Evening star. [volume] (Washington, D.C.) 1854-1972, 1950-05-16
Milk Producers
RestAfter Deniia.
0fPriiceFixiinq
Only Five Witnesses
Called by Defense
In Antitrust Case

Inc Maryland ana Virginia
Milk Producers Association and
its secretary treasurer, B. B. Der
rick today rested their case in Dis
trict Court. They are on treason
charges that they conspired with
four diaries to fix milk prices here.
Defense Attorney william E.
Leahy called five witnesses. One
Of them, William B. Cooper, asso-
citation Office manager. denied that
there had ever been any intent on
the part Of the association to fix
milk prices in concert with
distributors.
The four dairies-Alexandria
Harvey, Richf1eld and Lucerne
"a Safeway Stores subsidiary
rested their case late yesterday
before Judge Alexander Holtzoff
Earlier in the day. the judge
granted an acquittal motion for
three other defendants, Chest
nut Farms Chevy Chase, Thomp-
sons and Wakefield diaries; but
he ruled the remaining, diaries,
the association and Mr.. Derrick
must continue on trial.
Basis of Court Ruling.
The court based it's ruling on
the fact that evidence submitted
since the trial opened on May
showed the acquitted distributors
had had. no written, full supply
contracts with the producer group
since 1888. even though they had
continued to buy most of their
milk from the association.
But, in the case of the other
diaries, the court found they had
full contracts, including a price
classification plan. Such con-
tracts are "price-fixin scheme
and in violation of the Sherman
antitrust act, Judge Holtzof held
The judge noted that farmer
co-operatives, such as the as
ISOLATION, are exempt from pro-
visions of the Sherman Act until
they enter into agreements with
non-farmers." At that point
co-operatives' immunity ends, he
added.
However, had the association
taken advantage of the Federal
Marketing Act. which provides
for the fixing of prices by the
Secretary of Agriculture, there
would have been no violation of
the Sherman Act. the judge held.
The Government had charged
the association withdrew from a
Federal marketing order in March,
1947.
Points to Price Exhibit.
William Blum, jr., attorney for
Alexandria Dairy, called the
courts attention to an exhibit
showing the dairy's prices since
the termination of the Federal
order have been controlled by
the Virginia Milk Commission.
Mr.. Blum contended the Alex
andria Dairy accordingly was ex-
empt from the charges.
II will take that under consi-
deration," Judge Holtzoff de-
clared.
Chief Prosecutor Robert H.
VIM agreed to stipulate that
Alexandria Dairy's milk comes
solely from Virginia farmers and
that Harvey Dairy's supply is pro-
vided entirely by Maryland pro-
ducers.
Safeway Attorney Arthur Han
son then called Raymond B. Bush,
manager Of Lucerne plants in the
United States and Canada and a
former plant manager here. He
denied the company had any con-
tract with the association at the
time OF the indictment in March,
1948.
Old Company Dissolved.
The witness admitted the Lu-
cerne Cream & Butter Co. had
had a contract with the associa-
ton in 1912. but he pointed out
this company subsequently was
dissolved and the present COM
pany under the name of Lucerne
Milk Co. formed.
In his 45-minute oral ruling on
the acquittal motion. the Judge
observed that, I'm justice to all
there is no evidence that any de-
PENDANTS acted in bad faith" nor
that the prices established by
them were unreasonable"
He also took another oppor-
tunity to question the Govern
ment's decision to proceed under
criminal indictment rather than
"a civil suit.
This question could have well
been settled in a civil action, u
Judge Holtzoff declared.
The Government estimates that
Chestnut Farms sells Al per cent
of Washington's milk supply,