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every other dairy product would likewise be affected. To assure consumers an ample supply of fluid milk and other dairy products at all times of the year the cow population must be maintained to assure a plentiful milk supply at all times of the year. Milk production varies between the so-called flush season and the slack season, when the cows' milk flow declines. Therefore, during the flush season there is an excess of production and such excess traditionally is churned into butter. Butter, is, therefore, the balance wheel in the entire dairy economy. It can easily follow that a decline in butter income to the dairy farmer results to where it is unprofitable for the dairy farmer to produce, the cow population will immediately decrease and in time result in a shortage of milk production. This condition would no doubt cause higher prices of all dairy products. The present tax on oleomargarine if discontinued would not reduce the price of oleomargarine, but might on the contrary result in higher prices, for by supplanting butter, oleomargarine interests no doubt will attempt to obtain for themselves some portion of the now existing differential between butter and oleomargarine.

We have no objections to the repeal of taxes on uncolored oleomargarine or the repeal of occupational taxes. We do plead, however, for the continuance of the tax on butter-colored oleomargarine to enable consumers desiring to purchase butter assurance that they are purchasing butter and not be subject to possible deception and fraud.

Very truly yours,

L. E. EVANS, General Manager.

Senator EUGENE D. MILLIKIN,

Chairman, Senate Finance Committee,

CINCINNATI, OHIO, May 19, 1948.

Senate Office Building, Washington, D. C.:

Respectfully request that it be included in official record resent as absolutely untrue statement of Joseph Fichter, master of Ohio Grange, before Senate Finance Committee today that four Ohio margarine manufacturers are opposed to repeal of Federal margarine taxes because they cannot manufacture yellow margarine in Ohio under State law. Truth is all four Ohio manufacturers are collaborating with Ohio consumers to end dictatorship of dairy lobby in Ohio and confidently expect repeal of Ohio margarine laws by referendum petitions being circulated and ballots within next year and half. For this reason all four Ohio margarine manufacturers favor repeal Federal margarine taxes by H. R. 2245.

THE CHURNGOLD CORP.
S. M. BLAKEMORE.

Hon. EUGENE D. MILLIKIN,

COLORADO DAIRY PRODUCTS ASSOCIATION, INC.,
Denver 2, Colo., May 14, 1948.

Senate Office Building, Washington, D. C. DEAR SIR: Now that the oleomargarine tax-repeal legislation bill has been referred to the Finance Committee of the Senate it will no doubt be brought to the floor soon for discussion and action.

As an association we should again like to ask your consideration of the dairy industry in this State, representing 25,000 dairy farmers and approximately 200 processors, manufacturers, and distributors.

The writer feels that the color yellow should be definitely retained as the identifying color of butter. Nature provided for it and made it that way.

The creamery-butter industry of Colorado feels that oleomargarine should be sold for the product it is, on its own merits, uncolored, or at least not colored yellow.

The present 10-cent tax per pound should be retained. The dairy industry of Colorado respectfully urges your consideration and support of the dairy farmer in this matter.

Very truly yours,

AMMON BRADSHAW, Executive Secretary.

STATEMENT OF COMMUNICATIONS WORKERS OF AMERICA

The old adage, "If you can build a better mouse trap than your neighbor, the world will beat a pathway to your door," apparently no longer holds true, at least with respect to the margarine-producing industry. Here we have an example of an American industry which has been able to produce a commodity, at a relatively low cost, necessary and desirable for healthful living, and Congress has placed barriers in the way of its sale because this product happens to resemble one already on the market.

The Communications Workers of America, which represents 230,000 telephone workers in 42 of the United States, is here to protest this unsound and uneconomic action. Approximately 70 percent, or 163,000, of the telephone workers represented by the CWA, are presently housewives or potential housewives who have more than just an academic interest in the question presently the subject of these hearings. We feel strongly that Congress has become a party to one of the most serious restraints of trade in history, which has and continues to result in considerable hardship to the American housewife.

