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with permitting the oleomargarine people to take the butter market which has been built up by dairy interests. When a proposition (Hill and Case amendments) is offered which will prevent fraud, they object. (April 28, 1948, p. 5109.) Representative Merlin Hull (Wisconsin)

In opposing repeal of the taxes, Mr. Hull pointed out that the present laws affecting oleomargarine, with but one slight amendment, have been in effect for nearly 60 years, and no other form of protection for the dairy farmer has been suggested

People have been led to believe that they are being taxed unjustly. Actually, of the more than 600,000,000 pounds of all oleo made in this country last year, less than 18,000,000 pounds were taxed the 10 cents per pound on colored olea.

It is alleged by Fortune magazine that over 40 percent of all the oleo made in this country is produced in plants owned by a British cartel which has monopolistic control over the palm oil, coconut oil, and other vegetable oils of the world. In a few months, foreign oils may begin to flow into our ports.

"The oleo manufacturers want to make their product yellow in order to imitate butter and take over the table-spread market in America. The consumers will not gain, but the farmers will lose.” (April 26, 1948, pp. 4992–4993.) Representative Henry M. Jackson (Washington)

“The removal of all taxes on oleomargarine and granting oleo manufacturers complete freedom to sell their product, colored or uncolored, as imitation butter would be just as harmful and unfair to city consumers as to farmer producers."

The dairy farmer has an investment to protect and in this sense is a smallbusiness man, and, like all small-business men, he is entitled to protection from powerful interests competing unfairly with his goods and services.

Butter is the cornerstone of the dairy farmer's economic structure. To have enough milk to meet fluid demands in the slack season requires an excess of milk in the flush season. Much of this surplus must go into butter production. If butter could not be produced profitably, farmers would naturally have to reduce their herds, and the consequent shortage of milk in the slack season would be aggravated and tend to raise fluid-milk prices.” On the other hand, tax removal would have inconsequential effects on the total sale of soybean and cottonseed oil, since oleo represents less than 3 percent of cash farm income. In addition, the dairy cow has made a valuable contribution to soil conservation.

If these taxes are removed, uncolored oleo will probably go off the market and the price of colored oleo will increase more than any tax saving. "The consumer will not save, and the United States Treasury will lose, but the oleo manufacturer will increase his already exorbitant profit.”

It has been predicted that we will lose another 2,500,000 head of dairy cattle in the next 3 years if the Federal taxes on oleomargarine are repealed. Meat prices will soar. (April 28, 1948, pp. 5127–5128.) Representative Ben F. Jensen (Iowa)

Mr. Jensen maintains that the manufacturers of oleomargarine will propagandize their product to the end that many American people will be led to believe that real butter is unhealthy and that eventually the price of oleomargarine will be higher than that of butter. (April 26, 1948, p. 4987.) Representative Frank B. Keefe (Wisconsin)

Mr. Keefe opposes repeal of the Federal tax on oleomargarine for the following reasons:

1. The housewife has no assurance that the price of colored oleomargarine will be reduced in the event that the tax is removed. The following example may be cited in proof of this point. In a Washington, D. C., store recently uncolored oleomargarine was selling for 41 cents per pound; colored oleomargarine was selling for 55 cents per pound, a differential of 14 cents, while the Federal tax on colored oleomargarine is only 10 cents per pound. It is apparent that there will be no reduction in price. "The price of oleomargarine will follow the historic price of butter all along the line.”

2. In the event that the Federal tax on colored oleomargarine is repealed, oleomargarine manufacturers will most likely use imported copra oil, which can be purchased for a fraction of what it costs to manufacture their product out of soybean or cottonseed oil.

3. The Federal tax on colored oleomargarine is the consumers' protection against the fraudulent sale of oleomargarine as butter.

4. The Federal tax on colored oleomargarine protects manufacturers of oleomargarine against misrepresentation of their product to the public. The law protects the producer as well as the consumer.

5. The enforcement of the tax collection is placed within the jurisdiction of the Bureau of Internal Revenue. The law providing for the tax on colored oleomargarine provides greater protection against fraud than the Pure Food and Drug Act because of the fact that this act covers only shipments in interstate commerce.

6. Taxes on uncolored oleomargarine are not burdensome. The cost of all these taxes, including license fees paid by retailers and wholesalers, to a family that consumes 3 pounds of oleomargarine per week (156 pounds per year), would amount to about 40 cents a year, or less than 1 cent a week.

7. The natural color of butter is always yellow. During some seasons the color is less yellow than in others. Color is added only for the sake of uniformity and not to imitate some other product.

