The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-04-12
Liberal Viewpoint
BY DIR. HARRY ELMER BARNES

THE utility holding companies continue their
Il propaganda against the Wheeler Reyburn
bill designed to terminate useless and parasitic
holding companies in the electric utility in
dustry. Meanwhile, the Federal Trade Com
mission has handed in report on the eastern
dairy industry which indicates the urgent de-
STABILITY of extending this withholding COM
pany legislation beyond the realm of electric
utilities.
The evils and exploitation revealed by this
report of the Federal Trade Commission are of
type which have been able to observe per-
sonaly.
1 have seen my neighbors in Central New
York sell milk for less than cents a quart and
at the same time have witnessed my friends in
New York City pay from Il to Is cents quart
for this same milk Not only are the consumers
gOuged outrageOuSly and unnecessarily, but the
dairy farmers are either ruined or brought to
the verge Of ruin, thus undermining the pur-
chasing power of a large group of consumers to
whom manufacturers would like to sell
their goods.
The great holding companies in the eastern
dairy industry imported enough milk from out
side to create a fictitious surplus. This gave
them an ostensible reason for paying the farm
ers the low milk prices which could be justified
only by an actual milk surplus. Then they
soaked the metropolitan consumers "the highest
prices" which could be logically justified only
by a relative shortage of milk.
THE most indefensible element in the situa-
l. ton lies in the fact that those who handle
the actual distribution of the milk from the
farmer to the city consumer did not get all the
profits from this outrageous differential be-
tween the producers prices for milk and what
the consumers have to pay. A good deal of
these profits went to the great dairy holding
companies which, so far as 1 have ever been
able to learn, play no essential function in
actually distributing milk. For example, this
report of the Federal Trade Commission points
out that the National Dairy Products Corp.
the largest of the dairy holding companies,
raked off no less than $27 100000 in dividends
from two subsidiaries in the Philadelphia area
alone from 1929 to 1884. This represented more
than 70 per cent Of its investment in the Phila-
delphia companies acquired"
In the light of their tenuous and very in
direct relationship of these dairy holding COM
panles to the actual marketing of milk the
salaries paid to the officers of the National
Dairy Products Corp. seem indefensible to the
outsider. For example, the President of this
corporation received in 1881 salary and other
| compensation amounting to $187947 Eleven
other officers in the corporation received salaries
and other compensations in 1881 ranging be-
tween s6312O and $4,000.
The officers of other great dairy holding
companies did not do so badly either For in
stance, the president of the Borden Company is
said to have received in 1881 salary and other
compensation amounting to S19OO30 In the
meantime, what was happening to the farmers?
The report answers this question:
The investigation has disclosed that a
serious condition exists among many producers
Many farmers who depend largely on their
dairy business for a livelihood, have been re-
duced to financial distress due at least in large
part to the low average price received for their
milk. Many have mortgages on their farms on
which interest payments are in default Others
have abandoned dairy farming and disposed of
their herds"
PERSONALLY. have nothing against the
National Dairy Products Corp. Indeed.
hold some of its stock and my own selfish in
terests would indicate desire to have it prosper
by continuing to rake off the cream from the
earnings of its subsidiaries which actually dis
tribute our milk
But as an economic commentator, I would
like to see it justify its existence I would like
to know if milk could not be distributed Just
as effectively to the American consuming pub
lie If both it and the Borden Co. went out
of existence. Indeed, would not the prices to
farmers be higher and those 70 consumers
lower?
Milk is certainly as important product to
the American public as electricity. and the
American public needs protection from the dairy
holding companies as much as from those in the
electric industry.
The farmers are. patiently unable to solve
their problem themselves. There are enough
doube-crossers and chiselers to sabotage any
local protective organization. And the Dairy
mems League has been repeatedly accused of
having sold out the farmers to the great dairy
holding companies.