Some of the arguments advanced by the dairy interests for retaining these taxes are:

“(1) Trivial benefits that might be derived from repeal of oleo taxes would be far outweighed by the damage to our agricultural economy and consumers' interests

* * *

"(2) Repeal of the laws would open the doors to fraud on the consuming public.

"(3) Oleomargarine is not entitled to the color yellow, which is butter's historic trade-mark.

"(4) Repeal of the oleo laws would set the precedent for other imitation foods."

*

*

the well-being and prosperity of my district is dependent on the welfare of the dairy farmer, and I am on his side." (April 26, 1948, pp. 49844986.)

Representative John W. Byrnes (Wisconsin)

This legislation is a crippling blow to the dairy industry without which this Nation could not long remain strong and prosperous. The purpose of this legislation is to increase the sales of an imitative product by legitimatizing its imitation.

Greatly increased sales of oleo will cause greatly reduced sales of the genuine product-butter. Higher milk prices and higher meat prices will follow. We cannot afford a decline in the total production of milk when the number of milk cows has already decreased so much while the population has increased.

This legislation would give full legitimacy to an imitative product; it would strike at farming closely associated with sound, solid conservation practices; it would aid 26 margarine manufacturers and mean ruin to the 2,000,000 small butter producers; it should be soundly defeated. (April 28, 1948, pp. 5126-5127.) Representative Clevenger (Ohio)

Mr. Clevenger, opposing removal of the tax, pointed out the unusual alignment of people and groups on this question of "oleomargarine colored yellow in imitation of butter." Some of the "strange bedfellows" are the Cotton South and the CIO, Harry Truman and Henry Wallace, and the Consumers' League and 26 big Wall Street corporations that make oleomargarine. Some groups expect the price of the product to go down, but the Cotton South hopes to get higher prices for its cottonseed oil. Both cannot happen; 5,000,000 farm families wil be left out in the cold. (April 26, 1948, p. 4962.)

Representative Carl T. Curtis (Nebraska)

The consumers as well as the farmers are "due for a drubbing" if the present Federal tax on oleomargarine is removed. The consumers will suffer because the price of colored oleomargarine will tend to follow butter prices even more closely than at present. The tax collected at present on uncolored oleomargarine is well spent for the policing of the manufacturers and distributors of oleomargarine to protect the consumer from fraud. The regular cream check kept many farmers going during bad times. Oleo and butter cannot and never should be put into competition with each other. (April 26, 1948, p. 4964.) Representative Glenn R. Davis (Wisconsin)

The passage of this legislation will lead to grievous abuses, attrition of our national supply of animal fats, deterioration of the American livestock industry, and depletion of our soil resources.

"How can the cost to any consumer be lessened by the removal of a tax when that tax is now being evaded simply by refraining from coloring oleomargarine yellow?"

Oleomargarine has imitated butter in body, texture, melting point, vitamin A content, and butter flavor. This Federal taxation preserves the right of the American people to be able to differentiate between butter and oleomargarine. Unfair competition for the butter market would have a serious effect on the livestock industry, and there is no substitute for this industry when it comes to retaining and developing soil fertility. (April 28, 1948, p. 5115.) Representative Alfred J. Elliott (California)

Here

"I do not believe we are approaching this legislation in the right way. you have two great industries that should be partners. One reason why cottonseed is so scarce today is not because it is being used in the production of oleo but because cottonseed is being fed to dairy and beef cattle.

* * *

"I am very fearful that the legislation we are about to adopt will, through the years, prove to be injurious to the dairy business. After all, by protecting the dairy industry we are preserving the welfare of the people on the whole, because there is no substitute for milk and its byproducts. The dairy industry provides steady employment the year around in contrast to the seasonal employment of about every other form of agricultural endeavor." (April 28, 1948, p. 5111.)

Representative Chester H. Gross (Pennsylvania)

This legislation is wrong from an economic standpoint. It represents an assault on the dairy industry, which has been the greatest mainstay to soil conservation and improved farming in America. We have now 2,000,000 less cows than we had 2 years ago. This is reflected in smaller milk supplies, dairy supplies, meat supplies, and in the smaller supply and higher cost of cowhides to the shoe manufacturers.

Cotton and certain other crops raised in the South are subsidized, and so those farmers do not make the same effort as dairy farmers.

Mr. Gross, in an effort to safeguard the public health, offered an amendment prohibiting the use in the manufacture of oleomargarine of any cottonseed grown in areas other than those certified to be free from pink boll weevil worms. This amendment would help make oleomargarine a clean, safe, and appetizing product. The amendment was declared not germane.

