requirement so that the presence of artificial color in butter is not declared.

There is probably an intention, an unknown, an element of deception there, because the rich yellow of summer butter is higher in vitamin A than the less yellow or white winter butter, and vitamin A is an important element in our food.

A lot of butter is artificially colored. Furthermore, the butters are colored to different shades. "Depending upon consumer preference, market by market, the butter manufacturer adds such amount of color as to result in the shade of color desired by his trade.

Margarine should be colored for the same reason as butter is colored. It permits the consumer to get the food in the shade or color that they are used to and is most pleasing to them. In the case of margarine, there is no reason to worry about any fraud because the laws now in existence so adequately cover this situation.

First, there is the Federal Food, Drug, and Cosmetic Act, which applies to the labeling of margarine, as it does to all other foods. Then there is the Federal standard for oleomargarine which covers its ingredients, as well as the labeling. There are the Bureau of Animal Industry regulations, if the margarine has any animal fat. There is the Federal Trade Commission, and I have worked with all of these in court cases. There are State and city food and drug laws and also State and local laws against deception.

You must remember that every pound of margarine, by law, must be conspicuously labeled with the word oleomargarine. Whether it is white or whether the consumer would buy it yellow, the consumer knows that she is getting oleomargarine.

As a physiologist, I can assure you that the coloring of food-in this case oleomargarine-serves, for the human, a good and valuable purpose. We know that people prefer to eat certain foods possessing certain colors. This is the result of many years of conditioning, habit, background, and so forth. When people eat a food in the color they prefer, it is more pleasing to them, and better service to the nervous system and the alimentary tract. They not only get more pleasure from it, but, in turn, actually get more value. That is why, as already stated, much butter is artificially colored, and should be. But, by the same token, the consumers of our country should be permitted to have the oleomargarine they want in the color they want. True, there have been a few cases, and only a handful over the past. years, where some dishonest person practiced fraud. Fraud to a smaller or greater extent is practiced in all fields of industry. The CHAIRMAN. Even in the political field.

Dr. CARLSON. Yes, yes.

I know that in no case over the past 25 years was any such person in any way involved with the margarine industry or was he a wholesaler or retailer. So far as I know, just because there are some few dishonest people who violate laws with respect to almost every product on the market, the Congress does not pass discriminatory legislation against all such products. In fact, if you review the reports of the Federal Food and Drug Administration, you will find during every year for many years a very large number of cases involving illegal butter and illegal cream. The cases involved filth, low fat, and short weight which are injurious to the health and are economic cheats.

Yet, notwithstanding these thousands of cases, no one has maintained that there should be a special tax on butter.

In conclusion, I can only say that these oleomargarine taxes should, in the interests of proper and adequate nutrition and in the interests of American democracy, be repealed just as quickly as possible. May I add this, this being the year 1948, on the basis of the past, these taxes are today stupid.

I thank you.

The CHAIRMAN. That is all. Thank you, Doctor.
Dr. CARLSON. Thank you:

The CHAIRMAN. Identify yourself for the record.

STATEMENT OF LEWIS G. HINES, NATIONAL LEGISLATIVE REPRESENTATIVE, AMERICAN FEDERATION OF LABOR, WASHINGTON, D. C.

Mr. HINES. The name is Lewis G. Hines.

Mr. Chairman, in the interest of time, I would rather file my statement, as I realize that you are running behind and our conclusions concur in what has already been said here with regard to the need for the removal of these taxes.

I might say that our membership encompasses a large number of the people referred to herein as the low-income groups. We feel this tax is discriminatory and should be removed. It should be a forerunner of removal of all taxes in the States. It would serve as an incentive in that direction.

We feel that margarine is a food product in its own right. I was very much interested in the discussion this morning with regard to the protection of the consumer in the restaurant. I concur in the thought that there is not too much to worry about when you consider the size of the pat of butter or margarine, or whatever it may be. The restaurant could, if they wanted to differentiate, merely state "We serve butter." I do not know that anybody would get hurt with the substitution of margarine, or, in fact, anything else. I want to say I appreciate the opportunity, Mr. Chairman, of appearing before the committee.

The CHAIRMAN. Your statement will appear in the record. (The statement referred to is as follows:)

STATEMENT OF LEWIS G. HINES, NATIONAL LEGISLATIVE REPRESENTATIVE OF THE AMERICAN FEDERATION OF LABOR, BEFORE THE SENATE FINANCE COMMITTEE, MAY 18, 1948

The American Federation of Labor desires to register its support of the legislation before this committee which proposes to eliminate discriminatory margarine tax on margarine.

