Senator EUGENE MILLIKIN, ORD COOPERATIVE CREAMERY CO., Chairman, Senate Finance Committee, Washington, D. C. DEAR SIR: Thank you for your telegram of May 12, giving us an opportunity to explain a few of our views on this subject. This creamery services over 1,000 of the butterfat producers of this locality. It was born over 20 years ago due to the adverse condition of the dairy industry in this locality. We have done considerable toward improving the quality of cream and the conditions for the production and manufacture of butter. By getting and retaining as much of the selling price of butter as we possibly could, we have enabled the farmers to stay in this business. There is no question but what the production of butter is for the well-being of the young people and in fact of all the people of this country. We have continually met with the competition of oleo. During the worst days of the drought and depression we have had an opportunity to see how important this industry was to the farmers of Nebraska. They would come in with their little pails of cream. Practically all of these cream checks were cashed at grocery stores or places where clothing, drugs, etc., could be purchased. This was their only regular source of money to buy these items, most of which were produced in other sections of the United States. We feel certain that at times many of the farmers would have had to leave this country had it not been for this small regular income and if it had not been for the tax difference between butter and oleo. If they had remained they would not have been able to even buy as much of the things produced in the city and other parts of the United States as they did. This would have hurt the economy of other sections far more than the repeal of this tax would now help them. It seems a shame now, in this time of uncertainty, to readjust the entire economy as between butter and oleo. I could give you examples and many other reasons why this tax should not be removed, but I am trying to make this letter reasonably short. Very truly yours, To the Honorable EUGENE D. MILLIKIN, EMIL A. BABKA, Manager. SPOKANE 8, WASH., May 12, 1948. Chairman, Finance Committee, Washington, D. C. DEAR MR. MILLIKIN: I am qualifying as representing the dairy interests of the Inland Empire of the State of Washington and northern Idaho. It is the opinion of the dairy interests mentioned that the commonly known Rivers bill for the repeal of the tax on oleomargarine is not in a true sense a tax-repeal bill, but an "escape and privilege" bill instead. It is believed here that should the tax be removed it would have no effect on the price of this socalled butter substitute but instead the main object is the privileges to be reaped thereafter. It is felt any repeal of the measure now existing would be a blow at the very foundation of dairy products. Butter has always been a basic factor in the establishment of market values of practically all dairy products as well as a symbol of national import since it is estimated that fully 35 percent of all farm income is derived from the dairy industry. As for the Inland Empire it is believed that one out of every 20 families are supported directly or indirectly by the industry. There is not a member of the industry in the Inland Empire who objects to the sale of oleomargarine on its merits for just what it is. But here is the picture as we view it: Butter, a genuine article of food from the God given dairy cow, or: oleomargarine, a derivative from soy beans, cottonseed oil, coconut, or what have you, milk flavored, vitamin fortified, artificially colored, preservative allowed, so called butter substitute for the genuine article. Since when has America become an "ersatz" nation? Fifty thousand Frenchmen can't be wrong. Try it in France the cradle of oleo. Why don't the pros for oleo come in with clean hands and tell the American people through their vast advertising propaganda that their product must be artificially colored, vitamined and flavored to taste and look like butter. The whole matter smacks of deceitful imitation and fraud placed before our Congress for legalization. And 76269-48- -24 by the way, how about the long record of fraud and deception connected with this so called "butter substitute"? It is the earnest hope of the dairy industry that protective measures may still be maintained and that when the family asks for butter they can get butter and when they want beef they don't get horse meat. DEAR MR. CHAIRMAN: We earnestly request the Senate approve the House bill repealing the tax on oleomargarine. Butter production way down-margarine must be freed. The bipartisan action of Congress to pay unemployment benefits to many million workers; the certainty the coverage will be extended, and the equal certainty that Congress will soon establish some form of health insurance, makes it imperative that Congress facilitate provision of adequate diets, and remove every barrier to such provision. The approximately $6,000,000 of taxes on oleomargarine collected