Corn ell Unive rsity Library SF 225.A1U5^BI»^ V.6 U. S. Federal milk commission for the Ml 3 1924 003 221 193 V, Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924003221193 EXHIBIT 39 13/26/17 SUUIIY SLOPE FARLi ROY P. RlUnCLE R.F.D.H0.1,J0HITST0T^II,n.Y. Decenber Ttrenty- eeoond, 1917, Mr, J. D. Lailer, Woiid'a Tower Bldg., New York City* Dear Sir:- Yours of 19tli inst , received, I aiiould iiave replied a little sooner biit ny niisierous duties as sole caretaker of 28 iiead of cattle and four horses as T?ell as th.e neoassity of fill- ing out and securing affadavits to ny questionnaire prevented* Am very glad ay evidence is of value to th.e Gozaaisslon. In re^i'ard to labor costs. Personally ay last aan receive $40 per month, board, lodging, and Tvashing. This s'urelj'- brings his cost to me up to $70. per aonth. He -n-orked an average of 276 hoiirs per aonth making a cost of $S^ '^x hoirr. This saan had privileges such a,s occasional use of horse and buggy that cannot easily be put on cash basis, Altho a nan of ability he was a very hard horse aan smd quite conservative of personal energy. I could not have hired hin at that figure for the whole season but got him after hay ing. The writer puts in more hours per month and knows that his labor in other fields would bring him certainly over 30ji per hour. Sometime ago I offered a man ^90 per month, board, etc. for one and one-half months. He refused on the grounds that more agreeable wor^ Other farmers around here are paying f rem EXHIBIT 39 ?AG2 3. $35 to ".Ad per noath -rrifh. "ooard eto. You uacIerstsJid tliat vhexa a famer can find a aan Trilling to hire out for a yoc-r he gets lees per lionth than where he hires out for only part or all of the busy season. I hired a nan a year ago to 'oegin A::ril lat, 1917 for one year for ^40 per month, house rent, all the nil:: he needed, fire TTood, all the garden he ^ranted and use of horse* He left after TTorking a fe^ Treeka to take nore renuaerative job in city. The bes'^ nan I ever had left ns at instigation of general nssnager of snail railTTaj' s^^^ten here to take job paying C'3. par day ^i^ith H.R. pass and seven hour da^r. So far this aonth there has been an auction every day excepting Simday^ -Trithin a radius of a few niles* I know personally and have been told by good authority in other cases that nost of these auctions -Jieans a farrier going out of business. They can :2ake as ii"ach or nore noney working for sone other farmer or in the city and have leas worry eto. Tie are wondering who is going to work all these fa,nis next year. Unfavorable seasons for three years iiave raade it hard for faraers to pay even as good "rages as those spoken of above, ilan3'' farmers could not pay then and had to do what they could with the help of their fanilies a^id let the rest go. Some nen are to be fo"und that like to work on fams and will do so at a reaBon£:ble wa^e but they plan to tal:e it easy and be as independent as they think the desperation of the farrner will permit* A severe hail storm this summer entirely rr.ined.the crops on some farms even to the apples. In regard to the cost of silage. Enclosed find data where I have substituted horse labor for traotor. In regard to the plowing and fitting of ny land, it being heavy soil and so m-och S E}3IBIT 39 PAGE 3. liain for tiiree saaions liaring laade i1i -iore 6o:ui:a<3t it requires a lot work to fit it properly and a plow draws mighty liard tiiru it if ground is plowed to any deptli. A neighbox wit la ligliter land says it would take Ilia six or seven days to fit nine acres of liis land. Some faraers nigiit "be situated to work tliree iLorses abreast^ tMs would enable one aan to do more work in a given length of time On liauling liarvester. It is very hard work for two lioraeg especi- ally where there are any grades at all to clinb. I realized the fact that in so far as actual time is concerned it is ch.6aper to haul harvester with tea^a but they usuall]'' get aore necks and I pre- fer to save ay horses on such jobs even at increased cost. There are seveial custom silo filling outfits in this neighborhood of varying capacities. The one most satisfactory is a large one run by a steam engine, 'Two men are furnished with th.e outfit and tney charge for their time and use of outfit Os.SO per b^ur. The other outfits run by gas tractors and engines onlj' have one man and oharf tl,S5 to Cs and 02,25 per h-oiir. Some farmers cut their silage as coarse as possible and get it thru the pipe (a slight exaggeration' and they get th.ru faster but do not get as many tons in their silo,, and it is not as good feed. Th.e writer cuts his finer than the avv age at an increased cost. From Sept, 29, 1915 to Nov, 12, ^17 I owned a I^Iogul 8-16 which cost me about §800. I was obliged to continually overload and it was depreciating very fast, I tried to trade with the same company with.out success and getting wrathh traded with, the Case pe s e:[i-ii:^it 39 page 5. 4. for a Case 10-20 being allOTrod nearly Trha.t I paid for t]ie IIogiiL- T^-e inorsased cost of tliese engiuss n-early or CLuite oTBibalaiic-ed. ■biie depreciation ojid tiie Case people ziade ne a good offer aa it "as a £0oC advert is anent for tliezi* II7 present tractor, nearly nerj stands ue in '^1064. It lias "oeen tlie practice in ixiny cases in t>i,. counti-y to cjiargs .'";i, per liour for ciiston work Trit'n tractor and di at iloT7in- etc, ""e do not figure any sr^at profit in tnis but "believe it reduces the cost of tractor to famer. You did not asi: ne to s-srear to tnia inforoation cut in as n-.-.oli as I ezpeot t-o swear to zi-y a/Jio3tion3a,ire tliis s^temoon I will treat tliis letter in the sane naronor and if it is unnecassajry no ham is done and possibly tine will be saved. Very trul3'' 3'-Qurs, Roy P.. Rvniile State of llQvr York, ) ss: County of Fulton. ) The undersigned, being a famer of the Town of liohawk, llontgonery County, does solemnly swear that the above and attached inforiiation and data is to the best of his 22nowled,v;-e the truth. Hoy P, Rankle Subscribed and awom to before no this 32nd day of Dccenber 1917. SzCz& J « Cut hell Caldorwood, (Seal) Surrogate of F-jaton County* EXHIBIT 39 PAGI] . 5^ COST OF SILAGE FOR 1917, Substituting liorse labor for tractor* Plotring: Hine acres ryith tean @ O^.OO per acre $36.00 Manure: 60 Tons O 3.50, 50^ benefit tliis year 75.00 Fertilizer: 1 Ton Acid Phosphate, hauling & ap:?l7ing 13,00 Fitting: ^8 Da3'-s Tith 3 horse tean sjid nan Q 4,50 per day 36,00 Seed: 3.65 bu. O C"3.00 10,95 Planting: 1 d^ 3-, ^inan and team 4,50 Cultivation: 10 da7a " " " 45.00 Harvesting: Hand outting 1,50 Hire of harvester 5.00 5 balls of t-rine 5,00 3 days haulinc: harvester Fith S horses 9.00 Filling: Estimate of neighbors & a^'-self -nrh^re filling outfit is hired and famer a'-ist have a nunber of e:n:tra nen for that tine including board of nen © 45 ""31513,88 1446838.23 1300 .,33 1445533,0;! 638013, 6 J 135647,29 94430.52 858091.46 577436.55 128481.57 189314.57 56791.33 30041.50 35710.45 48534.34 2948.90 3577.48 965.01 3978.07 2617.20 21644,25 525484.67 51951-.8S 2183,12. ' 5-il35.0'0' EXHIBIT 41 Page 5, Sales, Less Discount a & Allowances, Net Sales Oo at of Salea, Mlk, C'rean & Condensed, Butter & Eggs &. Other Merchandise, Freight &. Ferriage, Total Gross Profit, Selling & Operating Expenses, Creaaery Ea^enses, Delivery " Stame K General Operating Expenses, Administration " Stores, " Fam « Fer^Hil-Lao Bottles & Expenses, Tin Shop Expenses, Machine Shop " Royalties, Depreciation, Total Het Trading Profit, Other Income Total JULY 1917 AUG. 1917 1438318.60 1557119,12 1350,63 1354,15 1426967,98 1555754 .9Y 675090.30 839097.97 121789.05 118847.37 106652 .01 101207.73 903531.36 1059153.07 "'^33436,62 496611.90 102171.82 106864.28 303687,84 199162.79 33751.22 50906.57 37511.61 33636.96 40718.94 34767.19 43074,34 43410.47 4015.11 3785.25 4393.46 3373.03 980.73 1514.06 3759.66 3539.03 2212 . 74 3133.74 21185.25 31199.35 50o:1d2.71'" 49"207l.6l ■ 16973.91' ■ ■ 4540.39 4779.07 7900.84 ' SI 752, 98 X2441.13 EXIIIBIT 41 Page 6, SaT.es Leas Disooimts & Allowanoea, Net Sales Goat of Salea ^ kilk, Orean u Goniiensed , Butter & Egga & Otlier MerciiaDdiae , Freiglit & Ferriage, Total Gross Profit, SeJJJzi^ & Operating Expenaes , Greaiiery Expensea, DeiiTer;'- « SxalDle " Ge^ie.ral Operating Expenses, Adnini st rat ion Sfcorea, Faisa Fer>-LIil-Iiao Bottles & Expenses, Tin SlLop Expenses, Maoiiine Saop, •' Royalties, Depreciation, TotaJ. Het Trading Profit, Otlier Inooae Total » n S3ST. 1917 1389498.19 1310. 05 1388288.16 603483,62 145161.79 .89548^40 ^38193- 81 460094 «35 96939,74 179721,14 53565 ,^ 20169 b2 7 33388,64 39819.40 1845,74 2915*63 1128.47 2 741 o 60; 1500 »07 32646 ^25 456381,57 ""3712 .'78 123 4 » 73 OGT. 191 7 1489552.77 1840*83 148 7711 .ST" 705513,07 161784,34 76893,63 944390.03" 543531 ^91 84090.57 166335.09 48746,63 18557.56 33996.67 42543.00 3055*34 3451^55 1123,01 2709.48 1383.06 39456,25 454548,01 2328.89 111502.79* R Indiisates Loas * inoluided in this item of Profit is §30,000.00 adjustment on price of sld-SEaed milk sold Sheffield !By Products Company during the months of Januajry, Febri^ary, March, April, May June, JvCLy, August, and September. THE EiPIRE STATE DAIRY 001^.^ NY, Pro Forcia Profit and Losa Statement, Noveiiiber 30 th, 1916. Route Sales Stor^ Sales Other Earnings (Rent Discounts Dividends Interest Cost of iierchandise Creamery Expenses Freight Ferriages Wages Saiar^.es Rs-frj aeration Wa^^on and Harness Repairs, etc. Feed, Stable Expenses, etc* AutOiiiObile Expense Ooiiiaiissions Boxes and Cans Bottles Rent Gen-er.a1 -E:^en8es Dividends Interest Depreciation Loss General Business Revenues 244,663.66 31,587.73 261.00 331.33 79.96 4,043.77 370,866.43 Expenses 171,077.14 5,006.14 19,020.74 539.67 38,331.00 8,391.66 58.44 1,535.73 8,378.32 3,430.53 1,641.43 3,181.58 2, 604- 72 347, 50 14,256.03 1,265.83 370,866.43 Windsor Grain Account General Business Grain Account t3 Exhi'oit No. 43, Page S. THE EMPIRE STATE DAIRY OOii^PANY Pro Forma Profit and Loae Stateiiient, Deo. 31, 1916. 11/30/16 18/31/16 Revenues Expenses Roijte Sales Store Sales Other Earnings (Rent) Discounts Dividends Interest Cost of "iierchandi s© Creamery Expense Freight Ferriages Wages Salaries Refrigeration Wagon and Harness Repairs, etc. Feed, Stable Expenses, etc. Automobile Expenses Ooiamissions Boxes and Cans Bottles Rent General Expenses Dividends Interest Depreciation Loss General Business 251,711.03 31,394.38 157.00 233.80 3,430.00 7.21 9,311.30 285,033.73 Windsor Grain Account General Business Grain Aocouiit 176^761.35 5,936.04 18,535.36 586. J59 48, 940.66 2,291.74 23..73 1,246.55 7,538.07 3,418.97 1,843,83 24.06 3,213.14 347.50 9, 863, 3 8 6,485.85 285,033.73 t3 Exhiloit No. 4S_, Page 3. THE E>:PIRE STi^TE DIARY COIv'PANY Pro Forma Profit and Loss Statement January 31 st^ 1917. Revenues Expenses Route Sales Store Sales Other Earnings (Rent) Discounts Dividends Interest Cost of tierchandise Creatuery Expenses Freight Ferriages Wages Salaries Refrif aration Wagon and Harness Repairs, etc. Feod; Stable Expenses, ©to. AutOiiiObi.?;© Expense CO'ijj.i: esivons Box.ce and Cans Bo^a.ea Rent General E,^enses Di-rdends Interos c Depreciacion Loss Genei'al Business 358,019.19 31, 330-88 l':c? 00 309.01 15,00 18o84 188,084.90 14. :^88.C5 19 084.31 677.30 39-^339,53 3 , Bc/'l o 66 13.75 1.037.84 7', 078. 35 3,736,94 3;355»94 1, 776.50 4. 987 o 41 ' 347,50 39,147.95 478.11 37,516.73 316,306-04 316 306.04 Windsor Grain Account General Bsuiness Grain Account t4 ExhilDit No. 43, Page 4. THE EMPIRE STATE DAIRY COIfPANY Pro Forma Profit and Loss Statement Febr-uary 38 th, 1917- Revenues Expenses Rout© Saies Store Sales Other Earnings (Rent) Discounts Dividends Interest Cost of kerqhandis© Creaxuery E:q)enses Freight Ferriages Waj-es Salaries Refrigeration Wagon and Harness Repairs, etc. Feed, Sta"ble Expenses, etc. AutOiiiObile E3q3ensc5 Coaruissions Boxes and Cans Bottles Rent General Expenses Dividends Interest Depreciation Gain General Business 835,154.37 83,053.39 117.00 343.33 164,739.57 7,638.95 16,689.87 567 . 36 39,690.35 3,391.66 6.30 1,073.33 6,748,45 1,843.73 1,306.63 370.30 3,818.08 347.50 7,313.80 356.55 4, 307 . 96 357,668.08 357,668.08 Windsor Grain Account General Bsuiness Grain A'ooount t5 Exhibit No. 43, Page 5. THE EMPIRE STATE DAIRY COMPANY Pro Forma Profit and Losa statement March 3l8t, 1917. Revenues Expenses Ro-ute Sales Store SalGa Other Earnings (Rent) Diacounta Dividends Interest Coat of Ivlerchandise Oreamery E:q)enae8 Freight Ferriages Wages Salaries Refri. eration Wagon and Harness Repairs, eto. Feed, Stable |xpenaes, etc. Autoaiobile Expense Ccmmisaions Boxes and Cans Bottles Rent General Expenses Dividends Zjiterest Depreciation Gain General Business 878,998.74 82,007-76 835.00 398,73 30.85 185,138.15 7,879.09 82,085.86 589.68 49,388.35 3,891.66 ■ 137.45 1,239.60 8,463.64 3,749.68 838.39 10.79 814.31 347.50 14,424-98 1,099.33 3,999.93 301,480.48 301,480,48 Windsor Grain Account General BHsiness Grain Account te Exhibit No. 43, Page 6. THE EiiPIRE QTAlt DiilRY COl'TANY Pro Forma Profit and Lose Statement April 30, 1917. Revenues Expenses Route Sales Store Sales Other Earnings (Rent) Discounts Dividends Interest Oost of iierohandise Creamery Expenses Freight Ferriages Wages Salaries Refrigeration Wagon and Harness Repairs, etc. Feed, Stable Expenses, etc. Autoxuobile Expense Comiiiissions Boxes and Cans Bot^tles ReDt General Expenses Dividends Intcrcet Depreciation G Gain General Business 369,146.65 38,380.89 132.00 331.30 51.60 188, 31, 39, 1. 10, 3, 1, 3, 15, 633.38 683.14 315,35 463.43 300.63 391.66 846.14 083.51 376.63 654.89 844.33 709.85 916.85 347.50 840.76 599.69 317,84 397,938.35 397.933.35 Windsor Grain Account General Business Grain Account t7 Exhibit No. 43, Page 7, THE EICPIRE STATE DAIRY COMPANY Pro Forma Profit and Lose Statement May 31, 1917, Revenues Route Sales Store Sales Other Earnings (Rent) Discounts Dividends Interest Cost of Merchandise Oreaiaery Ej^enses Freight Ferriages Wages Salaries Refrigeration Wagon and Harness Repairs, Etc^ Feed, Stable Ejcpenses, eto^, Autoiaobile Expense Cocuiiissions Boxes and Cans Bottles Rent General Expenses Dividends Interest Depreciation Loss General Business 13,399.35 Expenses 306,084.73 > 33,183.34 305.00 447.88 53.67 335,065.99 10,189.67 33,803.77 501.33 39,803.30 3, 391 . 66 135.60 1,180.37 9,957,31 3,880.63 955.33 5,063.75 5,857.18 347.50 34,330.49 933.39 353,373,96 353,373.96 Windsor Grain Account General Business Grain Account t8 Kxhibit No. 43, Page 8. THE EMPIRE STATE DAIRY Ca^PANY Fro Forma Profit and Loea Statement Rout© Sales Store Salea Other Earninga (Rent) Diacounta Dividends Interest Coat of Merchandise Creamery Expenses Freight Ferriages Wages Salaries Refrigeration Wagon ind Harness Repairs, etc. Feedj Stable Expenses, etc Automobile E^qjense GoJMnissions Boxes and Cans Bottles Rent General Ej^enaea Dividends Interest Depr-eciation Lobs General Business June 30, 1917. Revenues Expenses 343,957.91 34,119.38 133.00 155.30 111,67 361,305,33 11,987.84 35,053,31 433.53 50,733.71 3,391.66 1,559,04 1,699.96 7, 640 » 65 3,715.55 E74.59 3,338.97 5,376.47 347.50 13,943,07 5,759.21 15,483.13 393,948.39 393,948.39 Windawr Grain Account General Business Grain Account *9 Exhibit No. 4S, Page 9. TH^ El?PIRE STATE DIARY COMPANY Pro Forma Profit and Loss Statement July 31, 1917. Revenues E;Kpenaes Route Sales 368,509.58 Store Sales 36,078.87 Other Earnings (Rent) 306.00 Discounts 393.48 Dividends 15.00 Interest 86.37 6ost of Merchandise 255,113.51 Creamery Expenses 9,530.17 Freight 24,305.73 Ferriages 5^7.36 Wages 41,334.74 Salaries 2,291.66 Refrigeration 2,574.50 Wagon c'nd Harness Repairs, etc. 1,656.99 Feed, Stable Expenses, etc* 7,749.47 Automobile Expense 3,705.13 Commissions 1,088.89 Boxes and Cans 884.85 Bottles 5,326.85 Rent 347 . 50 General Expenses 13,195.47 Dividends Interest 1,060.53 Depreciation Gain General Basinese 34,746.07 405, 289.30 405, 389.30 Windsor Grain Account General Business Grain Account tio Exhibit No. 4S, Page 10.. THE EifPIRE STATE DAIRY OOHPAl^n' Pro Forma Profit and Losa Statement August 31, 1917. Revenuea Ejcpenses Route Sales Store Sales Other Earnings (Rent) Discounts Dividends Interest Cost of Llerchandise Creamery Expenses Freight Ferriages Wages Salaries Refrigeration Wagon and Harness Repairs, eto. Feed, Stable Expenses, etc. Automobile Expense Commissions Boxes and Cans Bottles Rent General Expenses Dividends Interest D^jriveciation Gain Gojaeral Business 365,633,64 38,819.98 133.00 400,19 133.77 363,083.89 10,145.18 34,371.77 535.03 43,115.50 3,391.66 3, 010 . 85 1,699.75 7,887.45 3,343.36 1,045.94 434.55 3,397.60 347.50 15,390.77 408.68 37,791.30 405,099.58 405,099.58 Windsor Gxain Account General BtLminess Grain Aoootint til Exhibit No. 4S, page 11. THE E:-;PIRE STATE DAIRY C01?PANy Pro Forroa Profit and Loss Statement September 30^ 1917, Revenues Expenses Route Sales Wholesale c?tore Sales Discounts Dividends Interest Other Earnings (Rent) Cost of Merchandise Creamery Expenses Freight Ferriages Wages Salaries Feed Automobile Expense Commisaions Bottles Boxes Cans Rent Interest General Ejcpenses Depreciation Gain General Business 383,358.88 39,119.97 36,141.56 179.70 1,168.43 349.00 329. 503.45 8', 850.90 31^301.96 456.36 53-367.10 3,391.66 6,318.00 3,938.93 1,378.57 4,599.88 413.50 87.46 347 . 50 1,740.39 17,186.63 10,647,35 360,117.53 360.117.53 Windsor Grain Aocomit General Business Grain Account tl3 Routfo Sales Wholesale Store Sales Dig count a Dividends Incerest Other Earnings (Rent) Cost of Merchandise Croarrory Expenses Freight Ferriages Wages Salaries Feod Automobile E:qjense Coiiiniissions Bottles Boxes Cans Rent Interest General Expenses D-epreoiation Gain General BuaiJiees Exhibit No. 43., Page 13. THE EIIPIRE STATE DAIRY 00i.;i'ANY Pro Forma Profit and Loss Statetnent October 31^ 1917, Revenues E:q3eriseg 379,591.50 33, 357c 05 36,817,38 356.33 3,430,00 36.16 143.00 330,066.17 9,113.68 17,436.33 465.91 40,323.41 3,391.66 10,134.64 3,876.83 1,497.59 5,702.36 13.50 53.88 347.50 736,80 13,731.79 18,179.13 353,784.09 353.784.09 Wirdsor Grain Account General Business Grain Account tl3 Exhibit No* 43, Page 13. THE EMPIRE STATE DAIRY COMPANY RECAPITULATION, Gain Losa Nov. 30th, '16 4,043.77 Deo. 31st, '16 9,311.30 Jan. 31et, '17 37,516.72 Feb. 38th, '17 4,307.96 Mar. 3l8t, '17 3,999.93 Apr. 30th, '17 317.54 May 3' St, '17 13,399.35 JiinG30th, '17 15, 483 > 13 July 31et, '17 34,746.07 Ausr. Slat, '17 87,791.30 Sop. 30th, '17 10,647.35 Oct. 31st, '17 18,179.13 Gain for 12 months 20,336.31 99,889.48 99,889.48 Ex k-6 12/26/17 p 17^6 of Minutes. BORDEN'S AVERAGE EUTTERFAT TEST -T'aTAL WIUK'WRCVM Year ending June 30/ 1917* 1916 July- August September October November December 3.g 4.0 4.0 3.9 Average? 3.7^4 1^17 January Februa^ Marcli ■ ' April Ma# June 3.S 3.6 3.§ 3.6 Applying these butterfat percentages, whtctL are substantially average, 'CO the prices paid producers, during the period covered by the lecent price advances, compared with previous years, and putting against these the prices charged the consumer for Grade "3" milk ?old in bottles delivered at consumer's door, we have the following :^esult8: PRICES TO PRODUCERS 1916 12.47 1917, 2.44 2.36 2.2s 2.26 2.21 2.11 2.33 2.83 2.90 3'. 50 3Jt ^.tontho per 100 lbs .W^ 1915 ".ec. $2/10 i|2.07 1915 1916, .lan. 2.05 1.9^ J"fcb. 1.35 1.36 ••^c^. l.go 1.73 'pr. Uay 1.^9 1.24 1.5^ 1.3^ ..'une I.IS 1.23 'iuly 1.40 1.50 ^x'M 1.56 1.66 Sep. 1.71 1.31 Oct, 2.00 2.45 2Tov. 2.10 2.55 -*veragel.7l 1.32 5.25 1917 5.19 5.01 4. Per quart (cents) 191^ 1915 1916 4.40 1916 4.12 3.95 3.73 3.33 -=^.35 2.72 3.19 5.21 5.^2 4.46 1915 4.36 353 3.33 2.64 2.51 2.93 3.31 3.63 4.25 4.46 T ) g3 4.30 4.70 4.43 5.06 HI il.W 7.95 "5757" l^TST :52- n n To Producer Aug. I916 Oct 1917 Increase To Distributor Aug. 1916 Oct, 1917 increase 5 To Producer 3,91^ To Distributor I.09 3.53 ^^^ quart 7.44 ?" 3T9ii " 14 ^jz*" n n f^ Ex. il-6 12/26/17 p. 1740 of Mimites. CHARGE TO CONSmffiRS DIFT^TRENTIAL Per .uart (cents) Per quart (centa) 191iJ- 1915 1916 4.5^ 4.60 4.75 1915, 1916 19i7 4.bif fe. 4. SI 5.07 5.05 5.99 5.17 5.22 6.17 5. 53 5.62 6.20 6.36 6.15 6.30 6.I1-9 6.2s 6.52 6.02 5. SI 6M 5.69 ^, 5A1 6.i^9 S.37#6.15 6.34 4.75 )^4.79 6.56 4.54 ^ 4.58 6.05 5.37 5.38 TroT 1914 1915 1916 9.0 9.0 10.0 1915 1916 1917 Jan. 9.0 9.0 10.0 Feb. 9.0 9.0 11.0 Mar. 9.0 9.0 11.0 Apr. 9.0 9.0 11.0 May- 9.0 9.0 11.0 June 9.0 9.0 11.0 July 9.0 ,5.0^ 11.5 Aug 9.0 (9.0) 12.5 Sep, 9.0 10.0 12.5, Oct. 9.0 10 (14.0) Nov. 9.0 , ;to,o 14.0 Average?, 9t25 11.625 Exhibit ij-7 12/26/17 P 17^6 of Minutes BORDEN'S FAPlf PRODUCTS COlfPAlTY, Inc., GRADE B- RETAIL October 1917. COMPARISON OF COST PER QUART FOR BRANCH EXPENSES. TOTAL lOCTROPOLITAN DISTRICY vs. GREATER NEW YORK CITY, TOTAL METROPOLITA;^ DISTRICT Per Qiiart S~120 General Branch Expense ,00509 130 Repairs & Maintenaiioe ,00062 ll]-0 Milk Rooai .OOI62 150 Stable Expense .OO555 160 Distributing Expense .01919 TOTAL .03207 GREATER ITK'^ YORK CITY Per Quart .00553 .00073 .00137 .00555 .02169 .03537 Ex. k^ 12/26/17 p. 174g of Minutes. BORDEN'S FAB.? PRODUCTS COMPAIY, Inc., EASTERN DIYISIOH - BOTTLES BOXES AND CANS, October 31, 191-7 • VALUE ON HAND AND IN CIRCULATION fijUART BOTTLES |19S,32g.07 PINT BOTTLES 67,b50.gS HALF PINT BOTTLES 25,iK)g.92 BOXES li|-6,31S,79 CANS ^5.639.4q TOTAL $gS3, 3^^6.11 A:^NUAL DEPRECIATION (ftUART PINT HALF PINT BOXES CANS TOTAL BOTTLES BOTTLES BOTTLES 1266,122. iK) 67,^^-60.17 30,992,25 i^3,321.i|-0 lg,6S9.53 i^26,5^.gO Do not compare value on hand with amount of depreciation as depreciation is csjedited to stock account monthly thus reducing inventory value. Ex. 4.9 12/26/17 p. 174-S of Minutes BORDEN'S FARM PRODUCTS CO., Inc. DEPRECIATION DATA. AMT. OF DEPRECIATION ON WAGES CHARGED TO COST 1917 May- $ 4,Og6.50 June ii.,20g.25 July ij-,30g.00 August i^, 073. 25 September if,03i.50 October 4-, 029. 75 November i^,0'j7.75 2g,g00.00 The above figures are actual charges arrived at by the following rates per montla: $2.00 Route wagon in service i^i^-.OO Trucks, Large Expresses ^3.00 3A ' Prucks |1,00 Canvassing wagons, small expresses, & business wagons 10.75 Buggies. ..ft ■ 1 yl.„ 50 k .kizQvj >, T'. WS of Minutes. COST OF HORSE UPKEEP (Excl-usive of Depreciation) AVERAGE' OF, SEVEN BRANCHES NUMBER AMOOTIT PER HORSE September - 1917 630 13,&10AS 21.92 October - 1917 611 1^^,732.93 2ii-.12 Ex. 5l» Dec. 25, 1917. P/ 17^9 of Minutes. BORDER'S FARJ^ PRODUCTS CO., Inc. CLOSED PLANTS. Brewster, Putnam Co., N.Y. Ackerson, Sussex Co., N. J. Ballina, Madison Co., N.Y. Fayettevllle, Jefferson Co., N.Y. South New Berlin Chenango Co., N.Y. Raymondsville, St. Lawrence Co., N.Y. South Worcester, Otsego Co., N.Y. Alden, Erie Co., N.Y, Earlville, Madison Co., N.Y. Greenwood, Syeuben Co., N.Y. Iiniitesville, Allegheny Co., N.Y. Camp Mills, Jefferson Co,, N.Y, Randall, Montgomery Co., N.Y. Huntsville, Sussex Co., N.Y. Po. tlandville, Oswego Co., N.Y. Daysville, Otsego Co., N.Y. Sterlingville, Jefferson Co., N.Y. Mocres Forks, Clinton Co., N.Y, Williamstown, Oswego Co., NY. «aadefiT-6ae4da-€eTT-N.Y, (open) Downsville, Delaware Co., N.Y. West Stockhridge, Berkshire Co., Mass, Old Chatham, Columbia Co., N.Y. Afton, Chenango Co., N.Y. West Winfield, Herkimer Co., N,Y. Youngs, Delaware Co., N.Y. Ex. oZ Dec. 26, 1917. P. 17^9 of Minutes. BOPDEH'S FA-M PRODUCTS CO., Ino. LI?T OF COUIJTRY BOTTLIHG PLAFTS EQUIPPED TO PASTEURIZE Bottling Grade "A" BrisTDen, Chenango Co., N.Y. Dryden, Tompkins Co., N.Y. Ft, Ann, Washington Co., N.Y. Honesdale, Wayne Co., Penna. Johnsons, Orange Co., N.Y, Mt. Upton, Chenango Oo», N.Y. New Milford, Orange Co., N.Y. Otisville, Orange Co., N.Y. Oxford, Chenango Co., N.Y. Otego, Otsego Co., N.Y. Papakating, Sussex Co., N.J, Pine Bush, Orange Co., N.Y. Stanfordville, Dutchess Co., I\!.Y. Washington Depot, Litchfield Co. Conn. Washing tonvi lie. Orange Co., N.Y, Wassaic, D tchess Co., N.Y, Bottling Grade "BT. Anoraa Lead Mines, Coliimhia Co., N.Y. (bottled raw) Branchville, Sussex Co., N.J. Burnsside, Orange Co., N.Y. Chatham, Columbia Co., N.Y. Oopake, Columbia Co., N.Y, Edaeston, Otsego Co., N.Y. Gouverneur, St. Lawrence Co., N.Y, Granville, Washington Co., N.Y, Hopewell Junction, Dutchess Co., N.Y,(bpttled raw) Lime Rock, Litchfield Co., Conn. Montrose, Susquehanna Co., Penna, Newark Valley, Tioga Co., N.Y. Oran Onondaga Co., N.Y. Pine Plains, Dutchess Co., N.Y. Poultney, Rutland Co., Vermont. Schenevus, Otsego Co., N.Y. Thompson, Susquehanna Co. Penna. Ulster, Bradford, Co, Pa (bottled raw). Waterville Oneida Co., N.Y. Whitehall, Washington Co., N.Y. Ex. 52 - page 2 Whitney Pt, Broorae Co., N.Y. Wingdale,Ditchess Co., N.'. Worcester, Otsego Co. , N.Y. CREAM aUD BUTTERMILK BOTTLED AT FOLLOWING FACTORIE Deposit,3roome Co., N.Y. Johns, Orange Co., N.Y. Oxford, Chenango Co., N.Y. Newark Valley, Tioga Co., N.Y. Gouverneu, St. Lawrence Co., N.Y. Sohenevus, Otsego Co., N.Y. Whitehall, Washington Co., N.Y. Millerton, Dutchess Co., N.Y. Cannaan, Litchfield, Conn, Hopewell Jtmotion, Dutchess Co., N.Y. Ex. 53* Dec. 26, 1917 p. 1750 of Ifinutee. BORDEN'S FARM PRODUCTS COMPANY, Inc. List of Plants Not Equipped to Pasteurize. Alfred, Allegheny Co., N.Y. Aiaaon, Allegheny Co., N.Y, Altinar, Oswego Co., N.Y.' Anorm Lead Mines, Columbia Co., N.Y. Angelicia, Allegheny, N.Y. Attica, Wyoming Co., N.Y. Barton, Tioga Co. , N.Y. Bath, Steuben Co., N.Y. Belznont, Allegheny Co'. , N.Y. Selvidere, Allegheny, N.Y. Berkshire, Tioga Co., N.Y." Bouckville, Madison Co., N.Y. Brush ton, Franklin Co.., k.Y. Campbell, Steuben Co., N.Y. Campbell Hall, Orange Co., N.Y. Canaan, Litchfield Co., Conn. Chapinville, Conn. Castorland, Lewis Co., N.Y. Catatonk, Tioga Co., N.Y. Carthage, Jefferson Co., N.Y. Castile, Wyoming Co., N..Y, ChauEont, Jefferson Co., N.Y. Coc'necton, Sullivan Co., N.Y. Cortland, Cortland Co., N.Y. Craryville, Columbia Co., N.Y. Cuba, Allegheny, N.Y. Cuba Summit, Allegheny, N.Y. DeKalb Jiinction, St. Lawrence Co., N.Y. Delphi Fall, Onondaga Co., N.Y. Denley, Lewis Co., N.Y. Deposit, Broome Co., N.Y. Eldred, McKean Co, Penna. Elm Valley, Ulegheny Co., N.Y. Endicott, Broome Co., N.Y. Fair Haven, Cayuga Co., N.Y. Farmingdale, Orange Co., N.Y. Fernwood, Oswego Co., N.Y. Flemingville, Tioga Co., N.Y. Forida, Orange Co. N.Y. Ft. Plain, Montgomery Co., N.Y. Friendship, Allegheny Co., N.Y. Gansevoort, Saratoga Co., N.Y. Genoa, Caugjt Co., N.Y. Giibertsbille, Chenango Co., N.Y. Ex 53 - page 2 Goshen, Orange Co., N.Y. Greenhaven, Dutohess Co., N.Y. Haptonbvirgh, Orange Co., N.Y, Harford, Mills, Cortland Co., N.Y. Harpereville, Broom e Co., N.Y. Hinsdale, Cattaragus Co., N.Y. Hornets Ferry, Bradford Co. Penna. Hopewell Junction, Ditohees Co., N.Y. Kanona, Steuben Co., N.Y/ Howard, N.Y. Kennes, Jefferson Co., N.Y. Kipps Station, Orange Co., N.Y. Lakewood, Wayne Co. , Penna. Lebabon, Madison Co., N.Y. Locke, fiayuga Co., N.Y. Mahopao, Putnau: Co., N.Y. Mallory, Oswego Co., N.Y. Maple View, OswegoCo., N.Y. Marathon, Gorland Co., N.Y, Maywood, Delaware Co., N.Y, Middleburgh, Schoharie Co., N.Y. Millerton, Dutchess Co., N.Y. Morrisville Station, Madison Co., N.Y, Meelytown, Orange Co., N.Y. Ni.bols, Tioga Co., N.Y. Oleaais Corners, Jefferson Co., N.Y. Owego, Tioga Co., N.Y. Parish, Oswego Co. N.Y. Peruton, ToBipkins Co., N.Y. Pine ^sland. Orange Co., N.Y. Plian Brook, St. Lawrence Co., N.Y. Ritchfield Spring, Otsego Co., N.Y. Riohford, Tioga Co., N.Y. Rouses Pt., Clinton Co., N.Y. Savona, Steuben Co., N.Y. Scio, Allegheny Co., N.Y, Sharon Springs, Schoharie Co., N.Y. Smith Boro, Tioga Co., N.Y. Solsville, Madison Co., N.Y. Sugar Loaf, Orange Co., N.Y. Tunnel, Broome Co., N.Y. Turtle Pt., McKean Co. Penna. Ulster, pradford Co., Pa. ''eedsport, Cayuga Co., N.Y. West Danby, Tompkins Co. , N.Y. West Wedmeston, Otsego Co., N.Y. Westmoreland, Oneida Co., N.Y. Fisner, Orange Co., N.Y. 11 of these ship in oauis exoluaively except: Anccam Lead Mines Hopewell Juno t ion Ulster. 'a Exhibit 54, Page 1 = BORDEN'S FARMS PRODUCTS CO'JPANY, Inc LIST OF PLANTS SUPPLYING NEW YORK CITY. Alfred, Allegany Co., N. Y, Almond, Allegany Co., N. Y. Altmar, Oewegc Co., N. Y. Altona, Clinton Co., N. Y, Ancram Lead Mines, Col-umbia Co.,^N. Y. Angelica, Allegany Co., N- Y. Attica, Wyoming Co., N. Y. Barton, Tioga Co., N. Y. Eath., Steuben Co., N. Y. BeWont, Allega^ Co., N. Y. Belvidere, Allegancy Co., N. Y. Berkshire, Tioga Co., N. Y. Bouckville, Madison Co., N. Y. Branchville, Suasex Co., N.Y. Brisben, Chenango Co., N. Y. Brownsville, Jefferson Co., N.Y. Brughton, Franklin Co., N.Y. Burns ide. Orange Co., N.Y. Caiiipbell, Steuben Co., N.Y, Cacipbeli Hall, Orange Co., N.Y. Canaan, Litchfield Co., Conn. Castorland, Lewis Co., N.Y. Oatatsnk, Tioga Co. N.Y. Carthage, Jefferson Co., N.Y. Castile, Wyoming Co., N.Y, Chatham, Columbia Co., N.Y. Ohaijmont, Jefferson Co., N.Y, Cherry Valley, Otsego Co., N.Y. Clayton, Jefferson Co., N.Y, Clinton, Oneida Co., N.Y. Cocheston, Sxillivan Co., N.Y. Copake, Columbia Co., N.Y. Cortland, Cortland Co., N.Y. Oraryville, Columbia Co., N.Y, Croghan, Lewis Co., N.Y. Cuba, Allegany, Co., N.Y. Cuba Summit, Allegany Co., N.Y, Daysville, Oswego Co., N.Y. De Kalb junction, St. Lawrence Co., N.Y. Delphi Falls, Onondaga Co., N.Y. Denley, Lewis Co., N.Y, Deposit, Broome Co., N.Y. Bryden, Teompkins Co., N.Y. Elms ton, Otsego Co., N.Y. Eidred, HcKean Co., Pa. ts Exhibit 54> Page 2* Elm Valley, Allegany Co., N.Y, Erxdicott, Broome Co., N.Y. Fairhaven, Cayuga Co., 17. Y. Farmingdale, Orange Co. N.Y. Farmwood, Oswego Co. N.Y. Fishkill Plains, Dutchess Co. J N.Y. Fleii^ingville, Tioga Co., N.Y. Florida, Orange Co., N.Y. Fort Ann, Washington Co., N.Y. Fort Plain, Montgomery Co., N.Y. Friendship, Allegany Co., N.Y. Ganeevoort, Saratoga Co., N.Y. Genoa, Cayug^ Co., N.Y. Georgetown, Madison Co., N.Y. Gilbertsville, Chenango Co., N.Y. Goshen, Orange Co., N.Y. Gouverneur, 3t. Lawrnce Co., N.Y. Granville, Washington Co., N.Y. Greenhaven, Dutchess Co., N.Y, Haiaptonburgh, Orange Co., N.Y. Harford Mills, Courtland Co., N.Y. Harpersv'lle, Broome Co., N.Y. Hinsdale, Cattaraugus Co., n.y. holmes, Dutchess Co., N.Y, Hornets Ferry, Bradford Co., P4. Honesdale, Wayne Co., Pa. Hopewell Junction, Dutchess Co., N.Y. Johnsons, Orange Co., N.Y. Eanona, Steuben Co., N.Y. Eeenes, Jefferson Co., n.y Kingsley, Susquehanna Co., Pa. Kipps Station, Orange Co., N.Y. LaFargeville, Jefferson Co., N.Y. Jjakewood, Wayne Co., Pa. Lebanon, Madison Co., N.Y. Lime Rock, Litchfield Co., Conn. Locke, Cayuga Co., N.Y. Lyons Falls, Lewis Co., N.Y, Ldadrid, St. Lawrence Co., N.Y. Mahopao, Putnam Co., N.Y. Mallory, Oswego Co., N.Y. Maple View, Oswego Co., N.Y. Marathon, Cortland Co., N.Y. Marksboro, Warren Co., N.J". Maywood, Delaware Co., N.Y. Mexico, Oswego Co., N.Y. Middleburgh, Sohoharrie, N,Y, Millerton, Dutchess Co., N.Y. ^« ExhiMt No. 54, Page 3. Mill Plains, Fairfield Co., Conn. Montrose, Susquehanna Co., ?a. Morrisville, Station, Madison Co., N.Y. Mount Upton, Chenango Co., ^''.Y. Neelytown, Orange Cc, F.Y. Newark Valley, Tioga Co., N.Y. New Milford, Orange Co., N.Y. New Woodstock, Madison Co., N.Y, Nichols, Tioga Co., N.Y. Oleans Corners, Jefferson Co., N.Y. Oran, Onondaga Co., N.Y, Otego, Otsego Co., N.Y. Otisville, Orange Co., N.Y. Owego, Tioga Co., N.Y. Oxford, Chenango, N.Y, Papakating, Sussex Co., N.J. Parish, Oswego Co., N.Y. Peruton, Tompkins Co., N.Y. Pine Bush, Orange Co., N.Y. Pine Island, Orange Co., N.Y. . Pine Plains, Dutchess Co., U.y. Plum Brook, St. Lawrence co\> N,Y.- Port Leydon, Lewis Co., N.Y, Poultney, Rutland Co., Vermont. Richfield Springs, Otsego Co., N.Y.- Richfordj Tioga Co., N.Y. Rosiere, Jefferson Co., N.Y, Rouses Point, Clinton Co., N.Y. Savona, Steuben Co., N.Y, Schenevus, Otsego Co., N.Y. Schoharie, Schoharie Co., N.Y.- Scio, Alle^iany co»j N.Y. Sharon Springs, Schoharie Co., N.Y. S^althboro, Tioga Co., N.Y. Solsville, Madison Co., N.Y, Stanford^ lie, Dutchess Co., N.Y. Stittsviile, Oneida Co., N.Y. Stor;iiVili©, Dutchess Co.j N.Y. Sugar Loaf, Orange Co., N.Y. Theresa, Jefferson Co., N.Y» Thompson, Susquehanna Co,-, Pa. Towner s,Pulaian Co., N.Y. Tranquility, Sussex Co., N.J. Tiinnel, Broome Co., N.Y, Turtle Point, McKean, Pa. Ulster, Bradford Co., Pa, Warwick,- Orange Co., N.Y. Washington Depot, Litchfield, Conn, Washingtonville, Orange Co., N.Y, Wassaio, Dutchess Co., N,Y* t4 Ejthi^it Ko. 54, Page 4. Waterville, Oneida Co., N. Y. Weedsport, Cayuga Co., N.Y. West Danby, Toapkins Co., N.Y. West Ednieston, Otsego Co., N.Y. Westaoreland, Oneida COt, N.y, Whitehall, k % Washington Co., N.Y. Whitney Point, Brooae Co,, N.Y. Wingdale, Dutchess Co., N.Y. Wiener, Orange Co., N.Y. Worcester, Otasgo Co., F.Y. Ex. 56 Dec. 26, 1917 page 1750 of Minutes. BORDEN'S FARM PRODUCTS COMPANY, Inc. CITY PASTEURIZING PLANTS. Cans Per Day Now Handling Can Handle 952 DeKalb Avenue, Brooklyn 1,150 1,200 55 Steinway Avenue, L.I. City SOO 1,000 310 East 117th Street, U.Y.City Closed 50O 4-362 Park Avenue, N.Y. City 60O SOO 90 Third Avenue, Brooklyn, 1,200 1,500 144 Provost Street? Jersey City 700 1,200 322 East 103rd Street, N.Y. Ci ty 60O 6OO 5,050 6, SOO Ex. 57 , Deoen-ber 26, 1917 P. 1751 BOPDE^'^'S FAPlf PRODUCTS COMPAl^, Ino. No. 1 and 2 ActuaJ. price paid faricers for three years past, by zones. Jan. 1915 Long Hau3. 1.922 Short Haul 1.932 Long Haul i.S5g 1916 Carthage Allegany Short Haul Allegany 1.S91 Feb l.SOS l.gS7 1.7^5 1,836 Mar. 1.7^3 l.g29 1.731 1.797 Apr. l.iK>6 l.il-S7 1.530 1.603 l.i|-S6 May 1.161 1.269 1.2g2 1.361 1.362 June 1.111 1.196 1.224- 1.302 1.297 July 1.305 1.373 1.39s l.i^-77 1.33^^- August lA9^ 1.53^^ 1.5S6 1.655 1.516 Sept. Oct. 1.605 1.907 1.62^^- l.S9g 1.732 2.3S0 1.7^7 1.665 Carthage 2.39s 2.20b 2.209 Kov. 2.02s 2,005 2.^^.76 2.iJ.76 2.310 2.313 DeoeEiber2.001 2.002 2.i<47 2.^^-68 2.371 2.31s Ex. 57 - page 2 Actual Price Paid Farmers For Three Years Past, iDy Zones. i917 Long Haul Short Jen. 2.36S 2.396 Feb 2.29g 2.3i^-7 Mar. 2.223 2.289 Apr. 2.230 2.339 May 2.1S9 2. 301 June 2.0S9 2.203 July 2.305 2.454- Aug. 2.790 2.gg4. Sept. 2.S57 2.S76 Oct, Kov, Dec. Carthage Allegany 2,294 2,3S$- 2.214 2.297 2,14-1 2.177 2.110 2.14-6 2.074- 2.090 I.9SI 1.9S0 2.0/9 2.203 2.676 2.697 2,74.2 2.766 EXHIBIT 58 13/S6/17. Borden's Farm Prodiiota Oonpaay, lAcn VolTjffiie of Ptiroha^e Hov, 1916 Nov, 1S17 State of Hew York Outside of He-:? York 35035938 3503578 38339506 32890593 3314358 ' 36104851 Total poimds Butter nade Hay 1917 " « Dec 1917 944 Lbs, 3226 " 13 days available Clieese nade Hay 1317 " " Deo 1917 31819 Lbs 1916 1S17 Er-IIBIT 59 12/26/17 Borden's Fam Products Co. Ino* Average Butter Fat Content Hov. 4,0 Deo. 3,9 Jan, 3.8 Feb, 3*7 Mar, 3.6 Apr. 3,6 May 3.6 J^me 3*6 Jiily 3.7 Aug. 3.8 Sept, 3.9 Oct, 4,0 Average 12 no a. 3.74 t ^ 1771 MEETING OF THE FEDERAL lilLK COMMISSION FOR THE KIDDLS STATES, held in the Oo-Oiiiiittee Room of the Aldaxcianlc Ghaja'b&x of the City Hall, at New York City, on Thursday, Deceaiber 37, 1917, at 10 o'clock A. M, There were present? Wo H. JORDAN^ Chairman, MABEL HYDE KITTREDGE, EUGENE SOnOEN, BRADLEY FULLER, LUCIUS BROWN, MORTIMER L, SCHIFF, CHARLES M. DOW, JOHN LIITGHELL, ARTHUR WILLIAMS, S= C. SHEDRIGK, A. Barton HEPBURN, FRANK W. STE'^fEFS, Counael. FRANK E. FERLEY, Secretary- APPEARANCES: MR, ALGER, Counsel for Distributors. MRt BAIRD, Counsel for Consumers. imn MILLER, Counsel for Producers. The Chairiaan called the iiieeting to order at 10: S5 A.M. MR, ALGER: liB.y it please the Comaission, I appreciate the courtesy and forbearance with which the Ooauaiseion has met- the various problems which I, as counsel for the distributors, have had to weet in the course of this protracted investigation. We have been obliged, as you know, to furnish figures which involved the reorgani2ation of the accounts of a number of these distributors* It has been a very hard task to produce, in the form in which you have t 1773 required, the faote which you need from the standpoint of the dietributorsj eo that I have only finished my case today. I have had no time to put in a brief, and I shall have to depend upox. the few halting phrases that I can get off to you now, and without a brief, as the distributors* arguments and presentation to this Commission. Now, this is a very serious responsibility which I find that I have to bear, and I appreciate that, probably more than the members of the Commission can. For nearly twenty years I have known what the milk dealer had to do, what his burden was, and what his dis- tribution problems were; and I have seen those problems get more serious as years go by, and I have seen that margin of profit get narrower and narrower, to the negligible and the disappearing point, until we reach the condition which we are in now. Now, why did the distributors -— I have been asked this before — why did the distributors consent to the appointment of this Commission? This Commission has it in its power under the mandate -" of authority which has been conferred upon them by us and by the producers to completely bankrupt and ruin every distributor in New York, and do it within a month, by a mi 3 take on what might be not more than a small sum of lees than a cent. Now^ when you are getting down to as delicate a •b IV CI !^c your daa^ors uO hsa.lth inoroasec The eaaontial oh£,raoi:cr of proaer'viM;^ tha milx cupply of New York, tlirougj^ 9:''f ?, c:lP".t orp;ana of distribution, in the proper shape, "cenainD axid Trill atay constant; ax-d anything wiiioh tends d:):coc.t"'.y or :;.rdi^8otly to irpair or cut out that service, or destroy Izj ie a pu'olic injury. u i '.S. t Now_, T think I am entitled to say /at this tiaie^ because); as I say, I qui te appreoia.te the standpoint of the cor.aomni's What if it is true that the New York oommittee pointed out yesterday, that milk is the chgapest of all unrrca.'. foods now, wsiy below anything else? ?