George Korfage, Southern Foods Sales, Inc. Carl Meyer, Durkee Famous Foods. Nate Gallagher, chairman of the Kentucky Legislative Committee, Brotherhood of Railroad Trainmen. Frank B. Bloemer, Bloemer Food Sales Co. W. B. Taylor, regional director of the Congress of Industrial Organizations for the State of Kentucky. Henry G. Meyer, secretary of the Progressive Grocers Association, Inc. G. W. Allen, Henderson, Ky., secretary-treasurer-manager of the Ohio Valley Soybean Cooperative. M. W. McGrath, Early & Daniels Co. Harold Miller, Louisville Soy Products Corp. W. T. Owens, president of the Advertising Club of Louisville. DEAR SENATOR: Your committee will soon have before it the highly controversial margarine question. Being in the wholesale food business and dealing with a great number of rural stores, I feel that I can tell you the feeling in this territory on this subject. It was very well stated to me today by Mr. Carol Walz, owner of the rural store in Lowell, Iowa-a community of probably 50 people. His business is principally with the farming trade. He says "I sell more margarine than butter and 80 percent of it goes to farmers, and these farmers are in favor of repeal." The Iowa farmer is a fair-minded individual and can certainly tell right from wrong. That positively is the way this problem should be decided-not on pressure. Washington has too often done the expedient thing. Why not do the right thing this time, which certainly would be to repeal these antiquated taxes and regulations. The butter lobby claims to be speaking for the farmers of Iowa.. I do not believe they do. If these farmers could speak for themselves I am confident that they would decide this problem from a viewpoint of right or wrong. G. D. PARKER, Vice President. Senator EUGENE D. MILLIKIN, Chairman, Senate Finance Committee, LINWOOD CREAMERY, Wichita 9, Kans., May 14, 1948. Senate Office Building, Washington, D. C. HONORABLE SIR: The entire dairy industry is putting its last hope and trust in your committee that we will receive adequate time and consideration so that all evidence can be presented fairly and without trying to stampede this legislation through the United States Senate. As a Senator from a neighboring State, I feel sure that you realize the extreme importance of this legislation; particularly to the 4,000,000 small dairy farmers in our country. So far most of the reasons that have been advanced by the supporters of the Rivers bill has been discriminatory taxes. Surely any tax or law that is devised to protect the American public from fraud isn't discriminating against anybody, and certainly this tax hasn't had any discriminating effect on the sales of oleo. As of today they are at an all-time high, but it is discriminating against the consumer when any imitation product, colored like butter and tasting like butter, can be palmed off as butter when there is a large difference in price. There are 65,000,000 meals served daily in public eating places in our country. What assurance will these people that eat their meals in restaurants have that they are eating genuine butter when there is no protection that will prohibit the serving of a substitute for the real thing? But regardless of all of the arguments on either side, there are a few facts that will affect the American farmer and housewife if existing taxes and regulations on oleo are removed. These facts should certainly be considered by your committee. First, the dairy industry as a whole is a savior of American soil, and it must be remembered that the wealth of this world lies in the top 6 inches of the world's surface. It is one of the few farming practices that puts back into the soil a great deal of the wealth that is taken out by cropping. Depletion of soil fertility is already one of the world's greatest problems. Many illustrations could be sighted where land depleted by single crop farming has been brought back to its original fertility by dairy farming. Nurtitionists are now learning that the actual value of our everyday food is largely determined by the fertility of the soil on which it is grown. Food grown on worn-out soils, being lacking in some of the elements necessary for good health. To depress the American dairy industry at this time is to further encourage soil mining. Second, out of the 4,000,000 American farmers, who own dairy cows, 1,250,000 of these farmers milk from 3 to 6 cows, and largely depend upon their cream checks for their ready cash. These farmers will receive a stunning fianancial blow, while 22 big corporations will profit. Third, the housewife who is today buying white margarine will still pay the same price, if the tax is removed, or the housewife who is buying