Evening star., 1936-10-01
VAST MILK DOMAIN
OF ONE CONCERN
Barred BY SURVEY
Trade Commission Reports
National Dairy Operates
in 27 States.
REGULATION ATTACKED
IN TWO SUITS HERE
Justice Wheat Gives q. s. Nine
Days to Answer Injunction
Plea Of 12 Farmers.
BY BLAIR BOLLES.

BY BLAIR BOLLES.
National Dairy Products Corp, par.
ent concern Of the largest milk dis
tributor and Of the largest ice cream
plant In the District, controls more
than one-tenth Of the milk business,
more than one-fifth of the ice cream
business and one-third Of the cheese
business of the United States, the
Federal Trade Commission reported
today in the course Of milk study
ordered by Congress.
The information was made public
Is Agricultural Adjustment Admin
istration lawyers began preparation
Of . defense Of the legality Of Federal
regulation of milk distributors for
presentation in District Court here
October 8.
The regulation, Is it applies TO
Washington, was attacked yesterday
in two suits by IL Maryland and Vir-
ginia farmers who contended 1t was
unconstitutional. Chief Justice Al
fred A. Wheat gave the Government
nine days to show cause why Secre-
tary Wallace should not be enjoined
from enforcing the order establishing
the control.
The Federal Trade Commissions
report is one Of a series prepared
according to q House resolution Of
June, 1894. The study leading to
today's disclosures was to determine
the existence and extent Of unfair
monopoly and price-depressing prac-
tices," with emphasis on the New
York milkshed, where the National
Dairy has its headquarters.
Extensive Ice Cream Trade.
Chestnut Farms Chevy Chase Dali
ries and Southern Diaries, Inc, ice
cream handler. Of Washington, and
Nationals $50 other subsidiaries,
bought 3,727,s42,2s2 pounds of fluid
milk and sold 37.s5o, ,oss gallons Of ice
cream two years ago. Nationals ice
cream operations extend through ~
States, the commission reported,
ranging from 2 per cent Of the total
business In Montana to 50 per cent In
Connecticut.
subsidiaries Of National Dairy
Products Corp. have granted special
discounts TO chain stores handling
their products" the report said in .
discussion Of monopoly practices In
the milk industry. For example,
Chestnut Farms-Chevy Chase Dairy
Co. had q special contract with .
large chain store system in WASH
ington, D. c.. granting 5 per cent dis
count on all purchases Of milk and
cream"
The store was not named.
Nationals strength, the commission
declared, enables it 'to obtain special
discounts and allowances on pur-
chases Of supplies for its subsidiaries.
For example, it has special arrange
ment with sugar brokers whereby its
subsidiaries receive Q rebate Of S cents
q bag on their requirements Of sugar.
It also has an arrangement with
the National Biscuit Co. for . special
rebate on the purchase Of ice cream
cones for its subsidiaries"
National became leader of the
United States cheese industry, the re-
port disclosed, through its acquisition
Of Breakstone Bros, Inc, and Of
Kraft Phenix Cheese Corp. Through
Kraft, National dominates c. A.
Straubel Co., zone Of the few active
members Of the Wisconsin Cheese
Exchange, whose activities fix the
basis for the price Of cheese through
out the United States"
Borden Aid Received.
Kraft-Phenix received aid, too,
from Nationals leading rival, the
Borden Co., the report indicated.
Certain documents found in the
files Of the Borden Co. discloses that
at times the company refrained from
competing with other large companies.
including Kraft-Phenix Cheese Corp,
Carnation Co. and Pet Milk Co"
said the report.
The commission report charges that
the National Dairy near-monopoly ex-
tends also into the cooperative field.
As an example. the report cites Shef-
field Producers Cooperative Associa-
ton. with q membership Of $4,000
dairy farmers, and declares that the
association Is dominated and con-
trolled" by its only customer, Sheffeld
Farms Co., o subsidiary Of National.
The first suit against the milk
agreement here was filed by Seton
Darr for II Montgomery and Fred
erick County, Md, farmers, producing
milk for Highland Farms Dairy, q
Capital distributor. Four hours later
George A. Cassidy, jr., and Frederick
Stholman filed the second in the
name of A. Lawrence Leigh, . Fair
fax County, Va. producer.
Leigh complained he would receive
less with regulation in effect than
he Is now paid under . contract
with the Model Farms Dairy, Inc.
He maintained that the 2 cents per
hundredweight tax levied on dis
tributors by the order will result in
the public's using less milk, for be
believed that the tax. assessed to
administer the control order, would
be added to the consumer price.
Unlawful Authority Alleged.
Both suits argued that the order
constitutes an unlawful deiegation OF
authority, - -
me Ii Marylanders forecast .'the
financial ruin Of the plaintiffs and
the destruction Of their dairy farm
Ing business" through the operation
of the order. and complained that it
ignores their contractural agreement
with Highland Farms Dairy.
This suit was filed In behalf Of
Joseph H. cGan1ey, Monfcvia. Nd;
Harry @. Crum, WalkersviIle; Anna
M. Davis, Frederick; Glenn Trout,
Frederick: Harvey lAre. Frederick:
Frank M. Stauffer, Walkersville;
Carl M. Thomas, Frederick; Glen
Crum, Frederick: Samuel Rosenstork
and Harry swomley, trading q Rosen.
stork Il Co.. OF Frederick clAnde =.
Droueburg, Frederick, ana James D.
Runkles, Dickefson.