The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1927-11-29
'LUND'S REPORT
TO AUDIT BOARD
is CHALLENGED
Continued fiom pare one)

A0 SAA& 1AD4AADA y WALL
Continued fiom page one)
tain transactions and to determine
whether or not the procedure taken
at the time such transactions arose
was founded on good business prac-
tice. We realize that the economic
functions of the various branches Of
the grain and milling industries
present many complications, gen
orally little understood by the
casual observer, and complete anal
yses of many transactions will dis
close findings contrary to hastily
formed conclusions.
Practices Outlined
eve endeavor briefly to sketch
the practices generally followed by
millers and submit evidence to
show whether or not the manage
ynent Of the North Dakota Mill and
Elevator association made Z radical
departure from good and sound
policies followed by industries en-
gagged in a similar line Of bust
ness.
"Mr. o. B. Lund, accountant, in
his report to the members Of the
state board Of auditors, stated that
the Midland Grain company of Min
neapolis received an average profit
Of $117.38 per car Of wheat sold to
the North Dakota Mill and Eleva-
tor association. On an academic
conclusion he stated that the total
profit inuring to the benefit of the
company amounted to $37,226.84
on 318 cars of wheat delivered.
"Our examination of the books
and records of the Midland Grain
company disprove this conclusion
and the certified report Of Hen
erickson and Wilson, public account
ants of st. Paul, Mimi, bears out
our report, in which it is maintain
ed that the alleged middleman's
profit of $37, 1864 was arbitrarily
determined and not founded on &C.
tual facts and conditions"
After reviewing the facts regard
ing the incorporation and ownership
of the Midland Grain company,
showing it to be owned by l. S.
Joseph, David S. Levin and Morris
Kantar, with Levin as general man.
ager, the report states.
"Millers, mixers and exporters,
when in need Of certain grain for
particular purposes, call on dealers
and others having such grain for
sale, or having~knowledge of avail
able supplies, and arrange through
them for the purchase Of their spc-
cific needs. 1t appears to be un-
economical for millers and mixers
to maintain direct buying organiza-
tions and our examination disclosed
that millers, as a general rule, buy
their wheat through grain dealers.
"The grain dealer fills a definite
need in the economical scheme of
the milling and grain industries by
maintaining this contact between
the producer apd the manufacturer.
To do this he must have representa-
tives and buyers in the producing
territories in touch with market Of
ferings, reviewing samples and gen.
orally relieving millers of the prob
lem of getting grain required for
their particular purposes.
D0osASCo 40 w 2V0nC = bOWA
"The business Of q flour mill is
to manufacture flour, and a flour
mill is generally dependent for its
net income on the profits arising
from flour and feed contracts.
Flour contracts are usually made
with brokerage firms for u stated
number of barrels Of a specific
quality. Deliveries of the manu-
featured products are often made
several months after the date of
the contracts; the selling price,
however, is based on the prevailing
cash or futures price Of wheat as
of the date Of contract.
"The mill is assured of its rev.
enue as Of date of contract if the
mill has available the wheat neces-
sary to manufacture the flour. This
condition seldom, if ever, exists and
the mill must go into the market for
the purpose Of buying wheat neces-
sary to fill its flour CONTRACTS. tt
is not only necessary to secure a
given number of bushels of wheat,
but wheat must be had of q spe-
cific quality. It is not, and never
can be. feasible to engage a force
Of buyers to go out into the pro-
ducing territories and promiscu-
ously to accept the offerings of
such sources without regard to the
mills specific requirements. On
the contrary, conservative milling
methods prove that it is sound
policy to contract with reputable
grain dealers for the delivery Of
specified qualities, kinds and grades
of wheat needed to fill the flour
contracts entered into.
sin this connection the (state)
senate fact-finding committee
stated in its report: 1T is our rec
ommendation, however, that the
mill purchase wheat on the basis Of
it's actual milling value without any
discrimination as to who the seller
may be- The management of the
North Dakota Mill and Elevator as
ISOLATION apparently is being CEN
sured mostly for doing the very
thing the fact-finding committee
endorsed in its report.
Entitled to Fair Profit
I'm the reports of the auditor for
The state board of auditors and in
the report filed by the fact-finding
considerable stress is
aid on the payments Of alleged ex-
.essive middlemen's profits, chiefly
to transactions with the
Midland Grain company. 1t is our
that since the grain
dealer assumes the risk incidental
10 furnishing Of wheat necessary in
The manufacturing of flour, he is en-
titled to a Reasonable profit on the
deal. 1t must be borne in mind
that the grain dealer is in business