colored margarine will save the 10-cent tax; that is if the present price of oleo isn't advanced. After the tax is removed; however, only 4 percent of the 700,000,000 pounds of margarine sold last year was colored. Therefore the actual money saving to the housewife is practically nil, but the repeal can certainly raise her grocery bill. Because any further reduction in our dairy herds will increase the price of fluid milk-cream-cheese and ice cream, which will cost the housewife far more than what she could hope to gain. Fourth, it is not commonly known that 40 percent of our beef and veal supply is traceable to our dairy herds. So further reduction in these herds will effect the price of meat to a higher level. Also it takes cowhides to make leather, so we can expect higher prices in shoes and other leather goods. Apparently, we have a big job in feeding most of this world, yet this legislation, if passed, can only help retard every form of agriculture with other forms of farming so highly profitable. Many farmers, particularly in the great Wheat Belt have already quit milking. Passage of this bill will further discourage dairying and let's not forget that during the depression, it was the dairy cow that kept the farmer going, and kept him off of relief. So it is a grave responsibility that you and your committee and every Senator as a lawmaking body have. The future welfare of every citizen should be considered, not just the powerful propaganda and the powerful lobby that has made this issue front-page The little man is represented by you and your fellow colleagues. They don't have millions of dollars to spend to present their side of this issue. They look to you and trust in you to look out for them. Therefore, Mr. Senator, as chairman of the Finance Committee, we again request that the dairy industry receive a fair and impartial hearing. news. Very truly yours. J. G. VESS, JR., Procurement Manager. STATEMENT OF B. B. DERRICK, SECRETARY-TREASURER OF THE MARYLAND AND VIRGINIA MILK PRODUCERS ASSOCIATION, INC., SENATE COMMITTEE ON FINANCE, MAY 18, 1948 Our organization consists of 1,537 member-producers throughout Maryland and Virginia, who supplied 391,547,270 pounds of fluid milk during 1947 to the Washington milkshed. We are filing in opposition to the removal of all restrictions on the manufacture and sale of colored oleomargarine. For more than 60 years dairy farmers and consumers have been protected against the fraud and deception incident to the unhampered manufacture and sale of this synthetic substitute for butter which competes with it so unfairly in the market place. As early as 1870 imitations of butter, compounded of low-priced oils and fats, were known in France. Shortly thereafter our American cities were deluged by these spurious products. The sizable butter market and the great disparity between the price of butter and that of the substitute product soon led to wholesale fraud and deception. By 1880 four States and the District of Columbia had found it necessary to enact legislation to protect their citizens. In 1886 the Congress was forced to fall in line with the 32 States which had passed anticolor laws. In that year it passed the Grout bill, taxing artificially colored oleomargarine 10 cents per pound and uncolored oleomargarine* onefourth cent per pound. Evasions of this law became rampant when it was learned that the use of palm oil in oleomargarine would give the compound a yellow color. When American agriculture turned against the manufacturers for using a foreign oil, they con ceived a concoction of sulfur and cottonseed oil to achieve the desired effect. It was then necessary to enact a more stringent color law in 1931 to stamp out these abuses. In the light of such a history of fraud and deceit it scarcely seems credible that the Congress would countenance the removal of these taxes-the only method by which effective control may be maintained, the public protected, and the farmer insured of a market for his product. We sincerely trust that this committee will exercise sufficient understanding and breadth of vision to perceive the irreparable harm that would be inflicted upon a large segment of our farm economy by this legisaltive experiment-the repeal measure here proposed. B. B. DERRICK, Secretary-Treasurer. Senator EUGENE D. MILLIKIN, FORT COLLINS, COLO., May 13, 1948. Chairman, Finance Committee, United States Senate Office Building, Washington, D. C. DEAR SENATOR MILLIKIN: You have among your many duties a very far-reaching responsibility thrust upon you and your Finance Committee members in the recent legislative move to pass the oleo law. As a long resident of Colorado, a graduate of its State college at