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products in the manufacture of oleo to give it as near as possible the flavor of butter, and with preservatives used to make oleo appear to the consumer as butter, dairy farmers rightly contend that the one distinct identification of a white color should remain.

Dairy farmers see further the danger of substitution of oils and fats not found in natural milk, to be used in other dairy products if this piece of legislation remaining is taken off. Surely both the producer and consumer should be protected from a great temptation of fraud and misrepresentation when attempts are made to sell a substitute synthetic food product in the guise of a natural superior product. For indeed if butter were not generally recognized as a superior product no deception would be undertaken.

We are opposed to the repeal of the Federal tax on oleo because we recognize the repeal of the tax as the first step in efforts to remove measures which now tend to prevent oleo from being sold as an imitation of butter.

If this bill is passed, oleo consumers in Ohio and in 19 other States will save only one-fourth cent per pound, assuming that the reduction caused by the tax repeal is reflected in the reduction in the price of oleo. There is no guaranty, however, that this reduction will be passed on to the consumers. I do not believe that city consumers are too much concerned about such a small possible reduction in the cost of oleo when the repeal of the tax can be very harmful to agriculture and to our whole national economy.

Senator HAWKES. May I interrupt?

Mr. FICHTER. Surely.

Senator HAWKES. Why do you say that the consumer will only be saved a quarter of a cent a pound?

Mr. FICHTER. In our State.

Senator HAWKES. Can you prove that?

Mr. FICHTER. Yes, because in Ohio, the law prohibits the manufacture and sale of colored oleo.

Senator HAWKES. It is absolutely prohibited.

Mr. FICHTER. That is right.

Senator HAWKES. Of course, that same reasoning does not apply over the country in general, and that is what we have to think about. Mr. FICHTER. That is true. But as I understand it, that applies in 20 of the States, and I might say this, that it has been pointed out in Ohio that the passage of this bill will put the oleo manufacturers in Ohio at a great disadvantage with the oleo manufacturers in other States in which they can manufacture oleo, that our oleo manufacturers cannot make it, and they cannot export it, and they will be at a 10-cent disadvantage. They have recently discovered that.

Senator BARKLEY. Your local law applies to the consumption of oleomargarine within the State; it does not prevent manufacturers-Mr. FICHTER. Yes, it does.

Senator BARKLEY. From shipping it out of the State?

Mr. FICHTER. It prevents the manufacture of it.

Senator BARKLEY. You cannot even make it out there?

Mr. FICHTER. That is right.

Senator BARKLEY. You have not any oleo manufacturers who would be affected by this.

Mr. FICHTER. They would be affected in this way. The consumer in Ohio, the only saving that would come if there would be a saving

would be on the uncolored oleo. It would not save the buyers of

colored oleo.

Senator BARKLEY. You have oleo manufacturers in the State?
Mr. FICHTER. Yes, we do.

Senator BARKLEY. You do have?

Mr. FICHTER. Yes.

Senator BARKLEY. They make it white and keep it white?

Mr. FICHTER. Yes, that is right, make it white.

Senator BARKLEY. They could continue to do that.

Mr. FICHTER. They could continue to make it white, but you see they have discovered

Senator BARKLEY. You cannot sell it in the State under either white or colored yellow?

Mr. FICHTER. Yes, they can sell it. It can be sold in the white form, but it cannot be sold in the yellow, and it cannot be made in the yellow form.

Senator BARKLEY. I thought there were 22 States claimed here that prohibited the sale of oleomargarine in any form.

Mr. FICHTER. No, no, no; what I am saying is that in 20 States the manufacture and sale of colored oleo is prevented.

Senator BARKLEY. Is that true in all of those States?

Mr. FICHTER. That is the information that I have on it.

Senator BARKLEY. That they can make it white and sell it, but cannot make it colored and sell it.

Mr. FICHTER. That is right.

Senator THYE. If I may interrupt there, there are various laws existing in the different States. Now, some States have it that you cannot process it unless it contains so much animal fat. Insofar as the uncolored product is concerned it can be processed and sold. When the color comes in, which does not deprive the consumer of the food value or nutritive, it is a question of color entirely, why, there in some of the States they absolutely prohibit the sale of the product in its colored forms, and in other States they will prohibit the process unless it contains so much animal fat instead of vegetable fat.