Mr. Gross supported the Hill amendment (permitting oleomargarine to be colored yellow if it were molded in a triangular shape or any shape different from a square or a rectangle), saying that the dairy industry is entitled to that recognition and the housewife to that protection. (April 26, 1948, p. 4971; April 28, 1948, pp. 5125, 5108.)

Representative John W. Gwynne (Iowa)

1. The repeal of the Federal tax on oleomargarine will accomplish very little good for anyone and is certain to do positive harm to certain groups throughout the country as a whole.

2. "In spite of the great propaganda to the contrary, the repeal of the law providing for a 10-cent tax on colored oleomargarine will accomplish very little for the consumer. In the first place, it is the general opinion that the repeal of the tax will be followed by an increase in the price of oleomargarine substantially equivalent to the tax.

"In the second place, some 23 States now have laws either prohibiting the sale or manufacture of colored oleomargarine or putting drastic restrictions on the sale of manufacture. Those State laws will not be affected by any action taken in Congress."

* * *

3. "Any benefit that repeal of the tax would bring to the cotton States would be lost when competition begins in earnest with certain foreign oils. The cottonseed people cannot compete with these imported oils on any basis favorable to cottonseed."

4. Soil conservation is a necessary program in this country. The dairy industry makes a great contribution to the program of soil conservation. "If for no other reason, that is sufficient justification for the legislation now on the statute books designed to protect the dairy industry." (April 26. 1948, p. 4983.) Representative Charles B. Hoeven (Iowa)

Independent research laboratories have established the fact that oleomargarine cannot be made yellow without adding color. Statements formerly made that a natural yellow oleomargarine could be made from cottonseed and soybean oils if it were not necessary to bleach these oils to conform with the present Federal tax law on colored oleomargarine are without justification.

"The

* *

* truth in this respect is that the oleomargarine industry would have to bleach their oils even if there were no oleo tax laws on the books. The oleo manufacturers are forced to bleach these oils to remove undesirable odors, flavors, and colors, like dirty white and green." (April 26, 1948, p. 4979.)

Representative Clare E. Hoffman (Michigan)

For years through protective tariffs we have protected and subsidized industries. Now, when it is proposed to continue protection to the farmers, it is said that the dairy farmers shall be discriminated against in favor of the industries of the South. Those who say they are acting in favor of the consumers are actually in favor of the cottonseed-oil interests. This is shown by the opposition to the Hill and Case amendments. Those who oppose these amendments are not content

with permitting the oleomargarine people to take the butter market which has been built up by dairy interests. When a proposition (Hill and Case amendments) is offered which will prevent fraud, they object. (April 28, 1948, p. 5109.) Representative Merlin Hull (Wisconsin)

In opposing repeal of the taxes, Mr. Hull pointed out that the present laws affecting oleomargarine, with but one slight amendment, have been in effect for nearly 60 years, and no other form of protection for the dairy farmer has been suggested.

People have been led to believe that they are being taxed unjustly. Actually, of the more than 600,000,000 pounds of all oleo made in this country last year, less than 18,000,000 pounds were taxed the 10 cents per pound on colored olea.

It is alleged by Fortune magazine that over 40 percent of all the oleo made in this country is produced in plants owned by a British cartel which has monopolistic control over the palm oil, coconut oil, and other vegetable oils of the world. In a few months, foreign oils may begin to flow into our ports.

"The oleo manufacturers want to make their product yellow in order to imitate butter and take over the table-spread market in America. The consumers will not gain, but the farmers will lose." (April 26, 1948, pp. 4992–4993.)

Representative Henry M. Jackson (Washington)

"The removal of all taxes on oleomargarine and granting oleo manufacturers complete freedom to sell their product, colored or uncolored, as imitation butter would be just as harmful and unfair to city consumers as to farmer producers.' The dairy farmer has an investment to protect and in this sense is a smallbusiness man, and, like all small-business men, he is entitled to protection from powerful interests competing unfairly with his goods and services.

66* * * Butter is the cornerstone of the dairy farmer's economic structure. To have enough milk to meet fluid demands in the slack season requires an excess of milk in the flush season. Much of this surplus must go into butter production. If butter could not be produced profitably, farmers would naturally have to reduce their herds, and the consequent shortage of milk in the slack season would be aggravated and tend to raise fluid-milk prices.' On the other hand, tax removal would have inconsequential effects on the total sale of soybean and cottonseed oil, since oleo represents less than 3 percent of cash farm income. In addition, the dairy cow has made a valuable contribution to soil conservation.

