The sun., 1910-01-29
'BORDRNS CALL PROFITS POOR
'NOT EVEN REASONABLE, con-
a SIDERING TIE RISKS.


Omcer Of MIX Company OBJECTS TO the
Statements OT States Aoc0untAnt
About Msncy NaAlking-Reply Es That
the Figures Arc the Bordens' Own
al the milk trust inquiry before W. q.
brown yesterday A. W. Milburn. assistant
.M.easursr OF the Borden company. took
the stand to comment on the figures
compiled by Marvyn Soudder. an ac-
countant appointed by the Attorney
General TO examine the reported pronts
OF the Borden company. In the after
noon session Mr.. Scudder answered these
comments.
Mr. Milburn said the total net profits
OF the company as actually realized
were slzs. 1881 less than Mr.. Scudder
had figured Mr.. Scuddcr said later
his date had all been furnished 20 him
by Mr.. Mhlburn.
Mr. Milburn said: Even assuming
Mr.. Scudder's figure. s%os. .s7o 20. for the
profit on Huid milk in New York alone
for the year ended June 30. 1909. to be
correct It is only ia per cent on the
entire outstanding capital stock OF the
company. I. % per cent. on the present
tangible assets and q profit OF but 81
mills q quart Mr.. Scudder's answer
was that Mr.. Milburn compared the
prfits on fuid milk with the whole capital
OF the company. inclusive OF the pro-
duction OF cheese. butter. 40. whereas
he ought to have compared with the
mud milk part OF the capital only.
In response to Mr.. Milburn's state
ment that the cost OF milk 20 the COM
pany in the winter months was more than
8 cents. 90 that they had to sell at cents.
Mr. Scudder replied: This 10 like sav-
ing that il I lose 500 to- ay and expect
TO make $500 tomorrow then my average
loss day is SlOo' all manufacturers have
seasons when they don't expect to make
money
In none OF Mr. Scudders figures az
to profits Mr.. Milburn next commented.
has allowa nee been made for interest
on cost OF investments in bottling plants
and stations. depreciation, bad debts,
accident costs and insurance costs.
with one minor exception. These when
considered would reduce the profits
about SIS 900 for the year ended June 30.
JIoOs, and $4,000 for the year ended
June 80. 1909.
MIR. Scudder replied that he had used
in his calculation the same figures as
were used in calculating dividends, 90
that IL there had been any consideration
Of depreciation. &c.. IL would have surely
entered into the dividend computations.
Mr.. Milburn said of the large profits.
while In dollars and cents the profits
seem large, it should be judged in view
Of the magnitude OF the business. and the
figures given show not q reasonable but
an INADEQUATE return. whether based
on return on capital invested, on per-
ceutage Of profits on sales or on any other
basis by which what is fair and legiti-
mate profit 10 determined in any other
business. and especially in a business
perishable product. /.
Counsel for the Borden company pre-
sented a statement to he submitted in
evidence denying all connection OF that
company with the Consolidated Milk
which endeavored to Ak prices. IL set
forth also that no one was more oon-
oerned than Borden's in keeping down
the price Of milk to the consumer and in
making the production OF milk profitable
to the farmer.
This oompany's profits depend upon
the volume Of it's business. To increase
the retail prices cuts down the con-
sumption and diminishes the volume.
Also II the production OF milk In un-
profitable to the farmer be ceases dairy
ins and this compels the Borden company
to 90 further for its milk supply and 70
pay more for freight. icing and addi-
tional stations.
The statement went on to announce
! that the company was arranging To
cooperate with the farmers in assisting
them TO secure COWS OF greater produc-
tive capacity and instruct them in the
| raising OF pure alfalfa seed and root
crops so as to diminish their expenses
and thus enable than 70 make better
profits Attorney added that this state
ment was offered voluntarily I'D that
they waived all rights to the imInun. { :
provided to witnesses In the statute under
which the proceedings were being carried
on. Every paper they have would be
opened to view and everything they did
would be known TO the State.
When the hearing was adjourned until
| February on the motion OF the State
Mr.. Ely, counsellor for the milk trust
objected that il was not fair to keep every
body on the anxious seat 30 long. He
said that it meant the Interference with
the diminution OF. indeed the destruction
Of the business Of many milk men,
j. A. Brown. County Clerk Of Broomt
county, was a witness yesterday before
the Grand Jury that il investigating the
milk trust. The only other witness wal
Joseph Laemmle. secretary Of the Con
solidate Milk Exchange. which came intC
being after the Milk Exchange. Limited
was dissolved.