168 CONFERENCE ON MILK PROBLEMS 



nine cent milk went into effect at all, they made profits of 

 $2,617,029.40. These were net profits. Everything had 

 been charged off, even a large amount for depreciation. That 

 means that for that year, on the capital invested in that com- 

 pany, they paid 28 per cent dividends. That was done on eight 

 cent milk. 



During their ten years of existence, they have paid on their 

 preferred stock, every year, six per cent, and nearly every year, 

 on their common stock, ten per cent, and they rolled up a 

 surplus of $8,824-,230.00, on eight cent milk. 



Now, I will take up Sheffield. That is probably more il- 

 luminating, because the figures are smaller, and we can under- 

 stand them, perhaps, better. 



The Sheffields were organized about eight years ago. The 

 capital stock was five hundred thousand dollars. Two hun- 

 dred thousand dollars was issued for tangible assets. The 

 balance was issued for good will merely a balancing entry, 

 as Mr. Scudder testified again, or "water," as you and I would 

 call it. For the year ending February 28th, 1909, after de- 

 ducting all charges and expenses of every kind and nature, 

 Sheffield made profits of $221,000.00, and further showed net 

 earnings for the eight months ending October 31st, 1909, after 

 deducting all charges and expenses of every kind, of $257,- 

 000.00. 



Remember that these figures were given for the period up 

 to October 31st, 1909, the day before the price was raised 

 to nine cents. Those net earnings of $257,000.00 were for 

 eight months. That is one hundred and twenty per cent in 

 eight months on the original capital invested, of two hundred 

 thousand dollars, and yet they could not make sufficient profit 

 on eight cent milk, and it was necessary to raise the price. 



This company has been in existence about eight years. Dur- 

 ing the entire time that it has been in existence, it has nearly 

 every year paid, on its entire stock, including water, twelve 

 per cent dividends. In the year 1909 1 , up to the time of the 

 investigation, they paid twenty-two per cent, and during 

 that eight years, on the original investment of two hundred 

 thousand dollars, they have rolled up a surplus of $962,000.00 

 on eight cent milk. The poor milkman is indeed to be pitied ! 



Now, for the situation, what is the remedy? It is a prac- 