8. “It is impossible to produce a natural yellow oleomargarine from domestic oils.” In order to produce a yellow oleomargarine it must be colored.

9. Farmers are not benefited by the oleomargarine industry. During 1946 the American farmer could attribute only about two-tenths of 1 percent of his income to farm products used in the manufacture of oleomargarine.

10. Repeal of the tax on colored oleomargarine wi not help the southern cotton farmers. Records reveal that dairying and other competing interests are more important as sources of cash income to the farmers of the South than oleomargarine.

11. Butter has long been the balance wheel of the dairy industry. Milk is a seasonal product with great surpluses accumulating during periods of high production. The bulk of butter is made during such periods. This butter can be stored away and used during periods of low milk production. Without the stabilizing influence of butter consumers would be deprived of an adequate supply of fluid milk during periods when milk production is low.

12. “The dairy industry is the only type of farming that goes with a sound soil-conservation program. From that standpoint alone it is to the interests of all America to see that this great industry is not destroyed.” (April 26, 1948, pp. 4964-4967.) Representative William Lemke (North Dakota)

Mr. Lemke opposes the repeal of the tax on oleomargarine for the following reasons:

1. “There is only one reason why some of the manufacturers of oleo want to steal the trade-mark of butter, and that is to perpetrate a fraud upon the public. They want to color their product yellow so that the consuming public will not know the difference between it and butter."

2. The natural color of oleomargarine is not yellow.

3. “I have no objection to oleo provided it is offered in its natural color, or any other color except the trade-mark of butter-yellow. If anyone wishes to deceive themselves, and do not like the color white, let them have brown, green, or pink oleo, or any other color, but let this Congress not become an accomplice to a fraud-to deception."

4. The dairy industry contributes a great deal toward the building of a balanced economy, but the farmer and his family get less for providing the public with a balanced economy than those who work in the cities. (April 26, 1948, p. 4990.) Representative George MacKinnon (Minnesota)

1. There is nothing in this legislation that would aid 90 percent of the consumers of oleomargarine in America. For this reason “this legislation should be opposed if for no other reason than the fact that it is not honest legislation.”

2. The reason that this legislation will not benefit the great majority of consumers is that 90 percent of the oleo that is consumed in this country is not subject to the 10-cent tax.

3. The removal of the 10-cent tax on colored oleo may not have the desired effect of reducing the price of oleo even in areas where it can be sold. Producers of oleo would probably sell the colored product exclusively and might take advantage of the opportunity to raise the price above that now charged for the uncolored product.

4. If the farmers' market for butterfat is removed or seriously interfered with the result may be that the farmers will be forced to increase the price of milk. The price of meat would also be increased because dairy operations would be decreased.

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5. "The net result of this legislation in the long run will be to increase the price of oleomargarine to the majority of consumers, to increase the price of milk, to increase the price of meat, and if that result is a benefit to the consumers I fail to see it. The only people in America who would benefit from this legislation would be the oleomargarine manufacturers and they would do so at the expense of the consumers and to the detriment of the dairy farmer's honest market."

6. “To permit the artificial coloring of oleomargarine and to permit the sale of oleomargarine under such circumstances that it cannot be distinguished from creamery butter is a fraud on the purchaser and is unfair competition which the farmers of this Nation should not be required to face.” (April 28, 1948, pp. 5112-5113.) Representative Earl C. Michener (Michigan)

Margarine has been developed over the years into an imitation of butter. Its manufacture and sale is regulated in many States. The State laws did not happen overnight and are time-tested.

It is not fair competition to doctor and color margarine so the purchaser is deceived and does not know what he is getting.

The vegetable-oil industry and the dairy industry are to some extent interdependent. “For instance, in 1946 the cotton farmers received $21,000,000 from oleomargarine manufacturers for cottonseed oil, but during the same year the same farmers received $31,000,000 from dairy farmers who fed cottonseed meal to their cattle; also soybean growers received $23,000,000 from oleo manufacturers, while they received $55,000,000 for soybean products fed to dairy cattle.” (April 28, 1948, pp. 5099-5100.) Representative Karl E. Mundt (South Dakota)

it seems clear that the oleomargarine trust feels justified in spending vast sums of money in an effort to eliminate the tax upon colored margarine so that innocent consumers can be more readily deceived into accepting and using oleo instead of the more wholesome and nutritious product of butter.” Since it seems apparent that the only reason the oleo trust wants to color its product yellow is to make it look like butter, there can be no valid objection to the maintenance of a tax upon such a coloration process.

