Now I should make it clear that we do not desire to serve oleomargarine to every patient in our hospital and to our employees nor to discontinue the purchase of butter entirely just because of the differential in price. People come to our hospital to receive good care which will restore them to health. A necessary part of that care is adequate and proper food. It is not the aim of our hospitals to provide luxury care in every case. We owe it to the welfare of our patients and to the community which we serve to be as sensible and economical in our purchases of supplies as we can be without injuring or jeopardizing the quality of care which we render.

As a matter of fact I would not be here today if there were any question as to the relative food values of oleomargarine and butter. For many years it has been popularly recognized that there is little difference in food value between these two agricultural products. And now we understand that there have been conclusive scientific findings on this question. We presume that your committee will have this information available in considering the question before you.

The principal purpose of our statement is to point out to you that the present tax laws establish an effective prohibition on the use of oleomargarine in many cases in the provision of hospital care. This prohibition adds to our difficulty and to our expense in providing hospital service. It curtails the amount of service we can give, and it adds to the expense of patients who require care in our hospitals. As such, this tax is a tax upon distress, and in principle we believe it is wrong.

Under the present law, if a hospital wishes to purchase colored oleomargarine, it must pay a tax of 10 cents a pound. It is not only the amount of tax which imposes a burden in this case. The tax has made it more difficult for hospitals to purchase colored oleomargarine. We have been told that a large percentage of the oleomargarine on the market today has had the natural color of its ingredients removed because of this tax law, and it is not always easy to buy the colored product.

However, if the hospital wishes to color the bleached oleomargarine, it must pay a manufacturer's license fee of $600 per year., Senator Fulbright last December pointed out that all of the Federal taxes and license fees on oleomargarine amounted to less than $5,000,000 in 1946. It is plain that these taxes are not intended to produce revenue but to use esthetic senses of consumers as a means of forcing the use of one food instead of another. The result is to deny the hospital the right to choose which food it will serve to its patients and employees. This, again, is a burden upon the provision of care to sick people, a tax upon distress, and we believe that in principle it is wrong.

Hospitals today are faced with a dilemma arising from inflationary conditions. Increases in wages to hospital personnel and increases in the cost of equipment and supplies and services have added tremendously to our burden. Besides, hospital care is more elaborate and more costly than ever before. We must either curtail the amount of service which we provide or raise our rates again and again. Reduction in the essential quality of hospital care is unthinkable. Raising hospital rates will certainly make it more difficult for persons who need hospitalization to receive the care which they should have. Consequently we must eliminate all unnecessary costs in providing to the citizens of our communities the finest quality of hospital service at our command. As I said before, we cannot afford to provide luxury service. We must be economical in our buying and we must secure at the lowest possible prices those things which are necessary to provide good care.

The tax discrimination between butter and oleomargarine on a purely economic basis is a violation of this principle. It has forced us to buy a luxury food where in many cases a utility food would be preferable. It has denied us the right to choose between these foods on the basis of nutritional value. Under the present situation sick people are forced to pay an unjust tribute to a long-fostered prejudice which has no factual or scientific support.

The Council on Government Relations of the American Hospital Association has voted that the association should support any effort to remove this unjust tax. While we think that it is wrong in principle and that it is an unjust burden upon all consumers, we would like to urge that your committee give particular attention to the possibility of exempting hospitals from these tax provisions. In every hospital food is prepared and served to patients and employees under the direction of highly trained people who are able to make a sound judgment in their choice of food on the basis of known food value. They should be free to make this choice on the basis of what is best for the patient. It is most unfair to be

forced to make that choice on the basis of economic values alone, or because of financial advantage to any self-interested groups. Whatever the decision of Congress may be with regard to its treatment of the American consumers as a whole, we sincerely hope that Congress may see fit to correct this legislation as it applies to the use of oleomargarine in hospitals.

The CHAIRMAN. The next witness is Elliott H. Newcomb.

STATEMENT OF ELLIOTT H. NEWCOMB, NATIONAL EXECUTIVE DIRECTOR OF AMVETS, WASHINGTON, D. C.

Mr. NEWCOMB., Mr. Chairman, my name is Elliott H. Newcomb, national executive director of AMVETS, the only congressionally chartered organization composed exclusively of World War II veterans. Our national headquarters is located in the Victor Building, Washington, D. C., and we have active posts located in all the 48 States of the Union. I wish to express my personal appreciation and that of my organization for the opportunity of appearing before the committee at this important hearing.

The CHAIRMAN. We are glad to have you here.

