Evening star., 1933-08-20
DA|R|ES' CONTROL
AS UTILITY ASKED
Kmq Cool Toward Suggestion
at Present-SaIaries Due
for Airing Soon.
CONTINUED From First Page.)

alSu, CndL Tie pIOuuCcI 10 uiAocA pau,
and that the milk industry Is controlled
by a monopoly.
Incidentally, Seal has shown from
the maze of testimony during the first
three days of the hearings. some of the
large profits on the distributing end OF
the milk business. In one instance It
was brought out the head of milk
CORPORATION was paid a salary of $780,
600 q year until the depression came
along and reduced it last year to
t10s, 900.
Price Variations Shown.
Another point Seal disclosed was the
evidence of price discrimination among
charged former Secretary of Treasury
Mellon 13 cents quart for four bot
ties Of milk daily, while the same milk
was delivered to Secretary Of Agricul-
ture Wallace, who bought three quarts
daily at IL cents a quart. This same
dairy also sold milk as low as IL cents
Q quart to hold certain customers. The
price to the average consumer is 13
cents-the same that Mr.. Mellon paid.
Seal has been driving away to deter
mine just what effect the trust" has
on the small dealer-whether it is pre-
venting underselling. "One large COM
clared, has records to show the cost of
distribution, involving such items as
pasteurizing, bottling, ETC., but I have
not been able to find that in the case
of other distributors Yet practically
all the dealers are selling milk for 13
cents a quart, and not one Of them can
tell why
The investigation has developed that
approximately 80 per cent Of Washing
tons milk supply comes from dealers
In Maryland and Virginia who are
members of the Maryland Virginia Milk
Producers Association. This is a CO.
operative group, organized to obtain the
best possible price for milk produced by
farmers.
Glasses" Established.
The association set I'D so-called
milk classes" and each producer was
allocated q percentage to be shipped
Each class, however, consisted of the
same milk, but the prices differed.
For instance, class ! milk-the milk
that was bottled-brought the producer
70 cents a gallon, plus so-called pre-
miums for high butterfat content, the
barn score, cattle score, etc. It was
possible under this class for the pro-
ducer to get as high as 80 cents a gall
lon, but Seal said the average was %
cents, +. o. b. the barn. The cost to the
producer to deliver, however, amounts
to cents q gallon, which reduces the
price to 26 cents. In addition there is
q 1-cent brokerage fee, which brings the
net down to as cents.
For milk in the second class the pro-
ducer receives 20 cents a gallon, minus
brokerage fees and other charges, which
reduces the price to II cents. For the
1a fha C.
ever the market will bring. The pre-
vailing price, Seal said, Is II cents gal
lon. No premiums are paid on this
milk, although it is the same as the
class l milk for which the producer
receives net price of Is cents a gallon
Sought By-product Profit.
Seal pointed out that one dairy never
figured to make any profit on the class
of milk which it sold in bottles, but
aimed to make return on the cream
and by-products, which comes from the
surplus, or low priced milk.
Under this arrangement, Seal ex-
planned, sthe farmer is paid low prices
on the product on which the retailer
makes q profit. while the bottle con-
sumer Is forced to pay high prices be-
cause the distributor depends on the
surplus for his earnings
II haven't been able yet to find out
how the Maryland Virginia Milk Pro-
ducers' Association has been able to get
such control" Seal declared. "but in
tend to before the investigation is over.
The producers have told me they were
forced In by the distributors, and the
distributors said they had nothing to
do with it.
There is another strange thing about
this milk situation that I can't under
stand. The distributors have testified
that they don't want the farmer to pro-
duce a surplus, and yet their books
show all the profits come from the sale
Of the surplus"
Second Organization Acts.
Aside from the Maryland Virginia
Milk Producers Association, Seal said
there Is another super" organization
involved in the Washington milk indus
try-the Eastern States Milk Marketing
Association-which was formed to pre-
vent competition between the Washing
ton and Baltimore markets. Producers
in the Washington Baltimore area, he
explained, ship to retailers through this
organization. This group also arbi-
trarily fixes the price of milk shipped
into Washington without considering
the cost of production.
ou Tile CuSLl lpuCulS cuu Va tilC AiouS
try, Seal said he has developed the fact
that the National Dairy Products Cor
poration has virtual control of the Bal
timore and Washington markets This
Is the largest vendor of dairy products
in the country, and embraces every
State in the Union, as well as Canada
and Australia.
Assets Show Big Gain.
A. A. Stickler, treasurer of the cor
poration, revealed that in 1928 shortly
after incorporation, 1t had assets listed
at s11, 900, 900, which increased to $780,
900 900 in 1892. Good will in assets at
the time of incorporation was listed at
81. This intangible value was carried
on the books last year as s22, 100000.
In 1882 the company made net
profit of $12,000,000, exclusive OF
Sc, ,000, 900 written of for depreciation
and 100000 for maintenance and
repair. Cash on hand in 1882 amount
ed to $25, 900, 900, or one and half
times greater than current liabilities.
Since 1924, the company has paid out
more than $69.000,o00 in dividends to
stockholders.
The $50 ,O0o, 900 profits of the cor
poration caused Harry S. Barger,
washington lawyer, to write to Secre-
tary Wallace for an explanation of a
story which appeared in Washington
newspaper Thursday, announcing that
the dairy industry had been promised
q $50, ,o0O, 900 loan by the farm admin
istration. This money was promised
on condition that the industry complete
plans that would sharply limit the out
put of dairy products.
Sees Others Well OF.
Barger declared there is no reason
for believing that the dairy concerns
of the country at large are not as well
OF as those operating in the vicinity OF
Baltimore and Washington"
Barger was in acive practice in Wash
lxaekox, frnnn 1o1e 70 1Q21 ruhan he be.