January, 1932 



THE I. A. A. RECORD 



Page Seven 



Social Justice Group Upholds Prbcfucers 



Cotnmisssion's Report Declares Contract of Pevely Dairy Co. *' Indefensible/' 



States Issues of Controversy 



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THE Social Justice Commission of St. 

 Louis in response to an appeal from 

 a religious leader, many of whose par- 

 ishioners are members of the Sanitary 

 Milk Producers Association who for- 

 merly supplied milk to the Pevely Dairy 

 Company, arranged conferences between 

 representatives of the Pevely Dairy 

 Company and the Sanitary Milk Pro- 

 ducers Association. v ^ -^ -^ 



At these conferences it became evi- 

 dent to all members of the Commission 

 that all of the issues which precipi- 

 tated the conflict could and should be 

 arbitrated. The Sanitary Milk Pro- 

 ducers Association agreed to arbitrate. 

 The Pevely Company refused to arbi- 

 trate. The Social Justice Commission 

 did not propose that it would serve as 

 an arbitration commission, but sug- 

 gested some impartial group on which 

 both sides could agree. ': V 



As a result of these conferences, and 

 as a result of research in the entire field 

 of co-operative marketing of dairy 

 products, the Commission issues this 

 statement: : v ; i, . : . \ 



States Issues 



I. TKat organizations similar to the 

 Sanitary Milk Producers Associa- 

 _ tion exist in many cities and func- 

 tion satisfactorily. 

 II. That such organizations are sanc- 

 tioned by acts of congress and 

 laws of Missouri and Illinois and 

 are subject to legal control. 



III. That in communities where such 

 organizations function, the price 

 of milk is not higher than in com- 

 munities where they do not exist. 

 Differences in price are generally 

 due to local conditions. 



IV. That the issues of the controversy 

 are as follows: 



(A) A new contract issued by the Pevely 

 Dairy Company on September 1, 1931, to mem- 

 bers of the Sanitary Milk Producers Association, 

 from whom it had been buying milk, pre- 

 cipitated the present "strike." This contract 

 bound the farmer to supply his milk to the 

 Pevely Company at a price which the com- 

 pany assumed power to. fix. The farmer 

 had no power even to cancel his contract. 

 This contract seems to us to be ethically 

 indefensible. Mr. KerckhofiF (president, Pevely 

 Dairy Co.) has admitted that it was an error 

 and he has given the farmer the privilege of 

 cancellation, but the Pevely Company retains 

 the power under the contract to set the price. 

 Were it not for the protest of the farmers* 

 organization, even the privilege of cancellation 

 might not have been extended. ;-■■-.. 



Request Is Just 



(B) The Pevely Company also refused to 

 permit representatives of the Sanitary Milk Pro- 

 ducers Association to check the butterfat con- 

 tent of milk sold to it by members of the 

 Association. The price of milk depends upon 

 its butterfat content, which is determined in 

 the first instance by the company at its plant 

 in the city. The Pevely Company is willing to 



permit each farmer to make his own check, but 

 this is impractical for thousands of farmers. 

 The request of the Sanitary Milk Producers is 

 just and equitable, and the Pevely Company has 

 conceded as much in writing. 



(C) The Sanitary Milk Producers Associa- 

 tion has as its purpose collective bargaining on 

 behalf of its members with the several distrib- 

 utors of milk in St. Louis. Such collective bar- 

 gaining has been carried on for more than a 

 year with the other distributors, and the desire 

 of the association to bring the Pevely Company 

 into the plan presents a fundamental, though not 

 the most immediate, issue in the controversy. 

 The existing plan in no sense "draws a ring 

 around St. Louis." It permits the distributors 

 to purchase as much milk as they please from 

 any source, at any price not higher than that 

 paid to members of the association. Moreover, 

 the presence of consumers* representatives at 

 the price conferences, which is an integral part 

 of the plan, is an important assurance to the 

 public against extortion. We of the Social 

 Justice Commission believe that the right 

 to bargain collectively is an inalienable 

 right of farmers as well as of w^orkers and 

 employers. That principle has been widely ap- 

 proved. Among the religious bodies which 

 have publicly approved it are: The Roman 

 Catholic Church, through encyclicals or other 

 ofScial pronouncements by every Pope begin- 

 ning with Leo XIII, the Federal Council of 

 Churches of Christ of America, the Central 

 Conference of American Rabbis, and others. 



Pevely Is Wrong 



(D) Under the plan which is followed in 

 the collective bargaining arrangement, a base 

 price for a portion of the milk applied by each 

 farmer is fixed by agreement, and the price for 

 the remainder depends upon the Chicago but- 

 ter market. The Pevely Company insists that 

 a price which varies with the Chicago butter 

 market is the only price to pay for all milk 

 sold. This price is subject to short-time fluc- 

 tuations and gives the farmer no assurance of 

 stability such as prevails in the retail price of 

 milk. The Sanitary Milk Producers have agreed 

 to arbitrate the whole matter of price basis. 