We are cognizant of the fact that in this day of atomic energy, European recovery plans, and Palestine partitions it is difficult to muster much interest or enthusiasm in the comparatively minor problem of colored or uncolored margarine, of 10 cents or one-fourth cent or no tax on one of the many food products available to the average American shopper. But let us see if we cannot communicate to you simply and concisely what we consider the basic issue involved in this long-standing controversy and why the CWA among many other organizations and individuals feels it important that Federal taxes on margarine be repealed. We know that others have demonstrated beyond a reasonable doubt that modern margarine is as nutritious as its table-spread rival, butter. We need not, we think, dwell additionally on this subject. The early Supreme Court decisions which upheld State and Federal taxes on colored margarine based their conclusions primarily on the thesis that State and Federal tax authority could be used to protect the consuming public from fraud. It was argued that the margarine producers would try to pass off margarine as butter if they were permitted to color it. This unfounded, illogical line of reasoning persists today despite the existence of the Pure Food and Drug Act which specifically provides for adequate labeling. Is there anyone who sincerely believes that the average housewife would think she was buying butter, when she was actually getting margarine just because the color was yellow? Does the average housewife think she is getting salt when she wants sugar, just because the two products are white and have similar consistencies?

What, then, are the real purposes of these prohibitive taxes, license fees, and prohibitions on the sale and manufacture of colored margarine? They are barriers to progress. And Congress must carry on its conscience a large share of the responsibility for impeding the march of inventive genius in the dairy industry.

It will not take much prompting, we are sure, to remind Members of Congress of recent hearings which took place during which a well-known labor leader was called to explain his union's ban on phonograph recordings. Members of Congress and the public frowned upon artificially preventing the fruits of technological improvement from accruing to the people of the United States.

Workers in the telephone industry daily face technological unemployment due to impending mechanization of long-distance telephone calls. What would Congress' attitude be if the CWA attempted to prevent displacement of its workers by machines? What would Congress' answer be, if we stated that we wanted Congress to prohibitively tax all dial conversion machines to be installed by the telephone industry-in order to safeguard the jobs of telephone workers?

Yet the present taxes on margarine similarly prevent advanced scientific methods of benefiting the public. Butter as a cheap table spread is as obsolete as the old-fashioned ice box. The margarine industry has perfected a rival product which can be sold at less than half or a quarter of the price of butter. But Congress has become the instrument of the past which is preventing this cheaper product from reaching consumers in the form they desire it. It is the very essence of the American free enterprise system that inventive genius is rewarded by a free market in which to sell improved products-except, of course, for margarine.

What did Congress do when rayon was invented as a cheap substitute for silk? Was a tax placed on nylon when it replaced silk in stockings? The answer is "no." The material is properly marked, and the buyer who cannot afford the more expensive silk enjoys the benefits of products made from cheaper but equally serviceable substitutes.

It is to our national shame that one industry-the dairy industry-has rendered Congress its handmaiden in safeguarding itself from legitimate competiton. As a result, the public is forced to buy for a dollar a pound what it could have for 30 cents or less.

I wish there were more housewives on this committee, because what I am about to relate may be a little difficult for most men to comprehend, unless they, of course, have been properly schooled in household arts by their mothers or wives. There are several types of butter on the market which are white in color. Unsalted butter and whipped butter are almost as white as margarine. Should we, then, make the butter industry pay a tax on white butter, which looks like margarine, in order to be sure that the housewife who wants margarine does not get fooled into buying butter?

During its many years of trying to exist despite artificially created handicaps the margarine industry has demonstrated the type of creative and inventive ability that few other food industries have achieved. Its latest effort to overcome the discrimination against it is truly remarkable. I want to show you another advertisement which describes how a housewife can now color margarine without the mess and bother of putting it in a bowl, mixing it around, and, incidentally, wasting some of the margarine which she is unable to scrape off the sides of the bowl. Again I wish more of you were housewives, since you would better understand how having to color the margarine after you buy it is a simple but effective way of stunting the growth of the industry.

Now what are the most serious effects of these restraining, discriminatory taxes on margarine? The children and parents of low-income families, who are unable to overcome the psychological effects of a white table spread, and who for one reason or another do not want the bother of mixing a coloring agent into their margarine, and who do not want to buy a whole pound of a table spread at a time, must pay the high retail price which butter producers are asking.

This last consideration should not be underestimated. If margarine producers were permitted to manufacture colored margaine, the could prepare it in the convenient quarter pound or half pound sizes, and no doubt many more families would enoy the benefits of this lower-priced food product.