by the Federal Government and the retailers' license fees, very definitely restrict the consumption of oleo. They should be ended. Government figures show There is less than one-third enough butter for an adequate diet. In 1946, the butter supply was 711,000,000 pounds-nearly one-third less than before the war. In 1896, butter production was 22.2 pounds per capita; in 1946, it was only 10.6 pounds, or less than half as much. Although consumption of fluid milk had by 1946 increased 36.7 percent over prewar years, it was 100 quarts per person short of the "adequate diet" suggested by the House Economics Association. The Iowa State College of Agriculture at Ames, reported that one man-hour will produce 13.3 pounds of soybean oil compared with only 1.5 pounds of butterfat. The shift of milk away from butter gives dairymen a larger income, and consumers greater nutritional values. It leaves however, a dietetic vacuum, in spreads for bread, and for use with other foods. It is vital ot make available larger quantities of oleomargarine, at a fair price. Not only do taxes and retailers' fees restrict the supply of margarine, but the severe penalties for violation of rules deter many small grocers, who don't readily grasp detailed legal phraseology, from carrying it in stock. There should be freedom for margarine-to substitute for nonexistent butter. Yours sincerely, BENJAMIN C. MARSH, PROGRESSIVE FARMERS OF WISCONSIN, Senator EUGENE MILLIKEN, Chairman, Finance Committee, United States Capitol, Washington, D. C. DEAR SENATOR: Various bills proposing revised oleo legislation are so unfair to the general public, to the dairy farmer, and to all types of agriculture that it is impossible to state all of the facts in less than volumes of written material. Agriculture is the basic industry of our Nation today. Dairying is the largest source of income in our diversified agricultural industry. The effects of proposed oleo legislation, if passed, would be so far reaching the effects would upset the whole basic economy of the Nation. I wish to make a few brief, concise statements against removal of the tax on colored oleo on behalf of the numerous farm people that I represent. Butter is not too high priced; it is one of the cheapest sources of nutrients. Its price varies with cost of production, supply, and demand. Olea prices vary with butter prices. Butter definitely has definite food nutrients essential to health that are not contained in oleo. Regulations now permit oleo to be fortified with vitamins flavored like butter and preservatives to be added. Now certain interests further want to hoodwink the consuming public by imitating butter color, so that oleo may be a complete imitation of butter. This would be a complete return to barbarism when the might of the oleo interests would eliminate the rights of millions of honest, hard-working dairymen and encourage fraudulent practices upon the consuming public. Inflation and high food costs would spiral higher if oleo taxes were removed. This would come about through the elimination of vast amounts of dairy cows. Byproducts from the butter industry furnish buttermilk and skim-milk feeds which are very essential to the production of eggs and the feeding of poultry and hogs. Dairying supplies vast amounts of meat to packers through culling of herds and sale of veal. Eliminating of dairy herds from which 50 percent of the production goes into butter and the balance into evaporated milk, cheese, and fluid milk, could create scarcities of dairy products approximately 5 months of the year. It can plainly be seen how this would affect the costs of foods and increase inflation. Eliminating the 12 million dairy farmers whose products of toil go solely into the manufacture of butter is a step toward eliminating the family type of farm. This would create a social problem by causing a transition of the families to the cities where homes and employment are already an unsolved problem. Another problem will be the disposal of soybean and cotton seed meal, a byproduct now used for dairy cows and calf feed. Removing the oleo tax would also reflect lower prices to the cotton and soybean farmer. Certain amounts of the oils of these crops are used in the manufacture of margarine today. Coconut oil, imported into this country, would be used in the manufacture of colored oleo and eliminate the use of domestic oils. The tax on oleo does not restrict its sale. Recent surveys show that oleo production and sales have doubled in the past few years. A recent survey shows that 4 out of 5 families now purchase oleo. This does not indicate that margarine regulations are restrictive to sales or prohibitive to its costs. Removing the tax from oleo finally means two things: They are the encouragement of numerous frauds in food policies; and destabilizing the basis of American agriculture. Sincerely, PROGRESSIVE FARMERS OF WISCONSIN, PURE MILK PRODUCTS COOPERATIVE, Mr. O. PERDUE, Washington Hotel, Washington, D. C.: The Osseo, Neillsville, and New Richmond locals of Pure