*^hat if it ia true as the New vork ooamittee I notice, says that the distribubore are carrying the buainess now at a loss? We want to ha/e no increase in the price of milk, and the ic'..rmer says,. ''We can't get along without a big raise". Go that the easiest thi:3ig in the world is to say, "Well, we w\ll raake a scapegoat out of the system of distribution." But if thac is industrial s tat ©man ship, I do not know what industrial statesmanship iSt, iiv c- '■■.;-- 1 '"■/ -I ■ , If thB.t is not a BjlUhirTKl nirTtTioa 'of aTOiamg l. coiirn.-ciaitjn, I do not know what Bclshiviki. rr,ef!iods are. And — wha-3 is i^ore^ it is not the mandate of this conHiii ss.lon. We wa-nt for the farmer just what is fair for hi-^r,. We do not want to have the farmers of New York or the farmers whose milk comes to New York, produce their milk at a loss. It cannot be done for any lezigth of time, or the consiuner wi].l be sorry, and you cannot have the distributor carry his milk at a loss much longer than some of these companies have or what you are going to have more trouble of a different kind. You cannot reestablish a distributing system overnight. Some of these larges companies, like the Borden Company, have not been getting any profits since iugust. September, October, November and December are going to show losses. I presume if that is true with the large companies like the Borden company, it doubtless typical of a lot of the smaller companies not so well organized and not carrying such voliimes of trade. • Your mandate said to the producer and the distributor both a price which represents a reasonable and fair profit to the distributors of the milk and to the producers of the milk and which two prices and profits added together shall make and constitute a just and reasonable price for milk charged by the distributors to the consumers of the city of Hew York. We have tried to give you from the standpoint of erlve you ficm the ^tiir.dpoirit of the distrlbv.tora sorco T'lPTii.oBs^ The Bo::dcn corxpan^/- js the only large milk '.•>iopa-y j.n Few York which keeps an elaborate and careful oosb <^oeoiLrLt.lr..g oystera. They know just what thsce ibiaf-:B cost then: In the Bo.i-den oompauy. The smaller octp?,T.ie3, less wel.l.— ectablished and not cairyiug the same ■\i&lu-Jie, it majy be unfair to judge those smaller companies by tie terms of a more efficient one, but inasn.uch as you have the terms of the more efficient one here and have not got the terms of the small ones, I aim afraid the smaller c)omp>inies will have to stand by the returns that the Borden c'ompany makes, to that extents But, we have taken the returns from three other companies, ."Large distributors, and Mr. Kracke, the expert accountant, has taken separately the accounts of those companies, scheduling them, and setting them up in parallel columns with the Borden's, so that we have before you this record, the Kracke exhibit, which shows the costs of milk distribution for the Grade "B" milk for the month of October, that is, the great mass of household milk in the month of October. Elsewhere in the record you \iirill have, but un- fortunately I have not got it myself, the Borden record of their wholesale business as a separate entity. This is all bottle business in Grade "B" milk, and it is the bottle business with which the consumer, and particularly the children of New York are vitally interested. <^ ■; . How do il-.OGC figaves mai'.e v:/^ W^iat do the}' ■'^-W, I th..i.j.Lif, they shci-K protty woj.'l aome of the ^^t-.;ain under Trh.j.co. the d: Btribv.ti.yig oystftm is being cor.duct?Ai, The sumaaiy shows that in the month of October th-jce four companies, whioh supply nearly half the city's milii, sold Grade "B" milk bottled in the coimtry to the ajnount of ^tj^b95„00, at sale price, which made them a profit of ^■7 333.00. COMMISSIONER FILLIAFS: Which report are you alluding to? MRo ALGER: I am alluding to the four companies, OOMMISSi'OITER FILLIAIJS: Which sheet? MR, ALGEH; That is the top sheet. I think the first sheet, Mr, WilLiajns. That is the Grade ''B"" milk bottled in the country <, There is half a million dollars worth of business of milk handled by these dis- tributors for $17,000.00 profit. The next thing you have is the milk bottled in the city by those same distributors and sold at retail. There you have 11,29^1-, 192. 00 worth of milk carried around by those wagons, taken eajrly in the morning, to the doorsteps of the consumer, with all the distributing systems these four companies ha¥e got, with all their employes, and all of them at work, and what did they make out of it? They conducted that immense voltime of business at a loss of #12,937.00. Tb.ey sold cj.ty bott,ldd ml.lji at wtolea^OB pxioet? :.;- b'Uvt month aggregating $lJ6,000.00, and on tliat they •.■.;,-,;e a piofit of ^^^05. on ^g6,000.00 w6rth of buslxiess. The figures given there give the oosb of the operations, I shall not go into the cost of the opera- tions, because they are pretty well detailed there and when you get to talking about. OOO563, or something like that, the carrying of a fraction of a fraction in the mind is a very difficult ta-ik, but there are enough of those figures to make you see and appreciate that the only way in which the milk business can be conducted is by a contest between fractj.ons. It is going down into the infinite^411y small figiires, which infinitesimally small figures added together make a profit or make a loss. The milk business is not a business of dollars; it is a business of cents, it is a business of half cents and fractions and mills. Let us see how that works out. You know the commission is required to consider not only what the farmers' increase is for the month of December, if he is entitled to incceases, but they are also to consider the fact that the distributors in the month of November, feeling that their business was being conducted at a loss and that they were entitled by all rules of fair conduct to an in- creased price for their milk, if they had to pay it to the faj-mer, they voluntarily stood that increase of price of lio5 1786 half a oent to the farmer^ and the question that this commission was to consider in its final conclusion was whether or not there was an actual loss which the distributors had because of that operation in November, and which thus, the distributors, as a class, are entitled to have recouped in some subsequent months by this commission. I have ;just taken this line of argument, I have spent some time last night doing this. I have not got the November figures for these distributors, the ones in consider- ation here. What I have done, is this: I have taken the incjceased charges which fell upon the distri- butor in the month of November which he did not pass on, but which he carried, euid I have assumed that they did the same business in November that they did in October, the precise same number of quarts, the same type of quarts, and business generally, and I have applied these increases of November to the business of October which I think is fair as a way of figuring this thing out. that do we find? In the first place, we raised the farmers* price half a cent, and then we have had wage increases, then we have the freight increase of thre per cent, that freight increase representing the taix, you appreciate, on transportation, bills of transportation, and then we had inofease of labor. The Borden company has told you that their increases of labor for that month alone, beginning the end of October, was 1^500.00 a week, or at the raire of $251^,000 00 a yeB..c. Same of -the '^cnXBTrs cv^jr^m Brooklyn have a iLineteeai. psr cant., wage increase in that ..■;.) c.th, Soriie of the cs pfcwjpig hs.ve not had the same «Age 3',ia.Je, 'oome of then are hit ha,2'd.e.r than others , 3orue of the Bmallor ones got hit worse on the wage rai.30. Added together^ those three additional e3.eiBents of cost amounted to .OO693, That is translated into terms of per quart of milk, as Mr, Kraoke has done in the second sheet of his list here. That estimate is the estimated in- crease, November over October, and was made up of those three items which made that aimount. Let us see what effect that would have on the October figures, because if I do not do anything else I want to impress upon this com- mission what those small fractions mean to a distributing business involving millions. Take the figures of the four dealers to start with. I will aggregate the whole thing. They had retail country bottled Grade ^B" milk ij-, 006,079; they had city bottled Grade "B" milk 9.31^,066; they had wholesale Grade «B" bottled 67g,56g^ or a total of 13 > 99^. 713 quarts, How, on that this added expense of .O0693 would amount to the interesting sum of #97*909.03. That net profit on this nearly fourteen million of quarts for the month of October, taking the thing as a whole, and balancing off what they had lost? with what they had made, and getting the ho7 1788 net balance, these oompanies had made in the month of October, on handling 14,000,000 quarts of trade, $^>533«31. So, you deduct that from the increased cost in November and you have a net loss for November on that basis for these four oompanies alone of 193,375.77. Now, go a little further. Apply these figures again of November increase to the cost of the Borden company in October, taking that company separately. Their total amount of business was 6,909,221 quarts. Their net loss of November, on the whole business, on that branch of their business, for the wholesale business, had been |17,7gl.91. The increased November loss on that basis of .OO693 as the increase per quart during the month of November, would make $47,Sg0.90, or a total of #65,^66,38 loss for that branch of the business, disregsirding their wholesale business en- tirely in cans, which represents about forty-two per cent, of their business and which would involve a loss on every quart of their wholesale business, city pasteurized wholesale business, of a cent and nearly a mill — to be accurate, ,010877, 031 every quart of their wholesale business in cans. And, bear in mind that the Borden compsuiy had been going along without any profit at all for the whole year 1916—1917, ending June 30, had been suffering a complete loss since the month of September, October, and this in- creased loss in November, and you have not any reason to question but what they would have another loss for December, hog . -^'^£3 can be stood "by the distributors. I do not-.vWant to'-'leave it iii qiiite that form, I seem to be talking too much about the large distributors. It is only because the large distributors' figures are here and I have to use them as a criterion by which to have you get the correct idea of an industry which includes a large number of small dealers whose business is just as precious to them as anybody's else business is, and who have worked all their lives to' build it up, and which do not feel that that business should be ruthlessly taken away from them without the most careful scrutiny on the whole sit\iation by this this commission. Let us see what that increased cost in November of that fraction of a cent,, that. 00^93 i wolild amount to on the trade generally. The Board of Health has given some figures for three days, which figures they say are the average. They are the figures on which milk was brought in on I think the 26th and the 27th of October and some day in November. They give the actual figures of milk brought in on those days. Take the averaige of those three days of the milk brought to New York — I do not seem to have the figure itself, but that is immaterial, take the average — MR. NATHANS: 1,500,000. MR, ALGER : 1,500*000 quarts. You make ^°5 1790 that increase expense of .OO693 apply to that and you get 1329*973.00 as the increased cost which those distributors generally would have on the milk they brought to town, without considering what cost they woiild have on the milk which they otherwise disposed of in the country districts, I do not want to take up too much of your time, I want to have you appreciate, as I hope you do, that these small fractions concentrated on these distributors may make a back-breaking load, and it is of the utmost importance that the distributors have their costs very carefully considered because half a cent wrong on the distributors is just as likely to put out of business a n-umber of concerns whose business existance is essential to the welfare of the community, both the farmer and the distributor, and also for this reason this commission must be very careful to consider that the only way in which economies in this busi - ness can be made are by increases of volume, and if you take every increase of volume a liability, you will make a discouragement upon distribution, the economic handling of distribution which will paralyze the whole industry. Now, we do not ask for anything for the distri- butor which is not fall;. I ask for simply the per- formance of the mandate on the same basis as the farmer. We are going to do the very best we can to meet. the re- quirements of this wax. We are going to do the very best we can to meet the demands of the nation now engaged bo 10 ■ 1791 in this bitter struggle, and in which the distribution of food is an essential and vital part of its industrial efficiency. We are going to meet that problem the best way we know how and with all the patriotism that these men have got, and we will meet the farmers half way. That is as far as we can go, THE chairman: If the members of the oommission desire to ask Mr. Alger any questions, I trust we will proceed in a more or less orderly fashion so that our records may be in an orderly fashion. Does suiyone desire to ask any questions? COMISSIOHER MITCHELL: When you spoke of the reduction in tLs distribution of milk by districts, do your records indicate where that great loss was in the distribu- tion of bottJed Grade "B^' milk? MR. ALGER: It does, Mr. Mitchell. I can give you the pp^ge. Mr, Fox gave it in detail telling just where these things occur, and I will give you the page number. fo tk. 3 >.'"■■■: COMMISSIONER MITWIELL: Jii^t to say whethor offhand it is in the district of the poorer classes? MR. ALGER; It seemed to me rather mixed, that in some of the pocaer sections they stood up pretty wel.l,; in others they did not. I think on page 13^1 you will find that, Mr, Mitchell. COMISSIONER SCHEDRICK: Can you tell the commission how many distributors you represent, Mr. A3.ger? MR. ALGER : I put the list in last night; you have gut the whole list of the distrihutors who constitute the Milk Conference Board, Wha-t is the exact numher, Mr. Nathans? MR, OSCAR NATHANS: klS6ilt ll6, l3ut there are some of them outside of New Ydrk -^ a few ^f them outside of New York, COMISSIONER BROWNI What proportion is ^hat, Mr. Aj.ger, of the total number of dealers in the City of NsTir York? MR. ALGER: Why, I think we have got pretty nearly all the dealers of smy size, or doing any volume of "business, COMJill SSI ONER BROWN: You do not represent many men having a single route? MR, ALGER : No, COMISSIONER brown: There are a good many of those, are there not? fo2 1793 MR, ALGER : Oh, I presiune there axe a good, xnany pufihcaxt merohants — mercliantd of that type. But that is a negligible part of it. COMISSIONSR WILLIAMS: Mr, Chairman, I would like to ask Mr. Alger if the milk business as a whole, that is, the milk business conducted by his clients as a whole last year showed a profit or a loss> taking the year 1917 as far as it has gone. MR. ALGER: That I could not say, Mr. Williams; I do not know, MR, WILLIAMS: Did any of the companies show a profit? MR. ALGER: You mean of the companies on this list? t think so, COMMISSIONER WILLIAMS: Did the Borden company? MR. ALGER: No, I think not. COMMISSIONER WILLIAMS: On a year as a whole, did they? MR. ALGER: They make up their year, Mr. Wil- liams, ending June JO, 1917* and it showed a loss, if I understand rightly, of ^115,000.00, or something of that sort, COMISSIONER WILLIAMS: Take the Sheffield Farms, do you recall what they showed? MR. ALGER : They made a profit. COMMISSIONER WILLIAMS: What was it? MR. ALGER: I think they made about five per cent, on their investment. I think they made about |i|-gO,000.00. COMISSIONER WILLIAMS: Did Campbell make a profit? MR, ALGERJ I think not, they made a loss, MR. BAIRD: You are speaking of 1916? MR. ALGER: I916, that is what you are asking about . MR. STEVENSi How about the year ending June 30, 1917? MR. ALGEii' I have not that. I know for the Borden Compsuiy, and you have that in the record. I gave the calendar year of the other companies, COMISSIONER STEVENS: What was their average price, do you recall, of the Borden company? MR. ALGER: Do you mean the average price they paid the farmer? COMMISSIONER FiLLIAMS: No, the average price to the consumer. MR. ALGER: I have a schedvile, Mr. Williams. MR. STEVENS: The exhibits put in last night contain just the information you are asking for, Mr. Wil- liams. MR. WILLIAMS: Well, perhaps Mr. Alger could answer that offhand. fo 1795 MR. ALGER: No, I could not, Mr. Williams. It is rather complioated. COMMISSIONER wiLLIMS: Your price to the public for the year ending June is 11 cents; do you see what I mean? And of course in those figxires not for three months afterwards did you get the foiirteen cent income? MR. ALGER: I do not quite follow you, Mr. Stevens. COMMISSIONER STEVENS: Well, in the figures of the Borden company or any of these other companies that you give for the year ending June 30, are based upon the income from eleven cent milk and not from fourteen cent milk. MR. ALGER: Yes, the Borden company's figures have also "been brought down nearer todate, I think the record shows. COimi SSI ONER SCHEDRICK: You will find the Borden's last two months in the exhibits of yesterday, Mr. Williams. CO?^-aSSIO!'TER WILLIAMS: What I an: really coming to is, you have an income of between a million and a million and a half dollars more a year at the present price of milk than you would have had in the year ending June, 1917. Iffi. ALGER: I don't follow you. Why? COMMISSIONER WILLIAlfS: Because there is a difference in price there of three cents. FO MR. ALGER: What differenoe in price, between the j^rioe that the consumer pays "us and the farmerpays "us? COmaS?IONFR WILLIAMS: Yes. I say income. I have not referred to your costs. i(R. ALGER: No, I don't think there is that difference in income. COJ^MISSIOITSR WILLIAMS: Well, there is a three cent increase in the cost of milk and that iteans $322,000.00 a year based upon the average daily con- dumption vf New York. I am not speaking now of the Burden company alone, and if you have an average there of three cents that is practically a million dollars in itself of income, increased income. MR. ALGER : I do not catch that, Mr. Stevens, because I don't see where we get that income. COlffilSSIONER i^LLI.AHS: Well, you might check me up, Mr. Alger. The city uses a million and a hjo.Lf quarts a day. MR. ALGER: Yes. COIIMISSIONER WILLIAMS: And 3^5 d.ays that v5ould be 5^1-7,500,000 quarts a year. MR. ALGER : Yes. COMMISSIONER t^cllIAMS: Taking sixty per cent of that, which is the bottled milk, gives you 338,500,000. With the increase of a cent it is $3,235,000.00. Every ^ense change in the milk. fo 1797 MR. ALGER; I was giving it for the month. COM'-'ISSIONER ^LLIAMS: Well, I think the month is not quite enough. The milk companies incomes taking now the group as a whole, for each cent up or down, the change, hased upon the average daily consumption of a million and a half quarts, is 13,255,000.00 a year. Now, if you have got three cents, the difference "between eleven emd fourteen, then you have almost ten million dollars more of income, speaking now of the milk business as a whole in the greater city. Since June you have inoreaed your price, in the last two months to fourteen cents, ajid the preceding three months at eleven and a half, twelve and five and twelve and five. So that in figures for the year ending June 30th they are based on practically eleven cent milk for five months ajid ten and nine cent milk for seven months, MR. ALGERi Have you taken into consideration the increased price to us for that milk at all? GOIf^'^ISSIONSR MILLIAMS No, I am not speaking of that to you; I am simply talking about income , MR. ALGER: Income, yes. Well, would you call it income? GOM-'ISSIOMER wjLLIAMS: Another thing, Mr. Alger, if I may continue. Any figures of any of these companies based upon income, showing income by itself, refer to the fo 179s fourteen cent milk only for two months of the year, and now while we are talking of the future, say on the fourteen csnt basis, if on the fourteen cent basis for the year as a whole, i.t enormously increases the gross income. MR. ALGER: The theoretical gross income, yes, because the price to the consumer has gone up. If it has not also been followed and been occasioned by the increase of price to the farmer. COI^flSSIONSR WiLLIMS: Now, you take the farmer, discussion of the farmers' side again, a farmers price, the high price has been figured but for two months in the ye3.r, and likewise as to the distributors; when that increase of one or two or three cents a quart for the year is con- sidered as a whole, and these vast figures, the amount of money involved inins into an enormous figure. If the farmers could gain three cents more on the average, than they got on the average a year ago, they again take ten million dollars distributed among the farmers of the State. The only point I am making — it is not in the sense of a criticism, you of course appreciate — is this: That any figures of income either to the farmers or to the distri- buters for the past year — in considering them we sho\ild remember that there lias oeen only two months of this year in which the higher averages have prevailed, and that while the differences are slight in themselves, fractions of a cent, when yet they are applied to these enormous quantities fo 1799 they become very large e-uras of money. THE chairman: Of course, Mr. Williams, that is to 'oe considered on the basis of the amount of business done. COI'OnSSIONER WILLIAMS: I am using a million and a half quarts a day, which is of course only the New York City consumptionj it is not the metropolitan district consumption, which is a million greater, I tmderstand. Also we must have in mind when considering this that according to the best authority we have the million and a half quarts are a great many quarts lass than what we might call the normal saturation point, the normal demand for milk in this city under the conditions which prevailed prior to October. Then the consumption was more nearly two million quarts a day. THE chairman: My point is that our minds must not be submerged in the big figures of ten million dollars. You must remember the dairy industry amounts to a hundred million dollars a year, and we have to consider this dis~ tribution of ten million dollars in the light of all it means — of the whole situation, COffi.!I SSI ONER ^LLIAMS: Well, I agree that we shoulo not be submerged by ten million dollars, but it is some- thing to cons-ider. I thought our farmers would be glad to have it and know they are getting it. I think when you use that figiore you get some idea — we are now talking of return on invested capital, and every million dollars in that sense is quite a large item. fo IgOO THE CHAim^AN: But the censorship board could give us enlightenment on the invested capital of the farmer, which is tremendous. COMMISSIONER WILLIAMS: Well, I was inclined to feel very sorry for everybody listening to Mr, Alger's report or brief, which he so admirably delivered, until I began to figure these things out in these larger sums, and also applying, as I say, this fourteen cents, remembering that we have applied it to only two months of the year, and there are ten more months. If that figure — what I mean seriously is this: That if we are thinking of fourteen cents for ne:^t year as a price, we have also got to forget the income of last year to the distributors and producers and adjust our thought to the very much larger and enormously increased income to those two groups on the basis of fourteen cents. Pol 1501 MR. ALGER-' What two groups do you refer to? CO?'Q.a SSI ONER WILLIAMS: Distributors and producers . MR. ALGER: Oh, yes. As long as it is clear in your mind that the fourteen cents is not all collect- ing itself in the hands of the distributor, I am satisfied with your characterization. It has been passing through. COMMISSrOI\rER tpiLLIAMS: Welli an average price of fourteen cents, based upon the sixty per cent, ratio and the present consumption, is about ten million dollars a year more which the consumers of New York will pay. It is really more than that, because the average price has been less than eleven cents the past year; part of the time it was ten cents, and that is quite a lajge contribution to make. THE chairman: Mr. Williams, if you will make an estimate of the increased contribution on other foodstuffs, what do you suppose it would amount to in New York City, for an equal amount of business? COIffilSSIONER Williams: Well, the mllk bill of New York is |175,000.00 a day, I think; it is about ten per cent, of the food bill of the city, and I think that contribution is §10,000,000,00 for milk alone, additional contribution, and measures fairly the increased cost of other foods. P° 1802 THE CHAIRMAN: I think the evidence before us is that milk has not increased in price quite as much as the average of other foods, COMISSIONER WILLIAMS: I should be inclined to question that evidence a little. MR. STEVENS: Mr. Chairman, if there seem to be no more questions for Mr. Alger, I presume Mr, Baird will like to be heard, THE CHAIRLfAN: We will hear Mr. Baird now. MR. BAIRD: Mr. Chairman and Gentlemen of tho Commission: I think all of those who have sat through all these hearings and read the thousands of pages of testi- mony have thoroughly impressed upon them the difficulty of the perplexing problem that this commission has to solve; and I am not going to add to that difficulty by interposing any additional figures. I think that all the heads of the members of the commission are swimming with figures; but there are some things that I feel, on behalf of the consumer, should be pointed out; and one of the things is the quality of the evidence that has been produced before this commission. I am not criticising it; I am not saying that it is not as good evidence as these distributors are able to give the commission; but the inherent difficulty of the situa- tion has made the quality of evidence of very low quality. In other words, they are asked to take a segment of a circle and figure actual costs from the irregular dimensions po lg03 of a segment of a circle. Their accounting system has not been evolved for that purpose* It is in evidence here that there is hot one of these distributors that has a cost system, an efficient cost system; and yet^rthe cost system of that distributor is not such a cost system as can be read into the minutes of this body and upon which they can predicate a fair and reasonable conclusion. Uhen the first expert for the distributors appeared before this commission, the opening statement that he made was sufficient to disqualify the evidence which he subsequently gave^ That statement was that these are figures that have been given to us as the result of the questionnaire, and we have not verified them; they have not checked them up; we have received some of them over the telephone. And we cannot predi- cate any statement as to the accuracy of those figures.. Then, following that, additional figures were received from the distributors, and the figures that we have received from the distributors — and I admit that they are as good figures as they could possibly place before this commission — are not figures that would be admitted in evidence in a case at law, because they are not figures that are taken by the experts who have had access to the original sources of information. -s/They have been asked to find out the cost of the various items that figure into the ultimate cost of milk, and to go back :: -.:aelr business over a long period of time and to translate those figures into a small section of the period in question, Now, those figures I submit, are absolutely worthless. It seems to me that from the outset, this commission was entitled to know the operations of these companies over a period of years. They cannot take the month of Octoberj they cannot take the month of November, but they should know, after all is said and done, what these figures represented in the ultimate balance sheet of the company for the year 1917 — ox, I should say, for the year I916, and had they known that, I think they would have to find that these distributors were making a fair profit, at least. Now, Mr. Alger has spoken of the distributors going into bankruptcy. The president of the Sheffield company stated on the stand the other day that they did not want the price of milk to be increased,; that they would be satisifed with a net profit of three-eighths of a cento Now, three-eighths of a cent is a very innocent looking figure, but when you multiply it by over six hundred million quarts of milk a year, it becomes a stupendous figure; and the question is, after all the revolutions of the capital on that basis over a period of a year — the question is, what does that three-eights of a cent amount to in its net return to the company? This commission is unable to state; this po Ig05 oommission is unable to find, because it has not the in- formation before it upon which such a conclusion can be predi- cated. I do not believe that the parties to this con- tract, when they entered into it, understood the difficulties that would confront a commission of this kind. When it was stipulated in the contract th* the producers were to have a fair and reasonable profit over actual cost of production; that the distributors were to have a fair and reasonable profit over actual cost of production, I do not think that ' they realized the difficulty of fixing that basis for the months of January, February and March, And up to date, this commission has not before it information upon which they can fix a just price for January, February and March. There- fore, I say that this commission, in all fairness to all parties concerned, should reform that contract. With the consent of the farmer and with the consent of the distribut- or, they should reform that contract and make it cover the whole cycle of the year 191^, because you can only fix a fair profit for these companies on the basis of their complete year's operations. It is in evidence here that the months of January, February and March are not the most profitable months of the yeai% Xt is very likely that those months are the least profitable months of the year. Now, are you going to give them a profit of three-eights of a cent OTi the least profitable months of the year? If so. Now, I think that it is germane to this inquiry dividend to know what the • " requirements of these companies are„ For instance, the dividend requirements of the Chef field company are $210,000.00 a year; and at a mill a quart from milk they would make up $l6o,000.00 of those requirements, without taking into consideration pints and without taking into consideration quarts and all of the other items that enter into their vast business, Mr, Alger has spoken of the strain on the capital. I think that if you analyze the statement of these their companies, you will find that - :: actuaL working capital is about ten per cent, of their actual assets. It is a revolving fund, and their profit is due to the rapidity of its revolutions. They pick up three-eights of a cent a day, and that is turned over tomorrow. And from my analysis of these companies, they turn their revolving capital, or their working capital over between fifteen and twenty times a year. Now, the distributors say that they do not want an increase of the price of milk. The farmers say that they must have an increase in the price of milk in order to live. That increase cannot be given without coming ultimately out of the pocket of the consumer. Now, it is already in evidence here that that increase in the pxlc of milk has resulted in the reduction of twenty-five per-' cent, in the consumption, and it is very material for^this po lgo6 what does that profit aicount to on the most profitable months of the year, when costs are correspondingly lowered and production is correspondingly increased? Now, I think that it is germane to this inquiry — and I lave maintained all the time — that you should have some basis on which you can fix the profits of these companies, because it resolves itself to that. Now, counsel for the Sheffield company just stated that tii0T~nja]ce five per cent, on the capital invested last year. That is not in accordance with my figures. I can't give you figures, because the evidence is not before this com- mission; and it is germane to this inquiry of this com- mission, and this commission is entitled to those figures. But, I do claim this: I do claim on a profit of three- eights of a cent on one hundred and twenty million quarts, which is approximately what the Sheffield company distributes, that that would give them a profit of |i|-50,000.00 on milk alone. That does not take into account the cream or other by-products of the company; and it is in evidence before this commission, for instance, that on pints of milk, which is a fair volume of their business, they get thirty- three and one-third per cent, more than they do on quarts of milk. There is no evidence here on the profit that they make in the cream business, and I understand that the cream business is really the creajt of the milk business; that that is where tjiey make their profit. po ISOg committee t6 obnaider what a further increase in the price of milk — how that is going to be reflected in the reduction in constimption. There is a surplus of milk; there is plenty of milk> but the problem is for the farmer to sell his product; and if you increase the price of milk, you are going to — the scale is going to run down, the scale of consumption. Furthermore such figures as have been given this commission on actual costs, are figures that are giTjen by the Borden company, I do not know that that is the most efficient or^nization. I have my doubts. From such analyses as I have been able to make, although they may not have as good a cost system, I believe that the Sheffield company have a more efficient system in the distribution of milk, I believe their unit costs are smaller than the Borden company's. And unless you have the figures of the Sheffield company before you, I do not see how you can possibly predicate a conclusion, MR, STEVENSi We have something on the Sheffield company, which was introduced in evidence last Friday, last week, the last thing. MR. BAIRD: On costs? MR. STEVENS: On costs, yes. MR, BAIRD: When this commission was appointed the consumers had hi^ hopes that this question, which has been puzzling New York for thirty-five years, was going to be solved. Those hopes were not predicated po 1209 upon the fact that a commission had been appointed. We have had a great many commissions that have given reports, and have not solved this problem. But they were predicated upon the fact that a Federal commission had been appointed; and this is the first time in the history of this industry when it has been investigated by a Federal commission. Now, the struggle of the farmers in this State has extended over thirty-five years; the struggle of the consumers in this State against what they considered high prices for milk have extended over a period of thirty- five years« The prices of milk were formerly controlled by the Exchange Limited, and from 1S92 to 1^95 that organization fixed the price of milk in New York. It was finally proceeded against by the Attorney General, and on the proof that was submitted, it was dissolved. But im- mediately after, in the year IS96, the same group of men went across the river and organized the Consolidated Milk Exchange in New Jersey and there fixed the price for milk in the city of New York, And again, that organization was investigated, and they withdrew from the State of New York. Now, the lineal descendant of that organization is the New York Milk Conference, It is the same crowd doing the same thing in the same Tra.y. So that I say that those men cannot be looked at as a State question, MR. ALGER : I ^ish to be courteous, Mr, Baird, but your statement is absolutely incorrect in every particu- lar. MR. BAIRD: Correct me, then. You can reply to i" when I finish, Mr, Alger. MR, ALGER: But you are making a statement not based upon any testimony before this commission, and your statement that the New York Milk Conference, which is a board of trade, organized under the board of trade laws of the State, approved by the Supreme Court, aJid with its books open to the District Attorney by request from us to the Listrict Attorney — when you say it is the same organization — MR, BAIRD: I d.0 not say it is the same organi- zation, MR, ALGER: The same crowd, with a different name. tl 1211 IIR, BAIRD: I say they are the lineal descendants. I say that you can check off the riiembers of that organization and I think you will find they are practically the same. MR. ALGER; You have a different understanding of the term "lineal descendants" th^n I have. MR, 3AIRD1 You can check off the names in that present organization with the names in the former organiza- tion and I think you will find that they ^re practically the same. V-R, ALGER: I think not. liR. BAIRD* I will check them with you then. MR, ALGER: Very good. ilR. BAIRD: So, gentlemen, this question should be a federal question. It should be controlled by a federal commission. The states of Pennsylvania, Maryland and Dela- ware have recently been confronted with this problem and they have appointed a tri-etate commission; and one of the findings of that commission was that milk should be declared a public utility and should be handled as a public utility by a commission with power to waive state lines and state laws. Therefore, in closing, I want to say that I hope that one of the recommendations of this Commission will be that the milk industry for this section of the country, be placed under federal control. COMMISSIONER DOW: Are there any questions that t3 ^^^2 you gentleiueii desire to aak Mr. Baird? Mr. Alger, if liyou have somo further evidence you can go ahead and produce it at this time. MR. ALGER: I understood Mr. Waugh wae going to bring the Borden figures on the butterfat teat,, socie further exhibit that he wae working on and I do not know whether he is here or not. COMMISSIONER WILLIAMS: Are you going to have the figures on the cost of wholesale distribution in cans? HR. ALGERs I think that is in, Mr. Williams. Mr. Waugh had an exhibit at any early da.te in which I think he gave the cost of wholesale distribution* COMMISSIONER WILLIAMS: It is not in the tabiolation? IvIR, ALGTi]?? No, it is not in the tabulation. IIR= STEVENS: There were some exhibits put in last Friday which I have not seen yet, which covers some of those flatter Sc yiR, ALGER: I am embarrassed by the fact that while I know that the exhibit went in, I have not had a copy of it Juyself, but I am sure that something of tliat sort ia in. COMMISSIONER SCHOEN: The exhibit which lir, Waugh is to bring this morning I think refers to the bottled milk pasteurized in the country. MR. ALGER: AA any rate there were one or two things which Mr. Stevens indicated which we have not yet got t3 in. 1813 COMISSIONER WILLIAMS: I do not know whether you can answer this question, but apparently there is a material saving in pasteurizing and bottling in the country as shown by these figures. It is apparently somewheres near 1 cent. MR. STfVENS: Mr. Williams, that question was up last week and there are two sides to it. Some insist that th>3re is and some insist that there is not. Some insist that it is much cheaper in the city than it is in the country. MR. ALGER: There are twoseHiools that take two different doctrines. MR. STE'^JMS: I asked quite a number of questions on that in the evidence last week. I simply call your attention to not assuiae that there is but one side to it. There are two sides to it. In the exhibit put in yesterday, so far as the Borden plant is concerned, they show that a large percentage of the plants have not pas teuxi zing .appara- tus at the receiving plants. GOMKI SSI ONER WILLIAMS: I think that is true, Ur. Stevens, but it seems to me in this schsduifi the difference betw^eji the two, if we are to accept this schedule as representing the facts — MR. STE'^rENS: In certain schedules the figures unquestionably have the tendency which you indicate. There is no doubt about that. On the other hand, there are some ooxmter-baianoing iiiatters. JO sied-ed iiTTBq.a:©o ea-e ejetix 'MOm. HaMOISSII^/TOO ♦seA ^Moa HaiiOibtJiijTOO ieexnStj feutj: eeoqi; !;ueee:cd pti-e nt (1q%b qSn-Bt •i^^ eA-eq i pti^oo ''uoTeeae 8ATci.uo9-xe we ©A^q o:;. SutoS ex MOXBQ'i^nmoo B^.