Senator LUCAS. Do I understand you to say that the repeal of this tax will be detrimental to the margarine people, so far as Ohio is concerned?

Mr. FICHTER. Yes; I would say that. That is, the people who have been supporting the repeal of this tax have recently come to realize that the repeal of this tax so far as the Ohio margarine manufacturers are concerned, will put them at a 10-cent disadvantage with those in other States where they can manufacture it and sell it.

Senator LUCAS. Now, the repeal of this tax under conditions that you have explained in your manuscript will not seriously or in any wise affect the dairy interests of Ohio, would it?

Mr. FICHTER. Yes; I think it will.

Senator LUCAS. You still have your State law.

Mr. FICHTER. That is right.

Senator LUCAS. Which governs out there.

Mr. FICHTER. Yes.

Senator LUCAS. You have that after this bill is passed. If it should become the law, just how would the repeal of this tax affect the dairy interests in your State, as far as the State of Ohio is concerned in view of the State law there?

Mr. FICHTER. As I indicated, if I may read this one statementSenator LUCAS. Maybe I missed that.

Mr. FICHTER. We are opposed to the repeal of this tax because wo recognize it as a first step in efforts to remove measures which now tend to prevent oleo from being sold in imitation of butter, and if I may pursue that, I will be glad to try to answer the point that you raised.

When this was first proposed, I would say that the consumers in the cities in Ohio thought they were going to save something on their food bill, but they have discovered now that so far as Ohio is concerned, they will save one-fourth of a cent a pound. I pointed out a while ago that I went to the grocery store the other day and just priced the oleo and butter, and I found in the last 2 weeks oleo has gone up 4 cents. But here is the thing so far as our dairy industry is concerned, and whole farming in general. For several years we have had the issue in our State legislature over the matter of changing the law which would permit the manufacture and sale of oleo in the State. That is a very live issue.

Senator BUTLER. Of yellow oleo.

Mr. FICHTER. Yes, of yellow oleo. If this bill passes already I have heard comments from those who have been supporting the bill that the next step must be the changing of our State law, so that the manufacture and sale of oleo can be carried on.

We have in Ohio a legislature that is composed of two houses; the lower house of the legislature is composed so that each county has at least one representative, and therein is a means for the rural group to have some effective representation.

Since this bill has been under consideration by the Congress, I have noticed statements suggesting that now we have to change the make-up of our State legislature. We have folks who are recommending that we have a unicameral legislature, and are proposing to submit a constitutional amendment and one of the arguments they are using is that if we are going to take advantage, they say if the Congress passes this bill, Ohio will not be any better off; we have to hurry up and change our legislature so we can get rid of this law that prohibits the manufacture and sale of oleo, and I think that we are going to find in our State we are going to face a conflict, just the beginning of a conflict between the city interests and the rural interests over this matter of adequate representation, and I think it is the beginning of that effort. That is my point.

Senator LUCAS. I can understand your fears along that line. Once the tax is repealed from the Federal angle, it means the beginning of pressure in the States.

Mr. FICHTER. That is right.

Senator LUCAS. Where they have these laws to have it repealed there or have laws changed to meet certain conditions.

Senator HAWKES. May I ask you one more question, because I understood you to say it is illegal to color oleomargarine in your State.

Mr. FICHTER. No; it is illegal to sell it in the colored form.

Senator HAWKES. In other words, I could buy the white oleo and buy the coloring matter, and color it in my own home, but you could not do it in the restaurant, could you?

Mr. FICHTER. You could not do it and sell it.

Senator HAWKES. You could not do it and sell it?

Mr. FICHTER. Yes.

Senator HAWKES. If you could not do it in the restaurant could you not sell it to your customers in the restaurant?

Mr. FICHTER. I do not know about it. I just never checked into that, but you cannot make it, and you cannot sell it. The housewife can buy it uncolored and color it. Whether the restaurant can color it and sell it that way or not, I do not know. I think some of the other witnesses perhaps could answer that question. I would not want to undertake to answer it, because I have not checked into it.

Senator HAWKES. Thank you very much.

The CHAIRMAN. Proceed, please.

