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The CHAIRMAN. But there was nothing in the decision as I recall it that threw any doubt on the constitutionality of a regulation that would carry the decision into the food field.

Mr. LEPPER. That is correct.

The CHAIRMAN. How many employees do you have? Let me first ask you how many agencies are engaged in enforcing the oleo tax provisions at the present time?

Mr. LEPPER. The Bureau of Internal Revenue enforces the tax provision.

The CHAIRMAN. What do you folks do about it?

Mr. LEPPER. The only work that we do with Internal Revenue would be in a case where, as occurred in 1931, there was quite a widespread activity on the part of several people at Boston selling oleomargarine for butter. Many of them went to jail for conspiracy. We cooperated with the Bureau of Internal Revenue and brought in the angle of the violation of the Food and Drug Act, in that conspiracy, as well as of the Tax Act.

The CHAIRMAN. How many people do you have in your organization whose business it is to investigate violations of the Pure Food and Drug Act?

Mr. LEPPER. I do not know exactly, Senator.
The CHAIRMAN. Give me a rough guess in round numbers.
Mr. LEPPER. I should say five or six hundred.

The CHAIRMAN. How many people are there in Internal Revenue, if you know, who busy themselves in this particular matter?

Mr. LEPPER. That I do not know.

The CHAIRMAN. Mr. Stanley, would you find that out for us, please. Proceed.

Senator THYE. Would I be out of order if I asked one question at this point?

The CHAIRMAN. Go ahead, please.

Senator THYE. If the tax were removed entirely, the Internal Revenue Bureau would not in any sense have a responsibility in checking this?

Mr. LEPPER. I understand they would not.

Senator THYE. They would not have any responsibility whatsoever in checking on the product, whether it was improperly labeled or not? That would have to fall entirely upon the Food and Drug department.

Mr. LEPPER. That is my understanding; yes, sir.

The CHAIRMAN. Does the Department of Agriculture have anything to do with the subject matter?

Mr. LEPPER.. No, sir. The Food and Drug Act is no longer under the Department of Agriculture. It is now in the Federal Security Agency.

The CHAIRMAN. Then the two agencies concerned are your agency and Internal Revenue.

Mr. LEPPER. Correct.

“Am I correct in understanding that you opposed the addition of artificial flavor to oleomargarine?

The answer is “yes," at that time.

Senator HAWKES. May I interrupt there? You say “Yes, at that time.” How do you feel now!

Mr. LEPPER. At the time that that proposal was made it was in the beginning of the development of the use of diacetyl as a butter flavor. I took the position then that the use of diacetyl may give to the purchaser an impression that butter was present in the oleomargarine-that there was the possibility of an abuse in that respect.

Since that time, which was in 1941, when the standard was passed, we have no reason to believe that such belief exists on the part of the purchasing public, that there is butter in oleomargarine. We base that belief of course on the correspondence we received and our con tacts with consumers which we continually carry on to develop consumer reactions.

In the enforcement of the law like the Food and Drug Act it is very important often to be able to demonstrate to the court that you have a measure of consumer reaction as to the understanding of the identity of food, so that the Food and Drug Administration does attempt through its inspectors and through its contacts with consumer groups to understand the consumer opinions and beliefs, regarding food, and as the result of that I no longer feel that the use of diacetyl actually gives the consumer a belief that butter is present in oleomargarine.

Butter could be present legally. Many years ago butter was present in oleomargarine. It is many years, however, since any has been used in that way.

Senator BUTLER. Why would it change? Why would the custom change? Why did they stop using butter?

Mr. LEPPER. That I do not know. Of course, we must recognize, and do recognize, that oleomargarine is a butter substitute. It is used by those who purchase it in place of butter, and the endeavor of those oleomargarine manufacturers is to make their product satisfying in every respect they can as butter. Among the things that are concerned in this

Senator HAWKES. You do not mean as butter; you mean to replace butter.

Mr. LEPPER. To replace butter, that is, to have as many properties ás butter has for the person who wishes to use it in place of butter.

