Evening star., 1935-04-05
COMMISSION AIRS
PROFITS IN MILK
Big Salaries to Officials of
Parent of Local Firm
Reported.

The Federal Trade Commission to-
day turned its spotlight on National
Dairy Products Corp, parent concern
Of Chestnut Farms Chevy Chase
Dairy, largest dealers in the WASH
ington milkshed, in q report to Con-
gress rapping practices Of dairy prod
ucts distributors
The commission found q serious"
financial condition existing among
many milk producers, while large
sums in dividends have been paid by
the local distributor companies to
parent companies and officers of both
the parent and distributor companies
have drawn generous salaries"
The generous salary" paid Presi-
dent Thomas H. McInnerney of Ma
tional Dairy Products in 1881
amounted to $751; ,947: in 1892. $l7l,-
099: in 1888, as of September /, he
was paid sl08, 900 per year, excluding
bonuses or other compensation.
During 1881" the report adds, al
other officers of this corporation re-
ceived salary and other compensation
ranging between $50 900 and $50, ,12O /;
in 1882 10 ofIlcers Of the corporation
other than the president received SAL
aries and other compensation ranging
from $25, 900 to 500, $3.50"
Price Fixing Alleged.
Nevertheless. the commission dis
covered distributors and co-operatives
have arrived at agreements and un-
derstandings to fix prices to the con-
sumner as well as prices paid the pro-
ducer." The report did not cover the
local area.
The commission further disclosed
dealer companies are selling to con-
sumers at 'the highest prevailing
prices" milk bought from the pro-
ducers as surplus" which the pro-
ducer gets at very low cost.
Lack Of funds limited the commits
sion's investigation ordered by the
House Of Representatives by the Kop-
plemann resolution to the State oi
Connecticut and the Philadelphia
milksheQ, comprising Eastern Penn
sylvania. Delaware and parts Of New
Jersey. Maryland and West Virginia
But the report declares:
I'm the files of one OF the phila
delphia companies members Of the
commissions staff found correspond.
ence indicating that price agreement.
similar to those in effect in the Phil.
adelphia and Connecticut areas ar
in effect In other areas"
The Philadelphia housewife pays II
cents quart for milk retail; in Wash.
ington the same milk costs IS cents
The A. A. A. reported today nationa
price Of milk rose So per cent from
February. 1884 to February, 1885.
$27,5ee, eco I'm Six Years
Philadelphia operation of Nationa
Dairy Products during the six year,
Of 1929 to 1884, inclusive, brought tn.
firm from its two subsidiaries In thi,
area approximately $27, SOC. 900 in divi.
dends, the report disclosed. and con.
tinued:
Evidence was developed indicatins
that in both the Connecticut anc
Philadelphia milksheds, dealer com.
panies nave at times been In part
responsible for the creation OF q
milk surplus by importation Of mill
products from other producing areas
Much Of this importation is In the
folm of fluid cream and Is sold a,
such. Some has been converted back
intn f11id yroi1k and 80 ~oIl r1.~.
importations have at times tended t.
create q surplus, which results moi
only in local producers receiving q
lower price on the quantity Of theil
production SO displaced, but h taker
into consideration In the fixing o.
prices and to that extent tends to de.
press prices to local producers.
The same quality of milk may bt
sold in four or five different classes
each carrying . different price Il
the producer"
Report Protested.
The Dairy Industry Committee. rep.
resenting distributors all over tn,
country, Immediately replied the re.
ports effect has been to indict ar
entire industry for the sins of q mi.
croscopic minority.
1T arouses suspicion among all pro.
ducers because it charges distributors
as group, with abuses Of q few un.
ethical competitors.
1T causes the farmer ID suspect his
chief bargaining weapon, the co-opera-
tive association.
1t spreads distrust among consum-
ers. decreasing consumption, the net
result OF which is measured In lower
income to the farmer"
The committee, In the statement OF
Its secretary, w. A. Wentworth
charged the Trade Commission with
"vagueness" and called distributors
profits "meager."