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from farmers did not claim to have increased their payments to farmers by a single cent.
The farmer makes more out of the sale of fluid milk than of butter. The Nation needs more fluid milk out of which it gets more nutritional value.
“We ask no advantage for margarine. We are willing to provide strict penalties for any fraud or deception
we say, Punish the dishonest dealer, not the innocent public'.”
There is no significant nutritional difference between butter and margarine. (April 26, 1948, pp. 4991-4993.)
Mr. Poage opposed the Hill amendment and proposed another amendment striking out all of the taxes except a $1 license fee on all public eating places which served colored margarine and also requiring them to print that fact on the menue or serve the product in a triangular form. (April 28, 1948, p. 5117.) Representative David M. Potts (New York)
Mr. Potts favors repeal of the Federal tax on colored oleomargarine for the following reasons:
1. The sole purpose of the tax on colored oleomargarine is to discourage housewives from purchasing it.
2. Sales of margarine will no doubt increase, but most likely to a lesser degree than opponents of the repeal would lead us to believe.
3. The tax on margarine is a limitation on the free, competitive market in America.
4. Taxes on margarine are not for the purpose of raising revenue but to give to the dairy interests of America an unfair advantage having no place in a free-enterprise America.
5. It is claimed that the tax is imposed to raise revenue to prevent fraud in the marketing of margarine as butter. There is no more justification for burdening consumers with the operating costs of a Government agency charged with preventing fraud in the sale of colored oleomargarine than for the fraudulent. sales of any other product.
6. The cost of preventing fraud in general should be borne by the people as a whole and not by the consumers of any one product.
7. We must not give a subsidy to dairy interests any longer at the expense of consumers. (April 26, 1948, pp. 49614962.) Representative L. Mendel Rivers (South Carolina)
This oleo tax is certainly not sectional. The high cost of living knows no section or no city and this tax affects everybody in this country. This is not a southern bill; this is an all-American bill.
We have had abundant testimony that margarine is a healthful food. It is loaded with vitamins and it is good for children and growing people. One edible product grown on the farms of this Nation is being unfairly taxed on behalf of another.
The AMVETS testified before the Committee on Agriculture that the American housewives in 1947 spent twelve or thirteen thousand years mixing margarine. Because of the tax and license requirements, oleomargarine is not sold in many small grocery stores.
This tax is unfair and un-American and should be removed immediately. (April 26, 1948, pp. 4978–4979.)
Mr. Rivers opposed the Hill amendment saying it cut the heart out of the bill. This amendment leaves the tax in effect; it still leaves the cumbersome bookkeeping in effect; it straddles the manufacturer, the wholesaler, and the rest of them alike with this additional cost. (April 28, 1948, p. 5117.)
Mr. Rivers opposed the Andresen amendment removing all taxes on the manufacturer, the wholesaler, and the retailer and leaving a quarter of a cent excise tax to be charged the manufacturer of the oleomargarine that is sold in white form. This amendment prohibits the sale of yellow-colored margarine. (April 28, 1948, p. 5119.)
Mr. Rivers opposed the Combs amendment on the ground that under it this product could be served as butter if the tax was paid (p. 5124).
Mr. Rivers opposed the Gross amendment saying that no boll weevil gets into the cottonseed (from which oil is pressed for oleomargarine manufacture) because the seed is not formed at the time the boll weevil is active (p. 5125). Representative Adolph Sabath (Illinois)
Mr. Sabath favors repeal of the tax on oleomargarine. He introduced a bill on April 23, 1910 to eliminate the tax on butterine, and to regulate and provide supervision over the oleomargarine manufacturers. On January 20, 1912 he introduced a similar bill to repeal the tax. Mr. Sabath favors repeal so that a butter substitute will be available to consumers at prices they can afford to pay. (April 28, 1948, p. 5094.) Representative Robert J. Twyman (Illinois)
The present punitive tax.is outdated and should be removed. Margarine is a proper food and should be permitted the place it deserves. There will be no more violations of pure food laws without a tax than with it. There is still ample provision for penalizing any violaters.
Removing the punitive tax from oleomargarine is not going to be detrimental to butter or the producers of butter. (April 26, 1948, p. 4970.) Representative Harold F. Youngblood (Michigan)
“The bill to repeal taxes on oleo will not only help themselves but will benefit the Nation as a whole as well."