% JI 'qSn-Bii *'t;i tnoaj X'BTjieq.'Bm X'Stioici.Tpp'B qxti% %q2 0% ps^um I 'oe 3[Ltiqq. i^ou op I ;HaoiV *Ha iJieSiV ' xyi 'eonpoaaxiT o% levi^raj Stitq^ituis QA-eq noit OQ :tOa HMOISGiri.^oO •©jceqq. esmq.'eej Sufou'BT'Bq -j:eq.unoo jo jeqiimti b ejcB a^tetix ^HaoiV 'HH •enfBA q.ti9o jed OOI JO eq q-ou A-ETtr /©qj;, •©njq. 8T eeiSAei etiq. q.'Bii!}. ei^.'sofpttT Xaqx •petif'Bxdx© eq pxnoo eexnSij eeeq;). sd-ettxed aq^noqq. i AttM st q.'Bxt;^ pu-s '^aij-tmcsg stjq. TIT B!}.utod iCtrero i^-eeiS -e •a'sxix xavi^'Bx A%xo eqq. ux e^tfcod Mej B 0!). eTOuxoA xe%-BexS ig :;sS no^ een'Boeq 'jed-Beqc aq prnoM 9Trtztm©q.B'Bd Aci-xo eqq. ^'Bqq. ettmss'B /"bm fE-^QueS "e vex pxnoqe i •prnoii ax etiTg'BmT piTvoqs I cgyiVmUl HSMOISSiniOO iq-tiBld SxiTZtnaeq.B'Bd -e jtjx^l-eTiC oq. 'c).ou qi pxnoM ^siq-BjapTBuoo eq oq. QA-eq pinoM nofq.'eq.e Sutatoo8j: Xxi'e ;b 3iiTTj! JO etcrriTOA eqi, :j:iHnaa.Y that those are high enough? THE WiTTTESSJ I would think they were t o high. CO>TISSIONER BROWIT: That leaves fifty-six per cent, sold in cans? THE WITNESS: Yes, sir. COMMISSIONER BROWN: How much of that bottled milk is sold in stores, have you any idea? THE WiT^TESS: I have no idea, COIMI SSI ONER brown: We have figures showing that fifteen per cent, is sold from stores; woiild you think that is correct? THE wiT-T:i]gs: I could not say, COIOflSSIONER brown: Well, in any event fifteen per cent, of forty-four per cent, is 6.6 per cent, of the whole- annrunty isn^t it? THE WiTI^SS.-: I guess so, COWII SSI ONER BPOWN: That is less than seren per cent, of the whole milk of the city is sold in stores? THE witness: Yes, sir. C0MMI5SI0FER BROWU: That is what I wanted to get at. Now, then, there is another matter^ What do you sell your quarts of milk at^ bottled milk? THE WITITESS: Which kind? CO?ffiISSIOFER Brown: Grade "E" select or the other, either? THE WITNESS: Grade "^B" is fourteen cents — fourteen cents a quart, COFMISSIOHER BRO^N: You have one grade that you sell at fifteen, have you not? THE witness: No, sir. COMISSIONER brown: Then you cannot help me any in that, so I won't question you further, Mr, Horton, you may be able to help ae anyway. What do you sell your pints at? THE witness: Eight cents. COJiOII SSI ONER brown: Twi06 eight is sixteen, you would sell two pints at sixteen? THE i^ITI'TESS* If "tlie same party took two pints. COMISSIONER brown: Yes, get two pints for sixteen cents? fp9 1331 THE WITNESS: Yes. COJIMISSIONER brown: The difference is two oents, is it not? THE witness: Yes, sir. COMISSIONER BPO'W: On the two whole qiiarts of miU it is? THE WITNESS: On one quart. COMISSIONER brown: On the two quarts sold in different ways, the differ nee is two cents? THE WITNESS: Yes, sir. COMISSIONER BROWl\r: Which is one-seventh of the original cost instead of -irty-thrse ajid a third per cent, as stated here today? THE WITI'TESS: Yes. COMISSIONER DOW: Mr. Chairman, I would like to ask Mr. Horton his olojection to the ticket system. THE witness: The ticket system? There are two or three objections. One objection is to make the collections from the ptolio. They will put the ticket in a bottle and send it down on the sumbwaiter and the driver will say that he did not get it, and the lady says she put it in the bottle, and there is a dispute, and generally when it ends up we are the loser. That is one thing. Another thing is, take it in the private houses th^re th^ m^n go in the houses, the tickets are just as good as ffion6^» The man naturally gets very well acquainted with the servants in the house, and she is busy over the range, and she will say, "Johnnie, go and get your tickets." She might just as well' open her purse — and the public is robbed again. It used to be the bane of our life. A cous toiler out of ten dollars worth of tickets would not get over nine dollars worth of milk some- tames. Of course we don't like to come out to the public and state those things, but those are facts, MR. ALGER: At any rates, your accusations, your charges and your disputes and everything of that kind have got to be settled in favor of the customer, if you are going to have the customer. COMIS^IOITEH DOW: Have you a good many disputes under the present system, the bill system? THE WITNESS: We have a good many disputes from people who claim they are overcharged, and they have cards in their kitchens where the driver marked down on the card what he left that day. P-7-1 tl 1833 ®MMI SSI ONER SHEDRIOZ; I just want to^SL3Kjm&-~~.,.^ queKtion. Right now the dealers are selling milk; they are only aocoimting for milk to driver salesmen; tbey have only one thing to watoh, and that is milk. If they had tickets they would have two things to watch, would they not? They would have milk, which is one value and tickets which is another value, represents value. They would have to watch both, wouldn't they, and account for both? THE WITNESS: . .Why certainly, it is lots of detail. You would have to count them in the same as money, and they would have to oount thorn out, and they would have to put in orders, and there is pilk. -jf detail. That is an old system.. May I make a couple or three remarks? I want to draw your attention to — you must realize that after the first of January that our sales necessarily go off. They go off very materially for the first fifteen days in January, We are a retail business, you know. We have a great deal of first class trade. The first of February they commence again, and they go to Florida, they go all over. I suppose likely we will have, in the first ten days of February — we will have ten thousand to fifteen thousand quarts of trade that go away. They go away and they will be gone until just before Easter. They will come back again just before Easter, and they will stay a little while, and they are off again. We do not get a chance at a great portion of our trade, not over four months in the year. V6 183.i Now, in the evuiuuertime you figure on the peroentagji — - of bottled milk. Now, you can get that bottled milk very nearly to end the 15th day of June in the city of New York. This ndlk is not sold in the city of New York for 14 cents through the summer, to any great extent^ if we should keep the price where it is today. The volume is used in stores, in dipped milk. We have stores today that sell 300 quarts of milk. They will sell, in warm weather, in hot weather — they will sell as high as 600 and 800 quarts of milk.. Now, that price goes down in accordance to the propor- tion of what we pay for our milk. They tell about the public — my friend to the right here telling about the public paying for milk. I have sold thousands and thousands of quarts of milk out of stores for 5 cents a quart. There is not a city in the United States, with all the barriers that we have, that get milk any cheaper than the city of New York. Our milk is delivered in other states, and Westchester county. We truck it and draw it. Just think about it* If the milk was practically given to you, and you trucked the uiilk, with the conditions we have had in our streets, to Jamaica, you couid not make any money on it. You do not realize all those conditions. Our pay roll last week, for overtime, was nearly |3000, extra time, men laying at the depots there drawing 40 cents an hour, wasting for traijas. If there was auoh a profit in this business, why is it you paaa a bill in the legislature that we have got to put vp *^ 1835 a bond for our responaibility? Is there any other business does that? Did you ever hear tell of a financial institu- tion that had to give a bond? No one but the mi lie man, practically, has to do it. Did you ever realize that the only profit of food that you get, is only one profit, is milk, that we buy from the farmer, and put it at the public door; and if there is a dollar made in it, we make it. Is there any other article of food, or any other aitiole in any business? Look at them. They run from 4 to 30. Just Bit down and realize those things. Not only just one profit from what the farmer gets when he lays it at our platform, until the bottle is laid at your door. I would like — my friend at the right there, I would like to have him go through and put an inventory on our business, and put a fair value on it, and pay us a reasonable per cent on the actual oa-pitaO, invested. That is all I aek. MRc ALGER: We will get to that some other time. THS WITNESS: Well, you can take a year on it, if you like to. COMMISSIONER WILLIAMS: I would like to ask Mr. Horton a question. THE WITNESS: Yes sir. COMMISSIONER WILLIAMS: As I understand the matter at the present time, this great business is negotiated and carried on through the drivers of the companies, the retail bottled business. *^ 1833 THE WITNESS: We charge the dxiTers, that is the me-thTTd- "VT^ have; and our old systeffi was to have a bookJce^per for every five wagons, and now we charge it to the driver and he himself charges. COMMISSIONER WILLIAMS: Well, in effect, Mr. Chairman, what I am asking Hr. Horton is this: Whether it is not true that all these agents of the companies '-*- THE WITNESS: These what? COliMlSSIONER WILLIAMS: Agents. Your drivers are your agents? THE WITNESS: They are our ealeemen. 0Oia:iSSIOFSR WILLIAMS: salesmen. THE WITNESS: Yes sir. COKMISSIONER WILLIAMS: And they are also your collectors? THE WITNESS: A great portion of it; they collect about 75 to 80 per cent of our money, COMOSSIONER WILLIAMS: So I understand. They sell the milk to the extent of about 80 per cent and collect the money . THE WITNESS: They sell all the milk. COMMISSIONER WILLIAMS: That is about 80 per cent; in other words, the milk coinpanies of the city provide their salesmen with horses and wagons on which they go around to negotiate sales and collect their funds, as well as to make 1;he sales on the other articles and deliver the milk. *^ 1837 THE WTTHESS: Yes. COMMISSIONER WILLI AMBl TB'e qtier&^onnrainirlro^ aaky^-^r." Horton, is this: Whether at least during the war time, as a wax'-time measure — of course the customer is paying for that; the customer is paying for agents to oalj upon him with a horse ajid wagon. THE WITNESS: Certainly. COMMISSIONER WILLIAMS: They are paying the cost of collecting money by means of a horse and wagon, something that is not done in any other industry so far as I know. THE WITNESS: They do not pay for it there. COMMISSIONER WILLIAMS: They pay for it somewhere- They do not know they are paying for it, perhaps; but they are paying for that kind of service. Now, siippose the milk business was conducted on this basis; it is a necessity of life, people must have milk; and suppose you were to eliminate that expensive machine and you were to compel the consumer to ocme to your office and make a contract for milk, aa he must do, say, for gas. THE WITNESS: Yes. COMMISSIONER WILLIAMS: Or for water. Wouldn't you save a very large amount annually, which would help in reducing the cost of distributing milk to the consumer? MR, ALGER: May I ask you a question right there, ^r. Williams? COMMISSIONER WILLIAMS: Surely- ^6 18b3 MR, ALGER: Wliat would you think, if you were running a monthly magazine, irould you think it would be desirable for you to cancel your subscription list and rely on your former eubsoribex occasionally buying a copy ai the news stand. COMMISSIONER WILLIAMS: I think with the monthly magazine, for which the demand — MR. ALGER: (interrupting) Would you have the sales? COKMISSIOHER WILLIAMS: I am just going to answer you. — for which the demand must be developed, the modern merchandising methods are probably as efficient as they can be made; but now we axe talking of a commodity which every one must have, which every one desires to a greater extent than he does have it, because of price. It is a necessity of life, and in regard to which I think we all must agree that this expensive system of canvass and of collection is all built up for the purpose of competing. We have from seven and eight and ten wagone going into a single block, for which the customer is paying. Now, what I am asking is this.: Whether in the judgment of iLx. Horton — I am not asking him as to the advisability of it; of ceasing to represent the individual company to the public today; but whether from the standpoint of eoonomy, economy in men, horses and feed, economy in street traffic, eoonomy in costs, there would not be a very t7 1839 material adVing to the public if the entire public were notified that they must come to the milk office and sign a contract for the milk aervioe, and render that service on the basis of the contract. MR. ALGER: I just want to ask one question there, to add to your question. Do you ever think it is desirable from the standpoint of the farmer^ that the amount of milk purchased in New York should be thereby diminished? COMMISSIONER WILLIAMS: I think it should be increased.. MR. ALGER: Yes. COMMISSIONER Ti. lAMS: I think the increase depends — that the volume of milk used in New York, it seems to me, from the evidence, depends upon the price, and upon nothing else. You understand? MR, ALGER: I see your point, Mr. Williams, perfectly, OOiOnSSIONER WILLIAMS: I doubt that all the companies together sell a single quart more of milk because they have this enormously expensive method of carrying on your business. I think it is without a parallel in any other business in the world, that the salesmen of the corporation are given a horse and carriage to u^Jke their sales and collect their money. THE WITNESS: Carriage? COMMISSIONER WILLIAMS: Well, wagon; the same. ■fcS 18'i0 He is riding aroiind in it. I am putting the pictuxe_tQ_you in tho worst possifele way. THE WITNESS: Yea, I see. COMIv'ISSIOKER WILLI.AIiS: Because it seeiiis to lus that it is a pioture of extreme extravagance, and has been built — and represents an organization that has been built up, so that the Sheffield COii^pany and the Borden Oooipany and the different companies could all go in and coii^pete *or. the service of the oustomerj which he must have anyway; and the volume of which depends more largely, probably, than any other sergice, upon the cost of the service. Now, all this expensive organization gets into the cost of the milk to the consumer. And what I am asking, practically, is whether, as a war measure, it would not be a very desirable ©conoaiy to make the people of New York go to the milk office and contract for their milk service, instead of sending a salesman with a horse and wagon to negotiate for that sale, and sending seven or eight salesmen for that sale, as the evidence shows. THE WITNESS: You mean a contract — do you mean for him to go there every morning and get his milk, or she? You mean for the party to go each morning and get their liilk, GOMLIISSIONER WILLIAMS: No; sign a contract. THE WITNESS; Sign a oontraoti Kow7 Well, who is going to delivaj? it? ^^ 1841 OOiail SSI ONER WILLIAMS: Well,, the same delivery seTYicrdl. THE WITNESS: What? COrnn SSI ONER WILLIAMS: The same delivery service. THE WITNESS: Sign a contract? What good is the contract? We might have him put up — COMMISSIOMR WILLIAMS: (interrupting) If you want gas you have to go to the gas office. THE WITNESS: Yea, and I have to put up ^5 or |10 security^ don't I? COMMISSIONER WILLIAMS: I do not seeany reason why if you need it, you should not do that. THE WITNESS: If I go to your place and want electricity, I put up #10, and you turn on the electricity. How are these people going to get the Ciilk? You say, sign a contractr What does that contract amount to? We have to deliver it. Who io going to deliver it? OOMMISSIOFER WILLIAMS: Your wagon, instead of negotiating contracts, would be delivering milk and not collect bills. MR. ALGER: Negotiating contracts is what Mr, Horton did not quite follow. OOMMISSIOl'TER WILLIAMS: The customer comes to your door and performs that service, and he sends you a check at the end of the month, or at the end of the week; and you ask for a deposit, which protects your account? 1843 tlO THE WITNESS: Yes. COMIIISSIONER WILLIAMS: Why shouldn't you have thatj^ if it ia necessary? Now, that ia the custocior that paid by check and signed the contract and wants his milk deliveredj and the woaian who does not want that goee to the nearby store and buys her iiiilk and carries it horue, cr has the grocery deliver it* That is the cash business. THE WITNESS: But nineteen out of every twenty people that are interested enou^ to save the difference between what the milk is delivered and go downstairs, go to the store and get it. There is not one out of twenty but what takes the cheapest milk, if they are looking out for the pennies. It is the dipped milk, it is not bottled. If a lady comes in our store, or telephones for ailk, for a bottle, we have to deliver it just the sajne; and it costs just as much to deliver it. OOKHISSIOFER WILLIAMS: iCy question really is, do you think that such a system of eliminating this extravagant negotiating method and collecting ix^ethod — THE WITNESS: (Interrupting) I do not think there is any lost motion at all in the way we deliver it, a bit fflore than it is for your men to go around and read your iaeters. You have to eend a liian to read your iteters, you have to send. a iiian to t\irn it on and turn it off. COinaSSIONER WILLIAMS: He does not go with a til J-S43 horse and wagon. THE WIT?IESS: What? COirrll SSI ONER WILLIAiiS: He dooa not go with a horse and wagon. THE WITNESS: Sometimes he comes up in an auto- Biobiie, though. THE CHAIRMAN: The Chairman wishes to eay I do not think we are getting anywhere with this discussion; and we have got so much to do in the next two days, in deciding the real questions "before us_^ that I think we will have to call it off. COMMISSIONER FULLER: Woiild it be possible in your opinion, Mr. Horton, to • " zonize the oity^ and have competi- tive bidding for distribution of the milk, of all companies? THE WITNESS: Well, I think it would be wrong. COkiaSSIONER FULLER: And license the man in the particular zone. THE WITNESS: How about the man — you give a district to one maa, and another man has a plant in that district? What is to beoom© of his plant? Is it to be boarded up? COMMISSIONER FULLER; I am asking you a question. THE WITNESS: I think it is impractical. You talk about seven or eight wagons. How many different coxLpanies in the retail business on Manhattan Island today? Well^ the Mutual is going to be liquidated. How many are ■ul3 1S44 there left? There is only one little ooiapany besides Borden's and Sheffield, and that is Clover Farii; and we bought all their oTbtear business outside of that. Only two delivering companies on Manhattan Island, that is all there is. People ought to have one choice, GEORGE I.'. W A U G H , Jr., was recalled as a witness and exaxnined and testified as follows: QUESTIONS BY MR. ALGER: LIR. ALGER: L'r. Waugh has acme acre exhibits which Mr, Stevens asked for, and which I will offer in evidence. First is the retail selling prices for the last three years of the Borden Coupany, I offer that in evidence* (Received in evidence and iaarked Exhibit 60 of this date.) :iR. ALGER: The second is the salaries aiKl coniffiiasions paid to route salesriaen, and dates the increases were aiade. I offer that in evidence. (Received in evidence and aarked Exhibit 60 of this date.) :ffl. ALGERt The next is the sales in points for the week ending December 13, 1917, giving the various branches and the points of sales* I offer that in evidence. (Received in evidence and iiarked Exhibit 63 of this date.) im, ALGER: The next is the sales, retail and whol«aals, for the twelve inonths ending October 31, 1917. I offer that in evidence* ^Received in evidence and isarked Exhibit 63 of this date.) ^^"^ .1.845 Q Mr. Waugh, have you produced on© additional exhibit td those which I have already introduced in evidence. If you have, state what it is, and what explanation you have to raake concerning it, A I have here a statement showing the comparison of the city and country past eiiri zed bottled milk. I would like to add a statement to that^ to the effect that the comparison in the month of October shows an abnormal difference, due principally to the fact — Q (interrupting) Difference between what? A Difference between the cost at the city plant and the cost at the co^.mtry bottling plant. Q Due to what reason? A Due principally to the reason that in October only our most efficient country bottling p.lants put up bottled milk. The inefficient country bottling plants shipped their milk in cans. The result is we have a con-iparison of the country's best with the city's average, so that this difference is not to be construed as an average difference in the two processes. MR, ALGER: I see. That is all. I offer that in evidence-, (Received in evidence and marked Exhibit 64 of this date.) THE WITNESS^ I might add to that, when the demand for milk fell off, and hence our supply was less, we out off the inefficient bounty bottling plants and shipped ^ll£. in cans to the city, THE CHAIRMN: Are there any further questions tl4 .15-'^ or further svidenoe, Mr. Stevensl MR. STE'vfENS: Not that I know of. (On motion duly otade, eeoonded and carried the Comrnisaion then, at 13s 35 o'clock P. M.> went into executive session.) HEARINGS CL0SED4 EXHIBIT 60 Borden's Farm Products Coripany, Inc. KSTAIL SSLLIi'G PRICES FOR PAST THREE YEARS, Prior to Aug. 18,1216 0ct.20,lS15 Feb. 1,1 8/I8/I6 Injoreaaed to Inoroaged to Increas Condensed Mills: \ ptJ3 .08 Route Oreaa I- pts .10 — .- Extra Hy, « .14 — « Grade" 3" Past n .05 .06 II n n , Qlts ,0Q — H II j^it n t pte .05 — n R n qta .10 .11 Certified qts .15 Butt e-ri ilk q.ts .06 —— .09 .11 .16 .10 .12 .16 .07 .10 .13 .18 .11 Condenaed Hili: ^ pts Route Greaa. I- ^ Extra Hy, « Giade«B»Past« « n !j " It It Certified Butte ruUi: ^ n , qts ^ pts qts u u June 1,1917 J-oly 1,1917 Aiag.1,1917 Oct.: IiLoreased to Inoreased to Increased to Ino: to .18 .u .IS .Hi .13 ,14 .30 .06-J .13| .13 .16 .31 .07-1 .141 .isi .13t .15 .20 .10 .-« .^ At present tine bottled Gradd B la sold at our own stores for 13^ p©r quArt, and tlie loose lailk for llf$ per quart. EXHIBIT SI 12/3 ?/l6 Borden !e Farm Product a Conpany, Ino, SALARIES AITD COIEIISSIOIIS PAID TO ROUTE SALESLffi^T MID DATES IHCBEASES IIADE Prior to Sept,?, '16 Sept,23, '16 Sept o7, '16 Incjreased to Inoreaaed to First- year^iaan, per vest $ 15.00 Second « « " u is^qq 'fhird " " , and thereafter '] 17.00 |16.00 1 19,00 17.00 20.00 18.00 21.00 First- yBar-jnan, per week Second « n , « n Third " " , " " Aug. 9, ' increased '17 L to Qct*32,1917 Increased to $20.00 §33,00 21,00 24,00 23.00 •»«. .^.^ OOIilllSSlOHS PAID II'T ADDITION TO ABOVE AS FOLLOWS: Averaged f- 3 c 69 per raan per week ooverii the year of 1916. Averaged $ le54 per man per week coverir tlie aix months ending J"o.ly 31 > 1917. On present arrangement of 1^ Gomniiaaion on cash oolleoted it is estimated tliat drivers will receive at least |3.00 per week in addition to salary. EXHIBIT 62 Borden's Fam Products Oompany, Ino. SALES III POniTS, T/EEK Ei-IDliTG Dec »13, 1917. Average Average Brandies Ho .of Routes per Route per Day per Man Total . 34t]a Street 35 1854 265 64898 U7-t;]i " 75 1567 234 123764 84tli « 37 1840 263 68064 29tli " 36 1742 24S 62726 E Tlth « 40 1660 237 63410 leaiiiattan" 47 1S6Q 238 78461 St at en I aland 30 1861 266 55821 133rd Street 40 1813 230 64534 IBOtli « 73 15 73 ?,R 6 1 1 3681 Sterling Place 48 1793 257 86340 DeKalb Ave, 90 1692 242 152233 Liberty Ave, 38 1687 241 47240 Ft. HaEiilton Ave. 55 L660 237 91277 Long Island City 41 1716 245 70357 Grave send Ave 27 1700 243 45827 Flushing 14 1607 230 22503 Far Rooka,iiTay 5 L652 236 8261 Jaaaica 15 1634 242 25406 7^ 1689 341 1247863 EXHIBIT 63 12/37/17 Borden's Jara Produots Oonpany, Ino, SALES-RETAIL AITD WHOLESALE Twelve Hontjia Ending October 31 1917 GESATER ::m YORIC 0ITY« PRODUCTS Condensed liiUc Route Crean Esar/ Crean Grcde»B" Past, ^ pts X « II n II iij^n n If a Certified n 11 Butterailk n H K Qts Ind Qts pts Ind w Qts RETAIL TfKOLESALE 1886008 30376S 987090 115748 3625854 303769 30036030 86060 53623787 2936865 155058 3885 15157411 1114185 1431538 343698 138690 505 195871 784 37712 3393 1253141 47538 EXHIBIT 64: 13/37/17 BORDEii's faf:: products coiiPAiTY, inc., OOIIPAPJSOIT OF CITY AITD GOmiTRY PASTSURIZED BOTTLED HILK OCTOBER 1917. CITT BOTTLED Country Can TitylPlant Total Ooimt. Station Ils^ixae Expense Bottlt Paste .00033 E. 0. ,00125 Depreciation Bottles " Boxes « Cana 35 - AoooTmt (Haiiling) 10 a/c Genl. Factory Exp. 30 a/o " Repairs & llaint, 40 a/o Teaaiiig aziu. Stable 45 a/o Hauling for dairTmen 50 a/c Power House 110 a/c Receiving Exr-enoe 180 a/o Filling & Bottling 185 a/o Paateurizing ^Exp, 230 a/o Packing and Loading ,00075 240 a/c WasMng & St erlizing. 00034 Hiscellaneous Froth Butter Credit .00010 ,00125 .00055 .00008 .00015 .00061 .00051 ,00033 TOTAL E2P3ISS * 00001 ,00619 ,00230 •00319 .00030 .00003 .00-349 .00157 ,00234 .001S5 ,00044 ,00131 .00177 .00135 .00135 .01939 .00253 .00125 ,00219 ,00030 .00010 .00003 .00374 ,00213 ,00242 .00015 ,00356 ,00095 .00170 ,00177 ,00310 ,00169 ♦00001 .00076 .00127 ,00218 .00030 ,00352 .00120 .00045 .00039 .00131 .00053 .00138 .00087 ,00141 ,00175 .00001 *00004 ,02558 ,01707 * In red on original . Aa previously testified "by Ilr, Cronk October is an abnomal nontli for conparing these figures. § SUIMAKY OF IHVESTIGATIOH By the IJAYOR^S. OOiniTTSE ON MILZ. L Q fiGAHIZATlQlT OF TEE CQE-IITTSE, The Maynr^a Comnittee on ililk by appointment of Ma,yDx Jclu Piirroy Mitohel on Ootober 4tli, 1317 is the result of the oorree- pendenos with Health Ooanisaioner Eaerson, oonoeming tlie relation of tiie higb. price of milk to the health of the oomivnity and ©s^ peoially the health of infanta and children* ?, SGOPS AITD PLAN OF IFJESTIGATIONS. Two priaary questions were presented to the ooaaittee by tte ifa,yt>r, 1- Is the present price of nilk to oonstsziers jiistif ied7 3~ How can the price be reduced? In addition totSils, the Mayor asked the dortnittee to ooasider the advisability of establishing a pasterjrizing plant for oity institutions, and of establishing a milk distributing systen •for the entire city under franchise. Before -undertaking its own investigations, the oormittee ^cognised the value of the extensive investigation made by the leg- islature in 1916 by the ooaaittee known as the Wiok*s Goimittee whioh (isvoted six aonths to inveatigation of this sane subject. The survey 0? tie aaterial in the report of the Wick ♦a Cormittee laade it evident *^t the paroblea presented to the llayor^s Oormittee was of enoosaoufl jaagaitiui© and tliat the tine at the disposal of tiu& Mayox^ » -Ooanu-ttea- fa3 estreaely ahort. The ooaoittee^s prograra inoludsd a simrey of the sta- -tistics of the City milk supply, cost of r:ilk production, the cost of oolleotlon and distribution, relation of surplus milk to cost, the aeuliods of fixing aai^ket prioea, the effect of prices on the oonaumer and tlis consideration of reaadies fox reducing the cost of production aud the cost of diotrlbution. The oo2iaittee detemined to secure information through bliree channels: 1 -- Public hearings. 3 - Auditing accounts of producers and distrlDutors, 3 ~ Special investigations conoerziing prodv.ction, distribution and oonsunption of Eiilk, It was recognised that complete and detailed infonast- tion could not be secured on all matters but the inquiry should deal Witt questions of only zaajor importance. 3' ?ORK AOOOMPLISHED. The following work haa been perf omed. Public hearings « 11 Private conferences with the industry - 6 Aioditing accounts of producers - 1? Auditing accounts of distrib'utors - 6 Private investigations - 10, A ooiaplete digest of the material accumulated by the 's Oooaittee report was prepared in order that the committee - 3 - ciglit liave full advanta::e of this work and night ooar.are the oon- ditiona existing at the present tine, A svjrcey of 2,200 fanilies of ooneuners was nade, trliicli liad as its purpose, to ascertain the relation of high prices to tJie qiiantity of nilk ueed, A questionnaire concerning the qvantity and price of ailk was sent out to 133 other cities in America, A questionnaire was sent to all distributors of milk in Hew York City to secure statistics regarding distribution for the purpose of determining what ecoaomies could be obtainedby centralizing distribution. Through the testiiaony of witnesses and private in- veatigations, data was secured fron six states supplying nilk to Sew York City and figures compiled f roa 1368 dairy f axms concerning the ooBt of production. Oonrlete audit was made of the books of the Borden *s Fain Products Go, Inc. through the services of a public certified woo-ontant. The coimittee was assisted in its work by the office of tie CoaaisBioner of Account s, by the Department of Health, the New hxl Milk Coaaittee, the Association for Iiaprovlng the Condition of the Poor, and special investigators assigned to the office force of the ooaiaittee. The Oonolusions reached as a result of this investigation aw as follows i *• ^gj pGE IS TH E PRICE OF MILK AMD OTH ER FOOD PRODUCTS, . la the City of Kew York the retail price of milk in bottles -4- delivered to houses from wagons has ®lsen f ron 9^ per quart In Sspteaber 1916 to 14^ pe^r qiaart in OotolDer 1917, Frora Jtiae 1914 to Deoesiber 1917, scyeral products liave advanced in price as foUov^s:- COHUOpiTIES PRICi: JUITS 1314 PRIGi: DEC .1917 PER CEITT OF BTCEEASE« Eggs per dos, 23^ 67^ 191^ Com per bu, ?S 3,00 If 8 Pork per "bbl, 19.60 50.50 158 laaat par bUT* 90 2.36 144 Sugar per 100 lb. 3 .52 S.90 108 Oata per bu« .43 84^ 98 Beef per lb, IS 33 f7 t^eeae pe;? lb. 14 24| YS Butter per Xb. 37 47 74 Miliperquarli S 14 65 Ilillc tlierefore has not been alone in its rise in price ini lias risen to a n-.-.ob less degree tban mine other iaportant food prodnota. ... ,;-;■. ■• ■.• '■■ ' i. ;i la IS other cities where the price of nilk gan 9^ in telPer ISls^ prinfl has risen to: 141^/ in 4 13^ in e 12^ in 4 lli in 3 -5- In 35^oioiee wjiore tii© pric. of uills was 10/^ in 1S16 ■i:: 'lias risen to: 15^ In 6 14^ in 5 13^ i:i 5 la^ in e 11^ in 1 , Tlie rise in milk prices has therefor© not been confined t,o lew York City, !) - STATISTICS OF THS SUPPLY^ Tlie following statistioe eoiicemlng nilk supplied to New York city for the nontli of October have "been secured by the Department of Health. Nimber Dairy Fams 30,934 liilk Shipping stations 800 Dairy cows 400,000 Ililk reoeiyed ilovenber 1,627^127 qti^daily Iiew York State Supplies 1,402,377 qts. Pennsylvania 114,630 qts. Ilew Jersey 58,100 qts. Vermont 36^130 qts. Connecticut 9,000 qta. MassfiAhu setts 4,000 qts. Oaziada 3,000 qts. Milk sold in bottles frozi wagons 598,671 qts. Ililk sold i:-.. bottles froa stores 105,647 qts. Milk sold in cans froa ati sres 710,654 qta. i£ilk sold in cans froa laanufactur- ( srs 185,750 qts. Retail dealers 350 Retail TTagong 4,978 T^Tholeaale wagons 1,523 ~6~ Umber Grade A Raw Milk 50,000 qts. Grade A Pasteurized MiTJc 170,370 qta. Grade B Pasteurized Milk 1,380,350 qts. Grade Hilk Bone. 6. FOOD VALUE OF MILK For tlie same noney, one can get nearly four tines as wjjah. nutrition ©ut of nilk as out of lean beef, three tinea aa nvxiii as out of pork, T3ie energy in one quart of milk is equal to tlie energy in 11 00.1063 of airloin steak or 8^ eggs* Considering from tli© etaildpoittt of iLuaan nourisliment, milk is tlie most valuable of all injizaan foods and the ojieapeflt. In addition to it^ nourishing qualities, it has tro ouher valiiea of greatest importance, 1 - The furnishing to the body of salts, 3 - The fv.ralshing of the growth-produoing substanoea recently discovered and tg) to the present time unnamed. These stimulate the gro'srth of the jnoung and are found nowhere so available or in suah large accounts in other foods as thsy 2tre in nilk. For adults at hard work, the diet of bread and milk furnishea more strength, more nourishment and energy than a diet of ^read and meat. Even at 14j(J per quart, milk is the oheapeet of animal foods. Even up to 30^ pay qt., milk can compete on favorable *enna with any animal food at present prioes* -7~ :, TH5 SFFSGT OF PHICSS ON GOITSUMSRS, The price of rAlk is of vital iaportancxe to infanta and young oiiildren. Older persons nay exercise olioice and select their foods, but, infante and ohildren have no ohoioe and are dependant upon nilk. When children imder two years of age are deprived of ziili: and placed on a diet of other food they do badly. Hig prices in Hew York City during the past yBar have resulted in changing the ttle-c of young children in the poorer parts of the city fron milk to rfeer things, or fron nilk of hi^ grade to nilk of lower grade with i-onaequeat in;Jury to their health, A nilk census taken in October 1916 shows the city was '•siiyig 1,900,000 quarts of nilk a day, Sinilar census taken on October r., 34, and 25, 1917, showed respectively 1,411,658 quarts, 1,576,723 juartfi and 1,531,968 quarts, indicating shrinkages of 36.7 percent, 17 percent and 19.4 percent. Statistics fron large ooapaniea show decreases for October, ranging fron 50 percent to 11 percent. In 'JariouB districts of the city. These shrinkages in the aaount of nilk ^■'onsuia.ed are -undoubtedly due large to the advances in price which i'aire recently occurred. In the survey of 3,300 families having 5,438 '■'iiildren mder six years there was used by then in 1916 4,797 quarts ^ily, in 1917 3,193 quarts daily, a shrinkage of 1,604 quarts. Of ^^e 2,300 fanilies 1,480 were using less nilk t an last year and 969 ^ reduced their supply fron 25 to 50 percent beaause of the high ?^ices, 3,148 children under six years of age were drinking tea, Joffee, TTine and beer, a partial substitutionfor milk. Inoreaaed aortstlitv fron diarrheal diseases was noted in A STiTvey of otlier cities in America sliows tMt in the majority of tre. chere was a aiailar increase in deatlia sinong baloies f roH diarrheal diseases. A eJ^milar experience has occurred in foreign countries Tjnere, because of weir conditions infants were deprived of millc and lOiJb resulting inoreaae in the death rate was promptly oheclced as soon as ReliBf Organizations arranged for an adequate nilk s-upply both for aothers as well as for infants. There Is no doubt of the fact VJiat high prices and the shortage of milk have a direct effect on .LELfant mortality. The value of good milk is indicated, by the fact that jiicng the 50,000 babies in New York City annually patronizing infant iilk depots, the deaths rate for infants -under one year is only 43 per thousand, while the gensral death rate for infants imder one year in the entire city is 23 per thousand. 