The manufacturer, one of the properties of butter which the olemargarine manufacturer endeavors to simulate is the texture and its spreadability, let us say, and its use in the customary consumption of the food.

At the time the oleomargarine was first perfected or invented difficulty was experienced in getting those properties into the product, and

have been at that time that some butter was incorporated to give some of the texture properties that were desired.

I do say that for many years there is no record of butter being used that I know of in oleomargarine, and those properties are obtained by treatment of the oil, rather than through the addition of butter. The CHAIRMAN. Proceed, please.

Mr. LEPPER. “But notwithstanding your testimony the Federal Security Administrator at that time, Paul McNutt, included diacetyl in the standard."

Yes.

"Have you recently looked over the testimony which you gave at that hearing?

Yes.

it may

"Do you remember saying this:

“ If you will take oleomargarine, and this uninformed group, who don't know a great deal about what it is composed of, and color it, immediately the consumer gets a false conception of what that product might be. In other words, he probably would accept it without question for butter.'"

The rest of the question is, “Do you still hold that view ?”

Naturally the addition of artificial color to white oleomargarine makes it resemble butter, and removes one of the distinguishing features between the two products.

“Why did not the Food and Drug Administration oppose the use of artificial color in the definition and standard for oleoWas it because the revenue laws permitted colored oleo, though taxed ?"

The second part of the question answers the first part. The Federal Administrator certainly had no authority in setting up a standard to deny in oleomargarine that which Congress had permitted either with or without the levying of a tax.

“Do you believe the difficulty of preventing fraud and deception in the sale of oleomargarine as and for butter will be enhanced if the revenue laws are repealed ?"

As one engaged in the enforcement of the Food and Drug Act for 35 years, I frankly feel that insofar as interstate commerce is concerned, the fraud and deception in the sale of oleomargarine as butter can be controlled. Of course, that has nothing to do with the sale of the product made in a State and maintained and kept within its boundaries.

The CHAIRMAN. The question of alternatives is squarely before us through the amendment proposed by Senator Fulbright. I should like to suggest that you gentlemen get to work on the propositioon and get your counsel at work and whoever else might be useful to you, and suggest an amendment which in your opinion, without committing yourselves to the philosophy of the thing, would serve the purpose which you have just mentioned.

Mr. LEPPER. Yes, sir.

“Would you expect that if the tax regulation were removed, a greater enforcement burden will be placed on the Food and Drug Administration?”

I would say that there would be a greater enforcement burden; yes, sir.

“The legislation which we are considering would remove the 10 cents tax on oleomargarine when it is artificially colored yellow. The oleomargarine manufacturers want this restriction removed. In your opinion, is this because of a desire on their part to manufacture oleomargarine the same color as that which consumers associate with butter?"

That question is asking me to think for someone else. Just what is in the mind of the oleomargarine manufacturers in removing the 10 cents tax can be speculated on in many ways. Certainly the color that they wish to give oleomargarine is a butter color.

Senator GEORGE. The grower of fats and oils might be interested in increasing his sales, also.

Mr. LEPPER. Speaking of the grower of fats and oils, Senator George, I heard a statement made here this morning that you could not make an oleomargarine naturally yellow from oil.

Senator GEORGE. That is right.
Mr. LEPPER. That is not a fact.

Senator GEORGE. I know it is not a fact, but I heard it made. I suppose I will hear it again.

Mr. LEPPER. As a matter of fact, Congress amended the oleomargarine law not so many years ago because they were making oleomargarine from naturally yellow oils, and the courts decided that the law at that time did not prohibit that, nor did the tax on such oleomargarine. As the result of that Congress amended the oleomargarine law and made the product taxable when it had a yellow color beyond a certain definite shade measured by a scientific instrument, no matter from what source the color was derived.

Senator HAWKES. Do you know anything about the reasoning of that amendment, because that is a rather unusual thing. If they could make the color in the natural process, was there any question of impurities involved in there?

Mr. LEPPER. No. There was no question of impurity. It was a naturally yellow oil. The oil being favorably used at that time was known as palm oil. It was edible but it had a high pigment value. With the use of that oil he found that he could make a yellow product, and it resulted in a contest which was decided against the Government under the law at that time, and the law was amended.