We do not wish to extend our remarks excessively. We want merely to impress you with the fact that telephone workers regard present State and Federal taxes on margarine as unfair, economically unsound, and thoroughly illogical and out of place in our so-called "free" economy. We strongly urge, therefore, that that committee take a step in the right direction by reporting H. R. 2245 out of committee and by working for its passage by Congress.

STATEMENT OF CONSOLIDATED BADGER COOPERATIVE, OF SHAWANO, WIS., IN OPPOSITION TO REPEAL OF REGULATORY MEASURES PERTAINING TO OLEOMARGARINE SUBMITTED TO THE SENATE FINANCE COMMITTEE

George Rupple states that he is the manager of Consolidated Badger Cooperative and makes this statement in such capacity on behalf of more than 3,000 farmfamily stockholder-producers.

That each of these farmers has contributed to the reputation of butter as a top-quality by helping to build the modern sanitary dairy plants of Badger and by participating in quality improvement programs on the farm. Each is proud of the part butter has played in the dairy industry in helping to support plants which have permitted the production of the vast qualities of evaporated milk, powdered milk, and other dairy products required by the United States Government to meet past and present emergencies.

That Badger has cooperated wtih the Food and Drug Act by zealously guarding butter standards from the fraudulent substitution of adulterated butter in order to promote honesty and fair dealing in the interest of consumer. The Food and Drug Act defines as adulterated butter the "mixing, reworking, refining, or in any way producing a uniform, purified, or improved product from different lots or parcels of melted or unmelted butter or butterfat in which any acid, chemical,

or any substance whatever is introduced or used for the purpose or effect of deodorizing or removing therefrom rancidity, or any butter or butterfat with which there is mixed any substance foreign to butter."

That Badger membership strongly feels that these standards and the dairy structure which has been built thereon should not be jeopardized by permitting the easy, fraudulent imitation of butter in violation of everything for which the spirit of the Food and Drug Act has fought since 1906.

Badger does not want to tax oleomargarine.

Badger wants to prevent the fraudulent imitation of butter.

If oleomargarine is permitted to be packaged, colored, and cut like butter, what is to prevent its being served as butter for a large portion of the 63,000,000 meals per day served at public eating places?

If oleo is to be served as butter, why not repeal the butter standards and permit adulterated butter to be served with the same ease and lack of regulation? Badger can make a cheap butter by adding acids and chemicals to waste dairy products, and this butter will meet the same chemical tests as oleo.

But we believe it is better to maintain our traditional high Food and Drug Act standard in order to promote honesty and fair dealing in the interest of consumer. Let oleo stand on its own feet. If oleo can sell itself on its own merits, let it be sold as the uncolored, chemically treated, and manipulated reprocessed fat (from any and all sources) which it is, and repeal all taxes on this product.

But let us prevent any possibility of oleo or adulterated butter being sold as a natural, yellow, pure dairy product.

Let us maintain Pure Food and Drug Act standards.

GEORGE RUPPLE.

THE CONSUMER CONFERENCE OF GREATER CINCINNATI

To Members of the Finance Committee of the Senate:

MARGARINE TAXES

On behalf of the Consumer Conference, its 63 cooperating organizations representing thousands of homes in Ohio and other States, from Florida through Missouri to Oregon, we wish to present our reasons for urging you to remove the restrictive legislation on the manufacture and sale of margarine, which has wrought a hardship on women since 1886, or 61 years.

Such legislation

(1) Is in the interest of a single industry, the dairy industry, which is contrary to the principles of a democracy.

(2) Is contrary to the practices of competition in trade and the free enterprise system, such as we are supposed to have in democratic and capitalistic America. (3) Is contrary to the wishes of the people, as shown by the fact that there are about 20 bills now before the Congress for repeal.

(4) Is not contrary to farm interests. Margarine is made of surplus skim milk produced on farms; further, margarine manufacturors have announced their intention to use only domestically produced fats and oils.

(5) Is not needed to distinguish margarine from butter because Federal and State laws will always see that the public knows which product is being purIchased in stores and in restaurants.

(6) Is against the only food product carrying a Federal tax per pound and license fees for the privilege of making and selling a pure food product.