At a time when the bolstering of democratic nations throughout the world is dependent upon the American bread basket and our people are asked to ease inflation by eating less high-cost food, a law that artificially boosts prices and bars the consumption of nutritious margarine is unconscionable.

The ancient arguments voiced in support of the present legislation when it was enacted more than 60 years ago are no longer valid. The arguments have generaly been that margarine was an inferior substitute as a table fat, that the law was necessary to prevent fraudulent sale of colored margarine as butter, and that production by the dairy industry must be encouraged and protected against unfair competition.

Let us take a quick look at these obsolete arguments:

Is margarine inferior to butter?

The findings of numerous scientific investigations have been presented to this committee both in past and present sessions. It has been conclusively proved that high-quality margarine, when fortified with vitamins A and D, has the same nutritional value as high-quality butter. I do not presume to be a food expert, but for several years I have heard expert testimony before this committee that the possibilities of impurities and variation in nutritional content are as great in butter as in margarine. For instance, it is a well-known fact that the vtamin A and D content of butter is dependent not upon the cow but upon the diet and sunshine received by the cow.

It is well-known that butter is artificially colored for approximately 8 months out of the year, because, except in the summer months, there is insufficient provitamin A-carotenes-to give the butter a rich yellow shade. There is a greater amount of human handling and the possibility of bovine tuberculosis in butter. It would appear to me that consistent standards of purity and high nutritional content are much easier to maintain in synthetically prepared margarine than in natural butter. If anything, we need a law requiring vitamin fortification of natural butter and labeling of the exact nutritional content of the butter. Will colored margarine be sold fraudulently as butter?

The Food, Drug, and Cosmetics Act of 1938 and the definition and standard of identity for margarine promulgated thereunder on June 6, 1941, cover this situation completely. There are full powers and penalties necessary to prevent such fraud under the above-mentioned act without the retention of the present restrictive taxes. I am sure that no member of this committee believes that the present tax and license fees were enacted for revenue purposes, since the revenue received is negligible.

This is what they have done: The excessive license fees have succeeded in preventing two-thirds of the Nation's grocers from selling this highly nutritious, lowcost food. The 10-cent tax on colored margarine has succeeded in driving colored margarine almost completely off the market and forced the consumers to engage in the time-wasting and irritating operation of coloring it themselves. Does the dairy industry need protection?

By coincidence, while I was preparing this testimony. I came across an item in the New York Herald Tribune, February 26, 1948, announcing that the farmers of Wisconsin were supporting the repeal of their particularly vicious State law against margarine. Now we are told that Wisconsin is the leading dairy State in the Union. Can it be that our biggest dairymen have suddenly developed a conscience and feel that free competitive enterprise should be allowed to function? Maybe so, but the reason might also be that because of changed marketing conditions, there is more money in selling whole milk products than in selling butter. A few decades ago, butter was an important factor in the income of the dairy farmer; but today, with glass-lined tank cars for speedy delivery of fresh milk over long distances, the development and widespread use of dried whole milk and the consumption of more cheese and ice cream have changed this situation. The dairyman makes substantially more money and employs less labor when he sells his milk to whole-milk markets rather than as butterfat to the creameries. Even at a dollar a pound, butter is not coming back, and the farmers don't care. Today fluid milk and whole-milk products are up 50 percent over prewar, while butter is down almost 40 percent. Butter is scarce, and the above factors are going to keep it scarce.

In 1946 Wisconsin dairymen received only 1.36 percent of their total cash income from the sale of butter. Even in Wisconsin not enough butter is produced to supply their own citizens with enough butter to meet the standards laid down by the nutrition experts in the Department of Agriculture.

In the long run, the greater use of whole milk is to the benefit of our people. God gave us (by way of the cow) whole milk and probably meant us to consume the whole rather than parts of same. However, nutrition experts tell us that we should eat about twice as much table fat per capita as we are now consuming cf both butter and margarine. If the dair, men no longer care to turn out sizable amounts of butter, we should encourage rather than discourage the production and sale of other table fats such as margarine, for the sake of the health of our people.

From the standpoint of our proposed program of aid to the rest of the world, increased substitution of margarine makes sense. It takes 3 times as much acreage and 10 times as much labor to produce a pound of butter as

a pound of margarine, according to experts at the Ohio State University. Efficient utilization of our resources calls for the lifting of these restrictive fees and taxes. If this Congress feels true concern for the pocketbooks and health of millions of little people in America, if you really want to preserve free competitive enterprise, then here is a good place to start. Laws such as this Antimargarine Act fetter free competition, impose a hardship upon the low-income family, bolster inflation, and are no longer even of significance to the selfish monopoly minded pressure group they were originally designed to protect.