If these taxes are removed, uncolored oleo will probably go off the market and the price of colored oleo will increase more than any tax saving. "The consumer will not save, and the United States Treasury will lose, but the oleo manufacturer will increase his already exorbitant profit."

It has been predicted that we will lose another 2,500,000 head of dairy cattle in the next 3 years if the Federal taxes on oleomargarine are repealed. prices will soar. (April 28, 1948, pp. 5127-5128.)

Representative Ben F. Jensen (Iowa)

Meat

Mr. Jensen maintains that the manufacturers of oleomargarine will propagandize their product to the end that many American people will be led to believe that real butter is unhealthy and that eventually the price of oleomargarine will be higher than that of butter. (April 26, 1948, p. 4987.)

Representative Frank B. Keefe (Wisconsin)

Mr. Keefe opposes repeal of the Federal tax on oleomargarine for the following

reasons:

1. The housewife has no assurance that the price of colored oleomargarine will be reduced in the event that the tax is removed. The following example may be cited in proof of this point. In a Washington, D. C., store recently uncolored oleomargarine was selling for 41 cents per pound; colored oleomargarine was selling for 55 cents per pound, a differential of 14 cents, while the Federal tax on colored oleomargarine is only 10 cents per pound. It is apparent that there will be no reduction in price. "The price of oleomargarine will follow the historic price of butter all along the line."

2. In the event that the Federal tax on colored oleomargarine is repealed, oleomargarine manufacturers will most likely use imported copra oil, which can be purchased for a fraction of what it costs to manufacture their product out of soybean or cottonseed oil.

3. The Federal tax on colored oleomargarine is the consumers' protection against the fraudulent sale of oleomargarine as butter.

4. The Federal tax on colored oleomargarine protects manufacturers of oleomargarine against misrepresentation of their product to the public. The law protects the producer as well as the consumer.

5. The enforcement of the tax collection is placed within the jurisdiction of the Bureau of Internal Revenue. The law providing for the tax on colored oleomargarine provides greater protection against fraud than the Pure Food and Drug Act because of the fact that this act covers only shipments in interstate commerce.

6. Taxes on uncolored oleomargarine are not burdensome. The cost of all these taxes, including license fees paid by retailers and wholesalers, to a family that consumes 3 pounds of oleomargarine per week (156 pounds per year), would amount to about 40 cents a year, or less than 1 cent a week.

7. The natural color of butter is always yellow. During some seasons the color is less yellow than in others. Color is added only for the sake of uniformity and not to imitate some other product.

8. "It is impossible to produce a natural yellow oleomargarine from domestic oils." In order to produce a yellow oleomargarine it must be colored.

9. Farmers are not benefited by the oleomargarine industry. During 1946 the American farmer could attribute only about two-tenths of 1 percent of his income to farm products used in the manufacture of oleomargarine.

10. Repeal of the tax on colored oleomargarine will not help the southern cotton farmers. Records reveal that dairying and other competing interests are more important as sources of cash income to the farmers of the South than oleomargarine.

Milk is a

11. Butter has long been the balance wheel of the dairy industry. seasonal product with great surpluses accumulating during periods of high production. The bulk of butter is made during such periods. This butter can be stored away and used during periods of low milk production. Without the stabilizing influence of butter consumers would be deprived of an adequate supply of fluid milk during periods when milk production is low.

12. "The dairy industry is the only type of farming that goes with a sound soil-conservation program. From that standpoint alone it is to the interests of all America to see that this great industry is not destroyed." (April 26, 1948, pp. 4964-4967.)

Representative William Lemke (North Dakota)

Mr. Lemke opposes the repeal of the tax on oleomargarine for the following

reasons:

1. "There is only one reason why some of the manufacturers of oleo want to steal the trade-mark of butter, and that is to perpetrate a fraud upon the public. They want to color their product yellow so that the consuming public will not know the difference between it and butter."

2. The natural color of oleomargarine is not yellow.

3. "I have no objection to oleo provided it is offered in its natural color, or any other color except the trade-mark of butter-yellow. If anyone wishes to deceive themselves, and do not like the color white, let them have brown, green, or pink oleo, or any other color, but let this Congress not become an accomplice to a fraud-to deception."