(7) Is an inflationary measure in these tines when butter sells for around $1 a pound and when 80 percent of the families in the Nation, including a large percentage of the farmers, buy margarine. The tax and fees make it cost 12 to 15 cents more a pound.

(8) Causes a waste of materials in coloring when there is a world shortage of oils, and a waste in time, as 11,500 hours were spent in 1947 in coloring 600,000,000 pounds of margarine, which could have been colored at no expense or waste in factories.

(9) Forces the removal of the natural yellow color of the oils used in margarine, which is not required in any other food product, in order to remove any resemblance to butter.

(10) Permits the same coloring to be added to butter 8 months of the year with no mention of its presence.

76269-48- -22

(11) Does not deny the fact that margarine is equal to butter nutritionally, according to the best medical authority, and no other nutritional food has legislative restrictions on its sale. Both must contain 80 percent fat, and margarine contains 15,000 units of vitamin A, equal to average butter.

(12) Is obsolete and does not give the public a fair deal. Congressmen are supposed to represent not only the interests of the voters back home but the public as a whole. We are sure there are more users of margarine in each Congressman's district than of butter, so we urge in the general public interest that present margarine legislation be replaced.

We also wish prosperity to the butter interests, but let their good product stand on its own feet. They cannot supply demand at lower prices. Submitted by

Mrs. DENNIS E. JACKSON,

President, Consumer Conference of Greater Cincinnati.

STATEMENT OF ROBERT SCHIERING, PRESIDENT OF THE CO-OPERATIVE PURE MILK ASSOCIATION

My name is Robert Schiering. I own and operate a dairy farm in Butler County, Ohio, on which I produce milk and dairy products for sale in the Greater Cincinnati market. I am also president of the Co-Operative Pure Milk Association, which has a membership of more than 2,000 dairy farmers located in 25 counties in southwestern Ohio, southeastern Indiana, and northern Kentucky. In addition to providing a market for these milk-shipping members of the association, our organization also markets the cream for more than 13,000 small dairy farmers located within a radius of 100 miles from Cincinnati in the three States of Ohio, Indiana, and Kentucky.

As a dairy farmer, and as president of an organization of dairy farmers, I am vitally interested in the proposed legislation which is intended to remove all Federal taxes on the manufacture, sale, and distribution of oleomargarine. It seems to me that this legislation is being railroaded through the Congress without proper, fair, and adequate consideration. As you well know, this legislation, when being considered in the House of Representatives, was referred-and I believe quite properly so-to the House Committee on Agriculture. Hearings were held, and the committee finally decided that no further action should be taken on this legislation during this session of the Congress.

This committee was, at the same time, considering a long-term agricultural bill, which, when adopted, will be a major factor in determining agricultural income in this Nation, not only in the immediate future but possibly for many years to come. This bill will deal with soil conservation and governmental price supports and other interrelated subjects.

It seems obvious to me that this committae acted wisely in deferring action on the oleogarmarine tax repeal question, which will diminish the income of dairy farmers in this Nation, until a full and complete long-range agricultural program could be perfected and adopted. It would, indeed, be a travesty to repeal the Federal oleomargarine taxes and then, through fraud in the sale of these products, reduce the income of dairy farmers to the extent that it may become necessary for the Government, under a long-term price-support program, to buy manufactured dairy products for the sole purpose of maintaining the income of dairy farmers at levels necessary to allow them to compete favorably and to buy the products of other segments of our American economy.

The Federal oleomargarine tax laws were adopted by the Congress more than 60 years ago because of the widespread fraud in the sale of oleomargarine as butter. These laws were passed only after careful consideration, not only for the protection of the dairy industry but equally as well for the protection of the consuming public.

The oleomargarine manufacturers in this Nation have carried on a very successful propaganda campaign which has led the public, and apparently many of our statesmen and legislators, to believe that these taxes are punitive in nature and are intended solely for the purpose of preventing the manufacture and sale of oleomargarine; nothing could be further from the truth.

The present Federal oleomargarine tax laws, as your committee should well know, imposes a tax of only one-fourth of 1 cent per pound when the oleomargarine is sold in any other color except "butter yellow." If current statistical

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