Mr. NEWCOMB. AMVETS, at its 1947 national convention in Columbus, Ohio, adopted resolutions calling for legislative action designed to lower the cost of living to veterans and families. In the month of February, the national executive committee of AMVETS overwhelmingly voted to support legislation repealing oleomargarine taxes and license fees as a substantial step in the direction of lowering the cost of living.

AMVETS' interest in this legislation is three-fold:

(a) As citizens who have served in America's greatest and most destructive war, who are sincerely and uncompromisingly insistent that American liberties and free enterprise not be jeopardized through pressure and monopoly legislation;

(b) As consumers; and

(c) As representatives of the younger group of American business

men.

In these critical times, with the very nature of our way of life at stake, and with pressure upon food, resources, and family budgets, discriminatory tax laws should not favor one food product against another solely in the selfish interests of a few.

This is the basic fault of the Federal antimargarine law; however, with the pure-food protection that we have today in Federal and State legislation, the retention of the Federal margarine law can only be construed as an attempt to protect butter interests.

The passage of H. R. 2245 by the House of Representatives is a heartening sign of the awareness of the American people generally to the importance of opposing selfish economic blocs and powers in our governmental system. If we do not stand guard more zealously now than ever before at the doorways to our freedom, we shall soon have no freedom. Threats to our freedom come not only from outside but from within, when pressure groups attempt to secure privileges for themselves at the expense of the many and the general welfare.

I believe I can speak for the moment for all veterans as consumers. There are about 16,000,000 veterans of World War II, who represent,

by and large, the younger, working element of our society. Most of them are not what you would call rich; a great part of them are actually hard put to it to finish their education and supply their families with the necessities of life. Their interests as consumers are direct and undeniable.

The margarine tax is a serious barrier within the food trade and constituted a dangerous precedent for discriminatory legislation favoring one business, or product, against another. A large percentage of veterans who have gone into business for themselves are small retailers or wholesalers of food products. This law penalizes the small independent merchant against the large outlet. It imposes a system of restrictions that impair the efficient functioning of business until they resemble in practice the socialistic controls over business in many other countries. It penalizes farm producers of the greater part of the country to the selfish benefit of a relatively few producers in the smaller part. It serves to close up opportunities for veterans in the food trade and in important agricultural enterprises. The Government's sovereign tax powers, by imposing exorbitant license fees on food stores handling margarine, are being used to penalize and discriminate against the merchant who wishes to handle this pure food product.

Most veterans today are in business, or associated with some form of business, or are planning enterprises or business careers. Their primary interet is that the traditional way of business-the opportunity to choose one's field of enterprise to offer a new product on the basis of equal or better value at less cost-be maintained.

The last war was largely fought to maintain such basic commercial freedom. To permit American enterprise to be shackled in the arbitrary interest of a single minority group or commodity, as is done in the case of antimargarine legislation, is contrary to the spirit and principles for which these boys fought. It is inconsistent with the democratic rights and privileges upon which all American freedom and business progress has been built.

In view of the abundance of technical testimony the committee is hearing this week on margarine, and the taxes assessed thereon, I shall not attempt to advise the committee in that direction. I feel, however, that it is absurd and ridiculous that special occupational taxes should be levied on the handlers of oleomargarine, placing them in the company, in the United States Code, with handlers of narcotics, marihuana, liquor, and firearms. I respectfully request the committee, and the Congress, to take favorable action toward the repeal of all Federal taxes now levied on oleomargarine.

The CHAIRMAN. Thank you very much, Mr. Newcomb.

Mr. NEWCOMB. Thank you, Mr. Chairman.

The CHAIRMAN. The next witness is Miss Anna Lord Strauss.

STATEMENT OF MISS ANNA LORD STRAUSS, PRESIDENT, LEAGUE OF WOMEN VOTERS OF THE UNITED STATES, WASHINGTON, D. C.

Miss STRAUSS. Mr. Chairman, I am Anna Lord Strauss, national president of the League of Women Voters of the United States, whose purpose is active participation of citizens in government.

The League of Women Voters urges your approval of H. R. 2245, a bill providing for the repeal of the Federal taxes and license fees on the manufacture, distribution, and sale of margarine. As an organization of citizens interested in good government, the league has long favored such legislation. It is our opinion that the law creating these taxes and fees is unjust and discriminatory.

The legislation which discriminates against the sale of oleomargarine was enacted in the form of a tax measure. In 1947, the margarine tax represented two-hundredths of 1 percent of the money collected by the Bureau of Internal Revenue. The money is such an insignificant portion of the Federal tax revenue that its continuance for that purpose is not justified. The issue resolves itself then to the real effort of the legislation.

