The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1920-06-23
THE MILLERS CASE
Ask Printing Statement of the North
western Miller

The raillers of the country feel that
in certain printed statements regard
ing their business, as they express IT,
uniformed readers have been mis-
led into the belief that there mas
been much profiteering in the in
They request that their side of the
case in the interest of fair play be
presented in the following article from
the Northwestern Miller. This artlcle
reads as follows:
ION Nav % the representatives OF
ne railway brotherhoods filed with
the United States railroad labor
board a formal statement to the Ell
feet that wartime profits in the flour
trade had absorbed one-third OF the
price paid by the consumer Tor a par
rel of flour. and that so per cent OF
this margin was chargeable TO
profiteering. The statement ATTACKS
alike the miller, the jobber and the
retailer. Coming from such source,
the charges are likely to receive wac
publicity, and to find credence thru-
ont a considerable part of the couh-
try. It is. therefore, doubly untor-
tunate that they should have been
based not so much on actual mlsstate-
ments, as on partial statlsucs pr
scented without explanation ana lhua
warped from their true slgnlIlcahcees
1.-THE basis of the statement Is, OF
course. the famous report issued IN
1918 by the federal trade commas
sion. which summarized the costs anu
profits of some seventy-fiVe mllllhS
companies operating one hundred anu
thirty mills in the 1--WE iiscal ye@l9
from July /, 1912. to June 80, 1917.
As a result, nothing SPECIFIC is salo
regarding costs and profits during ths
past three years, or after the Unlteu
States food administration began lls
work; but the implication Is mao
rs4 -fr,rrf all
has continued unchecked. II IS I'M
fortunate that the federal trade com
mission has not seen fit to issue
Fundamentally report covering at least
the years 1917-1S and 1889, wneh'
with a maximum permissible prollt -
the miller of twenty-five cents pei
barrel. most mills were doing business
on half that margin.
Prior to the war the brother
hoods statement says, the miller S
profit of thirteen and halr cents
per barrel assured a liberal return OF
IL per cent on invested capital. But
during the year ending June 80, 1917
the millers had actually been aVerag-
ing fifty-two cents a barrel Ihese
are the federal trade commission
figures. and are probably not grossly
incorrect The statement, however
carefully omits the reason for these
extra ordinary apparent profits IN
1867. At the beginning OF the
crop year. the average farm price OF
wheat per bushel was ninety-three
cents on June l, 1917, it was $2.49.
All the larger mills had bought wheat
heavily in the summer and fall months
of 1916, and thus, thru absolutely no
action of their own, but simply thru
the unrestrained speculation of for
eign government wheat-buying agen-
cies. their wheat stocks for a short
time represented book profits of from
to 200 per cent.
THE federal trade commission
closed its survey with June 80, 1917
at precisely the time when these paper
profits were at their highest Almost
Immediately thereafter wheat and
flour prices dropped sharply, and
wheat stocks. instead of representing
a profit, appeared as a material loss.
Thus the book profits on wheat were
promptly wiped out, and the actual
milling margin of profit in 1917. as
another government report conclu-
sively proves, was materially lower
than in 1916. The brctherhood's state
ment ignores this fact completely. It's
whole argument is based on the theory
that the exceptinal conditions which
prevailed in 1867 were indicative
of the real course of trade.
Fortunately, there is a government
report on the milling industry which