Evening star., 1933-10-10
Seal Wants Explanation OF
S8O9,237 Increase
Within IS Days.
INQUIRY is CENTERED
ON CHESTNUT FARMS
Investigator Will Seek to Show
Amount of Write Up for
Milk Chain Affiliates.

An explanation Of why the good Will
of the Chestnut Farms Dairy increased
5000 ,237 "a in value within Is days Will
be demanded of officials of National
Dairy Products Co. when the Senate
District subcommittee investigating the
alleged milk monopoly here resumes ITS
hearings late this month, Special In
yestipator ElWood H. Seal said today.
Seal returned today from New YORK
with financial statements mvoiVeo IN
the acquisition by National Dairy OF olo
distributing companies, and Whlcn ne
intends to lay before the investigating
subcommittee.
When National Dairy applied to the
New York Stock Exchange for the list
ing of Chestnut Farms it valued that
concerns good will as of December 81,
1928, at $3.50, 1852 sc, Seal disclosed.
Value Later Set At Million.
Fifteen davs later, however. on jan
nary Is, 1929. National Dairy set the
value of Chestnut Farms good Will at
$1,000 900, according to testimony pre-
sented to the milk investigating SUBJ
committee last August At that near,
ing officers of National Dairy testlhed
the net worth of the local dairy at the
time of acquisition, January Is. 1879,
was 81. $50 600, of which 100000 rep
xssanted good will. Two years before,
at the end of the calendar year 1873,
however. the good will was valued at
only S2,760.09, representing Jump OF
approximately $4,000, according to the
the application filed with the New York
Stock Exchange. Commenting on the
disclosure, Seal said he wanted to know
from officials of National Dairy whether
they valued the good will OF the Chest-
nut Farms Dairy too high In their testl-
mony before the District subcommittee,
or too low in their application to the
stock market. Apparently, he said, both
valuations could not be correct.
To clear up the discrepancy, he said
he would subpoena A. A. Stickler,
treasurer of National Dairy Products
Co.; John N. Brawner, president OF
Chestnut Farms. and A. w. McCarty,
secretary of the local dairy.
Seeks to show Write Up"
In addition to the figures on the
local dairy set-up, Seal obtained from
National Dairy officials all the applica-
tions for stock listing of the dairleS ac-
quired by the holding company since its
organization in 1923, numbering Sis.
These had been requested by Chalrmar. r.
King of the Senate District Committee
for use at the hearing. Seal will
'break down" the statements to show
the actual net worth of the diaries and
distributing companies acquired, the
amount paid by National Dairy for
them. and the value OF which they now
list the subsidiaries. In this way, he
intends to show, he said. the amount
of write up" or boost in book value
r,loaaI caPh nf the affl1iatpC
Seal disclosed that, with the exception
of two or three small dairies, no actual
cash was paid by National Dairy for
any of the subsidiaries it has acquired
during the last nine years.
Meanwhile. the first of the local in
dependent diaries today had rejected
the proposed milk marketing agreement
for the Washington area drafted by the
Maryland and Virginia Milk Producers
Association. The Aide y-Green
MeadoWs-Fairfax Farm Diaries. through
its attorney, Seton Darr, contended in
rejecting the code that the increased
price to the farmer, provided in the
agreement. is arbitrarily set without
reference to the cost Of production. and
that the basic price and surplus quota"
plan of milk purchase is unfair.
Darr said his dairy would request
other independent milk distributing
companies, which recently organized as
the Independent Milk Distributors As
ISOLATION, to take similar action and be
prepared to fight the code when it is
submitted to the Agricultural Adjust
ment Administration for approval
Would Abolish 1-2-3 System.
Darr said his company would propose
that all milk be priced equally and that
the class 1-2-3 system be abolished
Under the class plan. the Maryland
and Virginia milk producers proposed
code calls for price of 20 cents a gal
lon for class l milk, % cents for class
2 milk and whatever the producer can
get for class milk. according to Darr.
The proposed agreement was distrib
uted yesterday to the local dairies.
Another objection Of the Alderney-
Green Meadows-Fa Farm Diaries,
according to Darr, is that, under the
agreement. independent distributors
would have to deal through the wash
ington Dairy Council. This agency, he
contended, is controlled by National
Dairy and the Maryland and Virginia
Milk Producers Association.
meeting of the independents, to de-
termine upon their policy with respect
t,o, will ho hold eit her