During the past decade the United States Government has paid out millions of dollars to farmers in the form of subsidies to continue an unbalanced program. If this practice is continued it may become necessary to subsidize the urban population by granting higher pay and thereby contribute to even greater devaluation of the American dollar. . “In my opinion, all such subsidies are just another form of governmental control and bring more clearly before our eyes the spectre of the Hammer and Sicle (sic).” (April 26, 1948, p. 4975.)
FOR REPEAL (WITH RESERVATIONS)
Representative Francis Case (South Dakota)
Mr. Case introduced an amendment to H. R. 2245. The amendment provides “That section 2301 of the Internal Revenue Code is repealed insofar as it relates to oleomargarine sold in round or circular pats or prints.”
This amendment would eliminate fraud and "avoids all of that argument about price and color. It puts everyone on notice
that roundness may mean oleomargarine, and every person will then know what he or she is buying or getting.” (April 28, 1948, p. 5107.) Representative J. M. Combs (Texas)
It would be unfair to the consuming public and to the dairy industry to permit oleomargarine to be palmed off as butter since it so accurately duplicates the taste of butter.
Mr. Combs offered an amendment which would leave the Rivers bill as it is insofar as it repeals all taxes and regulations on manufacturers, sellers, handlers, and dispensers of oleomargarine, whether it is colored or not, provided that the Secretary of the Treasury shall see to it that those who sell oleomargarine colored yellow shall so manufacture, distribute, and dispense it that those who purchase it, whether on the table in a public eating place or in a grocery store, will know what they are getting. (April 28, 1948, p. 5123.) Representative Norris Cotton (New Hampshire)
Mr. Cotton stated that he believes that the tax on oleomargarine is wrong, and the wrong approach to the problem. He is in favor of the Hill amendment which provides for selling oleomargarine in a triangular package. He stated that he would vote for the bill if the amendment is adopted. (April 28, 1948, p. 5106.) Representative William S. Hill (Colorado)
Those who favor removal of the tax feel that the housewife should have the right to buy yellow oleomargarine without the 10-cents-per-pound tax, while those who oppose removal contend that if oleomargarine is permitted to be colored yellow and sold without a payment of a 10-cents-per-pound tax that yellow oleomargarine would be passed off to the public and served as butter. Mr. Hill, striving to find a middle ground where agreement could be reached, offered a bill as a substitute for H. R. 2245. This bill would reduce the tax on yellow oleomargarine from 10 cents a pound to one-fourth of 1 cent per pound if the yellow oleomargarine is prepared so that it will be cylindrical or triangular in shape instead of in a square or rectangular form, exempts hospitals from the definition of a manufacturer, and reduces the license fees of wholesalers and retailers who handle yellow oleomargarine. In this way the consumer could have his oleomargarine the color he wants it, yellow, and still would be protected from fraud. (April 28, 1948, pp. 4962–4963 ; April 28, 1948, pp. 5104-5105.)
Representative H. Carl Andersen (Minnesota)
Passage of this legislation will dislocate the dairy economy. It will tend to lower the price of butter and if that is done farmers may simply sell their herds. With labor and feed costs high, farmers cannot afford to produce butter at a price under what they are receiving today.
Dr. Charles Mayo, of the renowned Mayo Clinic, has for years stressed the vital need our Nation has for sufficient whole milk to insure the proper development of our children. Passage of this legislation would reduce the supply of whole milk and all dairy products. Unfair competition from oleo will eventually take away so many of our dairy herds that scarcities of milk and butter will inevitably ensue. (April 26, 1948, pp. 4983–1984.) Representative August H. Andresen (Minnesota)
1. This is an economic issue. One branch of agriculture is seeking to expand the sale of its products at the expense of another group. It is not intended to bring lower food prices to the people.
2. “The oleomargarine industry and the National Cotton Council, which represents the southern cotton States, want to have oleomargarine colored yellow to make it look like butter so as to increase their sales and to increase the use and price of cottonseed oil. Fifty-three percent of the fat in oleomargarine is from cottonseed."
3. In the event that the tax is repealed colored oleomargarine will not necessarily sell for the same price as now charged for uncolored oleomargarine. For example, an advertisement in a recent Washington Evening Star listed the price of a colored oleomargarine at 55 cents per pound. In the natural color it can be purchased for 40 cents per pound. The tax is only 10 cents per pound. In this case there was a price differential of 15 cents per pound between the colored and uncolored product.
4. If the tax were repealed it would not help very much because in 22 States in which two-thirds of the people reside the people would not be able to purchase colored margarine because those States have laws prohibiting the sale of colored margarine.