Mr. FICHTER. Incidentally, the price of oleo in grocery stores increased 4 cents per pound during the last 2 weeks. This increase was not caused by the tax. It is interesting to note that the objection raised by consumers to this increase of 4 cents per pound in the price of oleo has not been as noticeable as is the clamor for a reduction in the tax to the extent of only one-fourth cent per pound.

It is significant that the farmer receives only 31 percent of the consumer's dollar which is spent for oleo while he receives 76 percent of the consumer's dollar which is spent for butter. This means that the purchaser of butter is receiving more for his dollar, with less being spent for distribution costs, than is the case with the purchase of oleo. In opposing this bill which would repeal the Federal tax on oleo, we are not pleading in behalf of the selfish interests of dairy farmers, of dairy manufacturers, or of farmers as a whole. We are urging the defeat of this bill as a means of helping to guarantee an adequate supply of milk for all the families of the Nation, as a means of making possible the continued production of butter, as a means of stabilizing agriculture economically, and as a means of conserving our soil. Thoughtful people in the city and in the country are coming to the realization that a stable agriculture is basic to the stability of the entire Nation. Farmers produce the food which sustains life, and in their care rests the conservation of the soil so that it shall be a continuing source of food. We cannot say that we have a stable agriculture when, in these so-called good times, the farmers, who constitute one-fifth of the population, are receiving only one-ninth of the national income.

On account of the fact that about four-fifths of our population live in the cities today it is quite likely that there are millions of people who do not recognize the importance of farming. There are many whose only acquaintance with food is made at the time when they see it on their table in their homes or in a restaurant. This lack of acquaintance with farming causes an indifference to agriculture which is proving harmful not only to farmers but to our whole society. If this indifference continues to prevail, agriculture will become so much neglected that our Nation will find itself someday in a situation similar to that of other nations which have neglected their agriculture in the past. If we are wise, we shall check this tendency before it is too late.

The oleo bill when viewed superficially may seem rather unimportant, but when considered carefully, it is tremendously important. The CHAIRMAN. Thank you very much, Mr. Fichter.

Mr. FICHTER. Thank you.

The CHAIRMAN. The next witness is Mr. Henry Lepper, of the United States Food and Drug Administration.

I think the record should make it very clear that Mr. Lepper is not a volunteer here. He was requested to come by the committee.

Mr. Lepper, will you state your name and identify yourself for the benefit of the record?

STATEMENT OF HENRY LEPPER, FOOD AND DRUG

ADMINISTRATION, WASHINGTON, D. C.

Mr. LEPPER. My name is Henry A. Lepper. I am Chief of the Cereal and Dairy Section of the Food and Drug Administration, United States Government, Washington, D. C.

The CHAIRMAN. Senator Butler, I understand you have some questions you would like to put to Mr. Lepper.

Senator BUTLER. I have quite a list of questions here. I would suggest, Mr. Chairman, if it is agreeable, that I simply submit the questions and let Dr. Lepper submit the replies for the record.

Mr. LEPPER. That is agreeable.

Senator BUTLER. That would save a lot of time.

The CHAIRMAN. That is agreeable.

Senator BUTLER. And I think, Mr. Lepper, you will have no trouble in answering the questions rather promptly for the clerk who is making up the complete record.

The CHAIRMAN. Will you read the question in each case, Mr. Lepper. Mr. LEPPER. "Are you engaged in food enforcement work for the Food and Drug Administration?"

The answer is "Yes."

"How long have you been engaged in food work?”

Thirty-five years.

"Do oleomargarine and butter come within your province?"

Yes.

"Has a definition and standard of identity for oleomargarine been established under the food and drug law?"

Yes.

"Did you participate as a witness representing the Food and Drug Administration in the hearing which was held preceding the establishment of that standard?"

Yes.

"Is it true that the oleomargarine standard permits the addition of an artificial butter flavor called diacetyl and also permits artificial yellow color?"

Yes.

"In your opinion what is the purpose and effect of adding artificial flavor and artificial yellow color to oleomargarine?"

The flavor that has been permitted in oleomargarine known as diacetyl is a flavor which has been demonstrated to be present in butter through the practice of ripening the cream during the butter-making process. It is caused by the action of certain bacteria upon the citric acid of the milk.

After the discovery of the identity of the flavoring substance in butter, it was found that such flavoring substances could be made in a more concentrated form and it was given the identity either of starter distillate or when more highly purified, diacetyl.

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