Pasteurization didn't even arrive in the US until the 1890s so even if these cows had unadulterated milk, it would still be killing massive amounts of infants by feeding it to them.
In a place like New York City, without adequate pasture and no refrigeration in the first place so nessicating literal factory farming, there was no way to market milk that wouldn't be lethal at the time.
It's frankly baffling that anybody was drinking raw milk at all at the time. Usually you'd process it into yogurt or cheese unless you directly lived on a farm or had a breastfeeding problem (which would likely result in the death of an infant). This was known since ancient times. It's why raw milk consumption was mostly associated with peasant farmers for a very long time.
I guess they saw a market of poor rural immigrants who had lived on a farm and decided to swindle them to death.
One thing to keep in mind with this time period and public health, of course is life was still cheap in cities. This is the age of King Cholera.
Edit: As an interesting aside, distiller's grains are nowadays more popular with beef cattle farmers. They're high in protein since they've been spent for making ethanol and so are better for producing muscle than milk. They've also been suggested as a good human supplement since it's got all the good stuff of grain without the sugar, so here comes bachelor chow. https://en.wikipedia.org/wiki/Distillers_grains
The reason they were raising cows in the city in the first place is the wet grain will spoil if you try to transport it too far from the distillery. They were trying to make a buck on trash.