« AnteriorContinuar »
and oils. As this shortage is filled and as the present high demand returns to more normal levels, it is obvious that we are going to have to expand our domestic market for edible oils or face a drastic decline in both the price and production. Removal of the antimargarine laws would permit the expansion of the domestic margarine market for cottonseed products; retention of the antimargarine laws would prevent that expansion and leave cotton producers particularly vulnerable to the expected drop in the demand for edible oils.
It is important to note that the markets that margarine should and can exploit are chiefly markets which are not being supplied today. Although standards of living have been going up, per capita consumption of needed, nutritious table fats has been steadily going down. During the 1920's, total per capita consumption of margarine and butter averaged 20 pounds per person. By 1946, due almost wholly to the decline in butter consumption, per capita consumption of margarine and butter combined was only 14.3 pounds. This decline was due chiefly to the fact that the dairy industry has been neglecting butter more and more in favor of the more profitable whole-milk market. In 1936, butterfat and farm butter represented 27.9 percent of total dairy cash income. In 1946, that figure had fallen to 14.8 percent. The Bureau of Human Nutrition and Home Economics has recommended a per capita consumption of 36 pounds of table fat annually for “an adequate diet at moderate cost." It is apparent that butter cannot and will not fill this nutritional need of our people and that margarine is handicapped in filling it by the legislative restraints placed upon it.
The harmful effect of these antimargarine laws upon the health of our country falls with special weight upon the very people who grow the cotton. No one needs a better diet more than this large low-income group. No one is less able to pay the price of butter. The margarine taxes, however, strike the cotton farmer a double blow. By restricting his markets, they reduce his cash income. By making margarine more expensive and harder to get, they reduce his chance to buy good food with the few dollars that he does make.
In this connection, it is important to note that the Federal license fees imposed upon wholesalers and retailers of margarine are particularly burdensome to the small independent rural merchants who comprise the chief food outlets in most of the cotton States. For the country as a whole in June 1947, according to the Commissioner of Internal Revenue, only about 1 in 2 retail stores was licensed to sell margarine; only about 1 in 100 was licensed to sell yellow margarine. This situation was aggravated in most cotton areas where there are fewer chain stores and more small independent grocers. As a result, many cotton farmers cannot even buy the margarine into which their cottonseed
But we do not oppose antimargarine laws solely because they penalize the pocketbook of our farmers, or even because they harm the health of low income groups throughout the country. There is another and perhaps a more important reason for opposing all such legislation.
The margarine laws are wrong in principle. They are politically immoral. They are undemocratic and un-American. They penalize the farmer who produces cottonseed, soybean, or peanut oil, for the ostensible benefit of the farmer who produces butter. They restrict one domestic food product in an attempt to favor another. They take money from the pocketbooks of one group of our farmers and attempt to channel it into the pocketbooks of another group. They tax a necessary food of the poor and leave untouched a rival food which not everyone can afford to buy.
A great many people have said: "Why doesn't the cotton industry take a lesson from the dairy people? Why don't you solve your problems with a tax on rayon, like the tax on margarine?”
The cotton industry accepts the premise but rejects the principle. Starting from zero in the early 1900's, the rayon industry has each year steadily increased its productive, capacity. In 1947 domestic rayon consumption totaled almost a billion pounds, or the equivalent in usable fiber of about one-fourth of the cotton consumed. We believe that a tax on rayon is justified if a tax on margarine is justified but we do not believe in the principle of internal domestic tariffs on one American product for the benefit of another. We are willing to compete with rayon in the open market energetically and fairly in the traditions of our free-enterprise economy. We reject the whole idea of legislative privilege and discrimination, whether applied to cotton and rayon or to margarine and butter. We have not asked, and we shall not ask, for penalty taxes on our synthetic competitor. At the same time, we believe we are perfectly justified in demanding that the penalty taxes on margarine be removed.
In conclusion, let me suggest that everyone who has to take a stand on this great national issue should do so with a sense of history-with an appreciation of the changing conditions that come with changing times. We believe that sincere and open-minded men, who may have found some merit in the antimargarine laws in the past have come to realize that the time for ending them is here. Today, the average American—the housewife, the laborer, consumers everywhere-have become familiar with the raw facts of the case. The slow process of public education has gone on for many years and it has been tremendously quickened by the general concern over food shortages in the recent past.
Deep and widespread resentment over these taxes is sweeping the country. Almost very important newspaper in the country, almost every widely read magazine, and almost every columnist and news commentator has taken up the campaign. This is a cause on which people from every section of the country, of every political affiliation, of every shade of liberal or conservative thought, are joined.
Today, public opposition to the antimargarine laws is so widespread and so strong that we believe they cannot and will not be tolerated any longer. We respectfully urge your committee to recommend their repeal.
The CHAIRMAN. Thank you very much.