3. COST OF PRQDUCTIOII , Nearly every factor in the cost of pmduction is variable. laong the 30,000 dairy farms sup-; lying milk for New York City there a,re great differences in the size of the farm, in the character of ■'■Jjb farming bv.siness, in the number of cows kept, in the quantity of rilk prod-jioed, ajid in the conditions of feed, labor and other coat itsas. Each dairy district has local physical conditions, cliiaate ar; reography, which greatly affect the cost of milk production. The majority of dairy farms do not keep books or cost accounts, and the tecur tag of accurate figures is only possible from a small percentage ~'f farms. The best that can be done is to select representative Jairy districts and enou^ typical dairy farms to provide a general average of cost of nillc prodiiotion ^jnder present conditiona, Tiie date oonpiled inoludeB figures fron 1,368 dairy fame in tiie six states contributing ailk to Haw Tork City. Officials f roa tli© State Departments of Agrio'-lturs of these states fr.rnis3ied figures oonpiled. "by tlien in their testimony at hearings before the Goiaaittee, other figures were obtained fron published reports and the Cosinittee'e own group of expert aooouutants aeoured figures at flaet iiand from seventeen dairy farms* Investigations show costs ranging from 5^ per quart to &|- rer quart. iEhere is a definite relation between the size of the dairy and the cost of milk. Our investigations show that in this territory large dairies produce milk cheaper than small dairies. There is aleo a definite relation bet^veen the productivity of the individual oow and the cost of milk. Large producing oowtt produce milk much oheaper than small producing oowa. The average cost of milk produc- ^^ion is 7jiJ^er q-uart for the months of October fox milk containing ^7 percent butter fat. The cost items are as follows :« COST ITEIIS AI-IOmiT COST PEP. COST PER __^.. EUITDRED W3, QUART. I'lpaurrtion. '""Grain 34.7 lbs at "55 per ton .95425 .03 05 Hay 51.8 « « 13 " » ,3108 .0067 Silage 105.9 « « 5 « « ,33475 .0057 Labor 3.58 hrs at ZO^ per hour .7770 ,0l67 All other charges 3l.6fS .6356 .0137 Total S.S434 ,0S33 October factor Ixifo) .3344 .0069 Total S.2SS0 ■ ' ■.'OYOS In the above list the producers total cost is C3.94 per hun,- ^^ed pQimds of milk or 6 l/3^ per quart. The ann'oal changes in the -10- TOlune of nili: prod-ooed during different laontlia of tlie year liae been aooonpaniM 'oy annual olianges in pricee paid to prodiscers during ulie paat If&n, years* It is clieaper to produce milk Tv^ien ootra are in pasture than w3ien ■fhey are fed grain i:: tlie bam, therefore, it costs nore to produce nilli in October tban in June, During tlie ten yea.x period the avera;;e October price has been 11^ greater than the average 3^arly price. This was recognised in the agreenent iDetween the distributors and the Dairymen's League bythe addition of llji for the nonth of October to the cost of milk. The addition of thifl llfo for October nalies the cost \.'3*B5 per hundred pounds or 7^ per qaart* Th.e above cost represents only the average dairy fana with a dairy herd of average size containing dairy oows is-hiab. axe average producers under the aanagsinent of the average farmer* As an example of what r-an be done under the best con- ditions on a large dairy farm with a large herd of cows of high productivity and a competent business management, the Committee has aade a complete audit of the boolcs from such a farm at Hobart, ITe^ York, showing the cost of milk to be only 5 l/Zj^ per quart for the YQa.x as compared with S l/3j^ per quart on the. average farm. On the Hobart Farm there was a profit of- over fj2,200. The T7iok*s Committee report showed that the cost of milk production previous to 1913 on the average farm was not more than 5^ per quart. Oonsequsntly the cost has increased to the extent at least of 1 1/3/5 per quart to the farmer during the past year. The largest single item in the cost of producing a quart of milk is the oost of grain. This amounts to 3^ per quart. ♦83j 1.08 2.^0 84,00- 30,50 46.50 35.00 21.00 30.00 ,46i ,5Si ,89i 40 .SO. 48.00- 57.00- 30.00 44.00 80.00 30.00 40.00 57.34 ~11~ ae prioe of grain iiae sh-own enonaoua acLvanoea in the past tiiree years. Tlie nost recent figures obtained from tlie Hew York Pro- duce Sxoibange are as followa:- FOQD VAL'UES DSC. 15 1915 1916 1917 Yellow Corn {vex "bv.) Bran (per ton; Hay Oats (32=f to b-u) Oil Meal (per ton) Tallow Meal " Gluten ileal " from tiie above tabiLLation, tlie prioe of oom produota and iTiieat products liave about doubled. Tjiis neans that in h.is feed bill ilone, the dairy famer has to pay l^'for each quart of nillc more b-ian he did 3 yeara ago. The labor it era which ia the next large at in the list has increased 50 percent in the last year and about 100 percent since war conditions existed. The evidence, in fact ahow© ;liat in nany dair^r districts labor cannot be obtained at any reason- ible price. The other it ens of coat for producing mlVs. n'ost be •ecognized aa reaaona'ole. The data f rem all farns ahows that 6 1/3/5 per quart is a "air eatisiate of the yearly average cost of producing average nilk 'H the average fam under present conditions and that 7jJ per quart s a fair eatinate of the cost for the nonths of October, IToveaber ^ Deoenber. • COST OF DISTRIBUTIOIT. The distribution of ailk has been sT'steiiiatized and organ- sed in a nuoh greater degree than any other branch in. the industry* ^ert business iianageaent, capital and oonpetition has brought about -13- apid dsvelopmeat in distriTDuting ByBtea in recent years « There ie L wide variation in tlie oauae of distribution corresponding with ;lie difference in businass effioieny and in voluDie of huainesa. hiring ten nontlis ending ITovember 1, 1917, three of the largest dis- ;ributing oompaniea showed net losses of respectively, ^169,574*54, ?53,873,19, $42,-256,98, and one of these was ooaipelled to go into L receivers hands. On the other hand, three other large dis- iributing ooapaniea showed profits during sane period, although ;]iese pofits were small oonpared with other years. One conrany showed a loss of more than 4/l0 of a cent per quart on every quart >f mili handled this year. Another company showed a profit of 1/4^ )er quart for the same period* A complete ^udit of the boolss of the lorden^s Farm Products Company, Inc., included a verification of ost items by checking with the original vouchers* Figures obt- ained by a less rigid examination from the books of five of the other istributing companies show that the figures of the Borden's Farm i-oduots Company, Inc., are conservative as to costs and fairly rep- eeent items of cost included in the collection and distribution of ilk. Each of the principal items represents a group of costs oon- lijiing numerous zoinor details* The general list may be summarized 5 follows :- PJ:IAIL HILK bottled IH city. (OCTOBgR) >Uing Price 14.000^ 'et of Milk (4 percent milkk October) o. 743500^ l^try stationChandli g only cans) •°°5i?2" 'ei^t & ^ / ,008260 Jy Tr:.oking (cans from Railroad tooity factory) ,002370 TJy Factory Expense(inol-ading pasteurizing, washing ^^ -^oa bottles and caps) .0170*50 )elivery Expense (includes, driver, horses, \Tagons, ■branoli naintenance, and general expense) ,052000 Sailing overliead(lnoliides general aalea ugr, and clerks, advertising) •003130 Ldninis-fcrative Expense (Officers, offices, clerks) aooomting derit) ,001380 )ed.uotione from sales. T"bad debts, etc.) .OOOSOO )ifferenoe between retaJJ. price and average ant, re- alized, (aotiial averaG;e sales were 13,879 per qt.) ,001510 Jotal ,14537 ^osa .00557 'otal ^4000 .0, SURPLUS hile:^ One of the most serious problems faa^g the industry rliether of the producing or distributing branch consists in surplus lilk. This surplus is due to the fact that the supply does not lorreepond with the demand. At the season of the year when cows ■re first put on pasture there is great over production. ,J9uri|ig he hot weather of J^XLJ and August there is usually a shortage, .gain in October and November when grain feeding begins there occurs ^ over production although not eo great as in May and June, Surplus •■^Ik is ocaainonly made into butter, cheese, condensed milk and milk 0¥der« These milk products sell most of the year at prices which esiiit in a loss of milk manufactured into them from the reg^.'.lar sour- es of the fluid milk supply. The retailers in fluid milk in the past 3.ve been compelled to buy all of the milk produced by the dairyman a the dairy districts, where their shipping stations are eatab- ■•Shed, la recent months three new factors have had a marked In- Luenoe on .surplus milk* (l) « The great advance in price of fluid milk which -14" has xediiced tlte deoancL, tHeroby creating an artificial surplus* For the first tiae in 10 years tnere was more aiilk produced in JuLy and August tiia^n the aarket would oons-une, While this was partly due to- weather conditions it is believed it wa^ largely due to the stimulation of higher prices paid to the producer and to a lessened demand on the part of the consumer. One retail oomi>any was compelled to manufacture in Jul 3'- 3,625,000 ciuarts of milk into butter, making 3 54,727 lbs costing 51-|-;^ per lb, while the market price for butter was 46^ per lb. This same company manufactured 2,451,000 quarts of milk into cheese at a cost of 37^ per lb, while the market price for cheese was S4^ per lb* At the price which producers received for their product in October, butter would cost to produce, 81^ per lb. (2)v- Another influence was the agreement between the Pro- ducers and Distributors Organisation whereby the distributors closed up shi-ping stations where the supply exceeded the demand* rnis res-olted in the closing up of one retail company of 31 stations, and another retail company of 39 stations during the aonth of October. (3) " The new market for condensed milk furnished by the ^ar orders of the allies* These war contracts guarantee a profit above costs so that oondensories are in a poaition to compete with the fluid milk aarket for the supply. This has furnished producers with an outlet at higher prices which has fortified them in their demands for higher prices in the market for fluid milk. The fact that — 1&-* Healt]i Departsient regiilatijwia do not apply to tlie oondaoaed vi.il'^ lias inoraased t'ne influence of the competition by these oondensories. So long as all milk p-jjroheLfled from a producer "by the distri'outor la paid for at the full market price for fluid uilk, there will "oe a loss on surplus milk manufactured into butter and cheese* Butter, cheese and other milk products are normally manufactured out of milk which does not reach the fluid milk market, and is produced by farmers who do not re- ceive the full price for fluid milk. Consequently, the price of butter and cheese will always be controlled by the price of ailk outside of the territory s-applylng the fluid milk market, Ihen one considers that at times 40 percent of the milk pur- oliaaed by the distributors is a surplus which must be manufac- tured at a loss, the influence of surplus milk on the cost of fluid milk is apparent. The problem of aurplus and its effect on the cost of fluid milk is as yst -unsolved, This problem requires immediate and further in vest i -at ion. II, EGOHOHIES BT PP.ODUCTIOH ta) Larger produoing; cowg It is admitted that tlie average oow in tlie prod-uoing territory producea not more than 5,000 Toe, of nilk per year* Go¥S producing less than 4,000 lbs. per jrear c-re -unprofitable. All such ootra are erupported at the expense of the dairy and at the ejspense of th.e oona-oaing publio. The eliaiination of these non-prodiiotive oows would eliainate an item of expense which would considerably reduce the cost of milk* This is an eoonony which is being advocated by the dairyaen themselves through their cows testing associations. Only a small percentage of dairj'men, horrever, are members of ooTT testing associations. Cows producing 8,000 lbs. of milk per year are able to produce milk, even at present prices, for B^ a quart or less, while cows producing only 3,000 lbs, per year do so at a cost of more than S-l/S^ per quart. In addition to eliminating the low-productive oow, dairymen can improve by breeding the productivity of the animals in their herds, although this is a slow process requiring sev- eral years time. The low-productive oow can, however, be el- iminated immediately. £o) Larp ; er dailxies There is not a corresponding increase in expense with ■b^e increase in the size of the dairy, for the reason that ovei^ «17~ "head expenses increa-se a-;.oh more sloTrl3r tlian the inoreaao in vol^Jiae of T:usiness, consequently large dairies in this territory produce milk av.ch cheaper tlian siaall ones. By keeping larger herds, dairymen can produce uilk at less cost tham ^y keeping eraall herds. If there are 400,000 cows on 30,000 farms the dairy herds producing nilk for New Yor£ City average only 13 cows to a farm. From data secured it appears that herds containing from 7 to 10 oovre produce milk at a cost of 6,66 for the year 1S17, while herds containing over 50 cows produce milk at a oost of 4.65 per year, .(o) Collective hauling Statistics from 11 milk shi-ping stations show that 453 farmers* wagons are used to haul to the station 1,181 40- q-aairt cans of milk. This is a little less than 3 cans to a wagon, average distance of the dairy fanas 'oeing under 3 miles. On a two horse country truck it is possible for one man to haul 30 4a-quart cans of milk. Through collective hauling ^y suoh trucks at these 11 stations it would require only 44 s-aoh wagons to haul the same milk that was 'nauled by the 453 wagons. In other word&, only one-tenth as many wagons woiJ.d be required, and one-tenth as many men. It is obvious that the aaving in ea^ense to the farmer in the oost of milk, arji hence to the consumer, would be very great through the institution of such oo-operative hauling. The duplication of wagons Ruling milk to aountry stations is even greater tJtiaa the ^^Plication of wagons distributing milk in city markets. "18" ( d) Gollective buying of grain Tjie largest single iten in tlie cost of nillr is tiie cost of grain. Little STioceas iias res-ulted. froa attempts so far made at collective b-aying. The dairyaen sliipping milk to Hew York City use appraxiaately 671 car loads of grain per month, each car carrying 35 tons, auount ing . to 13,780 tons of grain at §55.000 per ton which is $933,330,000 per nonth, Trhich is til, 078, 760.00 per year. This nakes the dairymen aupplsdng milk to ITew York City as a group the largest single oustoaer of grain in the -srorld. It eeenis fair to assume that -if this grain were purchased through a single agent, and the size of tlie order were guaranteed, sone consideration ought to he given to the sise of the order. Enquiry of one of the largest ooacziisflion merchants of the New York Produce Exchange load elicited a reply, which is in part as follows: "The ordinary dalrynan is. not -u^-ually in a position to huy feed in car load lota and nust therefore "buy from a retail dealer, who moat cliarge ahout 10^ more than he pays for the goods, and now haviaig storage capacity must also buy frequently, preventing lia from availing himself of markets when they are lowest.,.. Collective 'OTAying through a purchasing agent of imaense quant it es makes possible purchases whenever the laarkets warrant, and the buying of enough to tide over what might appear to be a steadily rising aarket. Under these conditions there should be saved at least lOfff on the purchase of feed, as compared with the system under which feed is now purchased," l(yfo on ^933,330.00 would be §93,333.00 per aonth. This K'' 12, EOOITOMISS IIT DISTRIBUTIOIT "'^-^ (a) DAYLIGHT DELIVERY Daylight lelivsry of lailk refers to operation of delivery wagons during tlae norning iiours after breakfast, ratlier t'nan during the early hours of the day before "bzeakfaat. The delivery of nilk in the early morning hours before breakfast is a relia of the days in which aunioipalitiBa received their supply fron nearby farms -rrithout the advantages of refrigei-- ation at which tixie it beoane oustoaary for farmers to drive into cities imrjiediat ely after the mornings milking with fresh milk. The early morning delivery thus became a habit. At the present time with milk coming from distances of several hundred miles and with the refrigerating faclities which now exist, there is no reason excepting habit ^hh milk should be delivered before breakfast. In the summer months during hot weather, be- cause among the poorer classes ice in a luxury, it is proper to sake an early morning delivery, but during at least six mon- ths of the year it is cool enough to prevent any disadvantages, through temperature. The City of Chicago since 190S has practiced daylight delivery from October 1st to April 15th* For a number of years in the City of Boston there has been daylight delivery during the winter montlis. The City of Philadalphia adopted daylight - tail wagons, it is sold at the present time at wholesale to grocery stores by the large dealers from ll^-^ to IZ^ in bottles. In 40- quart cans the wholesale price by the dealer to the store is X04 a quart. Many grocery stores retail milk, whether in bottles or in cans, at the same price charged to the store by the dealer. Many of the largest grocerymen in Hew York City have ladioated their willingness to continue this practice of selling milk from stores at no charge for such service on the groijnd that this brings trade to the store for other things. This is not eoonoaio, because the 00 st of amsik service must necessarily be chgurged in the cost of otitfiur txupfxU.tiea. Wi- llis infant Liili: dapots operated under the auspices of the Health. Department are not econonio, for the sane reason, namely, that thev are opera jsd without any charge for arent. The ohject of ths nilk depots is to place within reach of in- fants and children good nills at a low price « From the stand- point of the infants and children to whon milk is a vital necessity, the disposition of the grocerymen to dispense nilt without charge aust he viewed as an advantage* On the other hand, if grocery stores should charge a profit on each quart of nilk offered for sale, the data collected indicates that the cost of dispensing ailk through such stores would be ahout one half the cost of dispensing milk through retail wagons. This woTild aean a reduction ir- retail price of from one cent to two cents per quart on hot tied milk. w^ O3) Loose milk fron grocery stores Ililk in 40~quart oana sold to grocery stores at IQ^ per quart is retailed by s-:.o3i stores at not more than llj^ per q-uart. This is the cheapest milk o:ffered to the public, costing 3^ per quart leas than nilk distributed in bottles iron retail Tragons, Fron a sanitary standpoint it is believed to bs ucLsaf e for the use of infants and children. On the questionnaire sent out b^r the Ooanittee to 133 cities in Anerica, 65 replies were received, and without exception every liealth officer oondaaned the sale of loose nilk« In not more than 3 or 4 cities was the sale of loose nilk peraitted at all« In avioh cities as Boston and Chicago, the sale is entirely prohibited, .(d) Centralizing delivery S3rsteas The siost izaportant renedy proposed for the reduction in the retail price consists in the elimination of duplioar- tion in the collection and deliveiry of milk noTT practised by the several competitivs distributing oonpanies. The data collected shows that there is duplication of effort in the country at collecting stations, inefficiency in transporta- tion because of broken oar load lots instead of car load lots, (implication in ha^-iLirig fron railroad platfor;^ to the city, i'l^pli cation of bottling and pasteurizing in city stations, and above all, duplication in the delivery wagons on the streets. Statistics of the dBlivery system suggest savings ^iiat would result from the elimination of competition and the —3 3— ■ substitution of a sirigle aer'^oe delivery* Tlie statietice far Nes" York City are as follows: Bottled ailk eupply 704,318 q-uarta Ililk in cans 896,405 " Retail wagons 4 ,978 " Wholeaale wagons 1,522 quarts Average load of retail wagons 143 " Average load of wholesale wagons 14,7 cans Investigation sh.ows tJiat tlie naxisiim load for a re- tail ijagon in 438 q-uarts, consequently if the total voliime of retail ailk aaoimting to 704,318 quarts were carried on re- tail wagons handling only full loads, the "bottled milk of Uew York City would "be handled by onlj 2,243 retail wagons instead of the 4,S78 actually in use at the present tine. This would nean only 45.4^ of the piieaent nurfoer, or a saving of B4,7f9 of the total. In wholesale ^ailk the niaxicrua load for a two horse wagon operated by one aan is 75 cans per day. If all of the wholesale nilk, aaounting to 896,405 quarts, or 22,410 cans, were carried on wagons handling only aaxiaua loads, the number of wagons required would be only 300, as oonpared with the 1,533 wholesale wagons now operating. This would be a saving of For a number of years, milk lias "been retailed in ^^adelphia for 2/< less than in Hew York City, Philadelphia -34r- retail loads liave averaged 300 quarts to tlie wagon, while IsT York retail load^ have averaged laas than 300 quarts to the wagon. Thia difference in load is chiefly responsible for the difference in the retail p±&oe« In the City of Ottowa Canada 75^ of the husiness in the hands of one distribv-ting firm which operates at a laargin of only 3»25 centa abo'-e the cost of production, as oonpared with the laargln for distribution in Philadelphia of five cents and in ITew York of seven cents. The llilk Ooanaittee appointed by the Food Controller for Canada reported on Hoveaber 34, 1917 in favor of the "Unr- ifioation and reorganization of the nilk diat rib- -.ting business" and cited the experience in the adoption of a single delivery aystea by the City of Regina, Saskatchewan, where a net saving of at least l-l/8j^ per quart over the previous cost of milk resulted froa the ado"tion of this aystea. The exact saving in Hew York City can only be de- terained by a careful survey of the location of the covjitry and oity plants and of their present outpijit and capacities. Such a detailed study has been attenptsd by our Cormittee and the results will be presented in the detailed report. The saving restating froa the elimination of duplica- Hoa of delivery wagons ta not the only eoonony to be secured through \-.nification of the distributing branch of the business , Dujaioation in country handling, freight, hauling, oity plants, overhead, and administration would all be reduced. From the above data our contnittee feela j/stified in stating that a great econony would result from th.e centralisation lb. lb. (e) PoTJdered Mil.k» Tiie lo^rest prioea obtainable on powdered nilk are; S]d.n millc powder in barrels of 150 Iba. eacli, 21]^ per TI?liole milk powder in barrels of 150 lbs. each, 37/5 per In fl-:.id milk tlieae prices are equivalent to a little leas tlaan 4^ a qiiart for skiin milk and about 9-1/3/5 for whole milk» Th.3 fact that this powder when properly kept is almost isrperiahable, cam be shipped long dietanoea, and kept in stor- age, and can be used for cooking and manufacturing purposes and for practically all purposes for which fluid milk is used, Justifies its reooaaendation as a substitute for flv.id nilk for that portion of the milk supply which is used for manufao- tTjiring purposes and for some cooking purposes aould with advantage 'oeoone a market for milk powder. The shortage in the aource of production of milk powder could well be remedied by the derelop^ aent of producing territory outside of the limita of the aouroes of fluid milk supply. It is undoubtedly true that many portions of the south prevented from furnishing fluid milk by distance and ^y climate could on account of the fertility of the soil pro- duce milk cheaply if markets were developed for milk in powdered feiffl. The use of milk powder for a considerable percentage of tlie market not only for manufaot-Jixing but for household and oook- iiig purposes would relieve the pressure of high prices to some extent on euoh consumers. .-36- C H C L U S I H S« 1- Hilk liaa yisen in price in Hew York City, 55 percent since June 1314. This is u "oh less than the increase in price of eggs, com, pork, wheat, Bugs.r, oats, beef, and other iapor- tant food products, 3- In all other cities in Merica there has been a correspond- ing increase in the price of food products and of nilk, 3- Hilk ie the moat valuable of all human foods not only for the young but the adxilts and even at 14;!^ per q-oart it is the cheapest of all aninal foods, 4- The quantity of nilk consuned by llevr York City is about 30 per cent less than a year ago, Ilany families use less nilk and are substituting tea, coffee, beer, wine and other things for the feeding of yoimg children whose health and growth are injjured by s\-.oh substitutes, 5- The cost of milk production on the average dairy farn supplying milk to New York City for the year of 1917 ^as 6 l/z4 per quart and for the months of October, November and December was 7i^ per quart, 6- The largest item In the cost of milk production is the cost of grain, amounting to d^ per quart. The grain products used infeeding have risen in price during the two years, 100 percent tod have increased the cost of milk to the farmer -2f- at least Ij^ per quart, faxn labor is the next largest item ai^aounting to 1^^ per q'uart of railk. TMs has increased 100 percent in two years. There is evidence that in nan;- dairy districts, dairy, farmera oannot obtain labor at any reaponable price* 7- COST OF DISTRIBUTIOIT. 37 .4 percent is sold in bottles at 14ji5 per quart fron wagons, 6.6 percent is sold from bottles in stores for X44 per quart or less, 44,4 percent is sold in 40 qiiart cans to whole- sale consunere or as dip nilk. 11,6 percent is sold in 40 qijiart cans for manufacturing purposes. Brieifly, 44 percent of the milk supply is in bottled and 56 percent in 40 quart cans. If the entire 44 percent bottle milk was sold at 14iz5 all of the can milk at lOjiJ. the average price received by the dealer, the retailers, is 11,73^, The cost items for collec- ting and distribi-.ting bottle mill: is .14537^ per quart, r©^ suiting in a loss of .00537$!^ for each quart sold. Of the 6 largest retailers, three have sustained heav^' losses during the past year and especially during the past three months. One of these has gone i.-.to a receivers hands. The cost of retailing as indicated hy the figures on the books and the six largest distributors and by the audit of the Borden's Farm Products Company; Inc., seems to be fair and reasonable. 8- SURPLUS KILE. One of the moat serious problems facing the industry consists of losses by the manufacture of surplus milk into oilk products such as butter and cheese. At certain seasons of tlie 3''ear tliere is an over production axiounting at timet? to 40 percent more tiian the aarket will oone-une as fluid :iiilk, 9- SUGGESTED ECOHOMIES III ?EODUCTJ''IT , (l) Larger producing cows, Th.e production of dairy ootrg can be increased in two ways: (a^ By ianediate elinination froa tiie herds of un- profitable and lOTT productive aniaals. (b) The breeding of larger producing cows, while a sloTT process, should be enooura,ged aa a sufficient number of high producers do not exist and aust be bred, (3) Larger dairies. The dairy fc.raa supplying Hew York avera:^'e only 13 cowa to a fara, and produce nilk at a cost of Q-l/Z^ per quart. Herds averaging 50 ootira can produce ailk at &-l/2j^ per q\iart. Saall herds should be discouraged and the dairynen educated to operate larger dairy units* (3) Collective hauling. There is a groa,t and unnecessary expense in collect- ing oilk from dairy farms due to the unnecessary nu:aber of iiiragona bringing nilk to shipping stations, Throiigh collec- tive hauling this coat can be reduced to the famer and hence to the oonsuner by possibly more than TSf^ through the adoption of a collective hauling system, (4) Collective buying of grain. -39- Tlie cost of grain fo3? dairy Lerds supplying New York City is f^ll, 078,^60,00 at present prices. By ocxleotive bu^dng of grain througli one dealer it is estinated a saving of lOf^ oould be seoured, Tlie saving wovld aao^ont to (;i, 107, 876. 00 per 3'ear, or one-fifth of a oent on eaoli q^jxirt of mil]£, 10^ SUGGESTED EGQITOIIITilS III DISTRIBUTIOI (1) Daylight- delivery By daylight delivery of milk, which means the delivery of nilk "between the hours of 7,00 a.m. and 2,00 i:.m,, there TTOuld be larger sales of milk, better oolleotions of cash, better oolleotions of empty bottles, less theft:,, better wor]^ing oonditions, and t".e wagons can probably carry 25^ increased load, (2) Retailing from grocery stores. Through grocery stores bottled milk can be retailed from 1 to 2i^ a quart less than the cost from retail wagons. Dipped milk can be sold for 3?i less. Because of the dangers from dipped milk, it seems wise to recommend that the public ■be educated to demand only bottled milk. The sale of bottled ailk from grocery stores should be encouraged^ (3) Centralised delivery system. By oen-cralizing the delivery system, the number of 3^8tail wagons could probably be reduced 50^ and the number of ^liolesale dragons 75f^. It is estimated that the saving in the ►-so- retail cost of nllk would be more tlian one cent, and perliapa as nv.oii as two oente, per quart tlirougla eoononies resulting froa tne elimination of unnecessary delivery wagons. An additional saving would result fron tlie elinination of other items of coat due to the present co::ipetitive delivery sj'-Btaa. Tiie Oomittee strongly reooanends steps towards bringing about the centralization of the business of nilji distribution, (4) Powdered Milk, Powdered milk can be used as a s-ubatitute for fluid Siill: for cooking and naniifaoturing purposes* It is estimated it uouLd result in a saving of four cents a qiiart over the price of retail bottled siilli, and of one cent a qvart over loose milk. The production of powdered nilk in territories renote from the sources of f Ivid nilk supply should be encouraged. -31- LUt of cost itens. 14:p laottled ailk Renediaa Pippoaed Reduction Oolleative "bujdng ,00305 Production Grain ,02050 Ha,y ,006 TO Silage ,00570 Labor ,01670 liiaoellaneous .01370 Winter factor .06690 Butter fat .00403 Total Distribution .07435 Total Iioaa .07113 «00537 Retail 00 st minus loss ,06575 Zggduction ,07435 Collective tiauling ,00250 Country Station ,00619 Centralized stat ions Freiglrt City Trucking; .00826 ,00237 carloads oentralized Possible on all. itens City factory .01703 centralized .00500 Delivery •03207 centralized and daylight ,03000 Selling overhead ,00212 centralized Adiainistration ,00128 centralized Deductions .00060 Sales less than ^retailpjjalce ,00121 Total .02955 Total .14000 SUMAHY OF II7ESTIQATI0IT By tlie KAYDR^S OOiniTTSE OK- MILE. , Q fiGAIIIZATION OF TIIE COimilTTEE. The Mayor* s Oomaittee on Uilk "by appoiiLtmerLt of Majror jblin Purroy Mitcliel on OctoTaer 4tli, 1917 is tlie result of the oorres- llgndenos witli Health. Ooonissioner Eaerson, oonoeming the relation of the Mgla price of milk to the health of the oonavjiity and ea- pec^ially the health of infants and children* 3, SCOPE AiTD PLAN OF im^STIQATlOLIS. Two priaary questions were presented to the oormittee hy tlie Mayor, 1- Is the present price of milk to constE^rs justified? 3- How oan the price he raiucedt In addition tolflils, the Mayor asked the ooanittee to consider the advisability of estahliehing a pastetirizing plant for oity institutions, and of estahliahing a silk distributing ajraten for the entire oity under franchise • Before ^jndertaking its own. investigations, the oonaittee recognized the value of the extensive investigation made by the le^ islature in 1916 by the oooaittee known as the Wok's CocEaittee whic^ devoted six nontha to investigation of this aame avhjeot.The aurvey of the naterial in the report of the Wick* a Ooianittee nade it evidei^ that the problan presented to the Mayor* s Ooianittee was of eaonjKm^ -2- ■J magnitude and tha,t the tine at th.e disposal of fhB Ma^'oi^e -CoaiEiittea •fas esfcreaely aliort, Tlie ooaoittee^e program, included a s-cirvey of the eta- tiatioB of the City ailk supply, cost of zailk production, the cost of oolleotion and distribution, relation of surplus nilk to cost, tlae laet'nods of fixing narket prices, tlie effect of prices on tlie consumer and tlie oonsideration of renedies for reducing tlie cost of production and tlie cost of distribution. Tli3 ooranittee determined to seooire infonaation tlirou^ three oliannels: 1 - Pu"blio hearings, 2 - Auditing accounts of produxjers and distributors, 3 - Special investigations concerning production, distrloution and oonsuaption of Eilk, It W£i3 recognized that conplete and detailed infonaa- fclon could not be secured on all matters but the inquiry should deal ffitli questions of only major importance. - ?0H£ AOCOMPLISHEII. The following work has been perf omed. Public hearings - 11 Private conferences with the industry - 6 Auditing accounts of producers - 17 Auditing accounts of distrihutors - 6 Private investigations - 10, A complete digest of the aaterial accumulated by the 'kick's Ooaiaittee report was prepared in order that the oomiittee - 3 - niglit 'nave full advanta:;e of this worl: and night oonr.are the con- ditions existing at the present tiae, A survey of 2,300 faailiea of oons-uners was -aade, ,-Tliich had as its rurpose, to ascertain the relation of high prices to the qv^intity of ailk iised, A questionnaire oonoeniing the qvantity and price of nilk was sent out to 133 other oities in America. A questionnaire was sent to all distrihutors of milk in Hew York City to secure statistics regarding distribution for the purpose of determining what eooaoaies could Tas ohtainediy centralising distribution. Through the testij2iony of witnesses and private in- vestigations, data was secured froii six states sv.pplying nilk to lew York City and figures compiled f ron 1368 dairy farms concerning tlie cost of production. Coarlete audit -^^as made of the books of the Borden* a Jam Products Co, Inc. through the services of a public certified £.coo^antant . The oacinittee was assisted in its work by the office of the CosEiissioner of Acco-..nts, by the Department of Health, the Hew York liiit Oosaaittee, the Aasooiation for Improving the Condition of the Poor, and special investigators assigned to the office force of the OQcnittee. The ooncl^ASions reached as a result of this investigation a^e as follows: ^* ADVAIICE III THE PRICE OF MIL K AEH OTHER FOOD PRODUCTS. . Iji fhia rn-i-« ^^ vr — v>-.i- 4.%^ -etail price of ailk in bottles -4~ delivered to houses from wagons has ssisen fron 9^ per quart in S3pte2iber 1916 to 14^ r-sr qiiart in OotoTDsr 1S17, From June 1914 to Deoenber 1917, several products have advanced in price as follo'57s:~ COHIIODITiilS PRICE JUITE 1S14 PRIC2 DEC. 191 7 PER CEITT OF DTCPtEASE. 3gg3 per dos. 231!$ 67]^ 19lfo Ooni per hu. 72' 2,00' 178 Pork per bhl. 19.60 50.50 158 laeat per "outa 90 2.26 144 S'^ar per 100 lb. 3*33 6.90 108 Oats per bu. .43 84^ 98 Beef per lb. 18 32 77 Olieeae per lb. 14 34^ 75 Butter per lb* 37 47 74 Milk per quart 9 14 55 llilk therefore has not been alone in its rise in price and. lias risen to a n-.-.oh less degree than Bine other iziportant food products. In IS other cities -where the price of nilk aan 9^ in Q oipPer 1516 . price liaa risen to: 1^/ in 4 13^' In 5 12^ in 4 lli in 3 -5- In 35^oitiea wlisre the pric . of zzllls. was 10^ in 1916 ..'