The CHAIRMAN. The suggestion has been made that we take the deepest yellow of butter at the height of the green season and that oleomargarine be required to carry the color on to an even deeper yellow, so that by the consumer taking a look, he can see when he is getting oleomargarine. Would that be feasible?

Mr. LEPPER. I do not believe the information is now available to set in legal terms what that deepest color is. It would only be a matter of controversy if you get it in general terms.

The CHAIRMAN. Do you not have a scientific gradation of colors! Mr. LEPPER. That is correct, but I do not know that there is a record of the measurement of what is that deepest color at the present time. It could be done.

The CHAIRMAN. You have to invent a measure for it, then.

Mr. LEPPER. You will have to determine what the limit of deepest color is in butter.

The CHAIRMAN. A gentleman came in to see me the other day who said that Germany had this problem at one time, and they solved it in this way, and I do not vouch for the accuracy of the statement at all. He said that Germany compelled the margarine people to introduce a chemical which had this effect: If you were suspicious in a restaurant as to what you were eating, you could take a match and touch the corner of the margarine, and there would be a very slight flame, which would not occur if you did the same thing to butter. Is that apocryphal, or what?

Mr. LEPPER. I have never heard that one, but I do know that in some of the foreign countries, in Denmark, for example, the government requires the addition of a certain percentage of a very easily identified oil to expedite the enforcement of the oleomargarine regulations, and makes the identification of the product simple and easy without great expense.

The CHAIRMAN. Has your Department made a study of foreign practice in this matter?

Mr. LEPPER. No, that information we gather in the course of our general reading and keeping up with the literature as we say on the subject. We have never investigated all of the foreign regulations and requirements.

"I would like to read to you a proposed amendment to the food and drug law and ask you whether in your opinion such an amendment would be effective in preventing deception and confusion. It would be proposed to amend section (102) as follows:

A food shall be deemed to be adulterated if it is oleomargarine, and it contains any artificial flavor or artificial color.?”

The CHAIRMAN. What is the question about that?

Senator CONNALLY. In that connection oleomargarine of course is a synthetic product. There are many elements in it and all of that might be termed artificial, so that it would be very confusing, would it not, an amendment of that character ?

Mr. LEPPER. I think the language is clear enough, Senator, artificial flavor and artificial color. They are very well established.

Senator CONNALLY. But in the case of natural, you said they used to make a natural yellow.

Mr. LEPPER. That is correct.
Senator CONNALLY. That would not be artificial.

Mr. LEPPER. That would not be artificial; no, sir. The color derived naturally from one of the ingredients of it would be natural.

Senator CONNALLY. That amendment would denounce that as being adulterated ?

Mr. LEPPER. No, sir, that would not.

The CHAIRMAN. It would certainly widen the difference in taste and appearance, would it not?

Mr. LEPPER. It would widen the difference in taste and appearance.

The CHAIRMAN. So the question as to whether an amendment of that kind is desirable is really a question of legislative policy, is it not?

Mr. LEPPER. The question was asked if it prevented deception and confusion.

The CHAIRMAN. To the extent that there is deception or confusion, obviously the more you put into law that draw the distinctions in tasté and appearance, the more you eliminate confusion.

Mr. LEPPER. That is correct.
The CHAIRMAN. And deception.
Mr. LEPPER. That is correct; yes, sir.

Senator HAWKES. The question asked is one that I cannot quite see any philosophy in back of at all, that is, any sound philosophy. I understand, Mr. Lepper, that the Pure Food and Drug Act was amended so that a natural product made from a certain kind of oil which had when it was finally produced and completed a yellow color may be as deep or deeper than butter, that they put an amendment in there and made them treat that natural product so that it did not have the color that naturally came to it.

Mr. LEPPER. That is correct, with one exception. You said the food law was amended. It was not the food law, Senator. It was the internal revenue tax law that was amended.

Senator HAWKES. I withdraw that statement and substitute internal revenue law. But I cannot see the objective of that. In other words, that is a good deal like telling me that if I take certain ingredients

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