5. Repeal of the tax on oleomargarine will force dairy farmers throughout the Middle West to reduce their herds which will result in increasing the price of dairy products and meat.
6. Dairying and soil conservation go together.
7. Mr. Andresen submitted an amendment which would repeal all license fees, manufacturers' taxes, wholesalers' occupational license fees, and the retailers' tax, and leave only a quarter-of-a-cent a pound tax on oleomargarine sold, to be collected from the manufacturer. It prohibits the sale of yellow-colored margarine. (April 28, 1948, pp. 5100, 5101, 5118.) Representative Wat Arnold (Missouri)
Mr. Arnold opposes the repeal of the tax on oleomargarine for the following reasons:
1. If the oleomargarine tax is repealed the dairy industry will be sharply curtailed. Areas of higher cost of production might eventually be entirely without dairy herds. This would no doubt lead to concentration of the dairy industry in the Middle West and would tend to be a move away from the goal of having every section of the country as nearly self-sufficient as possible.
2. The dairy industry and the raising of feed for dairy cattle are important aids to the soil conservation program.
3. “The repeal of the tax would result in tearing down one vital industry and giving prosperity to cotton and peanut growers. Cotton is an important crop. But margarine from cottonseed oil is but a by-product and not the principal reason for growing cotton. The encouragement of planting more cotton in the South will again seriously dislocate our agriculture.” (April 28, 1948, pp. 5098–5099.) Representative Marion T. Bennnett (Missouri)
The manufacture and sale of oleomargarine have been subject to regulation of one type or another in various parts of the world. In Canada, its use is completely prohibited.
It is contended that oleo is made from farm products, soybeans and cottonseed, and therefore anything that helps oleo should help the farmers. On the other hand, it has been stated that only two-tenths of 1 percent of farm income is traceable to oleomargarine.
Some of the arguments advanced by the dairy interests for retaining these taxes are:
“(1) Trivial benefits that might be derived from repeal of oleo taxes would be far outweighed by the damage to our agricultural economy and consumers' interests
“(2) Repeal of the laws would open the doors to fraud on the consuming public.
“(3) Oleomargarine is not entitled to the color yellow, which is butter's historic trade-mark.
“(4) Repeal of the oleo laws would set the precedent for other imitation foods.”
the well-being and prosperity of my district is dependent on the welfare of the dairy farmer, and I am on his side.” (April 26, 1948, pp. 498+ 4986.) Representative John W. Byrnes (Wisconsin)
This legislation is a crippling blow to the dairy industry without which this Nation could not long remain strong and prosperous. The purpose of this legislation is to increase the sales of an imitative product by legitimatizing its imitation.
Greatly increased sales of oleo will cause greatly reduced sales of the genuine product-butter. Higher milk prices and higher meat prices will follow. We cannot afford a decline in the total production of milk when the number of milk cows has already decreased so much while the population has increased.
This legislation would give full legitimacy to an imitative product; it would strike at farming closely associated with sound, solid conservation practices; it would aid 26 margarine manufacturers and mean ruin to the 2,000,000 small butter producers; it should be soundly defeated. (April 28, 1948, pp. 5126-5127.) Representative Clevenger (Ohio)
Mr. Clevenger, opposing removal of the tax, pointed out the unusual alignment of people and groups on this question of “oleomargarine colored yellow in imitation of butter.” Some of the "strange bedfellows" are the Cotton South and the CIO, Harry Truman and Henry Wallace, and the Consumers' League and 26 big Wall Street corporations that make oleomargarine. Some groups expect the price of the product to go down, but the Cotton South hopes to get higher prices for its cottonseed oil. Both cannot happen; 5,000,000 farm families wil be left out in the cold. (April 26, 1948, p. 4962.) Representative Carl T. Curtis (Nebraska)
The consumers as well as the farmers are “due for a drubbing” if the present Federal tax on oleomargarine is removed. The consumers will suffer because the price of colored oleomargarine will tend to follow butter prices even more closely than at present. The tax collected at present on uncolored oleomargarine is well spent for the policing of the manufacturers and distributors of oleomargarine to protect the consumer from fraud. The regular cream check kept many farmers going during bad times. Oleo and butter cannot and never should be put into competition with each other. (April 26, 1948, p. 4964.) Representative Glenn R. Davis (Wisconsin)
The passage of this legislation will lead to grievous abuses, attrition of our national supply of animal fats, deterioration of the American livestock industry, and depletion of our soil resources.