Fort Collins, and for some 8 years its director of extension service, working in every part on agricultural development and farm home improvements, I may have accumulated sufficient background upon this very much discussed question to warrent consideration. The arguments on both sides are long and many, to be sure. The essentials are, I believe, that of avoiding insofar as possible substitution of one type of food product unknowingly for another. One, the oleo with its many and varied fat derivatives and its added synthetic vitamin A and color is made to simulate the other, butter, a strictly milk product. The one-quarter cent per pound on the uncolored and 10 cents per pound on the colored with attendant license fees, are simply controls in this protection required against unknowing substitution and fraud. Ordinary labeling does not suffice in this highly profitable substitution program. The introduction of synthetic vitamin A to oleomargarine on the same basis as butter, the duplications of churning procedures used for butter, simulating of flavors and fat processing all to the end of taking the place of butter, make these controls in our opinion absolutely essential until better controls are brought to bear. The citizenry of this Nation are dependent upon a sound, well-balanced agriculture. This program extends far beyond dairying. Break down the protection on butterfat in the form of butter, then "filled" milk, ice cream, cheese and synthetic substitutions in these dairy products are sure to follow in rapid sucession. Every milk product is closely interrelated and any distress on one is soon felt in all others. May I mention two more closely related experience of background on the above. On leaving State college my first work was that of assisting the internal revenue agent, Mr. Love, of Denver, in tracking down the remaining moonshiners of oleomargarine (those who color and sell as butter). They were the last of desperate violators in Colorado. Next we protected with legislation against "filled milk” substitution. My hope from all this background would be not to see opened this field for substitution on these widely produced farm products in that our agricultural economy will suffer and no one in particular will benefit beyond the processors, chemical houses, and vendors of these synthetics. For the good of all I will be grateful if some contribution to these problems may I have been made in the above. Good luck. Sincerely yours, R. MCCANN. Senator EUGENE D. MILLIKIN, MCDONALD COOPERATIVE DAIRY CO., Senate Office Building, Washington, D. C. DEAR SIR: Oleo legislation will change American agriculture so that we will be a cereal-eating people rather than a meat-eating people. With the reduction in soil fertility it is questionable what the nutritive value of the cereal will be. Naturally this will not happen overnight, but it is definitely in the picture if dairy producers are to be discouraged by the passing of oleo legislation. It seems to me that you must have heard all of the pros and cons of this question by now. To me your problem is one of weighing the evidence and putting the emphasis on the right arguments. Dairying is the backbone of American agriculture. To me, anything that hurts dairying hurts agriculture. Anything that hurts the farmer as much as this legislation is bad for the United States. I know that your committee is busy, but I do hope that they weigh the evidence carefully, and not be swayed by the $6,000,000 propaganda campaign that has been running for the past 12 months. Yours very truly, MCDONALD COOPERATIVE DAIRY CO., CINCINNATI, OHIO, May 18, 1948. Chairman EUGENE D. MILLIKIN, Senate Committee on Finance: Understand Joseph Fichtner, master of Ohio Grange, indicated that we Ohio margarine manufacturers are opposed to H. R. 2245 because of the present Ohio law. Certainly we favor immediate enactment of H. R. 2245 and Ohioans are using every bit of initiative to repeal Ohio prohibition against manufacture and sale of yellow margarine. Witness had no right or authority to reflect our views in any way on this matter and we desire this telegram be inserted in the record. Hon. EUGENE D. MILLIKIN, Senate Office Building: J. P. WHITEHURST, NILES, MICH., May 19, 1948. Milk producers in every State will deeply deplore their inability to present their cause because of short time allotted them for hearing on oleo issue we honestly request that hearings be continued until a fair presentation of the issue can be made. W. G. ARMSTRONG, Master, Michigan State Grange. MILK DRIVERS AND DAIRY EMPLOYEES UNION, LOCAL No. 471, Senator EUGENE MILLIKEN, Senate Office Building, Washington, D. C. DEAR SIR: I have been informed by the Secretary of our Midstates East Coast Dairy Workers Conference, Mr. Frank Gillespie, Chicago, Ill., that, because of time limits placed on the oleomargarine hearing before the committee, it will be impossible to appear before your committee to present our views. Therefore, I am submitting them in writing to you. We are not opposed to the sale of oleomargarine, but we are opposed to oleomargarine being colored the same as butter. Our position is based on the following facts as we see them: 1. The consuming public should be able to detect oleomargarine from butter without a laboratory test. 2. If oleomargarine is colored like butter, it invites fraud, particularly in public eating places and bulk sales. 