4. The dairy industry contributes a great deal toward the building of a balanced economy, but the farmer and his family get less for providing the public with a balanced economy than those who work in the cities. (April 26, 1948, p. 4990.)

Representative George MacKinnon (Minnesota)

1. There is nothing in this legislation that would aid 90 percent of the consumers of oleomargarine in America. For this reason "this legislation should be opposed if for no other reason than the fact that it is not honest legislation."

2. The reason that this legislation will not benefit the great majority of consumers is that 90 percent of the oleo that is consumed in this country is not subject to the 10-cent tax.

3. The removal of the 10-cent tax on colored oleo may not have the desired effect of reducing the price of oleo even in areas where it can be sold. Producers of oleo would probably sell the colored product exclusively and might take advantage of the opportunity to raise the price above that now charged for the uncolored product.

4. If the farmers' market for butterfat is removed or seriously interfered with the result may be that the farmers will be forced to increase the price of milk. The price of meat would also be increased because dairy operations would be decreased.

5. "The net result of this legislation in the long run will be to increase the price of oleomargarine to the majority of consumers, to increase the price of milk, to increase the price of meat, and if that result is a benefit to the consumers I fail to see it. The only people in America who would benefit from this legislation would be the oleomargarine manufacturers and they would do so at the expense of the consumers and to the detriment of the dairy farmer's honest market."

6. "To permit the artificial coloring of oleomargarine and to permit the sale of oleomargarine under such circumstances that it cannot be distinguished from creamery butter is a fraud on the purchaser and is unfair competition which the farmers of this Nation should not be required to face." (April 28, 1948, pp.

5112-5113.)

Representative Earl C. Michener (Michigan)

Margarine has been developed over the years into an imitation of butter. Its manufacture and sale is regulated in many States. The State laws did not happen overnight and are time-tested.

It is not fair competition to doctor and color margarine so the purchaser is deceived and does not know what he is getting.

The vegetable-oil industry and the dairy industry are to some extent interdependent. "For instance, in 1946 the cotton farmers received $21,000,000 from oleomargarine manufacturers for cottonseed oil, but during the same year the same farmers received $31,000,000 from dairy farmers who fed cottonseed meal to their cattle; also soybean growers received $23,000,000 from oleo manufacturers, while they received $55,000,000 for soybean products fed to dairy cattle." (April 28, 1948, pp. 5099-5100.)

Representative Karl E. Mundt (South Dakota)

66

* * it seems clear that the oleomargarine trust feels justified in spending vast sums of money in an effort to eliminate the tax upon colored margarine so that innocent consumers can be more readily deceived into accepting and using oleo instead of the more wholesome and nutritious product of butter.' Since it seems apparent that the only reason the oleo trust wants to color its product yellow is to make it look like butter, there can be no valid objection to the maintenance of a tax upon such a coloration process.

There is nothing distasteful or repugnant about such foods as vanilla ice cream, angel food cake, and mashed potatoes which happen to be white in color.

66* * * I think this legislation should be defeated and the tax on colored oleo retained since it helps protect the consumer againt deception and adulteration and since it aids butter makers in their long fight to raise and maintain the standards of their product against unfair competition and against fraudulent imitation." (April 26, 1948, pp. 4970-4971.)

Representative Reid F. Murray (Wisconsin)

Fourteen of the largest dairy corporations in the United States made $4,000,000 less than they did the year before. The manufacturers of oleomargarine are making two to seven times the profits of 1940. “If they are making three times as much oleo and up to seven times the net profit they did in 1940, I do not see why they have been so eager to obtain legislation that gives them still more favorable legislative consideration when they now have more legislative protection than is provided the dairy people."

The antilivestock attitude of the present administration is illustrated by its foreign trade program. Funds received under section 32 of the AAA act are used for disposing of surpluses and for finding new uses for agricultural products. The greater part of these funds are received from livestock products, yet the funds are spent to subsidize cotton and other nonlivestock and soil-depleting crops. The duty on livestock products has been lowered so as to increase their importation.

The consumer is being squeezed and must pay more while the farmer receives less for his products. The handlers of dairy products are just about the only corporations in the United States that showed less net income in 1947 than in 1946.

“Every drop of oil in every pound of oleo is subsidized out of the Federal Treasury. The dairy cow stands on her own four feet, but her products are compelled to compete with a federally subsidized imitation and not a substitute."

If this bill becomes law and if the price of oleomargarine is 10 or 15 cents higher than at the present time, the American housewife may feel she has been 76269-48-3