■ naa riaen to: 15^ In 6 14^ in 5 13^ in 5 13^ in 8 11^ in 1 The rise in aiilk prices haa tlierefor© not been confined i,c SFew York City, ■' ~ STATISTICS OF THS SUPPLY. Tiie following statistioB concerning allk aupplied to '^viw York City for the nonth of October have been secured 'by the 0«partmer.t of Healths ITuaber Dairy Fame 30,934 liilk Shipping stations 800 Dairy ootts 400,000 Milk received ITovenber 1,627,127 qti ♦daily Hev7 York State Supplies 1,402,377 qts, Pennsylvania 114,630 qts. :Iew Jersey 53,100 qts. Vemont 36,130 qts. Connecticut 9,000 qts, Hassachusetts 4,000 qts. Canada 3,000 qts. Hilk Bold in bottles fron wagons 598,671 qts. Milk sold is. bottles fron stores 105,647 qts. Milk sold in cans froii stores 710,654 qts, Hiik sold, in cans fron nanufactuj>- ers 185,750 qts. Hetail dealers 350 Retail wagons 4,978 ^oleaale wagons 1,533 Nin.be r Grade A Haw Milk 50,000 qts. Grade A Pasteiurized Milk 170,370 qta. Grade B Pasteurized Milk 1,380,360 qts. Grade Milk Uoae, 6. FOOD VALUE OF HILK For tlie sane noney, one oan get nearly four tinea as Buoh, iiutrition out of nilk aa out of lean beef, tliree tiaea aa rnvsih as out of pork. Tjie energy in one quart of milk is equal to the energy in 11 ouaoes of airloin steak or B^ eggs, Conaidering from the standpoint of huaan nourishment, milk is the most valuable of all human foods and the cheapest* In addition to it^ nourishing qiialities, it has two o-tlier valuea of greatest iaportanoe, 1 ~ The furnishing to the body of aalts, 3' ~ The f v.raishing of the growth-producing substanoea recently discovered and up to the present time unnamed. These stimulate the growth of the yDtmg and are found nowhere so available or in such large aooounta in other foods as tloey ^2^6 in nilk. For adult a at hard work, the diet of bread and milk furnishes more strength, more nourishment and energy than a diet of '^read and meat. Even at X44 pe^: q^jart,milk ia the cheapest of anima^ foods. Even up to 30^ per qt,, milk oan compete on favoiab^e ■'63318 with any animal food at present ppi0©&# THE EFFECT OF PRIOES ON OONSIMERS. Tlie price Of riLlk is of vital importance to infanta and 'ouns oliildren. Older persons nay exercise ctioice and select their 'oods, but, infanta and oiiildren have no choice and are dependant ipon nilk. When children under two years of age are deprived of lilk and placed on a diet of other food they do badly, Hig prices .,n Hew York City during the past jrear have resulted in changing the ilet of yoimg children in the poorer parts of the city fron milk to ^tier things, or from milk of high grade to silk of lower grade with -ongequent injury to their health. A nilk census taken in October 1913 shows the city was i^.3ing 1,900,000 quarts of Sii-lk a day. Similar census taken on October % 34, and 25, 1917, showed respectively 1,411,658 quarts, 1,576,722 quarts and 1,531,968 quarts, indicating shrinkages of 36.7 percent, 1.7 percent and IS. 4 percent. Statistics from large companies show decreases for October, ranging fron 50 percent to 11 percent. In various districts of the city. These shrinkages in the amoxmt of milk jonsuaed are undoubtedly due large to the advances in price which •ave recently occurred. In the survey of 2,300 families having 5,438 'oiiildren \nder six years there was used by then in 1916 4,797 quarts ^ily, in 1917 3,193 quarts daily, a shrinkage of 1,604 quarts. Of *^e 3,300 families 1,480 were using leas milk t an last year and 959 .. '^ reduced their supply from 35 to 50 percent beaause of the high prices, 3,148 children under six years of age were drinking tea, coffee, wine and "beer, a partial eubstitutionfor milk. Increased mortality from diarrheal diseases was noted in ■*s^ Yoi - -^ mst. September eund October. a STorvey of other oitiee in Aiaerica BlL0\'7a tiia,t in the majority of tloeyj liere was a sinilar increase in deaths aaong babies f roH diarrheal iseaaes. A similar experience has occurred in foreign ooimtriee aere, becaiiae of war conditions infants were deprived of rsXLk. and hb resulting increase in the death rate was promptly checked as soon ,6 Relief Organizations arranged for an adequate nilk supply both ■or mothers as well as for infants. There is no doubt of the fact .Jnat high, prices and the ehortase of nilk have a direct effect on LCfant mortality. The value of good nillc is indicated by the fact that lacng the 60,000 babies in Uew Yori: City annually patronizing infant ailk depots, the deaths rate for infants -under one year is only 43 Der tliousand, while the gensral death rate for infants -under one 7dar in the entire city is Q3 per thousand. 3. COST OF PRODUCT lOIT , ITearly every factor in the cost of production is variable, liong the 30,000 dairy fams supr lying nilk for Hew York City there ■■'^Q great differences in the size of the fam, in the oliaraoter of "fc^e farming bv.siness, in the nuaber of cows kept, in the quantity of "ilk prod-acad, and in the conditions of feed, labor and other cost '■l;esi3. Each dairy district has local physical conditions, cliaate and P'sography, which greatly affect the cost of nilk production. The "iajority of dairy fams do not keep books or cost aocoimts, and the -eour-jig of accurate figures is only possible from a small percentage jf farms. The beat tlaat can be done is to select representative iairy districts and enough typical dairy fams to provide a general -9- averace of cost of ailk prod-uotion -onder present conditions. Tjie date oonpiled inol-udes figures fron 1,363 dairy farns in tlie six fj-uates contributing ailk to ITsv York City, Officials f roa tlie Suits Departments of Agriclture of tlieee states fv.rnislied figures oonpiled by then in their testiaonjr at liearings before the Conaittee, otlier figures were obtained fron publiahed reports and the Coouittee's own s^^oup of expert aooountants aeoured figures at fiaet hand f roai -erenteen dairy faras. Investigations show costs ranging froa 5^ per qv^^Tt to &| "er quart. ^ere is a definite relation between the sise of the dair^'' and the cost of nilk. Our investigations ahow that in this territory iargs dairies produce nilk cheaper than snail dairies. There is also a definite relation bet'~een the productivity of the individual cow and the cost of Siilk. Large producing cown produce milk much tJlieaper than aaall producing dowa. The average cost of ailk produo- ^■ion is 7)^^3r q-uart for the aonths of October for nilk containing '? percent butter fa,t. The oost itens are aa follows i- 00 S? ITEIIS AIIOUITT Gram 34,7 lbs at "'SS per ton Hay 51,3 « " 12 « " Silage 105,3 " « 5 " " labor 2. 52 hrs at 30^ per hour All other charges 21. 6f^ Total October factor (llfO Total COST PEH ETJimRSD IBS, COST PER QUART. ,95425 .3103 ,23475 ,7770 .02 05 .0067 .0057 ,0167 .3356 2.5424 .0137 .0'533 ■ ■ .3244 • 0069 S.2SS0 .0702 la the above list the producers total cost is s''2.94 per him- ■ed povjicls of ailk or 6 l/Z^ per quart. The ann'oal changes in th© volune of nilk produced during different niontha of tiie year iias tieen acoonpaniad "by annual olianges in prices paid to producers during 1;]iQ past ^on. years* It is cheaper to produce milk "wlien oovra are in pasture tlian wlien they are fed grain i.i the bam, therefore, it costs nore to produce iiil3r in Octo'oer than in June. During the •;en 3^ar period the average Ootoher price has been IVfs greater than the arerage yearly price. This was recognised in the agreenent between the distributors and the Dairyaen's League b3rthe addition of Ufj for the nonth of October to the cost of nilk. The addition of this Ufa for October aakes the cost C3»3S per hundred pounds or 7^ per qs^rt. The above cost ro" re ■;-ent s only the average dair^*" fam with a daix'y herd of average size oontsiining dairy oous which are average producers under the aanagenent of the a-vera^e farmer. As an example of wliat ran be done under the best con- ditions on a large dair3'" fam with a large herd of cows of high productivity and a CQn>etent business nanagenent , the Coiciittee has aade a oonplete audit of the books froia such a fam at Hobart, He^ York, showing the cost of nilk to be only 5 l/Z^ per quart for the 3J-aar as conpared with S 1/3^ per quart on the. average farm. On the Sobart ?am there was a profit of over 03,200. The T7ick*s Go:xiittee report showed that the cost of milk production previous to 1913 on the average fam was not more than 5^ per q^jart. Consequently the cost has increased to the extent at least of 1 l/3/j ^rer quart to the farner during the past year. The largest single item in the cost of producing a quart of 2iilk is the cost of grain. This amounts to 2^^ per quart. •asi 1.08 2.^0 34^00. 30,50 46.50 35.00 21.00 30.00 *46i *5&^ • 89^ 40.80- 48.00- 57.00- 30.00 44.00 80.00 30.00 40.00 57.34 -11- rae prioe of grain liae slioTm enormous advances in the past three years.- The most recent figvires obtained froa the Hew York Pro- duce Exchange are as follou-a:- FOOD VALUES DSC. 15 1915 1916 1917 Yellow Corn (per "bv.) Bran (per ton; Hay Oats (32# to hv.) Oil Meal (per ton) Tallow Meal * Gluten Heal " from the above tabiilation, the prioe of corn products and iTlieat products have about doubled* -This neans that in his feed bill alone, the dairy famer has to pay 1^ for each qviart of ailk more tlian he did 3 years ago. The labor iten which is the next largest in the list has increased 50 percent in the last year and about 100 percent since war conditions esisted. The evidence, in fact shows tliat in zaany dairy districts labor cannot be obtained at any reason- al5le price* The other it ens of cost for producing nilj: must be recognised as reasonable. The data from all farms ahows that S 1/3^ per quart is a fair ©atiaate of the yearly average cost of producing average milk on the average farm under present conditions and that 7^ per quart is a fair estimate of the cost for the months of October, Kovember and December.. ^' -QQST OF DISTRIBUTIOIT. The distribution of milk has been systematized and organ- ized in a much greater degree than any other branch in the industry»- Expert business management, capital and competition has brought about -13- iapii (ievelopiaent in dlBtribiiting systea in recent 3rears« There is a wide "variation in tlie oauae of distribution corresponding witli t!ie difference in "busineas effioieny and in volijsae of businesa. During tKi raontlia ending November 1, 1917, ttiree of the largest dia- tril)uting oonpanlea showed net losses of re8\-ectively, $169,574,54, S52,873,19, §42,356,98, and one of these was ooapelled to go into a receivers hands. On the other hand, three other large dis- tributing ooapaniea showed profits during sane period, althougb. these pofits were saall oonpared with other years. One oonxany SiKwred a loss of nore tlian 4/10 of a cent per quart on every quart of milk handled this year. Another company showed a profit of l/4^ per quart for the same period. A complete audit of the books of the BordKi's Farm Products Company, Inc., included a verification of coat itraas by checking with the original vouchers. Figures ob- tained by a less rigid examination from the boolcs of five of the other distributing companies show that the figTJires of the Borden's Farm Froducts Company, Inc., are conservative as to costs and fairly rep- resent items of cost included in the collection and distribution of aiXk. Each of the principal items represents a group of costs oon^ Gaining numerous minor deteiils. The general list may be s-ummarized as follows :- aSTAlL lilLE BOTTLED IIJ CITY. (0CT0B5R) Selling Price 14.000^ 3QBt of Milk (4 percent mill^ October) o, 742500^ -ouatry station(handli g only cans) •^^§1?S" freight 6 ' .008260 ^ity TrvxjlOng (cans from Bailroad toclty factory) .002370 ^ity Factory Expense (inolujding pasteurizing, washing ^^ --,«^ bottles and caps) .017020 -13- Delivery Expense (luoludea, driver, horses, wagonB, branch maintenance, and general expense) .058000 Selling overhead (includes general sales ngr, and clerks, advertising) .002120 Atoiniatrative Expense (Officers, offices, clerks) accounting dept) .001280 DecLuotione from sales, 'had debts, etc.) .000600 Difference between retail price and average ant. re- alized, (actual avera^je sales were 13,879 per qt.) .001310 Total .14537 Lobs .00557 Total ^4000 10. SUHPLUS MILK« One of the most serious problems fao^g the industry whether of the producing or distributing branch consists in surplxis milk. This surplus is due to the fact that the supply does not correspond with the demand. At the season of the year when cows are first put on pasture there is great over production, ^JJuring the hot weather of July and August there is usually a shortage. Again in October and November when grain feeding begins there occurs an over production although not so great as in Hay and June, Surplus Qills: is oacnionly laade into butter, cheese, condensed milk and milk powder. These milk products sell most of the year at prices which result in a loas of milk manufactured into them from the regt:lar sour- ces of the fluid milk supply. The retailers in fluid milk in the past liave been compelled to buy all of the milk produced by the dairyman in the dairy districts, where their shipping stations are estab- lished* In recent months three new factors have had a marked in?- fluenoe on surplus milk, (l) - The great advance in price of fluid milk which -14- has reduced tiie cLeaand, tjierolay creating aa artif ioia2 surplus* For the first time in 10 years tliere was more ailk produced in July and August tlian tlie aarket would oons-uae* While this was partly due to weather conditions it is believed it was largely due to the stiaulation of higher prices paid to the producer and to a lessened demand on the part of the oons-uner. One retail oonpany was compelled to manufacture in July 3,625,000 quarts of ailk into butter, making S 54,727 lbs costing Sl-f-j^ per lb, while the market price for butter was 4Sj^ per lb« This saae company manufactured 2,451,000 quarts of milk into cheese at a cost of 37i!i per lb, while the market price for cheese was 24j!f per lb* At the price which producers received for their product in October, butter would cost to produce, 81pi per lb. (2)- Another influence was the agreement between the Pro- ducers and Distributors Organization whereby the distributors closed up shi; ping stations where the supply exceeded the demand. This resulted in the closing up of one retail company of 31 stations, and another retail company of 39 stations dtiring the month. of October. (3) - The new market for condensed milk furnished by the TTar orders of the allies. These war contracts gi:iarantee a profit above costs so that condenaories are in a pflaition to compete with the fluid milk aarket for the supply. This has furnished producers with an outlet at higher prices which has fortified them in their demands for higher prj^cea in the market for fluid milk. The fact that ~1S- Hsalth. Departiaent rog-olaticms do not applj'' to tlie oonderLsed nilk has Incrsasod tlie influence of tlie competition by tliese condensories. So long as all milk p-.troliafled from a producer "by the distributor is paid for at the full market price for fluid nilk, there will be a loss on surplus nilk manufactured into butter and cheese. Butter, cheese and other lailk products are normaully manufactured out of milk which does not reach the fluid milk market, and is produced by farmers who do not re- ceive the full price for fluid milk. Consequently, the price of butter and cheese will always be controlled by the price of milk outside of the territory s-applying the fluid milk market, 'Waen one considers that at times 40 percent of the milk pvjs- chased by the distributors is a surplus which must be manufac- tured at a loss, the influence of surplus milk on the cost of fluid milk is apparent. The problem of surplus and its effect on the cost of fluid milk is as yet -onsolved. This problem requires immediate and further investi:ation. -16-- n. EGOHOHIES IJ PRODUCTIOIT (a) Larger producing cowa It ia admitted that the average oow in the producing territory produoea not more than 5,000 Toa. of nilk per year. Oowa producing less than 4,000 Ihs, per jnsar c;,re unprofitahle. All such cows are supported at the expense of the dairy and at the ejspenae of the oonauaing public. ThB eliiaination of these non-productive cows "would eliminate an item of expense which would oonsiderahly reduce the cost of nilk. This is an economy which ia being advocated by the dairymen themselves through their cows testing associations. Only a small percentage of dairymen, however, are nenbers of cow testing associations. Cows producing 6,000 lbs. of milk per year are able to produce milk, even at present prices, for 5jiJ a quart or less, while cows producing only 3,000 loa, per year do so at a cost of more than 8-l/3jiJ per quart. In addition to eliminating the low-productive oow, dairymen can improve by breeding the productivity of the animals in their herds, altho^Jigh this is a slow process req\iiring sev- eral years time* The low-productive cow can, however, be el- iminated ianediately. lb). Lare; er dairies There is not a corresponding increase in e^cpense with the increase in the size of the dairy, for the reason that over^ -17-^ liead. expenses increase a-.-.oli more sIottIj'- than tlie increase in vorone of Isusineas, consequently large dairiee in tliis territory produce mili: sav.oh cheaper tlian snail ones. By keeping larger herds, dairymen can produce iiill: at less coat than fey keeping siaall herds. If there are 400,000 cows on 30,000 farms the dairy herds producing nilk for New Yoa* City average only 13 oowa to a farm.. From data secured it appears that herds containing from 7 to 10 oo^s produce milk at a cost of S.66 for the year 1S17, while herds containing over 50 cows procluce nilk at a cost of 4,65 per year. (o) Collective hauling Statistics from 11 milk shi:ping stations show that 453 farmers^ wagons are used to haul to the station 1,181 40- q^iart cans of milk. This is a little lees tlian 3 cans to a wagon, average distance of the dairy farms being uader 3 miles. On a two horse country truck it is possible for one man to haul 30 40-quart cans of milk. Tlirough collective hauling "by such trucks at these 11 stations it would require only 44 auoh wagons to haul the same milk that was hauled by the 453 Tsragons, In other words, only one-tenth as many wagons wo-J.d be ^required, and one-tenth, as many men. It is obvious that the saving in expense to the farmer in the cost of milk, and hence "bo the oons-jaer, would be very great through the institution of such co-operative hauling. The duplication of wagons Ruling milk to sountry stations is even greater t]£ian the ^Tiplioatlon of wagons distributing milk in city markets. ^18- ( d) Oollective buying; of grain Tlie largest single itea in the cost of nillc is the coat of grain. Little success has resulted froa attempt s so far nade at collective buying. The dairyraen shipping milk to Hew York City use approxiiiately 671 oar loads of grain per month, each car carrying 35 tons, anoimt ing . to 16,780 tons of grain at 055.000 per ton which is §923,230.000 per nonth, which is 111,078.760.00 per year. This nakes the dairyaen supplying milk to !Tew York City as a group the largest single custoner of grain in the Trorld. It seeins fair to assume that if this grain T^ere purchased through a single agent, and the size of the order were guaranteed, soae consideration ought to he given to the siae of the orJ.er. Enquiry of one of the largest comiBsion nerohants of the llew York Produce Exchange has elicited a reply, which is in part as follows: "The ordinary 533 wholesale wagons now operating. This would be a saving of 8l,3l For a nisaber of years, milk has been retailed in ^'^^^ladelphia for 2j^ less than in Hew York City. Philadelphia -34- retail loads liave averaged 300 quarts to tlie wagon, while l3ff Tork retail loads iiave averaged less than 200 quarts to tie wagon. TMe difference in load ia chiefly responsible for the difference in the retail px&oe. In the City of Ottowa Canada 75fo of the "business in tiie hands of one distribv-ting fim -which operates at a laargin of only 3»25 cents abo.^e the cost of production, as oonpared i^rith the laargin for distribution in Philadel-hia of five cents and in Hew York of seven cents. The Hilk Ooaiaittee appoi::ted by the Food Controller for Canada reported on Hovember 34, 1917 in favor of the "Un- ification and reorganization of the ailk distribv.ting business" and cited the experience in the adoption of a single delivery system by the City of Hegina, Saskatchewan, where a net saving of at least l-l/8jzJ per quart over the previous cost of silk res-ulted froa the ado-tion of this systea. The exact saving in Hew York City can only be de- terained by a careful survey of the location of the country and city plants and of their present outp'at and capacities. Such a detailed study has been attempted by our Ooxaaittee and the results will be presented in the detailed report. Tile saving resv.lt ing fron the elinination of duplica.- tion of delivery wagons ia not the only econony to be secured through \-.nification of the distributing branch of the business. Duplication in country handling, freight, hauling, .city plants, overhead, and administration would all be reduced, Froa the above data our coanittee feels j-.- stifled in statine- t.Tin-h = «-n-^^t ^^or.r>««v wn^oid result froa the oentrali2at3.on lb. To. (e) Powdered Milk. Tlie lowest prices obtainable on powdered tailk are; Skin milk powder in barrels of 150 Iba. each, 21j^ per TOiole ailk powder in barrels of 150 lbs. each, 37j(J per In fl-.\id aili these prices are equivalent to a little less than 4j^ a qioart for skia milk and about 9-1/3/^ for whole milk* The fact that this powder when properly kept is almost isiperishable, can be shipped long distances, and kept in 3to3>- age, and can be used for cooking and manufacturing purposes and for practically all purposes for which fluid milk is used, justifies its recommendation as a substitute for flv.id milk for that portion of the milk supply which is used for manufac- turing purposes and for some cooking purposes lyould with advantage beoone a oarket for milk powder, the shortage in the source of production of ailk powder could well be remedied by the develop^ aent of producing territory outside of the limits of the aourcea of fluid ailk supply. It is undoubtedly true that many portions of the south prevented from furnishing fluid milk by distance and by cliaiate could on account of the fertility of the soil pro- iuoe ailk cheaply if markets were developed for milk in powdered foaa. The use of ailk powder for a considerable percentage of the market not only for manufacturing but for household and cook- ie purposes would relieve the pressure of high prices to some Extent on such consumers. -36- H L U S I N S, I- Milk lias rlaen in price in ITew York City, 55 perc.-.nt ainci Jtuae 1314. This ia xi-:oh leaa than the incree.se in price of egga, com, pork, wheat, sugar, oata, "oeef, and other iapor^ tant food products. 3- In all other citiaa in America there has been a correspond- ing increase in the price of food products and of nilk, 3- Milk is the most valualDle of all hiaaan foods not only for the young but the adults and even at 14:jli per q-uart it is the cheapest of all aninal foods, 4- The quantity of nilk cons^xied "by Nevi' York City is about 30 per cent less thcin a year a.~o. llan;'" families us© less nilk and are substituting tea, coffee, beer, wine and other things for the feeding of young children whose health and growth are injured by Bv.ch substitutes. 5~ The cost of ailk production on the average dairy farii supplying milk to Ilew York City for the year of 1917 was 6 1/3^ per quart and for the months of October, ITovember and December was 7^ per quart. 6~ The largest item in the cost of milk production ia the cost of grain, amounting to 2^ per quart. The grain products used infeeding have risen in price during the two years, 100 percent fend have increased the cost of milk to the farmer -2y- ab least X^ per quart* Fara laloor is the next largest item araotmting to ij^ per qtiart of ailk. This has increased 100 psrcsnt in two years. There is evidence that in nan;- dairy- districts, dairy farnera oannot obtain labor at any reaponable price. 7- COST QF DISTRIBUTIOII. 37.4 percent ^s sold in bottles at 14ji5 per quart fron wagons, 6.6 percent is sold from bottles in stores for 1^ per qusirt or less, 44,4 percent is sold in 40 quart cans to whole- sale consumers or as dip ciilk, 11.6 percent is sold in 40 qT:iart cans for jaanufactujing purposes. Briefly, 44 percent of the nilk supply is in bottled and 56 percent in 40 qx:iart cans. If the entire 44 percent bottle nilk was sold at 14j[^ all of the can milk at 10)!^. the average price received by the dealer, the retailers, is 11,73^., The cost itens for colleo- - ting and distribi-.ting bottle mill: is ,14537^ per quart, re-; suiting in a loss of ,00537i!i for each quart sold. Of the 6 largest retailers, three have sustained heavy losses during the past year and especially d-^jjcing the past three months. One of these has gone i.-.to a receivers hands. The cost of retailing as i.-.dicated hy the figures on the books and the Bis largest distributors and by the audit of the Borden's Farm Products Company; Inc., seems to be fair and reasonable. Q~ SURPLUS MILK. One of the moat serious problems facing the industry consists of losses by the manufacture of surpl^os milk into ailk products s-ooh as butter and cheese. At certain seaflons ~38~ of -blie year there ia an over prod-uotion cunoTJUt ing at tines •^0 40 percent nore tlian the market will oons-une as fluid rjilk. V. SUGGESTED ECOLTOl'IIES III Pl'.ODUCTI'IT . (1) Larger producing cows. The production of dairy oov/3 can he increased in two rrays: (a^ By iTEiediate elimination froEi the herds of tmr- profitahle and Io^t productive aninals. (h) The "breeding of larger producing co^ts, while a slot: process, should "be encoura.ged as a sufficient number of higli producers do not exist and nust be bred, (2) Larger dairies. The dairy f^.ra3 supplying ITew York avera:;e only 13 cows to a fam, and produce nilk at a cost of Q-l/Z^ per quart, . Herds averaging 50 oowe can produce nilk at 5-l/3j^ per quart, Saall herds should be discouraged and the dairymen educated to operate larger dair3'- units, (3) Collective hauling. There is a grc^/c and unnecessary expense in collect- ing aiik fron dairy farms due to the urxneces'-.ary nu::iber of T^rasons bringing nilk to shipping stations. Through collec- tive hauling this cost can be reduced to the farner and hence to the consumer by possibly more than 75fj through the adoption Oa a collective hauling system. (4) Collective buying of grain. -39^ The ooat of grain for dairy herds supplying Hew York City is tlljOTSjfSO.OO at present prices. By oolleotive 'o^a^dng of grain through one dealer it ia estiinated a saving of lOfj could be soourod. The saving world amount to (Jl, 107, 876. 00 per year, or ono~fifth of a cent on each q'ja,rt of aili. 10- .SUGGESTED EGQIIQIJES III DISTRIBUTION (l) Dajrlight delivery By daylight delivery of milk, which means the delivery of nilk between the hours of 7.00 a.m. and 2.00 it.a,, tiere i;Tould be larger sales of nilk, better collections of cash, better collections of enpty bottles, less theft:,, better working conditions, and t:-.e wagons can probably carry B5% increased load,. (3) Retailing froa grocery stores • Through grocery stores bottled silk can be retailed fron 1 to 2i^ a quart less than the cost froa retail wagons, dipped nilk can be sold for 3^ less* Because of the dangers froa dipped nilk, it seeas wise to recoimend that the pv.blio be educated to deaand only bottled nilk. The sale of bottled nilk fron grocery stores should be encouraged. (3) Centralized delivery systea. By centralising the delive-y systea, the nuaber of retail wa-ons oovld probably be reduced BOfo and the nuaber of ^liolesale wagons 75fo. It is eetiaated that the saving in the retail oost of nilk would "be more tlian one cent, and periLaps as nv.oh as two cents, per quart tlirough eoononiea resulting fron tlie elimination of uiineoeaflary delivery wagons. An additionaLL saving TroTild result fron the elinination of other itens of oost due to the present oouipetitive delivery eysteri. Tlie Oonnittee stronglj- reoo'i2Uuend3 steps towards bringing aoout the centralization of the business of nilk distribution, (4) PosTdered Milk, PoTTdered milk can be used as a substitute for fluid ailk for cooking and manufacturing purposes* It ie estimated it rrotad result in a saving of four cents a qiJiart over the price of retail bottled milk, and of one cent a qva-rt over loose milk, The produoiiion of powdered milk in territories remote from the sources of f Ivid milk supply should be encouraged. MEETIITG OP THE FEDERAL MILK COMMISSION FOR trj MIDDLE STATES, HELD AT THE OFFICE OF THE NOT TORK FEUFRA: FOOD BOARD, 220 West Flfty-seventii Street, on Friday January 25, I9lg, at ten o'clock A. M. There was present: Dr. W. H. JORDAN, Chairman ARTHUR WILLIAMS BRADLEY FULLER JOHIT MITCHELL MORTIMER SCHIFP DR. LUCIUS BROWN MABEL HYDE ZITTREDGE S. P. SHEDRICK EUGENE SCHOEN appearances: Jffi. ALGER, Counsel for Distributors. MR. MILLER, Counsel for Producers. The C airioioLn called the meeting to order at 10:55 o'clock A, M. THE CHAIRMAN: I understand the producers are represented this morning by Mr. Miller. Have you any ad- ditional data, Mr, Miller, which you wish to present to the commission? MR. miller: Yes^ ¥.t. Chairman. We would offer in evidence a large number of questionnaires, the answers to all of which are sworn to, showing the present costs of dairy feeds ■fctjgethernwith a summary of the same as made by clerks in the office, which I assume to be correct, showing the average of all the feeds, as now - priced by the retail dealers of whom the farmers purohase, bein.g ^'y^}6 ii^,x J.^xx.^-' (The data referred to was .-"ecelTedjija i?^i-lLjrj:>a- ^■-s.^arui jsuuikad Oomiolaeio-n's Exhibit Fo. 65, of this datv3 ; MR. miller: I will also state that I cade inquiry of Mr» DaTridaon . thia moraing. Mr. Eavldcon, you will recall, is the irector of the Daixyznen's Let^gue, who has charge of the sale of the Daixymen^s League feeds; and I can call him here if you desire; but he tells me that the price quoted on those feeds are now $1.00 a ton less than when he was sworn as a witness. I think that is all, Mr. Chairman, THE CHAIRMAFi Mr. Miller, did that one dollar preTail generaJJ.y? eR. MILLER: Yes, sir. THE CHAIRHAF: Today, with reference to these raw iriateiials which are put into the mixture Jmown as Daijcymen's Lsague feeds? MR. miller: Well, the feed as a whole is mixed s.nd charged for by the - at the mills where they are mixed, is $1,00 u ton less than the prices stated by Mr. Davidson when he waa on -'.he stand before the oommission. THE CHAIRMAU: Now, this $5^. and some cents is an average of the flat priue of the l.ist of feeds? MR. miller: Yes, sir. THE CHAIRIiUN: What feeds does that comrise, - the list? MR, miller: That comprises, first, ncla^^^^:f i-^^ / of wMoli we have 59 reports, showing the average sx/ C5x.C0 Bixffalo stook feeds, 38 reports, avexaging- $56^00. Hcmlny, 51 reports, averaging in price $6«.00. Yellow gluten, ?5 reports, average price $5^.37. Cottonseed meal, 77 reporjs, average prioe |6o.OO. Old process oil, 90 reports, average prioe ^62.00. Fancy coarse spring bran, 75 reports, average pxtoe ^,00. Winter wheat hran, 6g reports average price ^i;6.00. Standard aiddlings, g? reports, average price 050.00. Floiir middlings, 65 reports, average price 157.00. Fancy fftitta jniddlijags, 51 reports, average price, $60.00. Red dog flo\ir, 3^ reports, average price i^5.0Q.. 155 s tuj.ers ' dry grain, 43 reports, average price, I63.OO. Disxillero' Ajax grain, 11 reports, average prioe #63,00, Bre^rers' dry grain, 40 reports, average pxiou 1-53.00. Dry beet pulp, 20 reports, average prioe $52.00. Malt sprouts, 11 reports, average prioe $59.00. CiloLe cra^juery fsed, 22 reports, avarage prioe ^57.00. '"nloorn, 3j^ reports, e^verage prioe $62.00. Biles Union g .3 grains, 29 reports, average price $65,37, Globe dairy lesdg, I'j. .-epor^^s, average prioe $57^00. Buffalo dairy Mixed feeds.. IP. reports, at-^erage priie $57.00. Corn meal, 27 reports, avire.ge price $84-. 00, Ground oats, ^k- reports, average prioe $67.00. The reason that there are so few reports as to some of these feeds, is that they are not to be obtained, and no prioaa were given on them in many localities. CO^fMISSIOITER SCHIFF: Mr. Chairman, might I ask Judge Miller whether those are not prices that the farmers pay the retailers? I mean, those are actual prloea •- in maay «asea. -they get a discount in quantities. MR, MILIERi You do not understand it, Mr, Schiff; but I am not sure of that, COMMISSIONER SCHIFF: I am speaking of the farmer. I know I do, MR, MILLER: Yes. The affidavit reads, "That these are the prices charged by the retail feed dealers. COMMISSIONER SCHIFF: Yes, hut it does not say the price paid by the farmer. What I am trying to get at, Mr. Chairman, is simply this: Are these prices as quoted by the retail dealer, or are they actual prices that the f£.rmex' pays? There is quite a substantial difference. That was not Judge Miller *s statement. He said those E.xe ■'■Ib /jrloes charged by the retail. dealers. Am I not rr'.gbt ^lal ooinpariotively little, of that stuff is bought at ret ill. .' Xr 5t bo\-.ght in larger quantities? MR. liCHLi::.^" W.311., X n.on'S know as to that. COMMISLlO.Trj? FILLIMS^ Ai-v':her way of putting it, Mr. Chairman, ■- what ere the whcleoflJA prices? DonU the farmers buy wholesale? COMISSIONER fuller: Occasionally they buy by oar- load. 1^51 MR. MILLER: I suppose occasionally tliat a man does, but not generally, Mr. Williams. COMMISSIONER FULLER: The price has been so high, Mr. Williams, since cows went into the stable, that they have been afraid to buy. They have been waiting for it to be reduced, COMMISSIONER WILLIAMS: You take a farcer with a fairly average large herd, - that is what should be the basis. COMMISSIONER fuller: There are very few of those this year. I do not know of any in our locality. MR. miller: I do not know any in the locality in which I am acquainted; and in fact, we found by the reports in different sections that one difficulty is in obtaining the feeds at all, and in many instances these feeds have to be doled out, divided up among the farmers in that locality, giving them each a little. There has been great difficulty in getting feeds enough. THE chairman: I wotild like to ask one question, Mr, Miller, in order that the inquiry may be »n the record. You have averaged these flat prices,- they have been aver- aged. It is very clear that there are certain of these feeds that are used In much larger quantities than others, MR, miller: Yes, sir, that is true, THE CHAIRMAN: For instance, red dog flour, - I liappen to be somewhat familiar with the feed situation - but red dog flour is not 1S3Z uaed very anioh^ MR. MILLBntt^ It la not used, no, sir. THE CHAIMAN: And you axe weighting your avexage; tliat is, you are getting an average that hardly represents actual eipenditur© , because bran, which Is nuch cheaper, and middlings, are used in ouch larger quantities. MR, MILLER : That is true. Dr. Jordan. THE CHAIRlMNi And in order to really ascertain what it is costing the farmer, we ought to know the proportion, if we can, which I suppose we could know, MR, miller: No. THE CHAIRJjIAI?: (Continuing) Of these various feeds he uses. To average the flat prices gives us probably a rather too high price. MR. MILLER: I would not know as to that, whether it would be too high or too low. Dr. Jordan, except by studying out this analysis. The first I had seen it was this morning. The questionnaires were sent out and returned to the office, and were averaged there. However, the feeds that are used the most, I take it, by going through this list, would be hominy, yellow gluten, cottonseed meal, old pro- cess oil meal, spring bran and winter bran, distillers' dry grain, corn meal and ground oats, COMMISSIONER fuller: Cottonseed, did you say, too, Mr. Miller? MR. miller: Cottonseed meal, yes, sir. 1S53 COMMISSTOITER MITCHELL: Bo you have- tiie- iXUBpaJcativsa. prices there? MR. MILLER: What Is that? OOMMISSIOIiER MITCHELL: On those feeds that you hare just referred to now, have you the oom^^Ai^ative prices? MR. miller: We have the prices averaged from these reports on each one of these feeds, COMMISSIONER MITCHELL: But have you got the price that was put in from the last decision at the last hearing of those parti ctilar feeds? MR, miller: No, I have not, Mr. Mitchell; I have not the prices here as they were at the last hearing, THE chairman: A little further, Mr. Miller, what price is molasses feed? MR. miller: What price is quoted here? THE chairman: Yes. MR, miller: $51.00. THE chairman: Now, that refers to molasses feeds, which are in the class of compounded feeds that are made Tjp with molsLSses and grains and so forth? MR, miller: It is a feed that I hope our people dp not use much. THE chairman: No, I hope they do not; hut at the same time they are bought in tremendous quantities in this State. MR. miller: I suppose they are. THE chairman: I simply wish to throw that xesolii- - tiitm around that average, as it really does not represent the cost, because the quantities of faeed- in that way. m. miller: Yes, Well, I think that would be truej hut whether it would be too high or too low, as I say, I oould only judge by anaulyzing all of the figures. I think that the items that I have stated are -the onj^s In most general use, THE CHAIRMAIT: Yes. Have you further evidence, Mr. Miller? MR. miller: Nothing further. COMMISSIONER FULLER- About the only feed that you have quoted from, Mr, Miller, that is used solely as a balanced ration, is oatmeal, isn't it? MR. miller; I did not catch that, Mr, Fuller? COMMTiiSSIONER FULLER: I say., about the only feed that you quote •i;her8 that is used alone as a ration is oat- meal. MR. miller: I think so. COMMISSIONER ^ ' SOBOENI Mr. Chairman, might I ask Mr. MiU^r a direct question with regard to these averages that he is talking about? Last month we fixed the prioe of milk at a rate of ^60.00 a ton for feeds. What, in your judgment, is the reduction, on the average, using the same method of computation that we did in arriving at a ^60.00 prioe of the cost of feed, for the month of February 7 MR. miller: Somewhere from $1,00 to $1^50. COMMISSIOHEB SCHQEIT: Somewhere jfrom ^1^0 to II.50 less? MR. miller: That would be my j-udgment. OOMMISSIONER SCHOEN: Are there any other costs. Judge, that have been :tJicreased or decreased? MR. MILLER: I xmderstand the price of hay has advanced, COMiaSSIOUER SCHOEH: How much? MR, miller: I do not Icnow, I have not had time to investigate that, I have been away, but I am informed that the price of hay has advanced. COMMISSIONER SCHOEN: Do you want us to consider that in forming this month's estimate? MR. miller: Oh, yes, sir.. The advance in hay, - if you find there has been smy - and the decrease in feeds, if you find there is any. COMMISSI ONE? SCHOEN: Will you please then give us a list of the things that you want us to consider in fixing, the price of milk for the month of February? MR. miller: Well, I think, Mr. Schoen, all that I liave asked you to consider, in addition to the testimony already introduced, would be the increase in the price of hay, if you find there is such an increase, and decrease in the price of feeds, I do not know that I have anything further, except this, of course, that the price announced by the 1B36 ooinmission was a flat price, whioli we thought was low, -uzidex, ^--' the evidenoe. Nothing was said in the fliiding of this coffimission as to recoupment for the December lossese We find that the farmers should be recouped for their losses in Beoember, and we beliere that it wovild be very satisfactory to the farmers if the amoxmt of such recoupment could be stated; that is, when the commission has fixed a price that the farmers shotild receive for February, that the oommissicm state hew much in addition to that price they are giving them as a recoupment on their December losses, I mention that for the reason that it was well understood by the farmers, and was really a justifi- cation of the officers of the Dairymen's Xeague in agreeing to the appointment of this commission, that that recoupment should be made. And, if I might also make another suggestion - I trantto disclaim in advance any intention or desire to suggest to the commission their manner of procedure - but I do feel that an announcement, 3f it coujlld be made unanimous all the tetter, but at least an announcement of the costs of product- ion as this commission has found it, and the cost of fis- tribution as the ooznmiBsion has fo\md it, may be of much value in explaining both to the people in the city who are buying milk at these prices, and explaining to the farmers in the country who are selling milk at these prices, that this commission had found these facts from the evidence. I am 1^57 afraid, Mr, Chaimian, that there is growing up in this country too much of a feeling of antagonism between city and ooxintry. I just returned from a meeting at Ohlca^^,— representatives of the dairy farmers of the United States from San Francisco to Boston - and the \manimaus reports there were that there was a certain hitterness of feeling growing up between city and country; so much so that they adopted a resolution touching upon that subject; that resolution^ that particular one being as follows: "We deplore the growing antagonism between city and country and between producers and consumers, and call upon the forward looking men everywhere to work to allay this cisunder- standing, that it may not increase and crystallize, thus preventing that unity of purpose and action 80 necessary to maximum efficiency." In Germany, that antagnoism, according to reports, has reached a very acute stage. The week before last, I took an extract from the "New York Tribune" of January 12th, a dispatch from the Hague, in which it was stated that the Prussian Food Commissioner was sending out missionaries to allay this feeling. I will read only the last para- graph, which is as follows: *He has specially urged his hearers to dispel what he termed the unholy misunderstanding between the tomi aad the country and between producers and tixe oB,i©5a, 0<ese were the figuies 1S66 for Deoeaber S, Mr. Miller, wMoh are already in the record, 1,600,732 quarts, COIIMISSIOHER SCHIFF: What were the January figures? COMISSIONER BROWH: January figures l,609,g23. COMMISSIOITER SCHIFF: That is an increase, not a de- crease. COMMISSIONER BROWH: An increase » Did I say a de- crease? It should be a decrease. I do not thinlc that one survey means a great deal, except as a possible indica- tion. I think we should like to hear from the distributors on that, because their own figiires may show different from this one set of figures which we have. This is a very perceptible decrease in Grade "A" milk. COMISSIONER MITCHELL : What does that amount to. Dr. Brown? Have you got it there? COMMISSIONER BROWN: In Grade "A" milk, the grand totals are 1^9,733 quarts on that day; or rather, this was a canvass of the dealers on the preceding date, January 17th. The grand total for August 15, 1917 is 170,370 quarts. COMMISSIONER WILLIAMS: What are those figures again. Doctor? COJmiSSIOlTER brown: Which ones? COMMISSIONER WILLIAMS: ^le "A" milk for January? COIMISSIONER brown: "A" milk in round figures, 14.0,000. 