The effect is to provide a major hindrance to the sale of a nutritious, low-cost product. By this legislation we are protecting one industry from the competition offered by producers of another product. As citizens who believe the welfare of the country is fostered by vigorous free competition, this interference with trade is objectionable to us. We would like to see both the taxes and fees removed so that no barrier to the free flow of trade exists in this respect. We also firmly believe that no distinction should be made between margarine manufactured from ingredients produced in this country and those imported from other countries.

Our organization aims to stimulate citizen participation in government. In doing this we advocate legislation that the members have designated as of particular interest. We worked hard and long to achieve the enactment of an adequate Federal food, drug, and cosmetic law which passed in 1938. This law provides an adequate safeguard against the sale of harmful foods in interstate commerce. We therefore think that the reasoning that people should be protected from deception in the sale of margarine is no longer applicable. Some will say that the Federal food, drug, and cosmetic law applies only to products shipped across State lines and that adequate protection would not exist against the sale of inferior products within the States. It should be pointed out that every State but one, New Mexico, has a State food and drug law, many of which are modeled after our Federal one. Should State legislation be inadequate it is up to the citizens of those States where this is the case to see that their State legislatures take the necessary steps to improve it.

We recognize the fact that Federal taxes and fees are only one of the impediments to the free distribution of margarine. Many State leagues are active in their areas to secure repeal of State laws which add to this burden. However, we are convinced that the Federal Government should exert leadership in seting fair-trade patterns.

Because of the reasons I have outlined the League of Women Voters sincerely hopes that your committee will recognize the importance of this legislation and that you will give your approval to H. R. 2245, which provides for the repeal of the margarine taxes and fees.

The CHAIRMAN. Thank you very much. We are very glad you came. Miss STRAUSS. Thank you very much, Mr. Chairman.

The CHAIRMAN. Mrs. Louis Ottenberg on behalf of National Council of Jewish Women.

STATEMENT OF MRS. LOUIS OTTENBERG, MEMBER OF THE NATIONAL BOARD OF THE NATIONAL COUNCIL OF JEWISH WOMEN, NEW YORK, N. Y.

Mrs. OTTENBERG. Mr. Chairman, my name is Mrs. Louis Ottenberg, of the National Council of Jewish Women. I am a member of the National Board of the National Council of Jewish Women.

The National Council of Jewish Women, which was organized in 1893 and now has a membership of over 70,000 women in 300 senior and junior chapters throughout the United States, has, since its inception, dedicated itself to the promotion of the general welfare. It is our firm belief that the laws which provide for a discriminatory tax and license fees for the production and distribution of margarine are not conducive to the production of the general welfare.

Volumes of testimony have been presented before congressional committees on a number of occasions in support of our view, but, even at the risk of being repetitious, it is important to restate the sound and irrefutable reasons for the removal of the restrictions on margarine. The discriminatory margarine laws constitute the only case where restrictions on the production and sale are placed on one domestic product for the benefit of another competing product. This, in our opinion, is clearly not fair or just legislation, and is definitely not in the interests of the general welfare, since it accords privileges to one group at the expense of another. Furthermore, it is against the general welfare because it deprives large groups in our population of the opportunity to purchase a nutritious and much-needed food.

The nutritional value of margarine has been established by studies made by such scientific agencies as the New York Academy of Medicine and the National Research Council.

These studies indicated that when margarine is fortified with vitamin A in the required amount it is the equal of butter. As a matter of fact, the housewife is in a better position to appreciate the nutritional value of margarine.

Due to the informative labeling she knows just what the component parts of margarine are, which is not always true of butter, as the vitamins are left to nature and the coloring to the producer, with no information given to the consumer. At the present time it is not only unjust, but unrealistic not to encourage the greatest possible production and the widest possible distribution of margarine. With the price of butter fluctuating between 85 cents and $1 a pound, a housewife needs no elaborate statistics to know that she not only but must buy margarine in order to provide a well-balanced diet for her family. In many States, in addition to the Federal restrictions, the local taxes and fees are such that even now margarine is almost unobtainable. While it is true that your committee cannot concern itself with State laws, it can, by repealing the Federal laws, indicate to the States that the Federal Government recognizes the unfairness and undesirability of these discriminations and thereby encourage them to take similar action.

May we respectfully urge that your committee act favorably on H. R. 2245 and thereby afford the American people, especially those in the low-income groups, an opportunity to buy a valuable food at a price they can afford to pay.