interests, they are
designated as combination creameries
The fourth Observation-Disclosures
composed of crearneries that receive
cream from greater distances than 1T
can be hauled by wagons, the distance
extending up to 400 or 500 miles. The
plants are usually large, and an ex-
tensive system of agencies for the pur-
chase of cream is maintained.
"rhe Investigations show that the
cooperative creamery yields the larg-
est returns to the farmer for his but
ter fat. The individual and combina-
ton creameries, usually being located
in close competition with the coop
erative creameries, pay very nearly as
much.
The centralizers, where they have
gained monopoly, pay as little as the
farmer will accept Reports for July
1907. show that in Kansas and Nebras-
ka, where the monopoly appears to be
complete, the farmers received only II
to 10 cents a pound for their butter
fat, while in northern Iowa, Minnesota
Wisconsin and Illinois, where the CO.
operative creameries have the field, the
prices were from Is to rs cents
Trust Methods ReprehensibIe.
1.-THE methods of the centralizers are
sometimes very reprehensible. Where
these concerns have come into COM
have raised their prices to point that
made it impossible for the small con-
Germs to continue, and have thus forced
the latter out of business. Competition
having been destroyed and monopoly
secured, the prices paid to the farmers
were lowered. The large concerns OPP
Grating over a great territory, with
here and there competitor that they
wished to put out of business, could
in one locality raise the price paid
above that possible to pay with profit,
and at other places decrease the price
so little as not to be apparent and
more than offset the loss. This ability
to destroy competition without inf1ict-
ing self-1njury has been used effective
ly in many localities.
Railroads Aid in Killing Small Concerns
perhaps the most potent factor,
however in restricting the business of
the small creamery has been the spe-
cial low rates reported to be granted
by the railroads to the big creameries.
These rates were understood to be
much lower than for any similar COM
modify, being only about one-third Of
the rate on butter. In Nebraska, in
the best territory, the gross earnings
for hauling cream were but 10 cents
per car mile, while the settling basis
between railroads for hauling empty
cars was Is cents per car mile.
''rhe system Of killing the small
creameries has been carried on to the
fullest extent in southern Iowa, Mis-
souri, Kansas and Nebraska. Taking
Kansas as an Illustration, 1t is found
that the number of creameries declined
from 1873 in 1900 to 81 in 1905, while
in Minnesota in the same period there
was an increase from $50 to 905. The
decrease in Kansas is attributed to dis
satisfaction and distrust on the part of
the farmer with the central creamery.
to the low prices paid. the poor quality
of the butter, the killing of the small
creameries, and the loss of all immedi
ate contact between the farmer and the
owner of the business The increase
in Minnesota can be accounted for by
lust the reverse set of conditions. The
Ioes <o Kansas farmers during the last