The Climax-Madisonian. (Richmond, Madison County, Ky.) 1914-1917, 1915-10-20


against the selling price of tobacco
1t is to be noted that growers who
were not poolers with this Company
were charged fees in excess of that
complained of by vallandingham and
others in this suit, for which they got
no return benefit insofar as any re-
payment to them was concerned. We
find that the fees so charged were not
excessive, nor were they unfair.
IL
That the BurIey Tobacco Company
charged the growers $275, 900 for insur-
ance. when the tobacco was not In fact
insured, and that the amount paid to
and received by the Burnley Tobacco Com
pany for insurance should have been re-
paid to the growers.
What has been said in the last para
graph as to warehousing and redrying
fees will apply to this item of so-called
insurance. AS a matter of fact this
Company, instead of paying insurance
companies to insure the growers to-
bacco in pool, themselves issued incon-
testible warehouse receipts, by which
they guaranteed to redeliver to the
pooler or to his assignee the exact
quantity and grade of tobacco ware
housed, regardless of loss by fire. The
Company charged the grower certain
per cent for guaranteeing to the grow
er the return of his tobacco, which
was equivalent to insurance. The Com
pany itself did not insure the tobacco,
but took the risk of loss by fire. The
net profit of the Company from this
source was s26O,O0O. The Company
therefore saved to the grower the in
surance which formerly had been paid
TO the insurance companies and most
of which was taken out of the State of
Kentucky. By this arrangement the
money which went out of the state to
/ foreign insurance companies was kept
in the state, and, instead of going to
insurance companies, went to the Bur
/ ley Tobacco Company, the stock IN
which was owned by the growers them
/ selves. The charge made by the Com
pany was entirely legitimate, and the
profit was legitimate profit to the Com
pany.
That between the time of the organiza-
/ ton of the Company and the election of
a Board of Directors in 1912, those in
| charge of the Company's affairs applied
! its assets for the personal use and BEN
eft of many of its managers.
After investigating this charge we find
nothing to sustain it.
That the Company owns buildings used
for storage and pricing OF tobacco. as
follows:
One in Anderson County.
One in Breckenridge County.
One in Bracken County.
Three in Boone County.
One in Campbell County.
One in Franklin County.
| One in Fleming County.
Two in Grant County.
/ One il Hart County.
Two in Harrison County.
Three in Hardin County.
Three in Henry County.
| Two in Larue County.
| One in Mercer County.
One in Meade County.
Three in Owen County.
One in Oldham County.
Four in Robertson County.
Two in Scott County.
One in Spencer County.
Three in Trimble County.
".
That the Company now owns the fol.
| lowing loose leaf warehouses:
Two in Bracken County.
One in Carroll County.
One in Fayette County.
One in Fleming County.
One in Franklin County.
Two in Grant County.
One in Henry County.
One in Harrison County.
One in Hart County.
One in Montgomery County.
One in Owen County.
One in Pendleton County.
One in Shelby County.
1t is charged that practically all the
warehouses have been vacant and have
| produced no revenue since 1912; that they
could have been operated to produce an
income, but the officers of the Company
fraudulently managed them SO as to
produce no income; have neglected them
and that they are rapidly depreciating in
value.
We find from investigating the rec
ords of the Company that in the man
agement of the loose-leaf warehouses
the Company has made profit equa
to eleven per cent on the amount in
vested; that on the management of al
its warehouse property. including loose
leaf warehouses, it has made a prof
of eight per cent on the amount in
vested. We find nothing to suppor
the charge that the business or prop
erty of the Company has been neg
lected or improperly handled.
When the Burley Tobacco Company
was organized the loose-leaf marke
business had not been established. 1
has come into existence since tina
time. The Burley Tobacco Compan,
in order to accommodate the pooled
tobacco of 1909 found it necessary t.
purchase or erect warehouses at vari
GUS places in order to furnish conve
nient delivery points for the growers
Since the development of the loose
leaf market some of these propertie
are not necessary in carrying on TIL
business of the Company. and W
recommend to the stockholders tn
massage NJ a resolution racor,r,an,3;n,