There is nothing distasteful or repugnant about such foods as vanilla ice cream, angel food cake, and mashed potatoes which happen to be white in color,

I think this legislation should be defeated and the tax on colored oleo retained since it helps protect the consumer againt deception and adulteration and since it aids butter makers in their long fight to raise and maintain the standards of their product against unfair competition and against fraudulent imitation.” (April 26, 1948, pp. 4970–4971.) Representative Reid F. Murray (Wisconsin)

Fourteen of the largest dairy corporations in the United States made $4,000,000 less than they did the year before. The manufacturers of oleomargarine are making two to seven times the profits of 1940. "If they are making three times as much oleo and up to seven times the net profit they did in 1940, I do not see why they have been so eager to obtain legislation that gives them still more favorable legislative consideration when they now have more legislative protection than is provided the dairy people.”

The antilivestock attitude of the present administration is illustrated by its foreign trade program. Funds received under section 32 of the AAA act are used for disposing of surpluses and for finding new uses for agricultural products. The greater part of these funds are received from livestock products, yet the funds are spent to subsidize cotton and other nonlivestock and soil-depleting crops. The duty on livestock products has been lowered so as to increase their importation.

The consumer is being squeezed and must pay more while the farmer receives less for his products. The handlers of dairy products are just about the only corporations in the United States that showed less net income in 1947 than in 1946.

“Every drop of oil in every pound of oleo is subsidized out of the Federal Treasury. The dairy cow stands on her own four feet, but her products are compelled to compete with a federally subsidized imitation and not a substitute.”

If this bill becomes law and if the price of oleomargarine is 10 or 15 cents higher than at the present time, the American housewife may feel she has been

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misled or used as an agent to mislead her Congressman in this question. The farmer, too, knows who his true friends are.

Millions of babies are raised on evaporated milk. Storage stocks of evaporated milk have decreased while there has been a 58-percent increase in baby numbers.

Iowa, Wisconsin, and Minnesota produce one-fourth of the milk of the Nation, yet farmers in some of the other States received from 70 to 90 percent more in 1947 than the farmers of these States.

"This oleo bill means higher fluid milk prices; it means that the consumer, if he can still find it in the market place, will pay more for beef and veal; it means that milk cattle numbers will be further reduced and cause higher prices for hides and shoes; and, finally, it means a body blow to: soil conservation and soil-fertility conservation of our soils. All the housewife will have out of the passage of this bill will be an opportunity to pay more for oleomargarine.”

The present Secretary of Agriculture has refused to even announce a support price for milk and dairy products, even though the ouse has passed a bill requiring him to do so. Yet he found plenty of time and plenty of money to spend on nonlivestock crops and even subsidized cotton both domestically and in foreign trade when cotton was above parity in price.

Domestically produced oils now have protection which amounts practically to an embargo. This is contrary to the objective of having more harmonious world relationships. (April 27, 1948, pp. 5017, 5036–50; April 28, 1948, pp. 5120-5123.) Representative Joseph P. O'Hara (Minnesota)

Mr. O'Hara stated that the tax on oleomargarine is necessary to protect the health of our people. “Without the help that this tax affords the enforcement machinery of the Government is going to be very seriously impaired.” (April 28, 1948, p. 5114.) Representative John Phillips (California)

1. There is no doubt that the American consumer prefers butter wherever possible. The American Dairy Association recently conducted a test with 7,850 patrons of a cafeteria which revealed that at 2 cents a pat for butter and 1 cent a pat for oleo, 93 percent of the cafeteria patrons chose butter. At 1 cent a pat for butter as against free uncolored oleo, 98 percent chose butter.

2. Governmental regulations and restrictions on the dairy industry and livestock industries have tended to penalize their output. The trend still continues. The dairy cow population has shrunk 11 percent since 1945.

3. Milk production this year is lower than last year and the trend has not yet been checked. This trend began “when butter was discriminated against by Government order during the war, and the present scarcity and high prices of butter are natural results."

“If the butter industry is now to be further injured by loss of part of its milk to yellow oleomargarine this trend will be accentuated. We will find milk even less plentiful in milk sheds around our industrial centers. Higher prices for milk will follow as a matter of course, due to the relationship between fluid milk production and butter production.”

4. Milk is a seasonal product. In order to have an adequate supply during seasons of low production the farmer must milk more cows than he needs during the flush seasons. It is during the flush seasons that the bulk of their butter is manufactured. This makes it possible for the dairy industry to maintain a balanced output. Without the butter outlet farmers would cut their herds to the minimum so as to produce only enough milk to meet demands during the flush season which would result in a scarcity during the low production seasons.