On behalf of seven and one-half million American Federation of Labor members and their families, I beseech you to give favorable consideration to the legislation before you.

The CHAIRMAN. The next witness is Donald Montgomery, of the Congress of Industrial Organizations.

STATEMENT OF DONALD MONTGOMERY, CONGRESS OF INDUSTRIAL ORGANIZATIONS, WASHINGTON, D. C.

Mr. MONTGOMERY. My name is Donald Montgomery, Washington representative of the United Automobile Workers, CIO, appearing here this morning on behalf of the CIO.

The Congress of Industrial Organizations has consistently urged the repeal of all Federal taxes on oleomargarine. Through your committee it again makes that appeal to Congress.

Housewives who cannot afford butter should not be penalized because they use a substitute for butter. These taxes on oleomargarine are intended to make it difficult for them to buy a table fat which is cheaper than butter and is better than pan grease, and they have that effect.

Housewives who cannot afford to buy butter should be permitted to buy a substitute which is colored and flavored to suit their taste. Taxes on oleomargarine are intended to interfere with this desire of consumers to get a table fat which imitates as closely as possible the butter which they cannot afford to buy. Such regimentation of consumer choices is not attempted by Federal law on behalf of any industry except the dairy industry. It should be discontinued with respect to that industry.

Like butter, oleomargarine should become a staple in the food trade, manufactured and distributed on a close margin of profit. Oleomargarine is still more or less in a specialty class. Federal taxes on oleomargarine probably are not intended to protect a high-profit position for oleomargarine, but they have that effect. The raw materials sell for one-third the price of butterfat, but when they reach the consumer processed and packaged they sell not for one-third but for onehalf the price of butter. Removal of the nuisance taxes upon manufacturers, wholesalers, and retailers of oleomargarine will stimulate competition, open the channels of distribution, and bring its retail price down within some reasonable relation to its cost.

These reasons for repealing the oleo taxes need no argument. The arguments against repeal, however, should be examined.

It is said that Federal taxes are necessary to prevent the passing off of oleomargarine as butter. This is a question which arises with respect to many foods. Congress has given the Food and Drug Administration ample authority to prevent fraud and misrepresentation in the sale of oleomargarine. If it is truly concerned with protecting con

sumers against fraud, it need only make sure that it is providing adequate funds for enforcement of the food and drug law.

This argument against oleomargarine is in itself fraudulent when it comes from the dairy industry. Section 403 (k) of the Food, Drug, and Cosmetic Act exempts butter, cheese, and ice cream from the requirement, which applies to all other foods, that artificial coloring, artificial flavor, and chemical preservatives shall be disclosed upon the label.

It is said that restaurants may easily substitute oleomargarine for butter. Admittedly this is a problem, but it is a problem we face on all foods served in restaurants. If the way to handle it is to require the proprietor to display a sign that he serves oleomargarine, we have no objection to that proposal. Indeed we would like to see the principle thoroughly applied so that the proprietor shall also display signs saying:

"Beef livers sold here."

"We buy spring chicken in barrels."

"Canned orange juice is mixed with fresh and water is added." "We serve processed cheese."

"We sell centralizer butter."

It is said that butter has a proprietary right to the yellow color in which it is customarily sold. If so, it stands alone in all of the gallery of foods which are sold on the basis of color. Food coloring is a fullfledged industry in the United States, recognized and regulated under Federal law. The regulation is designed to protect consumers against injurious food dyes, and against being deceived by the use of artificial color, which, as noted, must be revealed on the label of all foods except butter, cheese, and ice cream. Over 3,000,000 pounds of food dyes a year are tested and certified by the Food and Drug Ad

ministration.

Artificially colored foods are commonplace. This may be foolish, but it is not illegal. For the butter industry to claim exclusive title to its particular color is to ask us to go back to a state of nature from which all the food trades, including the butter trade, departed long ago.

Finally, it is said that oleomargarine is an imitation, a substitute, against which the original and the genuine-butter-should be protected. American industry has grown great on substitutes, and our standard of living has been immeasurably enlarged and lifted by their The automobile originally was a substitute for the horse and buggy. The rubber tire was a substitute for horseshoes. The drop forge is a substitute for the blacksmith, and gasoline is our substitute for the oats in the horse's feed bag.

use.

I want to point out to you the basic fallacy of any such argument in our American economy. Our industry has grown great on substitutes, and our standard of living has been immeasurably enlarged and lifted by their use. The automobile was a substitute for the horse and buggy. You went out of town and were not sure that you were going to get back. It was not a good substitute for the horse and buggy.

Senator HAWKES. You were not even sure that you were going to get out of town.

Mr. MONTGOMERY. In that case, you were lucky you did not have far to walk back.