The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1909-04-09
PROPER PROFIT
is 20 PER CENT
John ]. MiIburn Defends the Oil
Trust and JuStifieS Its
Course.
NORTH R0SENTHAL SICK
FORMER GOVERNMENT ATToR-
NEY APPEARS FOR STANDARD.

St. Louis. Mo. April S.-The tempo
rary indisposition Of the Standards
81 .OOO-a-day lawyer, Moritz Rosenthal
Of Chicago. interfered slightly with the
program of the defense this afternoon
in the presentation of its reply 90 the
governments suit to dissolve the
Standard Oil company OF New Jersey
for alleged violations Of the Sherman
act
John J. Milburn of New York. the
Standards chief counsel. completed his
opening argument, and Mr.. Rosenthal
was to have followed with an address.
leaving John J. Johnson of Philadelphia
and David T. Watson Of Pittsburg to
argue the law points.
MT RosenthaI viii make his srgu-
ment tomorrow at the conclusion Of Mr..
Wstson's address.
Mr.. Watson's Contention.
Attorney Watson represented the
government i'm the Northern Securi-
ties case. and Is credited with having
won that suit for the government. air.
Watson insisted that in the present case
and in the Northern Securities case
principles of law were involved, and
that under no stretch Of the Imagination
could they be deemed identical.
He declared the defendants could not
be held for their conduct Of years past,
and that the only point the court could
consider was whether the Standard Oil
company was acting in restraint of
commerce, engaC aging In unfair COmpeti-
ton, or doing any Of the many other
divers things alleged on Nov. Is. 1905,
the day the petition in the present case
was dled.
Mr.. Watson insisted that Mr.. Rookie
Teller and his associates had the legal
right as citizens to combine.
Milburn's Reply to Kellogg.
Mr. 1Ilburn devoted several hours
today to replying to Special Attorney
/ General Frank 3. Kellogg's charges
that the Standard Oil had earned the
| enormous profit of over half billion
dollars on a capitalization of $97.250, 600.
/ This $700,00O.O00. Mr.. Kellogg charges
was both enormous and unreasonable
Mr.. Milburn denied these allegations in
no uncertain terms. That the profits
/ exceeded the sums paid out as divi-
/ dends, the attorney said was true, but
such surplus had been used in the ex-
/ tension of and construction of other
properties.
/ Another statement was that the value
| of the properties owned by the stand
ard Oil company Of New Jersey. which
! the government seeks to dissolve. capt.
/ talized at s97.250. 900. really possesses in
/ terests worth not less than 5000, 000 600.
/ And declared Mr.. Mnburn. with
marked emphasis, "the governments
/ theory for estimating profits. as set
forth in the petition, IS unsound in law
and does not accord with business prin-
ciples or the facts of human expert
ence. It is even difficult to discuss
such a proposition with patience"
Faliaey Explained.
The attorney pointed out that the
I fundamental fallacy i'm the govern
ment's position was that it failed in
any way TO recognize the enormous
cumulative effect Of compound interest.
/ Taking a. a basic proposition that the
properties of the Standard in 1852 were
worth $4,000 600, as testified to by Mr..
Archbold. the attorney quoted from a
table to show that compounded at per
cent from 1882 to 1906. the original SO
/ 100000 would reach the very comforta-
BILE amount Of S35j.06j.6S6.74. Assuming
/ that this per cent had been added to
! the capital. irrespective Of dividends.
! Mr.. MiIburn suggested il might in a
way explain the rapid and apparently
: phenomenal growth OF the Standard 5
assets.
Even taking the value OF the proper
ties of the defendant in 1882, $50. = 10, 900
as claimed by the government. the at
/ torney said, compounded at per cent
from 1852 TO 1906 it grew to $3.50. 271 900
which was but s612S.5sS less than the
actual assets of the latter year as
shown by the accounts Of the corpora
ton.
Why said he. IF we had never
purchased q gallon Of oil but loaned
our capital eXpeditiOusly and carefully
we could have made as much. and re.
calling the high interest rates of that
period. probably more"
Proper Profit 25 Per Cent.