The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1927-11-30
Senator Capper Warns Against Sectional Disparity
Mills DEALS WITH JOSEPH COMPANY
BROUGHT PROFIT INSTEAD OF Loss
FACTS DISPROvE LUND'S STATEMENTS
State Mill Paid Joseph Com.
pany $1O,654 For Privilege
Of Canceling Contracts, But
Sold Same Feed For $3,.
1852 Net Profit Above
Cancellation Charge

Cancellation Charge
Another shot was fired here TO-
day in the battle Of accountants
being waged over the operations of
the North Dakota State Mill and
Elevator.
In report released by Governor
A. G.. Sorlie for publication today,
T. H. Poole and William N. Schantz,
accountants for the governor, chal-
lenge various statements made by
0. B. Lund in his audit report on
the state mill enterprise and
contend that the actions Of the
North Dakota mill management
were similar to those of large pri-
vately owned milling enterprises.
Data contained in the report was
gathered by Poole and Schantk in
an audit of the affairs Of the l. s.
Joseph company, Minneapolis, men,
toned in Lund's report as having
made big profits in its dealings with
the North Dakota mill and elevator.
Contracts Were Profitable
Amcng other things the Poole
Schantz report takes direct issue
witll~a statement by Lund that the
North Dakota mill and elevator
sustained a direct cash loss Of $1O,-
654 because Of the cancellation Of
contracts calling for delivery by the
mill Of 1922 tons of feed to the
Joseph company. On the contrary,
the report to the governor contends,
the North Dakota mill and elevator
made a profit of .$3,2S5.92 by can
ceiling the contracts since it sold
the 1922 tons of feed in question
for $1a,039.92 and paid only $lO,-
654 for the cancellation privilege.
Commenting on the operations of
the state mill and elevator with re-
gard to feed sales, the auditors ap-
pointed by the governor said: ''In
his report to the state board of aud
itors Mr.. Lund expressed the fol-
lowing: During the months Of
July and September. 1926, sales
contracts were entered into by the
state mill to deliver to !. S. Joseph
company of Minneapolis 1900 tons
Of mill feed at $2l per tom, F. 0. B.
Minneapolis. '-'-.'
"'The local conditions existing at
the dates of these feed sales was
that the state Of North Dakota was
going into the fall and winter Of
1926 and 1927 with one Of the short
est feed crops in history
"'In the face of this condition
the mill owned by the state con-
tracted to deliver their mill feed
products for the next six months
to eastern markets at $21 per ton
ip such large quantities that they
were unable to make delivery on
all of the sales made and were
obliged to cancel a part Of these
contracts at q cost Of 81 per ton.
A cash payment Of $1O,654 was
made to I. S. Joseph company Of
Minneapolis for cancellation Of
1922 tons Of feed on this basis,
which was q direct cash loss to the
state mill that can be accurately
set up.
Contained in the. report sub
mitted by the senate fact-finding
committee is the following state
ment: These feed sales to the I.
S. Joseph company, in the approxi-
mate amount of 10000 tons were
made mostly at 80 cents per ton
less for pare than the Minneapolis
quotations on the same date, and
81 per ton cheaper for standard
middlings as compared to Minneap-
with the foregoing statements
before US we proceeded with the
examination Of the books and rec
ords Of the I. s. Joseph company,
verifying our findings from the
records of the North Dakota Mill
and Elevator association"
n Stock in the Joseph company, the
report shows, is held by I. s. Joseph,
B. Silvermah and M. Kantar with
Joseph the majority stockholder
and president and manager Of the
company.
Must Dispose OF Feed
Turning to the feed dealers
functions in the grain business, the
report says: I'm the milling in
dustry the proper disposing IL the
feed by-pr0ducts plays an import
ant part. When q miller undertakes
q. flour contract he considers cost
OF wheat plus cost Of manufacture
versus selling price. Of flour and
selling price Of feed. The miller
can sscertain with fair degree of |
accuracy the price Of material and
manufacturing costs. The selling
price Of the flour is set forth in the |
flour contract. There remains, how.
ever, the feed f6 be- disposed Of.
Few flour brokers' are IN the
market for fed and the practice Of
millers i to dispose d the feed |
q the same time the flour Is sold.
The mill sells the feed, resulting
from the flour contract, Tor delivery
- produced. Th1 ccst o1 tie wheet |
y already fixed Ia the price Of The
wheat purchased 10 4ill the flour
contract. All Of the elaunonts of tho !
Jour and feed ore couai1orod at the |!
kime the contract = utado and tie
market ductuations, @ of data of
delivety. have no bearing. Whatever
q The pr3ce Of flour Or led wlouj !
delivered The mill can no more !!
lf9crd to speculate on the prica of !
Leod than ik cou on The price of !
Hour, thore3ore,s e it enters into
Hour contract Il must also enter |
Into : eontEact 4ot tho djsposing |
4 tn 4eed Whieh & tho by-product |
of tho 40ur contract.
"Ihe natural outlet Tor the MN
led 8 the teod doaler asd g r. !
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