The Ogden standard. [volume] (Ogden City, Utah) 1902-1910, 1909-04-08
ANS " ERS
CHARGES
MADE
Counsel for Standard Oil
Justifies Enormous
Profits

st. Louis, April S-Attorney Mil
burn today resumed his argument on
behalf Of the Standard OIL company
in the governments suit to dissolve
the Standard for alleged violation Of
the Sherman act.
Mr.. Milburn devoted several hours
today to replying to Special Attorney
General Frank B. Kelloggs charges
that the Standard Oil had earned the
enormous profit Of half a billion dol
fars upon a capitalization of S97. 7.250,-
600. This 500, 600 600, Mr. Kellogg
charges. was both enormous and un-
reasonable.
Mr.. Milburn denied these allegations
in no uncertain terms. That tho
profits exceeded the sums paid out as
dividends, the attorney said. was true,
but such surplus had been used In the
extension Of and construction of other
properties.
Another statement was that the
value Of the properties owned by the
Standard OIL Of New Jersey, which
italized at 97.25O,000. really possesses
interests worth not less than S200,000,-
600
And" declared Mr. Mllburn, with
marked emphasis, the government
theory for estimating pronts, as set
forth In the petition, is unsound In law
and does not accord with business
principles or the facts Of human exs
rerience. 1t Is even difficult to dis
cuss such a proposition With pat
ience"
The attorney pointed out that the
fundamental fallaoy in the govern
ment's position was that II failed In
any way to recognize the enormous
cumulative effect of compound inter-
est.
Taking as a basic proposition that
the properties Of the Standard In
1882 were worth S10,000,000, it was
shown that the interest at per cent,
from 1882 TO 1906, the original S7O,s
600. 900 would reach the very comfort
able amount of 1855. 5.065. .6S6H. AS
suming that this per cent had been
added to the capital, irrespecuyely OF
dividends. Mr Milburn suggested it
might in way explain the rapid and
apparently phenomenal growth Of the
Standards assets.
Even taking the value of the prop
critics of the defendant In 1882, $751;
10000 az claimed by the government,
the attorney said. compounded at s
per cent from 1882 TO 1906. 1t grew
to 1853. ..2T1 900 which was but So
12S,5SS less than the actual assets of
The latter year as shown by the ac-
counts Of the company
Why" said he. IF we had never
purchased a gallon of oil, but loaned
our capital eXpeditiousl,- ana careful
ly we could have made as much, and
recalling the high interest rates Of
that period, probably more"
Mr.. Milburn made much of the fact
that none of the independent operat-
ors had appeared on the witness stand
to voice grievance.
Mr.. Milburn quoted Charles NJ,
Schwab Of New York, as manufac-
turing expert. as recently tesdfying
that he considered 25 per cent a prop
er profit for a manufacturer.
I'VE admit our profit annually is "a
per cent, We do not apologize or de-
fend tive stand upon IT," declared
Mr.. Milburn as he took the defend
ants investments calling attention to
the fact that S40,OOO,000 OF It's capital
ization is not in the oil business. but
other enterprises. But $73.o00.oo0
capital is really used in the oil busi-
ness, he said
But fourteen per cent of profit
comes to us from all the refined oil In
the United States was another as
sertion.
In closing, Mr. Milburn told how the
Galena Signal Oil company had secur-
ed 81 per cent OF the railway lubrica-
ton of the country, through what the
speaker declared TO be the absolute
merit of its product, and not through
Standard OIL influence.
John G. Johnson, of Philadelphia,
followed Mr. Milburn in the interest OF
the company.