This list of witnesses was supplied to us by Senator Fulbright. It is my understanding that it represents the oral presentation which the public wishes to make. Is there anyone in the audience who had intended to testify orally and who has been omitted ?
If not, then we will recess until ten o'clock tomorrow morning.
(Whereupon, at 4 p. m., an adjournment was taken, to reconvene at 10 a. m., Tuesday, May 18, 1948.)
UNITED STATES SENATE,
Washington, D. c. The committee met, pursuant to recess, at 10 a. m., in room 312, Senate Office Building, Senator Eugene D. Millikin (chairman) presiding.
Present: Senators Millikin, Butler, Hawkes, Martin, George, Barkley, Connally, Byrd, Johnson, and Lucas. , Also present: Senators Thye, Dworshak, and Fulbright. The CHAIRMAN. The hearing will come to order. Let the record show the presence of Senator Thye, of Minnesota. We are very glad to have you participate, if you wish, Senator.
Senator THYE. Thank you, Mr. Chairman.
The CHAIRMAN. The first witness is John Brandt, president of the Land O'Lakes Creameries, Inc. “Will you be seated, please, and identify yourself to the reporter. STATEMENT OF JOHN BRANDT, PRESIDENT, LAND O’LAKES
CREAMERIES, INC., LITCHFIELD, MINN. Mr. BRANDT. My name is John Brandt, president of the National Cooperative Milk Producers Federation, and president of the Land O’Lakes Creameries, Inc., of Minneapolis. I live in Litchfield, Minn.
In presenting our case on this subject of repeal of the tax on oleomargarine, I thing we could divide this question into two categories: one of fair practice, and the other of its economic results.
I would first like to deal with the subject of fair practice. The repeal of the oleomargarine tax as it was passed by the lower House certainly would deal a blow to the right of the dairy industry to a long-standing trade-mark, which is the color yellow. Butter has been known by the color yellow ever since anybody has ever known anything about butter, and it is, as we claim, the common-law trademark for butter.
Butter is manufactured entirely from a dairy product, from milk, with nothing added to it, and is therefore a product wholesome só far as the consumer is concerned.
The question of its relative merits and food value and consumer preference could easily be decided if you were to place the consumer's choice of oleomargarine or butter at the same price. There is not any question but what the consumer would choose butter in preference to Oleomargarine, and therefore from that standpoint alone I think the general public would consider oleomargarine an inferior product to butter.
However, butter and oleomargarine look and taste so very much alike that it is often difficult for the consumer to differentiate between oleomargarine and butter. That has been the result of years of research in perfecting the manufacture of a substitute for butter, and certainly the manufacturing, merchandising, and advertising methods have been an attempt completely to duplicate and imitate butter.
There can be no question but what the use of all of the advertising, the advertising methods, and the methods of manufacture are a direct attempt to imitate and confuse the general public that they are getting a product the same as butter. All we need to do is to look at the advertising in the various magazines and the package, the color that is used, the texture and every form that we can conceive of in the manufacture and sale of oleomargarine, and we do find that it is a matter of imitation or attempt to substitute this product for butter.
The oleomargarine people, in the desire to use the color yellow, certainly give every evidence that they want the consuming public to believe that it is butter, or that it is the same thing so far as a spread for bread is concerned. We, in the dairy business, claim that we have a common-law right and a trade practice established for many years in the use of the color in the manufacture of butter, and we now find that in the attempt to repeal the 10-cent tax on oleomargarine-on colored margarine, rather—that we are going to lose one of our rights and protection of our rights, and also the protection of the consumer against fraud and substitution.
The consuming public is now consuming yellow-colored oleomargarine in the belief that they are eating butter. I recently made a trip down through the Southern States, and I did not have to go that far. I could go to what we might call Northern States. And on this trip that I traveled around for about 3 weeks' time, I ate in all kinds of different places, and while I did not make a physical or chemical analysis of what I was eating at the various places, I did find that in even my inexpert knowledge of the difference between oleomargarine and butter I am sure that I ate oleomargarine at least 50 percent of the time that it was served as butter.
The funny part of it was that when you become critical and ask the waiter whether or not you were being served butter, or want another pat of the butter, that you are being served, something always happened, either they admitted that it was oleomargarine or they removed it entirely or showed you a sign that they were serving oleomargarine. But up until that point you did not know anything about whether you were using it or not.
The CHAIRMAN. I believe the committee would be interested in having a memorandum supporting your contention that yellow is a common-law trade color for butter which cannot be usurped by any other product, and also a memorandum on whether if the taxes were removed there nevertheless could be regulations to protect the consumer in his choice between the two products.
Mr. BRANDT. You would like that as an oral memorandum or one that is submitted in writing to you?
The CHAIRMAN. I would suggest that it be submitted in writing, and I suggest that it be rather carefully prepared, and that it be submitted within the next few days.
Mr. BRANDT. I will be glad to do that. That is the question of the common-law trade-mark of the use of the color yellow.