Milk Products Cooperative representing approximately 1,000 dairy farm families view with alarm the recent action of the House of Representatives in giving the color of yellow to oleomargarine. It is their opinion that such action is very injurious to the entire dairy industry. It will result in great financial losses for the dairy farmer and thereby cause a corresponding reduction in the production of milk. We are especially disappointed that such an action was taken by the first Congress controlled by the Republican Party in the last 14 years. We wish to emphatically point out that no action so drastic and so detrimental to the dairy industry was ever consummated or completed under the democratic regime. Better than 90 percent of Wisconsin farmers vote the Republican ticket. If the oleo bill passes the Senate we will not only be bitterly disappointed in the Republican Party but we will feel that we have been betrayed by the very people in whom we have placed our trust for 14 long years. Nothing will remain for the Wisconsin farmer but to turn in desperation to the Democratic Party. We are very loath to do this. Therefore be it resolved by the Osseo, Neillsville, and New Richmond locals of Pure Milk Products Cooperative, That we respectfully petition the Republicancontrolled Senate not to sell the dairy industry down the river as the House of Representatives has done but to maintain the yellow color for butter only. Be it understood that this resolution in no way casts any reflection or criticism on the Republican Representatives in Congress from Wisconsin who have unanimously voted in the interest of the dairy farmer. GEORGE ZEMPLE, Osseo Local. ART BAUERS, Neillsville Local. RONALD CASEY, New Richmond Local. STATEMENT OF WILLIAM O. PERDUE, GENERAL MANAGER, PURE MILK PRODUCTS COOPERATIVE, FOND DU LAC, Wis. Pure Milk Products Cooperative is the largest strictly bargaining producers' cooperative in the United States. It has a membership of over 23,000 members engaged in the production of milk. In the year 1948 our members will produce approximately 1,876,235,712 pounds of milk, with the approximate value of $75,049,500. The dairy farmers who are members of this cooperative have a total investment of over $250,000,000 for milk alone. Any legislation which threatens the security of our members and their $250,000,000 investment is a matter of gravest concern to us. In spite of the huge investment of dairy farmers jeopardized by this oleo tax repeal, the Senate of the United States has allotted about 4 hours to hear the case for agriculture. First, we want to protest the lack of understanding of the Senate Finance Committee in allotting only 4 hours to a measure which could jeopardize the enormous investment of agriculture in milk production. Senator Millikin, chairman of the Senate Finance Committee, has allotted 4 hours to agriculture because, his telegram states, "The press of more important legislation so requires." We are fearful that the committee has prejudged the case by allotting in a cavalier style such an impossibly short time to agriculture. The destruction or weakening of the butter market must adversely affect the entire price structure of dairy products, as well as total production and investment. Therefore, we respectfully request the committee reschedule the hearings of the death sentence for butter, and accord agriculture an opportunity to be heard in a fair, unbiased, and full hearing. Wisconsin dairy farmers (and millions of their fellows in other States) are up in arms over the attempt of the oleomargarine interests to usurp their Godgiven color-which is golden yellow. The Nation's dairy farmers are not seeking to deprive any person of the privilege of eating oleomargarine or any other spread or cooking oil which they might fancy. Farmers have no objection to, and themselves are large consumers of, such tempting spreads as peanut butter, jams, and jellies, and they use large quantities of cooking oils and similar materials. The oleomargarine manufacturers admittedly are insistent upon demanding that they be given the unrestricted right to color their product yellow. They say it's because custom has made the consumer expect the spread upon her bread to be yellow. What created this custom? Butter, of course-yellow butter. Thus the oleomargarine manufacturer admits that he wants to purvey his product to the American people for something that it is not. Had nature bestowed a green or pink color on butter, then the oleomargarine interests would want to usurp that color, too. After all, the color question is the only one. The Nation's dairy farmers have said that they are willing to allow removal of all restrictions and taxes on butter substitutes if they will be sold in their natural color, or in any other color under the sun except that yellow which is the original and only color of butter. The consumer readily accepts the purple color of grape jelly, the gold of orange marmalade, the red of currant jelly, the deeper red of raspberry or strawberry preserves. The