Evening star., 1933-08-17

had made big profits beyond reasonable
business expectations and, if So whether
those profits had resulted because they
had charged the consumers too mu.h
or had paid the farmers too little"
Mr.. Davies stated that the National
Dairy Products Corporation Is proud Of
! success under free and fair competi-
ton. and received permission to file a
memorandum Of facts
Denies Advice to Bowman.
r. S. Gordon. representing the Ma
tional Diaries, in questioning Mr.. Gra-
ham, brought out that the purchase
of the Western Maryl. I'd and Fairfield
dairies was S10.000,000 or $4,000, COO
deal. Mr. Graham admitted he had ad-
vised and engineered the deal because
Charles R. Bowman, then principal
owner of those dairies. owed the bank
very considerable amounts. He denied
that he had ever advised Mr. Bowman
to sell out to the National Diaries be-
cause he was fearful that otherwise he
would be driven out of the Baltimore
milk area.
Henry N. BraWner. president Of the
Chestnut Farms Dairy, and for 80
years a leading distributor in Wash
ington, testified that the Chestnut
Farms Dairy was sold to the National
Dairy Products Co. at sl,660 900, and
that in payment there was received
10000 shares of National Dairy stock at
Sis a share, sl000,000 worth Of gold
bonds and other stocks, all totaling
$4250,000.
Mr.. Brawner said he himself was
given a contract and 100000 a year
for a five-year term. with the right of
renewal His present salary is S27,00O
because Of a 10 per cent reduc ion He
told the committee there is now no
profit in the sale of basic milk by his
concern, but that the profits come
from the sale of cream, cheese. butter
and other products.
Senator King asked Mr.. BraWner
who fixes the price at which you sell,
either wholesale or retail?" and the wit
ness answered: Il do"
Denies "Understa nding."
Senator King asked if it isn't fact
that the distributors have such cordial
relations that the price is substantially
uniform?" Mr.. BraWner answered: 1T
has to be-"
He denied, however. that there is any
understanding" for uniform price and
pointed out that several independents
are selling milk for cent or two less.
He testified that the Chestnut Farms
Dairy is getting all of its milk supply
from the Maryland Virginia Milk Pro-
ducers Association, except three special
producers who have been furnishing
milk to his dairy for some 80 years The
total amount received from them, how
ever, is only $50 gallons out of some
10000 gallons.
Glenn w. Rose, an auditor from the
controller generals office, testified re-
garding the audit he had made of the
Thompson Dairy books. During this
phase of the hearing Senator King drew
from the witness a statement that he
found uniformity of prices charged for
milk in Washington among the principal
distributors
The attorney representing John Magill,
jr, secretary treasurer of the Maryland
Virginia Milk Producers Association,
drew from the auditor statement that
that association was on record as claim
ing a refund from the Thompson Dairy
for surplus milk bottled and distributed
as basic milk.
Net Profit S1,791,SS9.
The Chevy Chase and Chestnut
Farms Diaries, since their acquisition
by the National Dairy Products Cor
poration, have made net profits OF ST.
79I .889 during the past four years, the
committee was told yesterday.
Coupled with this testimony, by Nor
man Simpson. an auditor who went over
the books of the two concerns at the
instigation of Elwood H. Seal. assistant
corporation counsel and special inves-
tigator of the committee, came an ad-
mission forced by Roger Whiteford,
counsel for the two dairies, that this
profit was not on milk, but on butter,
cheese, cream and other products. The
Chevy Chase Dairy. he testified, sells
much of its milk below cost and makes
no profit on its milk business on the
ground that this Is a necessity of life,
while cream and other products are
more in the class of luxuries.
The two milk distributing concerns
supply approximately go per cent of the
milk delivered in the Washington area.
The net profits of the Chestnut Farms
Dairy since its acquisition by the Ma
tional Diaries, Simpson testified, were:
From April to December. 1929, S186 900;
1880, 1922, ,324; 1881. S379,958; 1882,
S432, ,O28, and for the first six months of
this year, s247,814.
Delivery Costs High.
Since its purchase by the same corpo-
ration in 1881, Chevy Chase has Shown
the following net profits: 1881, $187,219:
1882, $103,719. and for the first six
months Of this year. 4,507. The ac-
tual price paid for the Gairies by the