Evening star. [volume] (Washington, D.C.) 1854-1972, 1909-04-08
RIGHT TO ITS PROFITS
Attorney MiIburn Resumes
Standard Oil Argument.
GAINS NOT UNREASONABLE
Capital Would Have Earned as Much
Loaned at Interest.
GOVERNMENT THEORY WRONG
Declares Method Of Estimating
trary to Business Principles.

ST. LOUIS. April S.-Attorney Milburn.
heading the Standard Oil C6mpany's ar
ray OF lawyers who are here combating
the governments suit to have the cor
poration declared illegal as a violator
or the Sherman antitrust act. resumed
his argument in the United States circuit
court today
Mr. Milburn devoted several hours to
replying to Assistant Attorney General
FRANK 3. kelloggs charges that the
Standard had profit OF 500 COOS 600 upon
a capitalization of s97.2JO.OoO. This profit
Mr.. Kellogg has declared enormous and
unreasonable
That the defendants had made either
enormous or unreasonable profits Mr..
Milburn denied at the commencement Of
todays argument. That the profits ex-
ceded the sums paid out as dividends
the attorney said was true. but he ex-
planned that such surplus had been used
In property extension and construction.
Another statement commented on by
Mr.. Mflburn was the prosecutions charge
that the value of the properties owned
by the Standard Oil Company OF New
Jersey. though capitalized at s97. $50, 900,
really represents not less than $500. 900. zoe.
Governments Theory Unsound.
Mr.. Milburn declared with emphasis
that the governments theory for esti-
mating profits, a. set forth in the petit
ton, Is unsound in law and does not ac-
cord with business principles or the facts
Of human experience: 1t is even difficult
to discuss such a proposition with pa
thence.
The attorney pointed out that the
fundamental fallacy In the governments
position was that It failed in any way to
recognize the enormous cumulative effect
OF compound interest.
Taking as basic proposition that the
properties Of the Standard in 1882 were
worth $7O.OOO.OOO as testified to by Mr..
Archbold, the attorney quoted from a
table to show that compounded at Z per
cent from 1882 to 1905 the original So
100000 would reach $255. o65. 6s874. As
added to the capital. Irrespective of divi-
dends. Mr.. Milburn suggested II might in
way. explain the rapid and apparently
phenomenal growth Of the Standard 8
assets. Its but matter of pencil.
a bit of paper and a schoolboy to figure
it out-no lawyer is required" added Mr..
Milburn.
Even taking the value of the properties
of the defendant in 1882 ia be So. IL. 600,
as claimed by the government. Mr.. Mil
burn said that this. compounded at per
cent from 1882 to 1906 grew to $353. 271.-
600. which was but So 12S5SS less than
the actual assets of the latter years. az
shown by the accounts of the corpora
ton.
Might Be Earned on Loans.
why" said he. "if we had never pur-
chased a gallon of oil. but loaned our
capital expeditiousiy and carefully we
could have made as much. and with the
high interest rates OF that period proba-
bly, more
Speaking OF profits caused Mr.. Mlburn
to retrace his argument and reconsider
the pipe line situation He made much
of the fact that none of the Independent
operators had appeared on the witness
stand to voice grievances.
The oppressed make noise that
reaches to the four corners of the earth. :
said he. In fact, Americans often shout
before they are hurt. If hurt. they
came to complain. The interstate COM
merce commission is ready to listen to
and correct the wrong of transportation.
But no one has appeared before 1t with
complaints to our pipe lines. Our lines
will never be used common carriers.
as 1t is a part of the general economy
of refineries to own their own pipe lines
SO as to make certain their supply OF
crude oil"
Something at this point reminded the
Standard Oil attorney of the alleged
missing So $4,000 trainer loan." told of
by Mr.. kellogg. who asserted that he
could not trace 1t. John d. Archbold ties
titled in New York that he presumed
that 1t was mere matter of bookkeep-
ing transfer in explaining the entry.
Will Tell in Due Time.
with all of his even feminine persist
ence Mr.. kellogg could not locate the
exact man who knew Of that transao
tion." said Mr.. Milburn. Even II man
is only a farmer he will have separate &c
counts and many seemingly mixed trans,
fers to the farming account. especially i
he is a gentleman far-'e-. Wen dis
case is completed I will tel Mr.. kellogg
lust what became OF haE % oot 900
Tell it to the court" interrupted Mr..
kellogg.
81 will when this case is closed" was
the response.
at was not used for counsel fees?"
suggested the ascetic appearing Judge
Hook. whose humor had hitherto been
concealed.
The other judges smiled erimly at their
associates little joke.
mo. the sum was too large even for
lawyers said Mr.. Milburn. Although he
did not just say SO, my friend here. Mr.
Kellogg, intimates that our very size
constitutes a monopoly" continued the
Standards attorney. He evidently agrees
with the peerless leader of my moribund
PARTY that a profit of 50 per cent indi-
Gates monopoly" added Mr.. Mlburn.
who. as a democrat, was once follower
vTy