 It is not true that the price established by 

 collective bargaining is independent of mar- 

 ket forces, because necessarily it must be 

 adjustd from time to time according to 

 costs of production and market conditions. 

 Similar plans are in efFect in numerous of the 

 larger cities of the country, in which the pres- 

 ent retail price of milk varies from nine cents 

 to fourteen cents per quart. The price paid 

 by the dealers to farmers has been decreased 

 twice under the collective bargaining plan in 

 St. Louis. 



Does Not Apprcve Tax 



(E) Collection of dues in the association by 

 the dealers through withholding them from the 

 purchase price of milk, together with payment 

 of a correspondingly reduced price for milk 

 purchased from non-members, is objected to by 

 the Pevely Company. This practice his much 

 to recommend it. The money appears to have 

 been used for proper purposes. The Social Jus- 

 tice Commission, however, does not approve of 

 a virtual tax upon non-members of the asso- 

 ciation. We believe the producers association 

 should yield this point, and they have already 

 expressed willingness to arbitrate. 



(F) It has been charged that the Sanitary 

 Milk Producers Association are engaged in rack- 

 eteering. Violence against trucks and farmers 

 supplying the Pevely Company has taken place. 



This violence is deplored by all parties to the 

 controversy. We believe that the basic cause 

 is a sense of social injustice which provokes some 

 of its victims to reprehensible acts. .■•.;.,...■.• 



Starkloff's Moratorium 



V. That we regard the "moratorium" issued ' : 

 by Dr. Starkleff, which suspended one !. 

 of the city's sanitary milk regulations ^ ■ 

 only for the Pevely Company, as un- 

 justified, although it was declared in 

 good faith. The Pevely Company was . . 

 threatened with a shortage because of 

 the "strike." The city was threatened 

 with a disturbance of not over one- 

 fourth of its milk supply. There was a 

 sufScient total quantity of milk with ^ 



adequate means for distributing it, after 

 some readjustment. Although the ac- 

 tual quality of milk sold appears to have 

 been safeguarded, this suspension was 

 used and is being used against the farm- 

 ers* organization. ~ 

 It seems to be the intention of the Pevely 

 Company to set up a new group of milk pro- 

 ducers to replace members of the Sanitary Milk 

 Producers Association with whom it formerly 

 dealt. This is unjust to those who have 

 expended large sums, partly at the urging 

 of the Pevely Company itself, in order to 

 be able to supply the city with milk. 

 Not only is it bad social practice which ought 

 to be unhesitatingly condemned but it leaves 

 hundreds of families impoverished and socially 

 embittered. The public must know that the 

 milk producer in many localities, although to 

 a decreasing extent because of improvements in 

 transportation, must sell his fluid to the dis- 

 tributor who has a receiving station in his zone. 

 He is more or less at the mercy of that com- 

 pany. Unless he organizes with others, he must 

 remain in the company's power, because his in- 

 vestments are on land in the company's terri- 

 tory. To deny him the right to bargain col- 

 lectively is to force him to remain in this posi- 

 tion. Against such a condition American farm- 

 ers have the right to protest, and their protest 

 should be heard with sympathy. 



Entitled to Justice 



The Social Justice Commission has sought in 

 fairness to all and in behalf of the consumer, 

 producer and distributor to bring about arbi- 

 tration. It has sought to eliminate friction and 

 emotional resentment. In that it has failed. 

 The Pevely Company insists that there is noth- 

 ing to arbitrate, that its present producers are 

 satisfied. We are still concerned about the 

 principle in the controversy and about the fate 

 of the hundreds of producers and their depend- 

 ent families who now have lost their market 

 for fluid milk. They are entitled to justice. 

 This statement is our summary of the issues 

 as they appear to us. 



The report is signed by Professors FRANK 

 J. BRUNO, PERCIVAL CHUBB, RALPH C 

 FLETCHER, RALPH FUCHS, CHAS. L. 

 HODGE, JOSEPH KLAMON; by the follow- 

 ing clergymen: DR. GEORGE A. CAMPBELL, 

 D. R. CLARKE, DR. J. E. CROWTHER, 

 FATHER RALPH GALLAGER, DR. GEORGE 

 M. GIBSON, JR., DR. IVAN LEE HOLT, 

 FATHER JOSEPH HUSSLEIN, RABBI FER- 

 DINAND M. ISSERMAN, DR. M. ASHBY 

 JONES, BISHOP WILLIAM SCARLETT, FA- 

 THER THURBER M. SMITH, DR. JAY T. 

 STOCKING, RABBI SAMUEL THURMAN, 

 DR. WOFFORD C. TIMMONS, FATHER 

 RUSSELL WILBUR; and by Deans G. W. STE- 

 PHENS, SIDNEY E. SWEET. 