1667 COIIMISSIOIER WILLIAMS: In the dealers 'hands? COMMISSIOITER EROM: Sold by the Aalers. COMISSIONER WILLIMfS: lIThat was the preceding figure? COMMISSIONER 3R0W: 170,000. COmiSSIOlTER WILLIAMS: For what period? COMISSIONER BRO^: That is in August. COMMISSIONER KITTREDGE: Do you know the increase for January over December? COMMISSIONER BROWN: It has not been figured yet. COMMISSIONER WILLIAMS: There, doesn't it make a difference because you are comparing a winter and sumraer month, do you suppose? COMMISSIONER BROWN: Oh, I do not think so, no. No, our own impression in the matter is that they have gone from ^A" to "B" milk to a very considerable extent. THE CHAIRlfAN: Has it don any harm to the public? COMMISSIONER BROWIxt: I beg your pardon? THE OHAimiAN: Is that any injury to the public? COMMISSIONER BROWN: Not so far as I know. It is a very distinct advantage, - two cents a quart advantage. THE CHAIRMAN: And perfectly healthful milk? Now, we imderstand that these figures are what was actually sold to constoers, not what was received, - what was sold. COMISSIONER SHEDRIOK: ^o* THE chairman: Just what was received by dealers. COMMISSIONER SCHOEN: The big quantity, -^609,000, js what they received, - not sold. COMMISSIONER BROIW: Are you referring to. Qiad© ^An THE chairman: The first figtirea/ whsut do tliey represent? COMMISSIOITER BFtOTW: Tou refer to Grade "A", not grand total. THE chairman: I refer to grand total. COMMISSIONER BROWN: Grand total represents receipts, THE CHAIRMAN : Recaipts? COMMISSIONER BROWN: Receipts as shown by a pamphlet at the receiving points. THE chairman: But you have no comparison showing the surplus? COMMISSIONER BROWN: No. COMMISSIONER SHEDRICK: Mr. Chairman, a fluctuation of receipts on account' of storms will be probably three times what Dr. Brown has got there. COMMISSIONER BROWN: Yes. COMiasSIONER SHEDRICK: So you see the inadequacy of the commission taking those figures and trying to indicate as to just what the reduction or increase has been. THE chairman: Ha^e the distributors figures covering the period of time, that would show? COMMISSIONER SHEDRICK: If the distributors have got any figures, whxch I hope they will this afternoon, we 5>ugbt to have something worth listening to. I am just as disgusted as you are, if 1 might say it that wayi but I will say this: That perhaps the distributors have some extenuating : oiroumstancesinand I hep they will explain them. I hoped that the commission might have from the distributors this juornin^ their figures; but they have not got them, THE CHAIRMAN : This commission is a very patient body, but its patience is getting a bit strained. COMMISSIONER SHEDRICK: I think probably that is true, too; I hope it is. MR. ALGER: I may say, Mr. Chairman, that we expect at two o'clock this afternoon to present some figures with reference to the dipped milk business in concrete form, showing what effect this January decision has had upon the dipped milk business and the condition of the dealer in that line of trade; and we will have some more figures covering November, - what our books in November, our accounts in November show, early Saturday morning. The dipped milk, the loose milk situation is a very serious one; and I propose to supply those figures by calling some of the distribu- tors themselves, so that you can see what the conditions are, THE chairman: Will your figures, Mr. Alger, give us a segregated cost of the dipped milk? MR. ALGER: That is what I instructed, the preparation of the segregated cost proposition, as we have it, practic- ally in the form which we had it in the last hearing, - that is, as we gave it. 1070 THE CHAim^Air: On the Grade "B"? MR. ALGER: On tHe Grade «B«, yes. We hope to ha^s that in some shape. Of course, we have the problem of sur- plus, and that we will attempt to go into to soae extent. OOLIiVllSSIOFER MITCHELL: You will be able to tell us, Mr. Alger, this afternoon? MR. ALGER: I will be able to give you some this afternoon. commissioner mdtchell: Whether the consumption of mil^ has increased or decreased during the month of January? MR. ALGER : Oh, it has decreased, I can te]l you that now. COlvIMISSIONER BROWIj: There has not been a very violent decrsass, not c=.ven -irhat you found pro rata in our earJ.y sessions, MR. AIGER; V7e?l, X havc^ not got siifficiently definite inforraation en it to 'cr.cw. There has been a decree.se, Ther3 lias been a rcl'ling up of surplufi on the handc of the loaler^^, TBi: 0EA.CRIiT/i\i2 The commission woul^ be gl£-d to get the exact figures, Mr. Alrjer, MR. ALGER? You e^ppreciato the exceedingly difficult character of that informaticn; but we will give you the b^st we can on that rolling up of that surplus. COMMISSIONER KITTREDGE: Mr. Chairman, may I ask Mr. Alger, when he speaks of the dipped milk situation teing sexloTos, do©« Im.mean tliat it has deoTeaaed.-laj:gBayr ' MR. ALGER: No, I mean the dipped milk dealers are conducting business at an absolute loss; and that he has bpen carrying this right straight through the month of will Je^a-iary at a very serious loss, too. Now, I/have those figures by two o'clock this afternoon. Then I will be pre- pared to q»nd the afternoon on that. I think that needs to be very carefully considered^ OOmiSSIONER fuller: Mr. Alger, in that connection, can you give us the number of ^.tations that your companies have opened up, that were closed in October or previoios to October, during the last two months. MR. ALGER: I do not think so. If that information had been asked for some little time ago, we probably could have got those figures for you, I was not aware that there had been any opened up. COMMISSIONER FULLER: Well, I happen to know some my- self. MR. ALGER: You do? COMISSIONER fuller: And I wanted to know if that would not materially affect your surplus. MR. ALGER: It certainly would, if that were a general condition; but I think you will find it is not. Tha,t is all I have to say at this time, Mr. Chairman. I am sorry — I assumed that the producers^ end would certainly occupy most Of the day. Mr. Miller has made it very short, and we will try to do the same. 1372 THE chairman: There is one matter to which member?! of the ooicmisaloii think that- w«- ©iioTild o-all tb«_ At±An±i.aik d t^ producers. OOLIMISSIOITOR SCKIFF: Distributors? THE CHAIRIIAN: Distributors on the one hand and pro- ducers on the other; but the producers, because Mr. Van Zaun represents them in the co-operative stores. You may have noticed the stateir.ent in "The Rural New lorlcer," which is the following: "In the meantime, in utter indifference - that is, utter indifference to the fact that the commission exists - not to say contempt of the Federal Milk Commission, the big companies are conducting a war on the dealers who have been buying milk direct from the milk producing company which is operated by the Dairymen's League w officially. They have followed the independent wagons from consumer to con- sumer, and have sold milk at one cent to one and one-half vents less than they are charging We have a list here of the men, dealers, evidently, furnished by the editor of "The Rural New Yorker", who are concerned in this matter. Now, we asked Mr. Van Zaun to be here this morning, because I understand he has charge of the Independent Dairymen's League. MR. cooper: tty, he Is the sales ..ai^er of the Oo- operative Milk Produoexa Marketing. Aascotatijcm^ijaA.tli^ Ootmtry Milk Company, and I am President o£ that cssocia- t:lon and company. THE OHAIRMAU: Now, hare you any Infoxmation corrobora- ■ji r g- ';!.: a r j cicta-jien t ? MR. COOPER: In regard to the sending of wagons -around on the ro-utes, and selling at a lower price? THE CHAIRJ-fAF: Following the wagons and selling at one and on©-haJ.f cents below the price at which the milk was sold from yoiir cooperative stores? MR. COOPER: I do not know that I have the exact information jayself . There are men that have made statements to me of experience they had had. THE CHAIRlfAN: Can those men he produced here? MR. COOPER: I think so. THE chairman: This list is Micliaelson, Berghom, Grocers Milk Company - MR. COOPER: Mr. Berghorn is here. THE chairman: A few minutes ago I inquired if Mr. Berghorn was here. I will call the list and see how many are here. Michaelson. Berghorn. MR. berghorn: Mr. Berghorn is here. Grocers Milk Company. MR. LUWE: Here. THE chairman: Cohen. Sonnstein. Gordon. Schnaap. Nass. T^o are here. Can you produce Mr. Van Zaun? 137^ MR. COOPER: I think so; I do not know. He j.s ii.pt about sick. I saw him a few minutes ago, and. be ssad. Lc «r^£. going to bed this afternoon, THE chairman: He was telephoned to last nj glit arJ. ..aforoe^ about this. MR, COOPER: Well, it was the understanding he was to be here today, was it? THE chairman: Yes, sir. MR. COOPER: I did not understand it tliat way, although it may have been. You want me to try and get hold of him and see if we oan get him here? THE CHAIR1.?AN: Yes, sir, MR. ALGER: May I say, Mr. Chairman, at the moment, that from the list that you have read of these milk magnates who are supposed to have proposed these questions, I do not know any of them, I do not know that any of them are in business, and if they are in business, they are not con- nected with the MiXk Conference Board in any form. THE CHAIRifAH: ^e are trying to get at the facts. MR. ALGER: I am glad to have you get at the facts, but you won't get at the facts from any statement you will find in that paper. THE CHAmau: I will say, Mr. Alger, that Mr. Lamb Of the Food Administration wrote to the editor and asked for a confirmation, and this list of na^es was sent, and tbis gave sufficient color to the situation to 3-tify our looking Qin 'Qnx% ST ^-BVi^ JT '^ON 'et^^oq ^uid is 103. s:^u90 rxe% sxewcisvico 9uTSr8t[0 si-e Bieresp IPS^s^ ©^4- JO 9310s q.'Biiq. sn oq. e&nzoo i:oTq.'eMOj:iii •Jstti^XTij poc^'eSTQ.seAn-i: ^f sa-bt^ oq. piBiS 9q ptnoM pxTB 'uoTSSftnnioo sTqO- -^q xioxq.'eSiq.sGAUT joj q-osfqns z9dozd Axqjl V ST q.miq. V^Vl% Qn^ Q-'S^?- eq.'eq.a ccj. sa-bsi Seq sm sxsonpoid sqq. 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Jeq-J*© SutoS ©j-b sX-bs ©q q.'eqq. 8tiosj©d jo aieq u^ spues sq q.'Bqq. ©xdosd jo q-a^T: spqq. dn. 3[oeqo tteqq. pire q.trataaq.'Bq.s ©qq. ja ./Soxoes'BXqd xno£. ©3['Bj; :Ha01V 'HH iq.no q.'Bqq. ©isiBin noX op JtOH iNaOHOS aaHOISSIMKOO •xiOfil.'BSTq-SSAUT i©q3.xnj TS Stc L j['aux irp XT^ q-'^ ©^^'Bq.irs^q noX ©A'Bq oq. q.u'Bjft. i q.'eqq. q.oti - '©p-BTO sT sq.o'Bj j:©qq.inj ©qq. ^0 uoTq.'eSTq.eQAnT itxre ©a:oj©q '9nj:q.tm. s'ejii jx©sq.-f q.uoTaeq.'eq.B ©qq. q.'eqq. Sinoqs '©p'etn ^-rr. -ore-'H:;^' ©tp). qq.-Fitt 11075.0 ©tra 00 uj u©^'eq. '©j©qq. q.oS nOit q.STT ft; 4. c^rii^q. 'tretnaiTBqo 'an '©w oq. em©©B q.i rUaolV "HH think that it should be inrestigated to find out how fxv it ,s, true, how widespread that ouBtofii is . There Is oce v-.f~ ness present now wlio has paid ten cents a pint octtle ici "B" milk at the retail store. We do not know how widsaprev. tliat custom is. COMISSIOEER WILLIAMS: Will you mention his name, Mr. Miller, so we can oall him? MR. miller: This is a young lady by the name of Miss Spurr. MR. ALGER: Is that what was paid for it at the store? MR. MILLER: At the retail store, ten cents, as I under- stand it. I have not talked to her, but that is my understandin g COMMiSSIOilER FILirlAJIS: Is she present? MR, MILEiR- ?33. TH3 CEAIA'U'l'T: We will attend to that a little later. We will qaai +1:63 3 ci;a3r gentLemen. Mr. Berghorn. A. B E R G H R jT> called as a witness, being first duly sworn, wai: exgiilned sjod tastififed as follows: MR. ALGER: ?-5rhs.pg I was \xnder the wrong impression. Aren't those naries of supposed to be deaJ-ers, or are these grooery men? THE CHAIRIeAS: Jt la not clear who these men are. The list that was furnished was not clear. We are trying to fr.nd out who they are. MR. ALGER: I thought you were talking about daaJa^. COMISSIONER MITCHELL: "The Ruraa New Yorka-^' furnished this list. QUESTIONS BY COMMISSIONER RJLLER: Q Mr, Berghorn, where do you live? A I livo in The Bronx, 1026 Faile Street. Q What is your business? A Wholesale milk. Q Are you engaged in that business individually, or for somebody else? A I was at that time, but now I am in copartnership; that is, a corporation. Q A corporation? A Yes. Q How were you condujcting. the milk business at the tims of this trouble referred to? A Individually. Q And what was the date of your trouble? A Well, that we.s baok in November. Q November, 19:-7" A Yes. Q Nowj will you Btats to this commission just what it was? A Well, I did not q\iite - on your Chairman's statement there, I do nrt know just whether he has referenoo to - I misunderstood him there. He said something about the - Q (Interrupting) No, never mind what the Chairman said. Tell us just what trouble you had about the dis- tribution of milk. A Well, previous to November, I guess it was October, I was buying from the Cooperative Ilir. Producers^ Association. I ms buying mji milk from tts ^^Jr/- men's League; that is, from that aesociation^ Q That was in October? A Yes. Q Yes? A And th I made a change and went: ■'■c the other company. Q What company was that? A Brown & Ballsy Cc-a- densed Milk Company. And after the Borden Condensed Milk Oo] pany had purchased the Central Dairy Company and a few other oonoerns hexe, why, we had a little ruption. Q Well, tell Tis what it was? A There was a certain chain of stores; that is, there was a company in Harlem, they have a chain of stores, and I used to handle the accounts for Tietjen Brothers - I was formerly employed by those people - and they sold out to the Borden Company j and when Mr. Cooper tl'.iBea.te>nad to put milk into the, A. & P. -ancL-4j.ffp,r>ejai. ciia:j? stores, why, these people wanted to handle loose mi.LI: also. So, they gave me that trade. And with that trade -ihey gave mo two stores which the Borden company had; that 3 s, jhe tirade of. those stores which the Borden company had poroias-Jd from the firm I formerly worked for. Q Yes? A Of course, I could not very well re- fuse to serve the trade; and then, of course, the Borden, I siippose, they paid for that trade and paid for that busi- ness, and I suppose they got a little sore because I served the stores. So, we had a little meeting and they said - they asked me to lay down the trade. Q What did tliay say to you? MR. ALGER: What meeting? Q Where was that meetiiig held? A in r.Yp._ r^-r-tr-y- , - Dairy Company's office. Q In the Ceutial Dairr -Ooaupany's -offline? A Yea. • Q In Brooklyn or New York? A In New York, Q And when was that meeting held? A Why, that we,& in November. Q Now, just tell us what oocxxrred at that meeting? A Well, we were to go down and straighten up, you know. They started to run after my customers on a out price — THE CHAIRMAN: Who started to run after them? THE WITNESS: The Borden company. Q And what was your price then? A Well, my price - I was paying at the time - I was paying 13.70 for my milk, and we were selling at |^.00, that was the standard price, Q What price did they fix at those stores? What price did they cbajrge those stores^ A They charged the same price, but then when the trouble started they offered milk ten cents below, Q Ten cents below your price?. A Below what JJi.coai^ me. Q Below what it cost you? A Yes. Q And did you lose that trade? A I lost consider- able trade, although the trade I have got, they kind Of felt that they would patron!^ an independent dealer. ' C30 Q How much did you lose by reason of . that c\it.' i J IJ, I only liisll about ftv© ^_ What part of the city do you make your deliveries in? THE WITIffiSS: In The Bronx. COlO-flSSIOIJER WILLIAliS: Between what streets? THE WITJTESS: All between One Hixndred and Forty- fifth Street to Tremont, COMISSIOEER WILLI AI£S: From river to river? THE witness: Yes, Well, that is between Boston Road and Third Avenue. OOnflSSIOIffiR WILLIAMS: When did the fight begin? THE witness: Where did it begin? COMl-fl SSI ONER WILLIAMS: When? THE witness: In November. COffillSSIONER WXLLIAIIS: 1917? THE WIKTESS: Yes. OOmiSSIONER WILLIAlfS: How many cans were you handling in November, 1311 "i THE WITITER SHEDRICK: I do not think it is material enough to go into. I think I can explain it, MR. miller: Just a question, Mr. Eerghorn. During that war were you told by the Borden company or by any of the (dealers that the plan was to break up the Dairymen's League or this co-operative association by the first of the year? MR. ALGER: If so, by whom? MR, MILIER: If so, by whom? THE WITNESS: Well, I do not know which way to take i*. It was put to me kind Of that way- MR, miller: Who put it to you that way? THE WITNESS: We had a meeting, and of course on this basis there was not a living in the business. COMMISSrOWER MITCHELL: Who had the meeting? THE WITNESS: The dealers. COMMISSIOIJER MITCHELL: And who stated to then? THE WITITESS: Well, they had a meeting and different men got up, and when this league business got into busineso I ^as patronizing the league at the time, and several dealers got up and made statements that those individuals were under- selling Borden, why, Borden would certainly try to hold the trade, which you could not blame them for; they paid for it. MR. miller: And were they then trying to get you tc buy? COMMISSIONER BROTO: This was a meeting of in- dependent dealers, was il.? THE witness: Tes, MR, MILLER: And were they then trying to get you to buy your milk froni sources other than the producers' co- operative associat.^on? THE witness: Well, of course. I was dealing with Brown & Bailey before I ever bought off the league, and they Game and tried to sell me milk, COMMISSIONER WILLIAMS: Who were you buying your mi^k from in November? THE witness: From the Brown & Bailey Condensed Milk Company. COMMISSIONER WILLIAilS: Are they members of the leagae? THE TITIESS: miy, no. MR. L'iLLSR: No, they are dealers. TPi: ^ITI.-ESS: They are dealers, shippers. THE CHaIRI.^AIT: I think we have all the inforKati-.n ^e can get from this witness. The witness is excused. Is there a representative of the Grocers' Milk Company here? liH. miller: Just a question, Mr. Berghorn. Whom ^ere you buying milk from up to the first of October? THE WITT^SS: I was buying milk off the Dairymen's League i MR. miller: And whom did you buy of after the first of October? THE TIITTTITESS: Brown & Bailey. MR. miller: Why dil you change? THE WITI>IESS: Well, there was - I don't know - the league started to ship milk to the Grocers' Milk Company, 3^ the Grocers' Milk Company had some of my customers that they tied up with stock. They formed a corporation after they got my customers to take stock in that company, and my customers ..changed and went tc them; and it was simply a case of the Grocers' organizatjcn, through the Dairymen's League, of supplying my customers with the same milk that I was handling. So, I made the change, MR. ALGER: Are there any furtr.er particulars about that orggmization of Grocers that you want to tell us? THE fitness: Yes. Well, the Grover^ ot^^^o,^^ tion was organized In The Bronx. MR. ALGER: With reference to the milk end of ^-i;? THE PTTjnrsS: And l!r. Van Za^ started to ship tter: Mlk, and they started to take my trade, and I wae a ou.<:rmev of i/r. Van Zaun's, so I told him, "I an: buying milk from you, and these people go out and take my trade." COimiSSIONER SHEDRICK: Did they cut the price? THE wiBTESS: No. COIfMISSIONER SHEDRICK: Gave them stocky jiou say? THE WITT^SS: What is that? COMISSIONER FREDRICK: What were the inducements they made to get this trade? THE WITI^TESS: They did not have to make any induce- ments. These stores invested their money in the Grocers' Association, and naturally took their milk there. THE CHAIRYAN: Are there any fiirther questions? If ^ot, the witness is excused. MR. miller: Just a minute. THE CEAI?J''Ai': I would like to get through ;ith the witness as soon as possible, Mr. Miller. Now, -jbat v/e have gotten into these questions, it is really a question if it is relevant to our investigation any- way; but we would like to hear what this representative of the Grocers' Milk Company has to say. What is your name? MR. COHEN: Sol Cohen. S L C H E IT, called as a witness, being firs-^ i-L.- sworn, was ejcamiaed and teatified as foUaTvs; QUESnONS BY MR. FULLER: Q Where do you Ijve, Mr. Cohen? A S56 Waitio'..: Avenue . Q What is your business? A Grocer. Q Were you engaged in that busiojess during the inf.nt.n of November and December? A Yes, sir, Q January? A Yes, sir. Q And are ixov engaged ija tit© business? A petaxl grocer: business, Q Do you sell milk? A Yes, sir. Q Did you have some trouble about the sale of milk? A In the retail ?,ture? Q Yes, A 1-To. Q Did sor^ebody try to get you to take milk from other concerns than those fioni rhioli 3-ou were purchp.sj.ng? A No, I rji a member of the Grooere' Kilk Company, a shareholder. Q Yes? A And I am treesuror of the Grocers' Milk Coapsuny. Q W.01L 6.5 J you p-orchase your inilk of? A Of the Gr 30^x8- Mxlt Oc,rrpa.ny, The Grocers' Milk Company is pur- chasing froL thci C:) operative League, Q Qcr^e^ucy tr^ed to induce you to purchase it from somi body else? A i^ot xLe personally. q, Fnat do you know about this troubi'tf Anything? A We ■i ■(.; Have not had any trouble Utely. We only had^roar^-e.j:c: ^t:-^ first two montlia when we. started, Q Wh n was that? A That ncas October sjid Hove- je: Q What troToble then? A The oth.er.-pi^^ple -.re c:.yi^i -'c •undersell us. Q Tell the commission ^uet what it was? A X\eV... "-Ai trouble iraa that thay wer« -undarselling us. Q How much? A Were selling it for 9 cents and S ce-ts iiy price. Q Any price to get under you? A Exactly. Q And who were the other people? A Well, most of all the companiee Q Well, what companies? Mention some of them? A In October and November there was the Central Dairy. Q What? A The Central Dairyand the Bronx Farms Dairy Company, and all the others; and even now there are two con- cerns in The Bronx that are U3.ider3el3.ing. That is Wacht and Schwartz. Q Who? A Wa,cht j,nd S^h\:a,rtz^ Q And are thr.y daa-l&rsv i HeaJLers.; independent i-ealers , Q What :.£! thj oth3r onsr A Schwartz, Q Oh, t'c.r 2 •s.^ie, two &epara±e_ companies? A Two separat.3, companies. Q And whctt are they selling for? A Well, they are selling now less than $^.00 to some stores. Q Hof much less? A About $3.90 or *3.gO. Q $3.90? And doiahey sell to your competitorrj-. A Some of them, Q For leas money? A Yes. Q Have you had any trouble about your wagons beirg followed by anybody? A Not now, not the last couple of months. Q When did you have some trouble about that? A October and November, Q Who followed youx wagons? A I do not Icnow exactly who followed them, but we had lots of tro\ible with miUc, Milk was stolen, suid we had trouble tliat milk was soured. We liad a case In court this week. Q You had a case in court this week? A Yes, the firs two months. Q Do you kr.ow j:'- whom? A No. ^ You do art kii:.)W h-rw it be-came sour? A Noj th&y 3f-ur3d the milk on us, Q Well, how did they do it? A They put soiuething in it THE CHAIRJ-^AN: Who cid' Q How do you ki^ow thj,t: A W3J.:., we had complaints. We i"-d a case lastT©ek in court,. Q What? A We had a case j-ast week in court on account ^f that. Q Last wea'K in court? A Yes. q. Tell us what there was about that trouble? A Milk was soured, junked tablets were put into the mUJk;. THE CHAIRMAH: Who did it? THE witness: We do not know exactly^ the in- dividual driver who did it, the CHAimCAU: Whom have you in court? the witness: The name of the driver is Weissmann. Q And whose driver is he? A I do not know exactly whether it was Levy's or Bronx Farms, - one of the two. Q And you have had him arrested? A Yes, he is ar- rested. Q Have you had any other trouble? A Not since then, no more trouble. Q You say this occurred in January? A No, this was in October. Q No, but thisiast case occurred in January? A Yes, the case is in court in January, but the trouble started in 0otob3i% Q This troiitle about e curing the milk and about ooaapetition has bewr. in Octaber^ iJo^-ember, December. an4. January? A Not in Jan^ii-ry, no. Q Not in January? A Not in December, It was only In Oatober and Novarmber. »5 And the January trouble is the souring of the milk? I No, the case in court was in January. Q The case you brought was in January this year? A In January, but the milk was soured in October. 169 S Q You did noi:. bring it until January? A Xt was t. few times, and they put it up for a certain day. Q I see. All right. COmnSSIONER WiLLIAMS: I want to ask a quest.: vn, Mr. Chairman^ What do you sell your milk for now? THE witness: ^M-.BO. COMMISSIONER WILLIAMS: $^.20 for ko quarts? THE witness: ^0 quarts. C01>£MISSI0NER WILLIAMS- And. you said, that somebody ia .underselling youTfe^ THE WITNESS: Yes, sir. commissioner Williams: who is it? THE witness: Wacht and Schwartz. commissioner 'Williams: Both Irms &xe now under sening? i f romV THE WlTi^ESS: Two independent firms. COMMISSIOITER WILLIAMS: Where do they get their milk THE WlTi'TESS: I have no idea. C0J.OIISSI0NER FOLLER: Are they wholesalers? THE witness: Independent wholesalers. COmaSSIONER FCTLLER: What is their address? THE witness: I don't know. COMISSIOJIER FtJLLER: What? the witness: I don't know what their address is. COB,n:SSIONER FCTLLER: Don't you know wliav t^eir address Is? THE witness: No. "HE CHAIRiifAN: Do you knoiv wliat streot t:ioy acj zrpj THE witFESG: No. OOMISSIONER brown: What business are they inV THE witness: Wholeaale milk business. COMISSIONER brown: Wholesale milk business? TEE WITNESS: Yes. C0MMISSI0NI;R SHEDRICK: How much business do they do? THE witness: I have no idea. COMIS^^TOITSR SHEDRICK: Do they run one wagon or five' ciTHS wjTI\rESS: I don't know. COIv:iLf.:bION?R SHOEN: Don't you think it is up to you to find 0U+; e-ome-jliing about these people who are under- '" fc^llirg you and c'cins hero rjnd give us sor^a real evidence on "he idj^tter"? I'HS.: '7:^.KESS' '^- --d iiot e.^p:;ct to say anything in ■'his mattsr, COriiid:;ION^R SCHOEN: Don't you want to say some- thing in the maoter? THE witness: Well, I can't say any more than what I do not know. I 5^ orJ.y interested in this Grocers' Milk Company as a shareholder. OOMHSSIONER SCHOEN: You are also interested in "seeping up the price of milk and selling at the right price? THE witness: Cre"^ "tt^® right price. Q21,j: I should think you would 19C0 oe vary ouoh Interested in finding out who Is undfixseHizig yo:. and why. THE witness: Well, I do not take as much interest in this business - COMISSIOiTER FULLER: Have you lost any trade by reason of that underselling? THE witness: Yes, sir. COMMISSIONER FULLER: How much? THE WITNESS: About ten cans lately. COJflflSSIONER fuller: Ten cans a day? THE WITNESS: Ten cans a day, yea, COMISSIOImER fuller: That is about 400 quarts? THE WITNESS: ^00 quarts. COJOilSSIONER brown: Did you gain any? THE witness: No. THE CHAIRlvfAN: Are there any other questions? MR. ALGSR: May I just ask you — you say you rep- resent this Grocers' Milk Company? THE witness: Yes, sir. MR. ALGER: And the customers of the Grocers' Milk Company are all grocery stores, are they? THE witness: Bake s and grocery stores. MR. ALGER: Yesi and how long has that company been in business? THE WITITESS: Since October 2d. MR. ALGER: You began, a new company, at that time? :9Vi THE witness: Yes, sir. MR. ALGER: Then you started in trying to get ens. to., didn't you? THE WITNESS: Well, we got the customers before we started business. We sold stock to our— MR. ALGER: (interrupting) You got some of them by issuing stock? THE WITNESS: Yes, sir. MR. ALGER: Then you went to get others by not issuin stock, didn't you? THE WITI^SS: Well, becaus3 we — MR. ALGER: (interrupting) Didn't you? THE WITNESS: Yes. MR, ALGER: You are looking for trade like every- body else in the milk business, aren't you? THE WITl'TESS: Yes. MH. ALGER: So you tried to get sor^e of the customers doing business with the other dealers, natiirally? THE FiTigESS: Yes, sir. MR. ALGER: And they tried to keep their customers; the other companies tried to keep their customers; is that right? By giving inducements to their customers to stend by them instead of going with you? THE WITNESS: Yes, sir. MR. ALGER: That is what they did, didn't they? THE witness: Yes. 190£ IfR, ALGER: That is what you understand to be competition, don't you? THE WITNESS: Well, of course it was competition. MR, ALGER: Yes, and you were trying to get their business from their customers, and they were trying to keep their business and went to get soar of these grocery stores? THE witness: Yes, sir. MR. ALGER: Did you ever reduce a price to keep a customer in your life? THE WITNESS: To reduce the price? No. MR, ALGER: Didn't you ever make a reduction to keep a customer? THE WITNESS: No. MR, Alger: Never did? THE WITJTESS: No. MR. ALGER: How long have you been in business? THE WITNESS: Since October 2d. MR. ALGER: That is your whole business life, since October 2d? THE WITNESS: That is all. MR. ALGER: And you never rut a price to keep a cus- tomer? THE witness: Not the Grocers' Milk Company. MR. ALGER: That is all. THE CHAIRI^N: The witness is excused. COmiSSIONEH brown: Just a minute. What is your 1903 mthod. of delivering this miXk? THE witness: Method of delivering? COMISSIONER BROWN: What is your metliod of dBliver- .•'.iig this milk to your grocery store customers? How do you deliver this milk? THE witness: Two automobile trucks and three wagons. COI.WISSIONER brown: What time do you start your deliveries in the morning? THE witness: Well, it is usually about two o'clock or three. It is according to how the trains come in. COMMISSIONER BROWN: And the grocery stores are not open at that time, are they? THE WITNESS: No. COMIS SIGNER BROWN: Where do you leave your milk wha you deliver it? THE witness: In front of the store. COlTia SSI ONER brown: And there is where the milk was doctored, was it? THE witness: Yes. COMMISSIONER FULLER: What do you deliver, full-sized cans? THE WITlvIESS: ^0-quart cans. COMISSIONER fuller: You only deliver - you do not do any retail trade at all? THE witness: ^0. COMMISSIONER RJLLER: You do not deliver at a flat or house? THE witness: Ho, COmaSSIOMlR fuller: You simply deliver to stores? THE FITNESS: Yes. COMMISSIONER FULLER: I thought yoiir business was that of a. retail grocer? THE WITNESS: That is my personal business. COJfiaSSIONER SCHlFF: I em talking of your personal business^ How do you deliver milk from your retail grocery? You spoke of milk being soured on you. THE WITNESS: Not in the retail. COK\ITSSIO>^R SCHIFF: So you are talking now as the treasurer of the Grocers' Distributing Company and not as a retail grocer? THE ^ITNESS: Correct. COMHSSIONER SCHIFF : Oh » COMMIS??IO?TSR WILLIAMS: How many cans of milk does your compajiy distribute every day? THE WITNESS: Today 325 cans. COraa SSI ONER WILLIAMS: How many? THE witness: 3^5 . THE chairman: Are there any further questions? If not, the witness is excused. Have you anything further, Mr. Miller, at this time? CO^'MISSIONSR SCHOEN: This lady is here, Mr,. Chair- man, she might testify to us, this lady, about getting the a: ilk. MR. miller: Mis Spurr. AIMEE E. SPURR,- called as a witness, being first duly sworn, was examined and testified as follows r QUESTIONS BY MR, MILLER: Q Miss Spurr, where do you reside? A ^■^O West One Hun- dred and Eighteenth Street. Q And are you a stenographer in the employ of the Dairy- men's League? A I am Mr. Cooper's secretary. Q Have you r-ecently puroliased milk in pint bottles. Grade '^B" milk? A Yes. Q Of whom did you make the purchase? A Of -Seribian - I think it is Seribian brothers, at the same place where I live, One Hxmdred and Eighteenth Street and Amsterdam Avenue, the corner, Q Is that where your family buy their milk usually? A IJot my family. I very seldom buy milk, but I happened to buy a pint of milk that evening. Shall I tell the experi^aece I had? Q Yes, sir; all right. A I asked for a pint of milk, and the grocer gave it to me and said it was ten cents, and I paid it; but I asked him why it was ten cents, seeing that the Federal Food Commission had recently ruled that a pint of milk should be nine cents. He shrugged his shoulders and he gave me a copy of a notice that the Sheffield Farms had distributed apparently, to all of their customers, and to the groceries, as ISOc rrellj and he said tJiat those were the prices they were ob.iJLg&d to pay the Sheffield Farms people, ajad therefore he could not sell it to his customers, of course, without authority. And I compared the prices on the slip he gave me with the prioen that were printed in the newspaper, and they seemed to be just the same; hut it was not my understanding that the Food Com- mission meauit it that way. I xinder stood that the rulings of the commission were that the commission should pay, the ultimate consumer should pay the 9 cents a pint, and not the grocer. I mentioned that to him, and he said he would be very glad to have the matter taken up, because he did not want to pay nine cents a pint for milk to Sheffield ;.Farms if he could get it for less he wou3.d be willing to sell it for less. C0MMI3S70IJSR FULLER: What was the date of this? Do you know, Mis 3 £;par:cT THE WI TITLES: Let us see. I am not positive. COJ'IMISS'JOITER nil.LER: T-n January, was it? THE ^"TTI^T^SS* Oh, yGs; it was after the ruling of the commissioii, COMMISSrulJEP FUI.LER- Have you the slip that he gave you? THE witness: I have it, yes. I brought it down to the office next day. I was naturally interested in it. COMXSSIONER fuller: Have you it here? THE >vT:TIESS: No, I did not know I was going to be a Witness here today. I inquired at various other grocery . . , ^ ^Q find out the price of milk. 19)7 COmiSSIOlTER FULLER: Will you furnish us with t.