3. Successful imitation would seriously damage the future of dairy workers and dairy farmers in our State. 4. Oleomargarine today is sold at an exorbitant price, based on the cost of ingredients and the labor costs in processing. 5. Successful imitation by oleomargarine would principally benefit approximately 24 large business combines, and would injure the consuming public and the millions of dairy workers and dairy farmers alike. I am enclosing a copy of a resolution adopted by a Statewide Dairy Workers Conference on May 4; and on their behalf I am urging you and your committee to consider our views on this subject. Very truly yours, GENE LARSON, Chairman, Minnesota Conference of Dairy Workers. RESOLUTION Adopted at Stewards' Conference, Hotel Dyckman, Minneapolis, May 4, 1948 Whereas, the dairy industry is the basic industry of our State, and Whereas, butter is a staple and healthful food product, essential to the American table menu, and Whereas, there is no substitute with the same health-giving ingredients, and Whereas, today certain interests are sponsoring a bill in Congress permitting oleomargarine manufacturers to color oleomargarine to imitate butter, and Whereas, we do not oppose the sale of oleomargarine if not colored like butter, but do oppose oleomargarine being colored to immitate butter, therefore, be it Resolved, That each delegate write to their Senators, asking them to vote "no" on the bill permitting oleomargarine to be colored the same as butter: be it further resolved, That a copy of this resolution be sent to Senator Eugene Millikin, Chairman of the Senate Finance Committee. Hon. EUGENE D. MILLIKIN, MILWAUKEE COOPERATIVE MILK PRODUCERS, Chairman, Senate Finance Committee, 312 Senate Office Building, Washington, D. C. DEAR SENATOR MILLIKIN: Thank you for your wire of May 11. I am sorry that you have to limit the oleomargarine tax bill hearing to 2 days, for I do not think that adequate testimony can be given in so short a time. However, I am submitting the following statement as you suggested, and trust that it will get consideration by your committee: Urban consumers should be interested in close regulation, if not a prohibitive tax, on all imitations of dairy products for their own protection and the protection of the people who will follow them. History is replete with examples of what happened to civilization when land has been eroded and blown away by the wind because the soil has not been protected. The best protection for soil is grass which keeps water from washing it away and wind from blowing it. In order to induce farmers to keep more land in grass, a fair price for livestock products must be paid and butter cannot be produced in competition with vegetable oil and oils imported from the Orient. When the 10-cent tax on colored oleo was levied it was thought that this tax would keep colored oleo from being sold, but that is not the case today, for oleo can be produced so much cheaper than butter that the manufacturers could color their product and pay the tax and still make plenty of money. The question, I think, before Congress is whether it ought to preserve the soil that we have left (and we do not have too much left in some of our States, because of soil depletion) by inducing farmers to keep more land in grass, which they will not do unless they get fair returns from the products of the animals that eat the grass. Congress by such action, would protect all of the people, and on those grounds I say that a prohibitive tax on colored oleo is justified, and not from the narrow standpoint of helping the farmer. In other words, taxing oleo so that butter may bring fair enough returns so that farmers will keep livestock in large number is the sound ground for taxing dairy imitations. Congress should bear in mind that removing the tax on colored oleo will open the door to any number of frauds in the manufacture and sale of foods. There is no question that if colored oleo is tax-free, vegetable fats will be used to |