housewife likes green-tinted mint sauce for her lamb, dark-brown peanut butter for the children's school lunches. The foods upon our tables are of every color and hue, from the deep red of a succulent roast of beef to the stalk of white celery. Hence, why should oleomargarine in some color other than yellow be unpalatable? Even a deep orange shade should be acceptable and the degree of color could be set by statute so that oleomargarine colored this way could never be palmed off as butter. It could go tax free under its own distinctive color, but the 10-cent tax should be retained if it is to be colored like butter. Despite the thousands of words which have been said and printed on this color question, the oleomargarine manufacturers still insist that they do not want to imitate butter. They say that their product is a healthful, nutritious one they have even gone so far as to advertise that "there is no substitute for oleomargarine." If they do not want to imitate butter, then why did they demand and succeed in obtaining the right to use a chemical-diacetyl—which imparts the characteristic flavor of butter? They were not given that right by Congress or the will of the people but by the then Administrator of the Federal Security Administration. Why use this chemical to make their product taste like butter if they do not want to imitate butter? The fallacy of this argument must be apparent. No, by demanding the privilege of coloring this product like butter and flavoring it like butter, the oleomargarine manufacturer admits that he is unable to sell it on its own merits and must market it in the guise of something that it is not and can never replace. For a while the oleo lobby insisted that it had the right to the yellow color because oleo, as well as butter, had a natural yellow color. This statement went unchallenged until recently, when the Armour Institute of Chicago made a series of tests. They revealed conclusively that the oils from which oleomargarine are made do have a yellowish color, but that all of it is lost and the substance becomes a pale grey, oftentimes with a green tinge, after hydrogenation. They concluded that oleo's natural color after the necessary manufacturing processes would be much lighter than that of most butters and very likely would have little or no yellow pigmentation. American people who are accustomed to good living do not want substitutes. When you order and pay for a chicken sandwich you expect to get chicken, not disguised pork or veal. When you take your car to the filling station and order gasoline, you don't want the attendant to fill it with kerosene or fuel oil. Yes, the American people believe in protecting themselves against substitutes. It is a criminal offense for a private citizen to parade in a policeman's uniform. It is a serious offense for a sergeant in the country's service to wear a colonel's uniform. Why, then, should not the dairy farmer resent and seek to prevent a similar attempted limitation of his product-not merely of its texture, uses, and flavor but a blatant attempt to steal his trade-mark, which is golden yellow. We realize that the housewife has been deceived into thinking that elimination of this tax on colored oleo would lead to a reduction in the cost of living. It won't reduce the cost of living in more than 20 States which still have oleo taxes on colored margarine or which protect their dairy farmers by prohibiting the sale of colored oleomargine. It can't possibly reduce the cost of living even for a large family which uses nothing but oleomargarine, for the housewife can buy it now by paying only a nominal tax and color it herself through the new modern packaging method. The difference in the sale price of colored and uncolored oleo right now indicates that the margarine manufacturers will not necessarily be so generous as not to guide some of that tax cost into their own coffers, once the tax is repealed. I repeat, the dairy farmer is not trying to deprive anyone of oleo. He believes the housewife should be able to buy it without tax, either uncolored, or in some color other than yellow. But if it has to be colored yellow, then the dairy farmers believe it should be suitably controlled. The tax on colored oleomargarine, enforced by the Internal Revenue Bureau, is the only effective way of controlling this imitation and the only protection against wanton fraud and deception. We do not say that reputable oleomargarine manufacturers would seek to make huge profits by fraudulently selling their products as butter, but the person who eats in a restaurant has no guaranty that the butter he pays for is not a yellow substitute. And the large margin in retail price between butter and oleo will again lure unscrupulous individuals as it has in the past, and what someone has called "butterlegging" will again flourish if the restrictions are removed. The whole history of oleomargarine has proved the necessity of protecting the public from fraudulent sales of oleomargarine in the guise of butter. This |