^r clip this afternoon? THE WITNESS: Yes. And in every Cd.Be they charged the ssune amount. COinvIISSlONER fuller: 9 oenta? THE IITMSS: They charged 10 cents for a pint of milk, COWISSIONSR fuller: 10 cents for a pint of milk? THE WITNESS: And 15 cents for a quart. COiaa SSI ONER fuller: 15 cents per quart for Grade THE witness: Grade "B«. I do not think they se?l anything else. COraflSSIOFER fuller: How many places did you inquire at'r THE witness: I inquired at various tiTiies when I went in to purchase an^^^-uhing, or if I happened t.) he parsing a store I would go :.n and ask them the price of rrilk, beca^ise I wanted to find oac fctoat it. COMISSCuMR hTTLLER: Hjw ma^iy places did you find srere doing thatV THE WlTNTCSe: I shou.ld say about six in all. COMTSSXOKLR FULLER' Can you give us a list of thein, who they were? THE ¥ITNE3g: I co^xld find cut. hut I do not know. 190^5 Xn New York you never ask the name of stores. COMMISSIONER fuller: Will you do that and give us a list of them, please? THE WITMESS: I will try to do that. There is another store on Sixth Avenue, ShermaLn, I did find out the name between Thirty-eighth Street and Thirty-ninth Street on the west side of Sixth Avenue. That is a delicatessen store and they are selling ailk for that price. COMISSIOTTER FULLER: Will you prepare that list and furnish it to \is? THE WITNESS: Ihen? COMISSIONER fuller: This afternoon, or as soon as ym oan. THE WITNESS: Well, I am afraid I coiad not go up to Amsterdam Avenue and find out those stores by then. COMMISSIONER FULLER: Will you do it tomorrow? THE witness: I will try to do it this evening. COMISSIONER WILLIAMS: Mr. Chairman, I understand Miss Spurr testifies that the grocer told her he was paying the Sheffield Farms Company 9 cents a pint for milk. THE WITNESS: Yes, he did. COMISSIONER fILLIAMSt Did h6 show yoU d, hill from the Sheffield Farms Com^anyt TiiE witness: He did. COMISSIOIER WILLIAMS: For 9 cents? THE witness: WHy, he said, "Here is my hill from ■^S'>s them, and you can look at it and see if I aa not telling you the truth." COMMISSIONER WILLIAMS: Have you got the hill? THE WITNESS; No, I did not take his bill. MR. ALGER: Where was this place? What is the name of this place? THE FITNESS: Serihian Brothers. MR. ALGER: How do you spell it? THE WITNESS: S-e-r-i-h- I am not positive whether it is s-e-rib or s-e-r-a-b-i-a-n — Seribian Brothers, llSth Street and Amsterdam Avenue. MR. ALGER: What day of the month, was it, approxi- mately? Was it the first week of January? THE WITNESS: I think it was the Wednesday after the Federal Food Comr:i3Sion made their ruling. COMMISSIONER SHEDRICE: That would be about the 3^. of Jnaxay ? THE WITNESS: What did he say? MR. ALGER: That would be about the 3cL of January, wouldn't it? THE witness: About that, yes. THE chairman: Are there any further questions? MR. cooper: I want to maJce a statement here when they arethrough with the witness, THE CHAIRIMN- Well, is it a statement that would have a bearing? MR. COOPER: Ibsolutely, right on tMs point. ^_, D, COOPER* called as a witnedd, being first duly sworn, testified as follows: THE WITNESS: It has just oome to my ears fom a gentleman in the rear of this proceeding here that that was the work of the Dairymen's League, I want to state that people who are employed in our office came to me with this information, and that is the first that I knew of it. I have sent norcone out previous to thet to make amy inquiries and different girls who are employed in oixr office make the same statement, from different parts of the city, I endeavor- ed to get in touch with Mr, Williams to ask him about the enforcement of the prices set by this commission. Some days elapsed , and I was lonalle to get in touch with him, and I was away, I called up Mr, Williams and told him what had been reported to me from these people employed in the office, and I advised Miss Spurr to write the matter to Mr. Williams, as it was told to me that people going to these stores p\xTohased milk and taking it away were charged ten cents a pint in bottles and fifteen cents a quart, for milk purchased at the stores Euad carried away, MISS SPURR: May I make a statement, Mr. Chairman? THE chairman: Certainly. MISS spurr: I want to say that it was wholly on my 19 c initiative that I oame and told this to Mr. Cooper. I a^i interested in all these problems, and it was on tii.ai> zx^ovnt^ - ■that I asked the grocer. It had nothing to do with my work £,t the Dairymen's League at. all. It was -^-'jtirly tiiat X was .•'utereEtsd in the matter. COmiSSlONER WILLIAMS: Mr. Chairman, if the distrib-utora were not observing the prices fixed by this board for the month of January, I think no one needs to apologizing that fact to a Federal Food Board; in fact, I think they deserve the thanks of the board. THE CHAIMAN: Any further questions of Miss- Spurx? If not, you are excused. Miss Bpurr. MR. ALGER: Have you any further witnesses you want to put on thie morning? THE CHAIRMAN: Are the distributors ready now? MR. ALGER: I have a couple of grocers here who I understand would like to testify as to what they can do with these pxices, as to whether they can conduct busijiess and still make money at the margin of profit that is apparently offered to them. THE CHAIRilAN: Do you wish to put on witnesses in behalf of the distributors? MR. ALGEF: I understand there are two of them here that seem to come right along on the line of groceries . THE CHAIRMAN: I understand, Mr. Alger, you wish to put on certain witnesses in behalf of the distributors? 191^ MR, ALGER : No, they asked to come here In behaljf at themselves. I thought this opportunity ought to, be given to them., THE chairman: Will you give me the name? MR. ROWELL: Charles H. Rowell. CHARLES H, ROWELL, called as a witness, being first duly sworn, testified as follows: THE CHAIRMAN: Do you wish to question him? MR. ALGER: No, I thought I would let these gentlemen come here. The grocers wish to have some opportunity to test- ify before this commission on this question of the margin of profit that is afforded them on milk that they sell. I thought I would let these grocers come and let the commission here hear what they have to say, THE CHAIFMAN: Will you make a statement, Mr, Rowell? THE witness: What I wolild like to say to this commission is that the price that has been adjusted by the commission^ that the retail grocers - the retail dairymen sell their milk at, is impossible. We have been - we are paying $if.20 for a can of milk, which nets us 10-l/2cents. Now, we are obliged to sell it for 11 cents. A can of milk is supposed to contain ^ quarts. It happens a great many times that it loses by handling it a little of it, which may about to about heaf a quart; and when you dip out of a can of milk we never can dip i^O full quarts. It is between 3 S and 39 quarts we dip. How, at the rate - if we sell ths jmijj/ in accordance with the adjusted price, we realija^ fi-.kOi that is, if we could dip ko quarts out of a -caa3^ jaOJijch- we do xiot. THE chairman: How unich Oan^you- dip? THE witness: Between 33 and 39 qxiarts, heoause we always must add a little "bit more in order to make sure that, we have sold a. full xiuaart, b« ^aimrtfi oJ^^^U'lic.^ - l;oda.y the woffia^n oomes in and claims she cannot buy mcie than a half q;iart, jnct .for the baby, because the i^rioe^ls so high. ?3 rail :.fces 5ind .Tvi mak^-Oftsg, Wc msjte jfc|ich less than what !fe should exist on. MR. ALGER: Practically what it amounts to is this: You can't b y milk at ten and a half cents, dipped milk, and sell it at eleven cents? THE WITNESS: Impossible. THE chairman: What ought you to get, in your judgment? THE witness: I beg your pardon? THE GHAIRlvIAN: What price ought you to got from the consider, in you:' judgment? What is a living price to you? THE T/lTN.ilSS- Well, at J, east to net us twenty per cent. The retail distributor is always supposed - is alwa,ys figared to make thirty per cent; but we have to make, as we do now, between two and four pt5r cent. We could not pay out gas and electric bills. COMISSIONER MITCHELL: How much a quart should you receive? THE WITNESS: I beg your pardon? COMMISSIONER MITCHELL: How much a quart should you sell the milk for? THE withers: 12 oente. COimiSSIOl'IER MITCHELL: In other words, insteaS of twenty oeats a oan, you want to make sixty cents? THE witness: 6o cents, yes. COITMISSIOBER WILLIAMS: Wtieare is your place of ■business? THE WITNESS: On the East Side. COMMISSIONER WILLIAMS. Where? THE WITNESS: ^2 Delanoey Street. COMMISSIONER WILLIAMS: How many cans do you sell a day? THE WITNESS: Well, I sell an average of about 15 oens a day. GOMISrIIONSR WILLI AJISi 600 quarts of milk a day? THE WITNESS" I beg your pardon? COJIMISSIONER WILLIMS: Do you sell 600 quarts of milk a day? THE WITNESS" Yes, about 600 quarts. COMMISSIONER WILLIAIIS: About 600 quarts of dipped milk? THE WITl^SS: Yes, s:.r. MR» ALGER: How many s bores have you? COMISSIONER WILLIAMS: What question did you ask, Mr. Alger? Iffi. ALGER: How many stores? COMISSIONER WILLIAMS: Oh yes, how many stores? THE WITUESS: Four stores. t:ien? THE WITI^JESS: About. OOmiSSIOllER WILLIAMS: Where are the stores? THE WITIIESS: Fourteenth Street down to Delanoey. COJffllSSIOHER WILLIAIIS: Well, give us the numbers. THE WITNESS: M-Z Delanoey, 236 last Fourteenth St., 161 RiTington Street, and 57 Second Avenue. COMMISSIOHER WILLIAMS: Are they aJJ^ youj. own siores? THE WITIJESS: Yes, sir. - COMMISSIONER WILLIAMS: Are you the owner? THE witness: Yes, sir. C0MMIS3DNER i^^TLLIAMS: Why donH you sell bottled milk instead of dipped milk? THE witness: Because the people in the neighbor- hood could save more by buying it in bulk, buying it loose.. COMISSIOIOIR WILLIAMS: You sell it dipped because it is oheai-er? THE WITNESS; Yes, sir, COMISSIONER WlLLlJiKS: Do you sell any bottled milk? THE witness: Yes,rar. COMI SSI ONER WILLIAMS: How much? THE witness: About SO quarts a day and about SO pints. COMMISSIONER WILLI AliS: Altogether? 1,9-1 ' THE WITNESS: Y«s,sir. COMMISSIONER WILLIAMS: In all tlie- stores? Crxs.'Ly '^B" milk? THE witness: Only grade • 'TB^ mlli. Do- no t .2iandJ.0 any grade "A" milk. commissioner WILLIAMS: Wiat do you charge for tiiat? THE WITNESS: 15 oents a bottle and 9 cents a pint. COMMISSCONER willerf • m'^rn/.rnrtr ^-- ;. you make 1-1/2 oents on eacti bottle? THE WITNESS: About that. COMMISSIONER SCHIFF: Mr. Chairman, might I ask this ^ntleman a qtiestion? You speak p a spread of a half cent between the price you pay for loose milk and the price you sell, as not sufficient; that you ought to have a spread of, say, two oents. What was the spread a yeaj: ago? THE witness: I understand — may I ask you your question to be repeated? COMMISSIONEn GCfUFF: I wanted to know - you say that under the ruling,, under the price fixed by this com- mission at the end of Deceoil^er, there is a spread, a difference of a half uont 3. rxs.rt between the price you pay for milk per can and the prl J6 at which you retail it - between 10-1/2 oents and 11 oents. You say that to make a living out of that sort of business you need a difference of from 1-1/2 oents to 2 oents. Now, a year ago - I assume you r:e? I am simply asking lor inforiaa.tion. Timat did -/ou pay for riJ.i£ per can, and what did you sell it at a year or a b.i-U" a^t a half ago? I mean, some period beo!cre the xJiaxe-a.^^ ot milk got started? THE WITHESS: Before the iiu3caj£Bd prlo33 of milk, we used to make above a oent on a quart, a cent or '^on-.e thing more than a oent on a quart; but figuring the percentage of profit, it has net us, it has made much more. We have "been making over twenty per cent, between twenty and thirty per cent; whereas today the pe^ro-entage of profit is so much less. It is not the half oent on the quart. At that time we used to pay, say, $1.90 or $2.00, around that; and we used to sell it for $2. He, which gave us 4o cents on $2,00, or 50 cents on $1.90. This has given us much more than what it does top- day, though it may be even today we actually have a oent on a quart profit, which would give ue a much less percentage of profit. We must go in aooordanoe with the margin of profit, and not with what there is left profit on a quart. MR, ALGER: Your stores are all what they call dairy stores; they are not gxoooriea? THE WITHESS- Strictly dairy stores; milk, butter, cheese and eggs. MR. ALGER: And you do not handle lines of groceries and make any profits out of those? THE witness: Well, we handle as a side line just several lines of canned goods; but very little of th,r: -^o 'To sell. In fact, I did not handle that until the tine-n gn'. to be BO very hard, and only recently about several Kcnth.j sLi/je I was obliged- to .take -ixu sonie-_cannjed_gQoda_ansL.g.2lX..e:5^TuJb.3J. of that, WR, ALGER: Now, you are sfilling bottled min. Abou^ what percentage of your boistness is bottled milk? I under- stood you to say you sell about 600 quarts a day of dipped milk and about SO quarts a day of bottled milk. Is that cor- rect? COMMISSTOTTER WILLIAMS: SO quarts and 60 pints; that is 110 quarts. THE WITITESS: Yes, but on the bottled milk we cannot keep up the bottled milk trade, because it is dis- ooursLglng — it discourages one to sell bottled milk, being that the dealers require a deposit. I pay five cents for ea»ch bottle. Down around my way the people are not very much willing to leave five cents deposit, and I am obliged to chajge three cents deposit. This makes me lose on the long run on the bottled milk; and we could not sell or care to sell, rather, bottled milk. We prefer to sell loose milk, and on the loose milk — COMMISSIONER WILLIAMS: Why can»t you charge five oen.ts for the bottle? THE WITNESS: I ^eg your pardon? COmaSSIOHER WILLIAMS: ^V can't you charge five cents for the bo' ^e? THE WTwfiSS: Well, they rather not take it, MR. ALGER: They irould rather take-^the^dippocL.mu.^i:. _- than to put \:ip the five cents? COFMISSIOIIER WILLIAMS: I want to hring that out from the witness, THE witness: They do not want to part with the five cents, although they may figure that the bottle may break ob them or get lost on them, and they lose the five cents OO^fMISSIOITER WILLIAMS: But they eire willing to lose three cents? THE WITIJESS: Well, three cents is that much less, and they prefer three cents; and a good many times they wotild not take it. They go over to some oths^tores that get no deposit, COIIKISSIOIIER WILLIAMS: What you are really saying to the commission is that - you are pointingmout to the commission that two cents on the East Side, as a matter of deposit and not neoeu&ar.Cy of expense, is a considerable sum for those people? THE witness: Very considerable sum. Why, a woman for one cent * for one cent a woman will walk four or five blocks, to save the cent and buy it for a cent less . COIffilSSIONER Williams: what do you pay for your bottled milk? THE witness: Bottled milk - I do not remember what th© exact charge Is today, being there was a rai^e, birf X imagine it is either thirteen and a half -cents -or four jeei cents, OOimiSSIONER WILLIAMS : Well, don't you kv-uyr? THE witness: No, I don't know this particul£:.r price. from? COMMISSIONER WILLIAMS: Who do Jrou buy your milk THE witness: Several concerns. Ttee bottled milk I b\iy from the Orange County Milk Association:, loose milk — COMMISSIONER WILLIAMS. No, I am not asking about loose. You buy all your milk from the Orange County As- sociation? THE WITITESS: Yes, sir. COIHISSIOIEIR WILLIAIIS: You do not know whether you pay fourteen and a half — thirteen and a half cents or fourteen oentd? THE WITIJ?:rjS: I don-t; I suppose it is thirteen and a half cents, TIig ] s^.^on baa/u I do not know is that the raise was recently rit.de^ ar.1 J. have my bookkeeper go over these things, and after mpariaon vrttH bottled^ .than a year ago or, let us say, two years ago? THE witness: No, before I used to sell nruch more of the loose milk. Today I pay much more for the loose milk hut sell muoh less. MR, ALGER: I do not think you quite understand my question. You sell both loose milk and bottlsd milk. Now, you do not seel so much bottled milk as you do loose milk. I was asking you whether a year or so ago you had t.ore of your trade bottled milk than it is now, THE WITNESS: Yes, very muoh more. MR, ALGER: In proportion to your total business? THE WlTI-fESS: In proportion to the total business. MR. ALGER: The main change in your business has been the dropping off of bottled milk for loose milk? THE witness: Yes, MR. ALGER: Now, this delivery that you do; that is right in the building where your store is in the basement? Or do you deliver around the block? THE WITNESS: Well, in the building and around the block. Whenever a customer asks, we send it around. It is the immediate vicinity at any rate, MR. ALGER: You have the store-boy carry it around? THE witness: Yes, COMMISSIONER KITTREDGE: May I ask if there lias been -^ "■!»,«« tv.fl nriees were raised January Ist in the 99001 JO s^jmit) 031 *93 o* P®^ I -.SSaHiliilL SHX ise©! tSHVnilJi HaHOISSIMJIOD *Xt\^ 99001 JO sq-J-enb 02I Itioq-e e-Bii U.T 3[tTra JO :nmonre sm* IT'S «© *TI©il :SSmLLIiilL SHi iuseq I9qra909a P^^ ^I^^ iLi-BTurep xioeiii^eq jjo S^TirBJ %'^^% s-eq qontn moh :SiWITIIl HaNO BSIMOD •q^oe :S3aiLIIill SHi i3tTT« 9900X 9q4. JO. aCIToi psTi^Q-oq 9q:^ tie JJO 9trni«J "B ^S8^ e^ 9^®^ : 3003111112 uaNOISSIMOO •bqA *x«)TQ-iodoid ni :SSailLIM aEI *uQ%%io6.oxd uf treem I fgs-BO 9U0 rre&ai %ovi op i :30aaailI2 HaHOISSIHROO •jCXTWBj ©qq. jo ea9qo9ai a9qi|.o sqi; *«9q. 3[nTJp vreo XxTwbj aq:; jo sq-trip-e ©qq. pu« 'iq^eq A-eq ©q;}. joj ^ino ^a^nb jx«q ib !}.snC :|.©3 o^ peStiqo sf ©qs *p©eTiBi ST %% 3uT9q ataf:; ©qQ. IT'S P^re *©ioia ©ouo pxnB *tif'e9'9 ctix ef TiW Q-q,% StiT©q '©tn ptoq. ©qs pti« *iiOB'B©a eqq. ef q.'eqii x©q p©^s« I puY *Tr vw3 'g %xwi) v jT^q s^sS ©qs SufTiiont %xevL ©qq. ptt'BJVJ'Bnb •B jteqo.&q.eS ©qs SuTttJOta ©uq •sq^J'Bnl^i OMq. q.©S oq. p96n aqs - siC'Biit'B oq. pasn oqii '©tn ptoq. treniOM ©no - ©xoj©q p©q.^:^8 i e'e 'xremoA ©tto siffift ©xeqj, 'are-iBH *s©jt :SSaNIDl SHi *s©i :aoaaiiiii2 Haiioissiiiioo i!^T JO ©i-Bs ©qq. oq. sy :SSaiIJ.Iiu SHi i3[XTTa 99001 Pti'B p©iq.q.oq •tT26T 1925 THE CHAimiAN: TOiat did you .sell, loo-aa milk: for in December? "What price per quart? THE wiTTTESS: Ten cents. THE CHAIRMAN: Wlaat? THE WITITESS: Ten cents. THE chairman: You sold it for ten cents? THE witness: Yes, sir. COMMISSIONER WILLIAMS: W^a.t are you charging now? THE WITNESS: Eleren cents, COMISSIONER WILLIAMS: Well, why do you sell the loose milk fcir eleven cents, which is a half cent profit a quart > with a loss in the dipping, and you charge one and a half cents profit on the bottled milk where there is no loss in the dipping? THE witness: Well, on the bottled milk we could not charge more than fifteen cents, because this is the ad- justed - this is the price. COMMISSIONER WILLIAMS: We said fourteen cents is the price for the public to pay for the bottled milk, cash and carry. THE witness: Fifteen cents. COMISSIONER WILLIAMS: Fourteen cents was the price fixed by the Board, THE witness: And when I sell it for fifteen cents I lose two cents on it at the times, and loose, milk, when I 1926 sell for eleven cents, I cannot sell more than eleven cents because it is also a fixed price. COMI SSI ONER WILLIAMS: Well, do you sell the loose milk at eleven cents becausd the commission fixed the price at eleven cents? THE WITNESS: Yes, sir. COraiSSIONEH WILLIAMS: Then, why don't you sell the bottled milk, when the customer carry s it home, for fourteen cents? THE WITNESS: peoause some of the bottles I carry up to the house, and some of the bottles are being sold in the store, I was under the impressior that it was fifteen cents, COMMISSIONER MITCHELL: It is fourteen cents when they carry the miik away. It is fifteen cents if you r deHvAr it. THE WITNESS: Very well. Beginning today I shall be forced then to sell it fourteen cents. This again will prove to you gentlemen that the big retail distributer of this product has got to shut down. COI.MISSIONER WILLIAMS: Mr. Chairman, I would like to draw the witness' attention to this fact: That he may charge fourteen cents and ask five cents deposit on the bottle, so that there is no reason for a loss in the price at fourteen cents, THE witness: This cannot be done, because the civ^*#4^T^ For»-,p oomiQSTov have the chain stores, the chain stores all around the oity. Most of their stores do not^ charge any deposit, and their people who sell bottled milk also do not charge a deposit. Of course, there are some that do, but not around that vicinity. OOJaflSSIOUER BROmi: ^llhat does the Sheffield Farms sell their milk for, bottled? THE WITNESS: It is either fourteen cents or fifteen cents, COMISSIONER brown: Don't you know which? THE fitness: Ko. I think it is - I know Grade "A'' they sell for seventeen cents. THE CHAIFMAN: Are there any further questions? MR. ALGER: No. THE CHAIRIvIAN: if not, the witness is excused. Have yOu amy other witnesses? MR. ALGER: There is one other witness. J under- stand he has a grocery. MR. LUWE: Yes. I am a grocer. HARRY LUTVE, called as a witness, being first duly sworn, was examined and testified as follows: THE chairman: Now, will the witness make a statement in regard to this matter of retail trade? QUESTIONS BY MR. ALGER: Q First, what is your occupation? A Grocer. Q Where is your grocery? A 195 Eighth Avenue. Q Are you the proprietor of it? A I am the pro- Q Do you conduct a milk ^oisinass there in. yo^ax groxxery store? A Yes, sir, I sell milk. Q How much milk do you sell? A About six or seven cans a day. Q You have had personal charge of that milk end of your business? A Well, I have not ;just exactly. I have got personal charge of all of it, as far as that is concerned. Q And you want to make a statement, as I understand it, to the commission here about the milk end of your grocery business? A Yes. Q How, just make that statement. A Now, you buy the mil milk for ten and a half cents and you sell.it for eleven cents, and you can't dip any more than 32 or 39 quarts out of a can. The Board of Health bothers you for painting caps, cleaning and icingj and then it figures right out, why, you are out money. You do not even get back what you pay. Q Have you discussed this matter with other grocers? A I have, and they all say the same. It does not pay to handle it, and you can^t handle it and sell it at eleven cents anyhow. Q Have you handled milk in bottles? A Yes. Q How much milk in bottles do you handle? A We handle two dozen of the large and about eighteen bottles of pints. The pints cost seven and a half cents and I get nine cents for them; and the quart costs thirteen and a half cents and I sell them for fourteen cents. Q Have you any comment to make upon the bottled business? 1929 A Well, the- bottom business ie - if you figure tJie in- vestment on it and the delivery on it, why you, just break about even; that is all. Q But you do not make a loss the way you do on the other? A No, you do not make a loss on it. Q Do you get a depotit on your bottlBS? A Yes, 5 cents a battle. When the Sheffield people sold this milh, the did not charge any deposit. They did not oare if they ever got their bottles back. Q They do now? A Well, they do not sell us any more since the shortage of milk came in. Q They gave that up? A I am buying now froa the Central Dairy. Q The Sheffield Company simply gave up and dropped the whole thing? A That is it. COMMISSIONER WILLIAMS: What do you mean by the time of the shortage? THE WITNESS: The time of the farmers' strike. There was no milk coming in at all. COlOflSSIOl^R WILLIAMS: When was that? THE WITNESS: About the beginning of the winter, in October. COMMISSIOI^^:R fuller: October, I9l6. Q Are you sure about the date? I think the date is wrong as to the time when the Sheffield stopped their grocery deliveries. They stopped it all at one time. 1530 A Well, you TeTcembes tro oould not get any milk for ?. oouple of days. Itms just at tiiat time. coma SSI ONER WILLIMS: Do you understand the Sheffield compi-ny will not deliver you bottled milk? THE WITNESS: No, they won't deliver us any more bottled milk. OOMISSIONER WILLIAMS: But you can buy it frorc somebody else? THE WITJIESS: Well, I can buy it from the Central. MR. miller: When was it that the Sheffield told you there was a shortage of milk and they could not supply you? THE WITNESS : That was the time the farmers were not sending amy milk in. MR. ALGER: But how long ago, this fall, or a year ago? THE WITNESS: I think it was this fall. commission; R Williams: you say you break even at a half a cent profit? THE witness: Just about. commissioner WILLIAMS: What is the cost of handling bottled milk? THE witness: In what way do you mean? COmiSSIONER WILLIAIvfS: What money do you spend to handle it? THE WITNESS: Well, you have a delivery. COMISSIONER WILLIAMS: Do you mean you deliver it ^^L(»VA 9 f Q^ jT *5-©3 Pino^s 1900X3 aqq. g.'Bq^ sj Q-T ^« SxiT3[oot Jo ^*Bm Xji •%J3.oxd x-^'Bj. « aanSiJ 0:1. %q2 QAisq noi ;SSaNiIM aEI - I 'ii9jii rspivniim HaiioissiHMOO inOiC q-jUSA-Bti 'spxre qii-oq tio q.tjojd "s sanS^j o;; 5.0S ©A«q noA 'iCsuotct Xxre e^TBoi o:\. SntoS sj-B noX q.'stiq. 'sizw JO 8iq.q.oq -b tio ^.tr eo ji'eti is ptre sisacT JO rreo -e uo e^xiso ojq. esf-Bm noit jt *ajn9ifj %iUV0 noi 'iioq XtTB U9A9 %no 80100 TioA 'asqq.oxTB uo 8801 V^"^ stofQ-^'S sftiq. no esrent nojt 'X-Bii sTfqi sjnSfj liXreo nox :SSaiiilii aHI, isssttfsnq inoA jo aS-easA'a sqq. ^noq-e Moq i^tiq '8iq.q.oq z^inoTq.xBd ^^qq. uq .-SiWITIIl HaHOISSIMOO •eiQ.:}.oq 8xoqii ©qq. uo q.no ©a-e noX ©t^O-oq "B 3rB9Jcq noX jf ptre *s©i :SSaJ5iM SKI, isq-uso u8©axnoj q.'e tt8A9 3[^©jq noA jC:t©ATx©p StrfpntotiT -ertt^ ST ;;u8m8q.Bc^s moA %'B^% og iSHVITIIl HaiOISSIMOO •ep^a;. j©qq.o ©qq. ^.no :;no pxuoii ©qs 'q.j'enb -b sq.xi©o n©8q.j:Tioj q.-b q.t asArtsp ^ott op ©m jI rSSaaill SEJ. nxvrib -e s:m©o U8©:?.jnoj q.^ cSHVITUiii HaNOISSIiWOO i%on /.q^ 'oq. an p©:is^ a©inoq.Buo ©qq. jaj ;SSaiiJ,lM mi JO 8T^:^oq v JSATIsp noA ptuoji ;SiWmiiilL HaxiOISSIMOD •Qjo^s AX&00X2 « (i8©3t 8M J©q!n9in©a q.sna[ noA pu-B fspooS J9q:^o q:^TM 'st %vm -swoq ©q^ ui csSMilM 3Hi i9nioq ©q:^ uj iSmnilA HMOISSIHvlOO •q.T j©ATl9p ©^ cSSaHilAi aHI iB!J.U©0 U©9!}.Xn.0J JOJ ^u-r T^bl get tnralve cents, allowins..Ji8at 3. -^nt- f or the -loaaT^jt-on... , . oent profit. -COMMISSI OirajR WILLIAMS; You also feel that you ougtit to make thirty per cent-^n your turnoTrer every day? THE witness: Well, is that making thirty per osnt? You lose a half -oent, you Biu4Bt jcemembex^ handling it, the spilling. THE CHAIRMAH: That is only ten per oent. THE WITNESS: Then you are making one cent. That is only ten per oent. COMMISSIONER SCHIFF: What did you used to make? THE witness: Well, we used to make about one and a half cents a quart all the way through. My milk business has descreased from about - well, I have sold sts high as twelve cans a day. COJIMISSIONER BROWN. Since when, Mr, Luwe? THE WITITESS: Well, last summer I sold nine or ten can a day, COMISSIONER BROWN: You are selling how much now? THE witness: About six or seven. COmiSSIONER KITTREDGE: If you sold at twelve cents, wouldn^t you decrease still more if you put the price up? Wouldn't you decrease your sales still more? THE WITNESS: No, not if it is a fixed price like it is. It is a fixed price all over for eleven cents, you see, and we cannot handle it for that, so the consequence is +y\a+. mra w^ IT hfl-Vfl to throW it OUt, MR. ALGER: Ifh&t you want is -One. and a_jiaJjr cents? THE WTTFESS: No, we want a oent. MR. ALGER : A oent? THE WITFESS: Tlie half cent goes for losg. Forget to figure that in. MR. ALGER: You are not fixing the price which the consumer should pay for milk, but you are talking about your end, which you think should be one cent profit? THE WITNESS: We should have one and a half cents; a cent for profit and one-half cent wastage, COMMISSIONER FULLER: In other words, you do not endeavor to stimulate the consumpttoiLOf jmili^-al. tha_pr£a.eri4; prices? THE WITNESS: What do you mean? COJfMISSIONER FULLER: You do not try to increase your sales? THE WITNESS: No, we do not. COMMISSIONER FULLER: You try to decrease it. THE witness: We try to decrease it. COraiSSIONER Williams:' if yo^ adhered to the rule of the board of fourteen oents for bottled milk, and did not deliver. the ailidn the home, and asked the customer at that price to take it home, wouldn't you then be making a fair profit? THE witness: You mean if I pay thirteen and a half cents and got fourteen cents back, and she took it .J^ng_ m:^ta her? COMMISSIONER WILLIAMS: If you just received, too milk and turned it orer and took a margin of 3ia:.r osnt a bottle, wouldn»t that leave you some pro.:at oa lu-ndJdrg -ciie milk? THE WITITESS: It would not leave you any peroe:ai:r^e to speak of, as far as the investment is concerned. COMMISSIOITER WILLIMS: What is your inves-imeDt? THE WTTKESS. Well, your investment _is thi^iean, and a half cents on the bottle of milk. COMMISSIOTirEB WILLIAMS: Well, it is a turnover 365 a year^ you remember. THE WITNESS: Yea. COMMISSIONER WILLIAMS: Your average turnover is probably ten times a ye^r on all your stock. Here is a turn- over every day. You do not expect 'to maJce tiie eajte mar^n of profit on your daill.y turnover? THE WITKUSS: No, but you must remember you have to ice this stuff t-t different times of the year, COMMISSIONER WILLIM^S: Do you ice your bottled milk? THE witness: You have to ice your milk to keep it cold in the summer time. COJffilSSIOJTER WILLIAMS: You put it in the ice-box, don't you? ; '•>; r ) v: THE WI-mESS: Well, sometiiEea, and eoa&.u:7.>r. ice it all up in the case, the same way with the loe tr_t goes atxoimd the hulk goods. MR, ALGER: As a matter of fact, 'lor: wi.ny ra.x-.e of bottled milk a day do you suppose you C'e.Uvfcr? "^'o /o-. suppose you delivar six bottles of bottled milk a .lay? THE WITIIESS: More than that at any tinij, MR. ALGER: What? THE Wrmess: More than that at any ti^ne, MR. ALGER: How much? THE WTTIIESS; Why, I supply all the poor peop^^ in the Chelsea district. MR. ALGER: I am talking about delivery at their houses. THE Wl'T^TESS: I am ;just going to explain it to you. I supply all the .poor people in the Chelsea district for the New York City Ohari-uj'- Cr,r£XLi2U3.-':l.rrLj and I do not think there is an order goes out that doeg not get two bottles, and we deliver it ?-nd carr^' it up two or three or four flights of stairs; and if you take it right, on Saturday they get the most milk, COMlilSSIONER WILLIAMS: That delivery on your part was voluntary service. That was not in the order of the com- mission. THE WITIJESS- It was not in the order of the com- mission, no. u COMISSIONER WILLIMS: You are dolrg -l.rt ;:. > rr; own olioioe. THE WITI^SS: Still, the charity o-rs,nL"r>.tlon sajr^ on the other end, "If you do not delivo:: tti=i -, il'i ^-^ xl .:. have to go to some place else- and imy_tiif;, gooc.£^3?^xi^_i:i.ey will deliver the milk." MR. ALGER: You are selling groceries to -'the charity organization, too? THE witness; Yes, CO?fMISSIONER FtJLLER, In other words, the milk business has got to carry the risk of the business i" THE WITNESS: I look at it in the handling of the milk. You can't look at it that you are going to— ^^ handle it as x. acconaaodation. If you handle it as an accoirmodiitic:! c.r.d break a bottle a day, at the end of the year you wo-uJjI be out money, na mattex.how jmioh other goods you cell,, GCl-C'Ti'Sei 3MER FULLER: You keep telling us the people you c^i'.vri to want to buy your groceries. THE «7VTWES3: Yeo. that is the case. COmiSSIONER fuller: And that is why you handle the milk? THE witness: That is why we handle the milk. COmaSSIONER Williams: What do you charge for su,gar? THE witness: T^i^Q cents. COMMISSIONER WILLIAMS: You take a lose 0:1 -u^x don't you? THE WITNESS: No, I do not. You csiii buy d.ir^.lrs V.rj.y for $S.10. COMMISSIONER WILLIAMS: Har-auQh^ did you a^c-ra,3 :.r December for sugar? ^^-— --. THE witness: Ten cents. COI^MISSIONER WILLIAMS: What did you pay for it? THE ^THESS: Paid all prices. Had to buy it senord- hand, I arc a direct buyer from the Ajmerloan or any sugar refiner there is. THE chairman: If there are any more questions for the witness, please be concise. It is almost one o'cliOcJCj^and- _ we want to adjourn at that time. C0IIMI3SI0NSR SCHIFF: I move we adjourn. THE CHAIPMAI'I* , Until what hour? GOMMISSICNER SCHIFF: Two 0^ clock. THE CHAIFMAIT: The cozrnoBsion stands adjourned to owo o'clock. (The Commission thereupon at 12:55 o'clock P.M., adjourned to meet at two o'clock P. M. ) iy^6 After reoeea, 3:00 P.M. (Oommisaioner Charles M. Dow, was alflO px^seni^ The Chairman called tho meeUng, to-order at 3:40 o'clock P. M. MR ALGER: If it please the Commieeion, what I now propose to addxeea my testimoiiy to is the dipped milk for wholdaale buainessj and I am oalling a witness whom I would like t« havd sworn,— Mr. Roberts. *J'OHN W. ROBERTS, called as a witness, being first duly sworn, was examined and testified as follows: DIRECT EXAMINATION BY MR ALGER: Q Mr? Roberts, you are a certified public accountant, are you, employed by the firm of Haslcine & Sells? A I am employed by the firm of Haskins & Sells, certified public accountants, I am personally, myself, not certified. Q How long have you been employed by them? A Since December 36th, 1917. Q And how long have you been an aoco-untant? A For the jAst 14 years. Q Have you been requested to examine the books of certain milk distributors, and to examine the records of oertain other milk distributors from which you have made some compilations? A Yes, air. Q Now, what companies have you examined the books of? A The Levy Dairy Otanpany, the Standard Dairy Company, and the Model Dairy Company incorporated. 193^ Q A3U. New York City dietributore, are they? A Yo^c Q Now, what companies have furniehed you reco.rd«, ;>. whose books you have not examined? A Sheffield Far.m^, Slawson Decker Company, Empire State Dairy O^pa^ny .-nd Borden's Farms Products Oompaaiy, incorporated, Q Have you xnade some compilation from e.xaminat ion of thes^o books With reference to the handling of what is known as .loose milk? A I hav©. Q Now, hav© you prepared in schedule form your compila- tions indicating the quarts of milk sold by these c^paJiie^e, «> • the sales and costs of delivery, — deli^^ery costs, and the profits or losses covering the month of November? A I have. Q Is this one of the schedules that you prepared? A That is. MR ALGERj I am going to offer that in evidence and I will have some extra copies here for distri-^ but ion among the commission, fSohedtile received in evidence and marked Commission's exhibit No. 66 of this date.) Q Now, Mr. Roberts just tell the Commission in y&ur own way what yoiir results show from these books, first as to the natuxe of your examination,^- the extent of your examination of tbese accounts? A As to the nature of the examination, I examined the books of the Levy Dairy Oompanyt, the Standard Dairy Company and the Model Dairy Company,, from the trial balances and from the various entries in the books. From inforxaation obtained at those places, 1 prepared their profit and loss statement fox the month of November, and apportioned,"— allooated the various expono^e a.gainst- the various kinds of products atnd classes of customers in aooord- anoe with the services or the sales to those customers. Tlis/>- divided the profit and loss auaong the different classoe of busizxess. On Grade B milk sold vrholeed.li9 in cans, the Levy Dairy Company showed a lose of #7, 009. 88. THE CHAlRM&Nig: On how muigh business? THSr witness: On 1,198,336 quarts, making a loss per quart of $.005850, THE CHAIRMAN: I do not want to question the result sj but should not we have the basis by which that result is reached. The result itself is of little value. Should it go in the record? MR ALGER: Go ahead with the next concern, please? MR WILLIAMS: Just a minute, please, MR ALGER: That will come in, Mr.. Williams, later. I will have that. COMlil SSI ONER WILLIAMS: Here is a statement On the record of the large volume of milk which is handled in the Lory dairy r . at a certain loss, but no reasons are given and no basis is laid by which we can form our own conclusions. MR ALGER: The second sheet of the xe^oxt which ws have will come to' that. COMMISSIONER WILLIAMS: On the same dairies.' m ALGER: Yas; it ie the gam^ sb^ot of tLA. same exhibit. Isn't that oorx^ot, Mr. Rober-'js? THE WITNESS; Yoa, sir. MP? ALGERj I will give you ovpisfi. I have n.>-f aa fvll a sec of these copiea as I wo\ild wish, but that :•.& tiin official copy, and I have some extra copies Iiere. I will give one to the Chairman. (Mr, Nathans hands copy to Chairman.) Q Now that represented sales of how many dollars worth of milk? A Saies of |1I7, 861.10. Q Yes, COiail SSI ONER WILLIAMS: You mean dollars? THE WITNESS: Yes, Q And at what selling price? A At an average price of ^.£97863, — nearly 9.8 cents per quart. Q Now, take the Standard Dairy Company, hp-w many quarts sold do you have there? A 804,640 quarte. Q And selling for how much money in t^ gross? A #78,654.39. Q And showing whav? profit or loss on tha,t business for that month? A A lotje of #473. 3l| Q And what loas pe.-.' quart? A |. 000588. Q Nowj wiiat ,bout the Mutual Dairy Company? A Mutioal Sairy Company sold 3 SI; 040 quarts for |s5, 777.7d. making a loss of $100,38, or |. 000384 per quart. Q Now, take the next one? A The Sheffi^ Farms, Saaw&on l)eck©r -Oftmpany, 0- thes^a figiu-©e wor^ rurt cc^j.^:x^]^d j:r myself going over their books, but were fniTieh^c'. oy "Le Sheffield JUrma Slaw&on >©oJcer -Ooorpaziy •a.Tatl^a: ins-truatfj.or.B frsm our office as to the methods to be eari,xlCTed in 9JJ-Ov3a,ting L-he Oi^peatjoa against the v£c:iont:' ki:idg of. Trafiinof^p? This showed. 