“How can the cost to any consumer be lessened by the removal of a tax when that tax is now being evaded simply by refraining from coloring oleomargarine yellow ?”
Oleomargarine has imitated butter in body, texture, melting point, vitamin A content, and butter flavor. This Federal taxation preserves the right of the American people to be able to differentiate between butter and oleomargarine.
Unfair competition for the butter market would have a serious effect on the livestock industry, and there is no substitute for this industry when it comes to retaining and developing soil fertility. (April 28, 1948, p. 5115.) Representative Alfred J. Elliott (California)
“I do not believe we are approaching this legislation in the right way. Here you have two great industries that should be partners. One reason why cottonseed is so scarce today is not because it is being used in the production of oleo but because cottonseed is being fed to dairy and beef cattle.
“I am very fearful that the legislation we are about to adopt will, through the years, prove to be injurious to the dairy business. After all, by protecting the dairy industry we are preserving the welfare of the people on the whole, because there is no substitute for milk and its byproducts. The dairy industry provides steady employment the year around in contrast to the seasonal employment of about every other form of agricultural endeavor.” (April 28, 1948, p. 5111.) Representative Chester H. Gross (Pennsylvania)
This legislation is wrong from an economic standpoint. It represents an assault on the dairy industry, which has been the greatest mainstay to soil conservation and improved farming in America. We have now 2,000,000 less cows than we had 2 years ago. This is reflected in smaller milk supplies, dairy supplies, meat supplies, and in the smaller supply and higher cost of cowhides to the shoe manufacturers.
Cotton and certain other crops raised in the South are subsidized, and so those farmers do not make the same effort as dairy farmers.
Mr. Gross, in an effort to safeguard the public health, offered an amendment prohibiting the use in the manufacture of oleomargarine of any cottonseed grown in areas other than those certified to be free from pink boll weevil
This amendment would help make oleomargarine a clean, safe, and appetizing product. The amendment was declared not germane.
Mr. Gross supported the Hill amendment (permitting oleomargarine to be colored yellow if it were molded in a triangular shape or any shape different from a square or a rectangle), saying that the dairy industry is entitled to that recognition and the housewife to that protection. (April 26, 1948, p. 4971; April 28, 1948, pp. 5125, 5108.) Representative John W. Gwynne (Iowa)
1. The repeal of the Federal tax on oleomargarine will accomplish very little good for anyone and is certain to do positive harm to certain groups throughout the country as a whole.
2. “In spite of the great propaganda to the contrary, the repeal of the law providing for a 10-cent tax on colored oleomargarine will accomplish very little for the consumer. In the first place, it is the general opinion that the repeal of the tax will be followed by an increase in the price of oleomargarine substantially equivalent to the tax.
“In the second place, some 23 States now have laws either prohibiting the sale or manufacture of colored oleomargarine or putting drastic restrictions on the sale of manufacture. Those State laws will
not be affected by any action taken in Congress.”
3. “Any benefit that repeal of the tax would bring to the cotton States would be lost when competition begins in earnest with certain foreign oils. The cottonseed people cannot compete with these imported oils on any basis favorable to cottonseed."
4. Soil conservation is a necessary program in this country. The dairy industry makes a great contribution to the program of soil conservation. “If for no other reason, that is sufficient justification for the legislation now on the statute books designed to protect the dairy industry.” (April 26, 1948, p. 4983.) Representative Charles B. Hoeven (Iowa)
Independent research laboratories have established the fact that oleomargarine cannot be made yellow without adding color. Statements formerly made that a natural yellow oleomargarine could be made from cottonseed and soybean oils if it were not necessary to bleach these oils to conform with the present Federal tax law on colored oleomargarine are without justification. “The
truth in this respect is that the oleomargarine industry would have to bleach their oils even if there were no oleo tax laws on the books. The oleo manufacturers are forced to bleach these oils to remove undesirable odors, flavors, and colors, like dirty white and green.” (April 26, 1948, p. 4979.) Representative Clare E. Hoffman (Michigan)
For years through protective tariffs we have protected and subsidized industries. Now, when it is proposed to continue protection to the farmers, it is said that the dairy farmers shall be discriminated against in favor of the industries of the South. Those who say they are acting in favor of the consumers are actually in favor of the cottonseed-oil interests. This is shown by the opposition to the Hill and Case amendments. Those who oppose these amendments are not content