5. If milk production is reduced the consumer's milk bill would be increased by more than any possible saving in oleomargarine. Consumer costs would also be increased indirectly by the resulting increased costs of meat and leather products.

6. “The consumer is entitled to protection against imitation. The color requirements affecting oleo are among the mea’ıs of affording that protection.” (April 28, 1948, pp. 5128_5129.) Representative Charles B. Robertson (North Dakota)

1. “This has been labeled a butter-oleo fight. Herein lies the basic error in thinking which has resulted in bringing this matter up for consideration today. It is not a contest between butter and oleo; it is not a contest between the soybean or cotton farmer and the dairy farmer. It is a fight vital to every citizen of the Nation, and it is a fight between the entire public and the margarine interests." 2. Even if oleomargarine is the equal of butter in every respect it should not be permitted to imitate butter.

3. “The argument is not whether butter and oleo are on or near a par in nutritive and food value; the question is, Should we protect our dairy industry?

4. Proponents of tax repeal claim that the tax on oleomargarine is a specialprivilege tax, "subsidy," and "restraint of trade.” Even if these claims are justified, it is evading the basic question, “Should we protect our dairy industry?” We have tariff to protect industry; tariff may be considered a specialprivilege tax,

5. “We subsidize many farm products, including cotton and soybeans, I am told. We regulate many industries for the good of the Nation; regulation constitutes restraint of trade. But if these things are justified, then the cry of 'wolf' and is merely designed to arouse emotion."

6. It is claimed by the oleomargarine interests that if the tax on oleomargarine is repealed it will reduce the cost of butter and the cost of margarine. There is no apparent basis in fact for this statement. “How can removal of a tax on margarine reduce the cost of butter? They are not competing today because of the wide variance of price between butter and oleo.” The cost of butter is not high compared to other prices of products made from butterfat and milk. “The price the farmer receives for butterfat sold to the creameries to make butter is much lower than the price the same farmer would receive if he should sell this same butterfat to evaporators, cheese factories, or as fluid milk." In consideration of the fact that an hour of labor is required to produce a pound of butter, including all steps involved in the process of production and distribution, it hardly seems possible that it could sell for less than a dollar a pound. In consideration of these facts, the repeal of the oleomargarine tax will not reduce the cost of butter or the price the consumer must pay for it.

7. The repeal of the tax on olemargarine will reduce the price that the consumer must pay for uncolored oleomargarine only a quarter of a cent a pound. No one pays the 10-cent tax on colored oleomargarine unless it is colored when it is purchased. The most that the removal of the 10-cent per pound.tax on colored oleomargarine could do would be to make colored oleo available to consumers at the same price as paid for uncolored oleo today. It is not likely, however, that this will be the case if the margarine interests can get the privilege of making their product appear like butter.

8. The time that would be saved-by housewives if they could purchase colored oleomargarine instead of coloring it at home is not as important as the proponents of tax repeal would lead us to believe because of the fact that the majority of the housewives use more uncolored oleomargarine for cooking than they do for a table spread. For cooking purposes it does not matter whether it is colored yellow or whether it is white.

9. The tax on colored oleomargarine is the only protection that the housewife has in knowing whether she is buying butter or oleo. “The Pure Food and Drug people have no authority, except over interstate traffic, to regulate and prevent the sale of margarine as butter."

10. Butter in reality is the balance wheel of the dairy industry. Milk is not produced in the same quantity during all seasons of the year. A sufficient number of cows must be kept to provide an adequate quantity of milk to be used in fluid form for the manufacture of cheese and other milk products during seasons of low milk production. During seasons of high milk production there is a surplus of fluid milk. It is during these seasons that the bulk of our butter is manufactured.

11. If dairy herds are reduced to the point of producing a sufficient quantity of dairy products for human consumption during the high productive period of the herds, there will be a scarcity of dairy products during the low producing periods As a result the price of milk will tend to skyrocket during periods of low production.

12. “The dairy industry is more important as a means of revenue to the farmers of every State than will be the sale of vegetable oils to margarine manufacturers even if they triple or quadruple their sales, completely pushing the use of butter from the market.”

13. The dairy farmer is a better source of outlet for cotton and soybean products than the oleomargaine industry ever will be.

14. Beyond a doubt the dairy industry is worth protecting. The bill to repeal the Federal tax on oleomargarine should be defeated to avoid seriously crippling the dairy industry. (April 26, 1948, pp. 4982–4983.)

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