113,X>15 quarts stxLd, th© a&J.es amounting to $11,631.55. Q Now, that buainses ^«as largely what is known as a dplit oan bueineas, is it n^t? A Yes. Q And sold at a higher price than moat of theae other diatribntora? A They advised me that a majority of that ,._ waa sold in leas than oan lo-be and at a prio« of Xo^X/z cent a. Q And showing what? A They ahSwed a lose of 11,670.06, amounting per quart to |S14909. Q Take the Empjj^e State Dairy Crmipany? A Their figures were made i:^ in the same manner as for Sheffield Farms, aooiarding to inatxactions from our office, and they showed 679,^6 quarts sold, the aales amounting $6,783.06, and resulting in a loss *-^ Q (interrupting) At a aelling price of what? A At a aelling priae of #098301, ahowing a loaa of 110,701.15. Q And the lose per quart of how much? A Per quart of 1.015751. Q What about Bordena Farm Products Company? A The 19^3 Bordens Farm Pxoducrts (5ompany f\irnished the fi gores prepared upon their — in their course of accounting. They have a highly developed coat system. They showed 5,814,159 quarts sold, the sales amounting to $557,684.70, the average sa.lo per ouart being #.09508. Q That is not given here, is it? A Yes. The resulting loss being ^59,093.^5, or per quart $.010164. Q Now,, have you oonxpiled the average from these various companies, compiling them together? A Combining the results of these six companies shows 8,869.456 quarts of milk aold, the sales amounting to #857,731.50, an aver- age per quart of $.096705, resulting in a loss to the said companies of $79, 047.73, or per quart i!i. 008913. Q Now, those are the totals oocqpiled on your first sheet of this exhibit. Now, what prices did you use in making up this detailed oost which forms the second sheet of your exhibit? A The total of each kind of e^qjenses was determined and then distributed among the various classes of business on the various bases that apply to that kind of business, to each kind of business. From the Levy Dairy Company, for instance, the trial balance at October 31st, and at November 30th was obtained^ the increases in the balances of each account examined to determine as nearly as the timee permitted woul^ allow whether the amount of expense in that account was nromal for the month. In some oases, such as as taxes and insurance and other items, payments are sometimes made in 6n« month apply to other months. Where such payments oooTirred in November applying to other montha, they were enminated, the portion applying to other months was eliminated frjorn tho eicpensej and where no payments had been raade in Nu\eabv^;: bar. vjas ©xpexis© paid in other months applying to November, it m.B added. Making these ad;justment9, the profit a loss account vras made up. Q That ie in an effort to segregate to the Grade B Loose fluilk the proportions pf eapense property to be borne by that class of the buainees? A Yes. Now, the total of all "the expenses was distributed in aooordanoe with the quantities handled in the various prooesaes. The cost of the milk purohaaod was divided between the sales of Grade B milk in -Oane to shippers, confined to shippers from the creameries. By shippers, that is a term used in the milk business covering other dealers,, other wholesale milk dealers. Sometimes mi?.k is consigned from the creamery direct to a custoffv in New York and goes to the station and he gets that milk direct, so there is no handling in New York, and the socalled shipper pays the freight at this end. It is a different class Of business^ Then again the Grade B milk in cans sold to shippers af-Ser it has come into the factory in New York, it is a differenlj class of business from Grade B milk sold loosely to restaurants and the stores and other places, because for one thing these shippers come to the factory and ge'^ the milk. There is no delivery expense. And, for another 19^3 thing, thd prices to them, in woneequenoe, are some- what different^ so that that constitutes a s^paratna clascJi.ti'- Gation of the business. Then there is Grade B in cans to other wholesale Gutitomsrsj that is what I have brought into the statistics compiled* There is Grade B in bottles, Grade A in bottles, light cream,, heavy cream, condensed milk. The cost of the milk was apportioned between these different classes of business in accordance with th« quantities applying. The expenses, starting in with the e^enses at the country creameries, — they wore divi(ied in proportion to the quantities of milk shipped to the city that were used for the various classes of business. The freight and ferriage — Q You have cut out the shippers entirely from this classi- fication, have youJ A They are not invluded in the tabula- tion* Q And this is straight wholesale business? A The expenses of the creameries were applied to the output of the oxeameriee. Part of that went direct to the shippers, part to the factory. Now, the part that went to the faotory^ the ejtoiiAny p&.id freight on and ferdage. The amount of that freight and ferriage was Ii8,033.33; and it was divided in proportion to the quanities of milk entering into these various other lines of business. Hauling in the city was— then, I should say, in addition to the milk received from the creameries, milk me purchased in New YorkJ Therefore, there was hauling expense in the City that applied to both. It is applied a<%cordiiig to the total handl-M at '-he :rao-tcx-"'. Q Well, you have charged here, I talie it, elrapD)- that which vent to the factory, which went in tho r.sua.L w|:?3^ea,Le \my by the distributor hiiiaelf to his own property? A I ara r.ot sMre that I got your question, Q Well, I am trying to get at how you dogregated tho rrilk that ia sold in $he city other than by the dealers themselves. If I do not make that clear, just let that go. Well, thc-t represents, properly segxe^ted, the costs and expense of handling the milk received in the usxjal wholesale way, right straight through f rom the time he gets it i:rom the country to the time he makes his delivery in the city? A Yes, sir. COiCin SSI ONER BROWN: lir. Alger., that eliminates entirely shippers' business? THIT WITNESS: The business with shippers was not included in that tabu3^$ed statement of Grade B milk sold wholesale. MR ALGERJ Yes. THE CHAIRi-iAK® Please define the term 'fshippere" again. THE WITNESS: Other milk dealers; that ia about it? COM.SSIONER BROWNJ I think Mr. Alger can eniargo on that a little by saying that a fellow that goes out and gets wholesale trade — I think those men we had this morning 19^7 would be olaased as shippere, would they not? Isn't that true, Mr. Alger? That thosa men who testified this jaorning would be classed as shippers? MR ALGER: 5i I think it would go a little further than that. It is a man who, for example, "buys from the Levy Dairy Company at its plant ia the country, who takes it right from the plant, who takes all the expenses from that time t2i himself. COMMISSI ONER BROWN: Yes, but he might be in the city too* MR ALGER: Yes, he might be in the city too. COMMISSIONER BROWNE Except that he has more e;qpense in the one way than the other. MR ALGER: Yes. COMJaSSlONER WILLIAMS: Does this include the milk sxqpplied to bakers? Q Does it include milk siqpplied to bakers, Mr. Roberts? A Yes. Yes, it covers all other business in Grade B milk in oans sold by the Levy Dairy, aside from the sales to shipper sj that is, other than milk dealers. COMMISSIONER WILLIAMS: You mean sold by these six dealers? THE r-TNESS: Ye8,ta6 same thing is true of the others. COMMISSIONER WILLIAMS: The same thing is true. This report covers about 8,000,000 quarts of Mlk,— 8,869,000 cjuarta of milk, or a total of about 46,000,000 quarts sold here in a month, if I r0<3all the figaresj in other wftrds its is about SO per cent, isn-t it? THl WITITESSS I do not know what the total is that you have. MR i^LGER: You aro talking of wholesale businaas^ Mr. Williams? COMMISSIOITER WILLIAMS: No, the total milk simply in New York for the month of November is about, as I recall, 46,000,000j amd 40 per cent of that is this kind of miik. Schoen: COMMISSIONER 60 per c^nt is this kind of milk. COMMISSIONER WILLIAMS: 60 per cent that would be. COMMISSIONER SCHUEN: About 30,000,000. COMMISSIONER WILLIAMS: About 30,000,000; and this is covering then lees than a third of the total of this kind of milk that was sold in a month. MR ALGER: We are taking the dipped milk »nly, Mr. Williams. COMMISSIONER WILLIAMS: Yea, I understand that m ALGER: And part of the wholesale you are referring to might be bottled milk? COMMISSIONER WILLIAMS: What is what? MR i:,GER: Part Of the wholesale you are referring to might be bottled Mlk. We are taking now dipped milk. COMMISSIONER WILLIAMS: I understood dipped milk was about 60 per cent but nevertheless I do ass\3me that when a man is engaged in the wholesale business and the price is fixed at which be is tft sell his milk, it is to be assumed that at least he is not going to sell that milk at a loss at the price that is fixed; I do not think the Oommission has any other thought in mind. I certainly have not, and I l$66 aixi sure Mr. Williams has not. COMMISSIOJIER WILLIAMS: Mr, Ohairzaan, I do not think that counsel should jump at a conclusion because we ask for infa>rniation. Thattis no indication as to what out con- clusion will be. MR ALGER: Oh. noj I appreciate that, Mr. William'. COlflilSSIONER WILLIAMS: I would like to add that where a concern like the Borden Company is carrying on a variety of service, that is, the sale of butter and cream ajod eggg from the same delivery service, our minds might not meet on the principles adopted in the division of those costs. I think we should have an opportunity to review the method adopted by the experts in making those divisions, for I assume divisions are made. COMMISSI OUTER BROWN: I would like to ask Mr. Alger when he can give us the figures on the Standard Dairy Company and the Model Dairy Company? MR ALGER: To*-day, I think. OOMMI 831 ONER BROWN: Mr. A|ger, as a matter of fact, isn't a very email proportion Of the Model and Standard and Levy companies left out in these calculations? I'm ALGER: It is so small as to be negligible. They are wholesales concerns. OOMMIidSIONER WILLIAMS: May I get freight on the Levy first? I understand this is half their total busi- ness, the Levy. 1967 MR .,»LGER: The Standiird Dairy Company, COMMISSIOITER WILLIAMS: The Lvry first. I have not looked at the Standard. You report on 1,098,000 xiiiarto of milk. MR /LGER; Have you got the figures, Kr. Roberta? Sre you including Shippers bxisinese? I d^ not think we ought to. OOfaasSIOIiER ^ILLI^^MS: I think, Mr. Chairman, that we should include the csorporation as a whole, every bit of business it does, -upon Which it spends money, and then from that point let us see how the business is divided. im ALGER: Now, Mr, Roberts, having that thought in mind, can you take vc^ the Levy Dairy Company ope^^^tions as & whole during the month of November, if your figures are sufficiently coffiplete? THE ^ITNESSj I have got to add the three togeth-er here to get their total quarts sold. Just a minute. (Witness computes figures). COMMISSIONER SBHOEN: TlFhile he is adding that up, Mr, Alger, I notice thsre are a,bOut nine million quarts aocoimted for here in this first ©xhibit and about 37,000,000 quarts is the normal amount of milk that is distributed in the socalled wholesale way, that is, in cans, in one way or another, either to retail grocery stores or hotels or in other ways. How then does it c-ome-^ j^st to bear out Mr, Williams' statement©- that we get an accounting here of only non'^Jopix %^xi% Bu 9at9 o:t StttoS ex's noiC pu^ 'moti SuinaS ©i« noX ^BT^M ST ^isn!^ puv rnaOHOS HMOISSIMOO •exex-eep jaqi^o o;^ pxoe ex %-BViii. epniout %qxx eeop %Qll •peieATxep a ©p^jco bt ^^qj sSKVHiVK Hl'J. '%'e^% JO ^aeo aed ee Xxno tiiaOHOS HaNOISSiraOO •a ep-eao :hs£)7^ nii •pei^nqfiasTp :ixtot ©x^exottm evi% j:o i^tieo isd ££ Xxtio Sa^TPU'eq ©Jen ©A-eq ©m a'eqj^ eaoq.nqTJi;e;p ;;B©9Sfq ©'qa Suom-e ejCB Xx*^®^'sc^^'e qotUM seTa-Bdraoo xtb ©eetiq. Ti©ni •a:©Sxv •JJ'i 'ttOTaesnb asqt^o ©uo (».BT\f :i^30H0S HSiiOISSirmOO •BsjcnSfJ iteiR i^eS n.iU'BO I 'esxnoo jo puB feeett-fBi^ efesexoiiM SufXP^'sq 'XT'BTt^ Ax©A ©tnoe 'xt"®^© ©tnoB '©©"fu-edtnoo jsqao Xu-etn q.'eejS ? ere ©jeqj, -ex'© s:j,XT^B©a xT©t[q. ^.'bum noil ©AfS o^i- petJI- ©ats^ I •eeTtt'Btfeioo ©x''38 9X0^i4 Suta-eaedo %.ne-ioijj9 b-b ©p-eaa qx[% ut |?ezftiSTO©ar aj-B qoTiiJii euxeotioo e^% 1% peT^c^V ©A-Bq i xb\vi% b-bm 'letioTBBfTraroo 'J^H 'op 0^ V^\^% I *'B^ JHaOlv' H5'I •ees I tiiaOHDS HaNOISSI?KOO •X'BeA -e 3too^ 8ii JT :i.t op ;oti pxnoo ©^ •XX!^sTlpuT exx%'ae &n% %eS 0% 2ux%dme%%^ %QU WB I 'tr©otiog •aji 'seTtfedraoo ©esq?- ^ SHaoiV "SK 'S'.'^BXoqM a"© eti©o Tit PToe ^tXT^ S ©pisiO tio eeox ^^^ P«^ ^boo 'seX'BB JO ;m©in©q.'B!i8« ;8X'bb ©xnpeiioe efqi^ JO SuTP*®^ ©^^ ^®^* ^eBeuTBTwi 9X«s©toxiA x«*oi ©q* Jo :^xieo zed ££ 'pifqa a^o 1969 difficult, aa to how that should be accounted for. They simply take the milk from the plant in the country, but what their costs are and their handling expenses, becomes then a question for some other distributor. COMMISSIONER SCHOEN: No, you do not quite understar me. We get on^ and one half million quarts, roughly speaking, of milk, brought into New York City every day, don't we? MR ALGER: Yes. COI^^ISSIONER SCHOEN: And of that one and one half million quarts brought into New York City, 60 per cent of that is sold in cans? MR ALGER: Yes. COMMISSIONER SCHOEN: Which represents, roughly speaking, throughout the month, 37,000,000 quarts? m /iLGER: Yes. COi'liHSSIONER SCHOEN: Does that .then, that one and one half million quarts, have anything to do with the milk that is sold by this company from the station outside in the country somewhere to a certain shipper? MR ALGER: That is what I will have to make some inquiry aljout. A great deal of that milk will go to bakers,-- it will go to confectioners; a lot of Grade C milk is used for cooking purpose©, and milk of that kind is not oonsximption milk. COMMISSIONER SCHOEN: But the one and a half million 'spjOM aaqao tii 'en o:v q.e»J0!^ttt oti jo sT 5-T tze^i^ '^tTW .SaianqTaiSTP JO *boo 9i[a ^T e9S® 9tiT2©aTT9P JO JRSODS &n% Sutaand ©X8 Jtetit JT sv^oiL xeqi^o ttT JO 'Xj:©att©P S§® ^oJ SaTS'sxio aaia eaiuBdnoo 9^% eeeiun atui 'ei^OTipo:!:^ TCTtc P^^ ^mw no e©Ttt«atooo ptnone ©M XqM ptreivejeptm I'BO i teSS© xi:^tm op o:^ ©m 'q-e-Bd ©q^ uf op on./©A'eq ©m ©-b 5.0TI pn'B 'XT©ATstt©it©adtaoo pBti Suttia att^ A-'© 3ioot ©^ *91 •©©t© SttTti(}.^©Ae puB treexo pu'© tCT^ pu-B eS3© eepniotif ^vvn •ee©tti:©nq Bi^^vLom xx&vi% no uoaSttfqe'Bi^ o!^ ^xodex ©jXxi'Bdtooo ©m ^o idoo « itxi'eoT^J-O'Bxd 'itaeTOeq.'eae ■© en ©AfS f* m^ 3te« pxnoqe qm v^fxi^ j ^tui feq.jteqoH •:tx'i X-bx^P OQ- ittr-eai !^oa op i 'u'BtBax'BttO '^H 'ttJnoCp'e ©^ exojeq •eexnStj ©q!; en ©a^S o:^ Ax% 0^ SUTOS ©T e^jsqoa "^K IBflVlltlk H3K0ISSIHH00 nT tsS pui3 Xj* otv ©OTjjo erq oa ©tioqdex©:^ o^ e:^xi'BM ^0^2 'xn — ee©U"fenq ^©qtneAOii JTsq:^ tto Xxredraoo a^ip; tnojj MOU3t 0% e^xji PXTiom ©tpi iveqM ^enp 'q.tt©B8:td ©f oxiJit '^[xioaa -jit Iieq. pTUOM ©nrBTXXTiii 'JI^ JI tXOIHOaHOS HSliOISSIFvIOO nx ©e^^TassATTT ^uemc^arBdea q!VX«©H ©^a Hvm ©ir^ ut jijoa m©h ©nroo oa peeoddne ©t 8uok -iixTni ©P^iO Xti-e tji^TM op o^ Sutqaou ©■Bti pu-B ^^uemx^^a qi^rBeH ©xi^^ jo ep:rooe2 ©qt^ 0* SuTpiooo^ 'MTD ^:roA m©ii o^ut tm3no:rq ^xtht a ©P^^O xo y ep^xS «qaT© bi 0Z6I 1971 what profits they make on milk productQ, I think we have a right to know if they are making a profit on dondensed miOk^ and what it is^ if they are making cheese and making .butter, that those are all proper matters for consideration here. I think we might exclude eggs or anything that is not a dairy product. THE CHAIRMN: Just to get your point of view, Mr. Williams, you wo\ild aay then, if they are making a profit on condensed milk and Grade B bottled, sufficient profit, we may ask them to take a loss on wholeaale milk? COMMISSIONER MITCHELL: I think it is what money they are making on their business as a milk business and milk products bJisiness. I do not think we ought to apply a term that they are entitled to a profit on each division of their milk business. THE CHAIRMAN: Then your philos(jphy of the situation would allow them to waight one product, one form of milk to the disadvantage of the other. COMMISSIONER MITCHELL: Well, it would not matter what they did about t, ifl they reported the losses and profits hero, because we would take care of the weight- ing. MR ALGER: Mr. Mitchell, may I ask the Commissioner one question? Sij^posing we are losing money on milk we turn into condensed — I do not say that anybody is, but supposing they were — do you suppose they would be entitled to make up from the consumer in New York those losses? 1972 OOMMISSIOJTCR MITCHELL: I do not see how you oan conduct your buainese at all, unless you take into account what you make on the milk you buy. MR ALGER: It would not have occ\irred to me — COMMISSIONER MITCHELL: But if you have to sell eoae of your milk in condenser ies, and part of it in butter and part in cheese, and part to the wholesale and part to the retail trade, now, what we want to know is the result of your ajperatione as a milk dealer, daaaer in milk. MR ALGER: Yes, I see. COLMISSIONER WILLIAMS: Add to Mr. Mitchell's suggestion, I do not see any difference between us if this egg business is conducted independently of the milk business; but my understanding is that the egg biisiness is conducted on the same TOigon that the milk business is conducted on. The one assists the other, and I understand — I do not say that I do not think it is proved here; in fact, I am sure it is not — but my understanding is that the same principle may be adopted by the milk people of having leaders^ they might sell milk as a leader for selling butt r. COMMISSIONER MITVHELL: That is true. COMMISSIONER WILLIAMS: My thought is that we should get the business of the distributors as a whole. COMMIfc-'lONER MITCHELL: I do not think that you could take into consideration the profit the farmer makes on eggs. 1973 COMMISSIONER SCHEDRICK: ^on are going far afield, in my Judgment. I do want to say this as a buainass man, that I know of no commeroial enterprise that is allowing any department to sell goodd at a loss. They are sometimes using as leaders goods sold at oost or very close to cost; hut when you get dovm and tell a commercial business man, "Here is something that you must give the people something to buy" you are confiscating property, COMMISSIONER WILLIAMS: Let me right here say that in asking for this information we are not announcing any result c COMMISSIONER SCHEDRICK: But you are drifting at it and I do not like it. COMMISSIONER WILLIAMS: You may bs anticipating a conoluaion^ but I submit again it is unfair to consider only a part of it. COMMISSIONER SCHEDRICK: I agree with you on that. COMMISSIONER FULLER: Mr. Alger, the purpose, as a I understand it, of this evidence was simply to bring before the Commission their attention as to the saie of the whole- sale loose milk. MR ALGER: Yes. COMMISSIONER FULLER: And that was the only purpose. MR ALGSR: Yes. I wanted to see what these whole- salers hare got. I ought to have done it, perhaps, last time. I did not have as much in the record regarding wholesalers as I perhaps should, lastbtime. 137^ COMMISSIONER SCfHEDRICK: But the profits fox the Whole month, or loaaes, which it happens to be in this caee,— there is no objeotitn on the part of the distributors to giving it all. MR ALGER: Not at all. COMKISSIONER S0H2DRICK; And getting it right awajTi now. m ys.LGER: We will go right at the Levy Coaipa . im KRONZ® I wo\ild like that specifically stated, Mr. Chairman, just what is required, and we will t: to do it in every detail, but I don't want to double on any of this work of accounting. It is too massive. If the Commission will tell \ia what they want we will go to i With every bit of energy and prepare it. COMISSIONER WlLLIi^:MS: Mr. Chairman, I think a duplicate of the report that is submitted to the Food Admin tration at Washington undsx the license ig what we want. MR ALGER: Does that cover the month of November COKMI SSI ONER WILLIAMS: November 1st, yes* Then we wotild like to have the cc responding reports for the mon Dec ember. MR ALGER: We have not got that. COMI.assiONER SCHEDRICK; I do nOt think you can get December yet, MR i^LGER: Now, Mr. Roberts, we will return to the Levy Dairy Company, You have the figures as to the 1975 Operatione as a whol« which Mr. Williams ^nts for the ruoixth Of November. Go right at it, Mr. Robarte. THE witness: Grade B in cans sold to shippers, F. 0. B. oreamerieo, |554.16 of profit. Sold to shippers from the city factory |1, 900.87 lost. On Grade B in cans whole- sale, a loss of 17,009.86. On Grade B in bottles, a pijofit of $139.31. Grade A in bottles, a loss of ^135.40. Light creaii. sold to Truxton Dairy, without delivery expenses, a profit of $539.38. Light cream sold to wholesale customers a profit of t 434. 76. Heavy cream sold to Truxton Dairy, a profit of |3^.83. Heavy cream sold to wholascuLe customers a profit of 1554.33. Condensed milk to the Tr\ixton Dairy, a profit of $33.17, and to wholesale customers a profit of |136.54; malting for a total a net lose of |6, 633.88. COMMISSI O^^ER WILLIAMS: What is the total sale of miUc of all classes? THE WITNESS: In quarts? GOffiviI SSI ONER WILLIiiMS: Yes. THE WITNESS: Total quarts of milk were 3,150,700. COMMISSIONER WILLIii H: This report covers about half their business? I aesur^^e you will have the report for all that. Have you gbt the corresponding figures, Nr. Roberts for the Standard Dairy Company? THE WITJIESS: Yes, sir. MR ALGER: Just compute the number of quarts sold. •^ I' COMMISSIONER 80H0EN: Why not the same analyeie^ m ALGER: The same analyais of what Ib called for. COMMISSIONER WlLLIALlSt If he hae got that figure right here. MR ALGER: He has got it right here, THE WITNESS: Standard Dairy C<3ffipany, Grade B cans wholesale, a loss of |473,31. COMLIISSIONER WllLIAMS: No, but what is i^he total business in qiiarta? THE WITNESS: Oh, you want the quarts? COMISSIONER WILLIAMS: Total business you have got 804,000 quarts here* THE WITNESS: Yes. There is of Grade B in cans wholesale, 804,640, Grade B in bottles, 34, 603j Grade B in cans, sold to shippers, 31,440.. COmi SSI ONER WILLIAMS: Is that their to^al output? THE WITNESS: That is their total of aillc. COMMISSIONER WILLIAMS! In other words, about 870,000 quarts. Have you got tye same figures for the Model Dairy? COMMISSIONER SCH©EN: Just one minute. I would like to interrupt Mr. Roberts for a minute. You gave us here a loss of $135.40 on bottled A. Why should bottled A be incluo in this B soliedule here? THE WITHESSi It is not, He aaked for the other kiade Of bueineBB. I have got condensed milk in there and varieua other things, COMMISSIOITER SCHOEN: All right. I see. MR ALGER: Have you got through with the Standard Dairy, Mr. Roberta? Just exactly what you ^-ve for the Levy Dairy Coaqpany? THE WITNESS: I do not know whether they want .he amount in dollare of profit and lose on the various coiiuxioditles for the Stauadard Dairy- COMMISSIONER WILLIAUS: That would show in the report, wouldn't it? MR ALGER: Just what you gave for the Levy Dairy CoB©any-~' if it is a profit state it, if it is a loss, state it, THE WITNESS: On Grade B in cans wholesale they made a loss of 0473.31- Grade B in cans sold to shippers, a loss of 1313.87. Grade B in bottles, a profit of #364.78. Heavy oream, a profit of ^49. 57. Light cream, a profit of $338,#5. Buttermilk a loss of 118.34. Potcheese a profit of $11.37. American oheese, a profit of $ 74.06. Condensed milk a profit of |33.03. Butter, a loss of |11S*36. MR ALGER: Net for the month, what? THBT WITNESS: Net for the month on all the different commodities, a loss of 171*03. MR ALGER: Well, if you are through on that and 197S there axe no inquiries on that, let ua take the Model Dairy Company the aauie viay. 00MKI3SI0NER WILLIAMS: Can't he juat give totals and not the detail el m ALGER: If you are satisfied now with the totals. COMMISSIONER WILLIAMS; I understand we are going tc have a written report on each one? MR ALGER; Oh, no, I do not understand so at all- We have the written osit data here which the witness is putting in the record. We have not fully followed the report. That is why he ie giving it in detail. COMMISSIONER SOHOEN; I think we ought to get theia in detail^; it is a very sicqple flatter to ascertain them. lER ALGER; It can go in the record as you go along. 0OKMISSIO17ER SCHOEl?: Yes, it can go in the record as you go along, — those of us who have copies* MR ALGER: That is aruch sizapler. Give the saiae detail for the Model Dairy Oongjany in the same fashion. THE WITNESS: Model Dairy Company— well, I canH give you the net profit and loss on each of the items. GOMMISSIOUER WILLIi^MSi Can you give the total quarts sold? THE WITNESS: The total quarts eold, grade B to shippers F. 0. B. ureamery 311,504. Grade B sold to shippers, F.O.3. city plant, 169,440. In bottles. Grades 1979 A and B, I have nbt got thoee eepaiatdd, 38,434 qmxtec iTait a minute. No, all tt these figuifea that 1 hare just given you should hav6 beeti »d61d to shippdta ^.O.B. creamery". COMISSIOITER SCHOEF: And what ie the 361,040 that we have in the printed sohedule? MR ALGER: The first sheet, Mr, Schoen? COMMISSIONER SCHOEN; The first sheet, yes. THE iriTNESS: That we are coming to. That is sold t©— the 361,040 is Grade B milk sold in cans, to wholesaJ.* customers* COMMISSIONER SCHOEN: Well, then, what is the ^69, 440? THE WITNESS: That is 8©ld to shippers, as recently defined. I should correct what I j sut said. That 311,504 covers the total quarts of Grade B and heavt cream and buttermilk sold to shippers F.O.B. creamery. Now, sold to shippers F.O.B.New York, Grade B in cans 37,960; in bottles 160. COMJa SSI ONER WILLIAMS: 168 bottles? THE WITNESS: Yes* COMI SSI ONER WILLIAM: Not thousand? THK witness: No. hv.vy cream 760. Buttermilk 160. Wholesale customers, Grade 3 in cans, 361,040.- Grades A and B in bottles 313 quart Si Heavy cream 10,645. Buttermilk 840. Oc dense d milk in cans 7,18C , Pot cheese in cane 1,400. Quarts, that ie. To retail customers 1980 Grade B m cans, that would be Grade 3 dipp,,, locse, 11,400. A and B in bottlSB, 36,496. Heavy orea. 330. Buttexzuilk 340. Condensed .aillc SO. Potchee^ 160. Then they have eold in their atore Grade B in cana 3,600; bottled 3340, heavji oreait 340, buttermilk 500, condensed milk 360. OOI^MISSIOUER SOHOEIT: You have not any of the figuree about profits and of Iobb of that oompany on these various items, have youJ TOT witness: Well, I have the totals here. The total was a net profit of 11,488.03. THE CPAimm: On what amount of business? THE WITNESS: On sales of t67, 333.69. Iffl AtGER: Soes the Commission wish t«) have that segregated? THE chairman: I do not think it is n^oaesary. MR ALGER: They made |1, 488.03. If you wish that done, I presuaiS the aoco\xntant can do that. THE WITNESS: It would not change the figures for the Grade B milk wholesale. It would simply complete the figures for a whole lot of other things^ The rate per quart handled at the country factories has been obtained by taking t^^ total quarts output of those estr liehjoients, and dividing that into the expense of running those establishments. Now, I have iiiuitiplied that rate per quart by the number of qjiarts entering into this wholesale business; but I have not multiplied it into all the other kinds of business. 19^1 THE CHAIRMAN: It aeezna to me the profits are not 8u£fioiently large to justify eight hours work. COMMISSIONER SCHOEN: The only thing that might be gained by it, Mr. Chairman, would be the ability to oompaxe the various profits and losses of the equivalent part of the industry in other companies. That is the only thing that could be gained by it,— nothing else. I do not think th-=i-t ie necessary. OOHHISSIOJTER WILLIAMS: This company is doing about one per cent of the total business. I do not think it is worth while. I would rather deal with a Isirgex oompsaxy. Those are the only companies that you have the total operations of to-day? THE WITNESS: Yes. OOi'UCI SSI ONER MILLER: Mr. ChairmaK> I would like to ask this witness one or two questions before he ie die- missed, when you are through with the examination. THE CHAIRlviiiN: Have you reached a point — MR ALGER: Yes, Mr. Miller can go ahead. THE CHAIRMN: Mr. Miller? MR WMILLSR: to. Roberts the three first companies that you have named you have examined their books to obtain the data to make uo the analyses which you have? THE witness: Yes. MR MILLER Yes. THE witness: It was not a complete audit. I did. not see receipts for everything that had been paid or aa 19S2 chedk up every item that had gone into their books? I took their accounts as l found them, and studied theu. far as the time parmitted to find what adjustments might be nee essary in order to make them show the true conditions. MR MILLER: Juat right there, Mr. Roberts fiwhat adjustments might ba necessary, what adjustments did you mak&7 THE witness: Take the Levy Dairy, They loss according to their books was $5,789*43. No entries had been made for depreciation. The depreciation charges that I have just mentioned in here, two per cent on concrete buildings and four per cent on wood buildings and so forth, I inserted in expense* ¥iR MILLER: Did you make any adjustment as to segregating the cost between the wholesale, the canned milk and the bottled milk? THE WITNESS: Their books show no segregation, no. m MILLER: That is the exact pcint I was getting at that their books do not segregate the cost, do they? THE WITNESS: Their books do not segregate the cost. MR MILLER^ Then how did you segregate them? THE WITNESS: I foymd *he expense of their country creameries, and divided that in proportion to the output of tho country oxem^vX^B that went into the various classes of sales. m MULER: And did you take all the country plazits of a given company in uaking that aggregation? int aiTNESS: Yea. "^'^'■^■^ ER MILLER: Yea. THE WITNESS: 1 took the total expense of country plants and dividfld +>,»+ <« aaviaed that in proportion to the qimntitiee that went into the various classes of bueineee. MR MILLER: And wae that all of the country plants Of the given company"? THE witness; It me. MR MILLER: Did you in any manner segregate the expeaseg of those plants that were pasteurising and bottling milk, from the plants that were not? THE WITNESS: I did not. Jm I^ILLER: Yes. THE witness: As to the ^ountry factories, the Levy Dairy pasteurises its zailk in the city. The others do very little bottled buainess. MR MILLER: I think that is all. m. ALGER: The Standard pastevjrise all their milk in the country, don't they? THE WITNESS: Yes. COMISSIONER WILLIAMS: Mr. Chairman, I would Xike to ask Mr. Roberts, in making vcp his statement, if he would itemize an item such as coi. try expense, which is here, for the Levy Company, ^5,071, whioh I understand does not include pasteurization or bottling or any truckage, ferriage, or the haulage of the railroads — thAt is $5,000, and th« total expense of ^76,000 for the milk-p^ what I would like to get at is what makes up auch an item in country expense for the Levy Company^ and where it bears so large a proportion to the total cost o£ the milk itself to the other companies, I would like to see what goes into that item. THE WITNESS; The figure you have just quoted has been the amount applying to Grade B milk for the wholesale customers) that is five thousand odd. The total of such expense s for the company, covering all of their business, is $9,331»46. Fow, of that there was $4,338.97 of labor COMMISSIONER WILLIAMS; What labor is there at a receiving station where they do no pasteurization or bottling? THE WITNESS: Mr. Levy can tell us whether they have some pasteurization in the country? The bottling, I think, is all done here. COMISSIONER WILLIAMS: I would like to ask iir. Roberts, if you have not in making that country expense of 15,071.37 — MR NATHANS; Pasteurization is all in the City, factory, isn't it? THE WITNESS: The bottling is all in the City. No, some of their milk is pasteurized in the ootintry. MR LEVY: Both places. COMISSIONER WILLIAMS: Well, have you got it there, Mr* Roberts? m ALGER. Just What is it, Mr. Williams that you want? OOM-.il SSI ONER WILLIMS: Just what ma^B up thia $5^000 country eapene©. COMKISSIOITER SCHOEN: What are the iteffis that make it up? COMMISSIONER SCHEDRICK: If you haven't the iteina, can't you get them and hand them in to-morrow? THE WITNESS: At the ootmtry can stations there is iOQj #335.25. Fuel, power and light |753.36. Labor ^3,196. 47, Maintenance, repairs, taxes and miscellaneous, $1,561. 57 o COMMISSIONER WILLIAMS: (Ehat is |13,000 a year for maintenance and taxes in country plants? THE witness;- That is at can stations, and then there is als® the country factories whose expenses amount to C^4, 389.91, consisting of labor ^3,031.50; fuel, power and light |939.11_j ice, |s77o35, and maintenance and mlsj^ellanfmas, 11,041.05. COMMISSIONER WILLIAMS: Now, tl,000 in each groTip, substantially, is an estimated amount of what you think shoxild be in there, is it not? THE WITNIISS: No, sir. You mean miscellaneous? COMMISSIONER WILLlilMS: .. . the maintenance. THE WI'rNESS: Maintenance, that is the expendi- tures actually entered on their books for maintenance. That does not include ny depreciation. Depreciation is included elsewhere. 19^6 Commiaeioaex Wiiliama: The depx^i cation charga of $1400 is in addition? THE WITNESS: Yes. COMMISSIONER WILLIAMS: In other words they spent about $ 13,000 a year keeping the factories up, and on top of that you allow |18,000 for depreciation, or two per cent on concrete factories. MR MILLER; Mr. Chairman, before adjournment, I have a few more replies to questionaires I would like to offer in evidence^ which came in during the day on the part of the producers if I may. &£R ALGER: How many country plants does the Levy Company maintain, or doi;*t your records show? THE Witness: My records do not show, MR ALGER: Well, you have completely answered iix. Williams' question about the country expense? Is there anything you care to add, if not, we will leave that. THE CHAIRMAN: We do not care to go into anything unless it is necessary for our purposes. MR ALGER: I simply want to answer Mr. Williams' question. THE WITNESS: I would add this, that the expense entered in their books for November '^nder these country stations, expenses were about norxoal, compared with the expenses that had been entered in previous months throughout th. year 1917. 19S7 ^ OOMMISSIOITER WILLIAMS: Plus your own suLlDwanoes from an aooounting standpoint. To make thie clear, I under stand, Mr. Chairman — and I do not question the method at all-— that the accountants added to the actvial Ooerating oxpenees certain allo^'.-anoes for depreciation and maintenanoe, which they thought should he included^ and they allowed pro rata for taxes and things of that sort and there - fore thiff- aocount represents aotual ejqjenditure plua the theoretical additions which the oxpext accountants thought should be added, to bring out the true cost of operation for the month. THE OHAIRI/iANJ I do not understand that they are duplicating other itegi4 (bf expense. IIR ALGER; As a matter of fact it doubtless reduced items of expense, because it apportioned items of expense which occurred in November, taxes coming along about that time. THE witness: I did not add any tiling in to get to this country station expens I would offer in evi- dence numerous affidavits as ti the cost of dairy feeds in the country. I see by the summary that the highest niamher on the report on any one feed is 28, COMMISSIONER MITCHELL: Judge Miller, are tisese pujtohases made by the makers od these statements? liR MILLER: I do not think they are, by the foria of the affidavit. They may be in gart, but it is to inijuire as to the prices charged by the retail dealers in the country. This showa for this number an average coat of |60,18 a ton, averSgod as those th^is morning were. (statements referred to and summary of same deceived in evidence and marked Commission's exhibit 67 of this date). COMMISSIONER WILLIAMS: How does that compare. Judge. with the figure this morning? MR MILLER: It ie a little* higher, Mr, Williams, I say. COMMISSIONER SCHOEN: About #1.50 to $2. 1990 MR mihm I thiBK eb» These lietB sent to the Dairymen', league bffice and I have just received them a few minutee aino^. COMMISSIONER MITCHELL: Judge, you have in your files the figures put in at the last meeting aa to the cost of separate cattle feeds? MR MILLER: I find I have not, Mr. Mitchell. I ^8 looking through my files since this aorning's recess, and I find I do not have them* OOMISSIONER MITCHELL: It would be helpful if we c have presented to ue the part of cost of those feeds most used* I think it would be more valuable to show whether the rise or fall in the fall of feeds that we know are used in largest amounts* MR MILLER: It strikes me, Mr. Mitchell, if that method would be satisfactory to the Commission, the most reliable and satisfactory evidence would be on the Dairymens League! on feed. These are so many different ingredients that are mixed and not all of them are used by all of the dairy^iien. Now, the price of the Dairymeaa League feed has decreased $;i a ton since Mr. Davidson testified to its value before this Commission before. I believe that that will represent a fair estimate of the present price of feeds. OOMISSIONER MITCHELL: Tha-: is, the feeds sold thr< the Dairymene League? MR MILLER: Through the Dairymens League,— the 1991 mixed feed. COKLIISSIOFER SCHEDRICK: Balanced ration. MR MILLER® Balanced ration. iCR KRONK: Mr, Alger, may I just laay a word there to draw the Comjadeaioner's attention to the fact that the advances in prices did not go into effect to the trades- iiatU the 6th of Janxiary. It is very diffio\ilt, and we have very few days affected by the high prices. We are working pretty close. It is pretty hard for us to get it right off the reel. We have nothing back further than the 6th of January. THE CHAIRlvIAN: The Conuaission will now adjourn the public hearing to 10 o'clock toOmorrow morning. (The Coruiuission then, at 4:30 o'clock P. M., adjourned the public hearings and went into executive session.) ■m '■mi!-