Imperial Valley press., 1919-07-03
DARK SHADOW
Of HENDERSON
Continued from Page ~

by our State Market Director in fix
ing the price of fish; something I'M
heard of in the food business. In fig
uring the cost of production ~er COW
Mr.. Henderson insists on takln" 9
1000 pound COW whereas it can be
clearly shown that 10000 milk tc
5000" milk lbs. is more legitimate
prof. Woll, Univ. of CALI
1t is we'll here to call specific at
tention to the fact that the claimed
cost of production as held by the
Producers association is deliberately
based upon the least efficient dairy
man and the cost of inefficiency is
then passed along to the consumer
to pay the bill. The fair basis to
figure the cost of production would
be to consider the reasonably efficient
and progressive dairymen who are at
least able to come within the average
class, leaving the man falling below
such average to lose, rather than for
the public to sunport inefficlency.
On May the goth, 1919 the direc-
tors of the Northern California Milk
Producers association held meet
ing at the Palace Hotel and voted a
bond issue upon their property.
On July 10th, 1919 a quarter page
add was run in. the San Francisco Elk
aminer and Chronicle by Stevens &
Co.. to the effect: "We own and
offer to the general public 100000
first mortgage bonds Of the Northern
\ California Milk Producers Associa-
h ton"
There are several angles to this,
but the net result is that the dairv-
men, whose money, as evidenced by
their notes, has been used to acquire
certain properties, are now losing
control of those properties. Stevens
L. Co., will undertake the flotation
of these first MORTGAGE bonds on the
associations property.
\ What this money is to be used for
has not been announced. 1t is my in
formation that the plants which The
Northern California Milk Producers
association, claims to own, have not
been completely paid for yet. As
agitation at the recent legislature, the
association. promoters have found it
increasingly hard TO secure additional
funds by getting new members. Of
course the notes that they secured
from the dairymen originally were
hypothecated to banks which advanc-
ed money to them, which money was
naturally used in making the first
II payments on the properties.
\ Now whether the proceeds of the
proposed bend issue are to be used
to pay I'D the balances due the former
owners of the plants purchased by the
association, or whether or not it is to
be used to reimburse the banks that
discounted the notes which banks,
understand, due to certain objections
Of the banking commissioner, are not
particularly pleased with their se-
curity, | do not know. This last is
very probable, for understand that
many dairymen who were induced to
sign these notes, from false represen-
tatiOn or through intimidation. have
refused to pay in instruments due on
their notes, and have dared the aSso-
citation, to bring suit to compel pay
ment.
Either way, there is no doubt in
my mind that the association is in a
shaky financial condition, and no mat
ter for which of the two reasons they
need this bond issue, | repeat that if
1t goes through as planned by it's
promoters, the dairymen have lost
control of the property.
My reasons for stating this are two.
! First-that Il first mortgage bond
takes precedence over any other claim
! against the concern issuing it., and
if at any time an interest payment is
passed, such bonds may be foreclosed,
and in the case of stock company,
the stockholders come in last.
My second reason for believing that
when this bond issue is completed as
| it is as far as | can ascertain, the
| dairymen can now say good bye" to
their money and property. If Stevens
& Co., have arranged for these bonds
! to be underwritten as they undoubt-
eddy have, it being impossible, of
! course TO find out who the under
writer is, but this is the usual thing,
the whole thing is cut and dried.
If Stevens & Co., themselves are
the underwriters, they of course, will
have to offer the bonds to the general
public to get their money out of them.
| say the general public advisedly,
because the dairymen VINO have paid
$500 per COW to buy the property in
the first place are not going to buy
first mortgage bonds on their own
property. That would be buying
something twice.
If the association, properly run,
needed more money to go on with its
plans, it could secure it by assessing
its members. That would be what the
average commercial concern would do,
but in that event the original MEM
bers would still control, and it is my
firm belief that from the very be-
ginning this has been a scheme to
use the dairymen's money to form a
combination that some large interest
could eventually take over.
AS you are probably aware of the
fact that Is of the directors and Of
ficers Of the Producers association
in San Francisco have been indicted
by the grand Jury of that county and
have been arreigneed to plead on the
goth inst
leave it to your good judgment
that associations/or organizations of
this kind, controlled by a group OF
capitalists in Sacrame ntO--WhoSe an
tecedents preclude any thought OF
charitable motives--that has used
force to gain unwilling members,