Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1909-04-08
GOULD Sell No OIL
IND MIKE PROFITS
ATTORNEY FOR STANDARD Ap.
vANcEs NOVEL ARGUMENT
IN FEDERAL SUIT.
CAPITAL SIMPLE MATTER
OF coMPouNDlNG INTEREST
Standards Apparently Phenomenal
Growth one of Computing Interest
Ratss-siIburn Says Company Could
Have Made as Much or More if No
Oil Had Been Sold.

suit of the government against the
Standard Oil Company, charged with
violating the Sherman law, Attorney
Milburn, chief counsel for the Stand
ard, today devoted several hours to re-
plying to Attorney General Kellogg's
charges that the Standard had earned
the enormous profit of over a half bill
lion dollars upon a capitalization Of
s97,25O,0O0. He denied in no uncertain
terms that defendants had made either
enormous or unreasonable profits.
That the profits exceeded the sums
paid out as dividends, the attorney
said, was true, but such surplus had
been used inethe extension of and con-
struction of other properties. He stat
ed that value Of the properties owned
by the Standard really represents in
terests worth not less than $780, 100000
and declared Milburn, with
marked emphasis, "the governments
theory for estimating profits, as set
forth in the position, is unsound in
law, and does not accord with business
principles or the facts Of human ex-
perience. 1t is even difficult to discuss
such a proposition with patience"
The attorney pointed out that the
fundamental fallacy in the govern
ment's position was that it failed in
any way to recognize the enormous Gu
mulative effect Of compound interest.
Make Money Without Oil?
Taking as a basic proposition that
the properties OF the Standard in 1882
were worth 370,000,000, as testified to
by Mr.. Archbold. the attorney quoted
from table to show that compounded
at per cent from 1882 to 1906, this .,r-
.ginal $70,000,000 would reach the very
comfortable amount Of $255, ,065, ,SsS.
Assuming that this z per cent had been
added to the capital. irrespective Of
dividends, MiIburn suggested that 1t
might in q way explain the rapid and
apparently phenomenal growth Of the
Otandard's assets.
1T IL but matter Of pencil, bit of
paper and a school boy to figure 1t out
no lawyer Is required" added Mil
burn. why, il we had never pur-
chased a gallon of oil, but loaned our
capital expeditiously and carefully, we
would have made aymuch, and, recall
ing the high interest rates Of that Pc
riod, probably more.''
Admits 25 Per Cent Profit.
Mi1burn discussed economics, and
observed that when we come to our
senses, we will enact law that will
permit the regulation of these corpor-
ations." He defended corporations. and
admitted an annual profit of % per
cent. Quoting Charles M. Schwa;b as a
manufacturing expert who recently
testified, he said that he considered
Is per cent a proper profit for a manu-
facturer. 1--WE admit our profit annu-
ally is 25 per cent. We don't apollo
gize or defend tive stand upon it,"
declared Milburn, as he took up the
defendants investments, calling atten-
tion to the fact that s40,000,0O0 of it's
capitalization is not in the oil busi-
ness. hut in other enterprises. But
$73,000.000 of the capital is really used
In the oil business, he said. But IA
per cent profit comes to US from all
refined oil in the United States" was
another assertion. After short dis
cussion Of a law applicable to the case
as he viewed it, Milburn closed.