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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 OPPOSI
TION 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 farmr. 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.
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.
THE CONSUMER CONFERENCE OF GREATER CINCINNATI
To Members of the Finance Committee of the Senate:
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.
(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 purchased 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.
(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
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
information on the per capita consumption of fats and oils is correct, the average person in the United States uses approximately 12 pounds of such fats per year. At one-fourth of 1 cent per pound, the total tax paid by consumer of oleomargarine, colored any color except “butter yellow," would amount to approximately 3 cents per year. Certainly that amount is not a significant factor in the cost of living and is violently contrary to the cunning propaganda of the powerful oleo lobby.
Some of our greatest legislative leaders in this Nation have evidently been misled by this false propaganda. Our own Senator, Hon. Robert A. Taft, in a speech at Cleveland on April 17, before the Ohio convention of restaurateurs, is quoted in the Cincinnati Times-Star as follows: "Federal and State taxes were designed simply for the purpose of discouraging the sale of margarine and its use,” Taft declared. “Thusly, the distribution of a good and reasonably priced food has been denied people in the lower-wage brackets.”
I believe that a fair and impartial study of the present laws will prove conclusively that such statements are false and misleading, and it is my humble opinion that they are issued solely for political purposes. It is hard to believe that informed Members of the Congress can believe that the present laws were intended for that purpose or have the effect of denying food to any of our citizens.
Government figures show that since 1941 the sales of oleomargarine have more than doubled and that retail outlets have increased more than 64 percent.
The dairy farmers of this Nation do not want to restrict the manufacture, nor to impede the sale, of oleomargarine, provided it is not sold in imitation of butter. It is my opinion that present laws, instead of putting the sale and manufacture of oleomargarine at a disadvantage, actually grant to that product an actual competitive advantage over the manufacture and sale of butter. Federal laws permit oleomargarine to be “fortified" with vitamins, to be flavored with butter flavoring, and to be preserved with benzoate of soda. None of these may be added to butter when sold in interstate commerce. The use of any of these substances in butter would result in the seizure and condemnation of butter as an adulterated product. Adulterated and renovated butters, which like oleomargarine are imitations of good butter, carry the same excise, processing, and occupational taxes as oleomargarine. I know of no reason why oleomargarine should be the exception among butter substitutes.
Butter has been a basic food in the diet of man for thousands of years; its natural yellow color and typical flavor have been universally recognized and accepted. Dairy farmers feel that it is unfair for the oleomargarine industry to duplicate both the color and the flavor of butter. Oleomargarine not colored to imitate butter is just as palatable, as nutritious, and as digestible as it is when it is colored “butter yellow."
It is my belief, that for the protection of both the consumer and for the producer of dairy products there should be a positive identification of oleomargarine by the use of any other color other than the historic “butter yellow” color, which will enable both products to be readily identified on sight without the necessity of having the difference detected by expert laboratory analysis.
If the manufacturers of oleomargarine will produce a product identified by any color they choose, except "butter yellow,” for what it is, there will be no argument or controversy. I am sure that the dairy farmers of this Nation, and the manufacturers of butter, will never attempt to imitate either the color or any of the other characteristics of oleomargarine.
The consumers of this Nation have for years been in favor of various laws intended to prevent fraud in the sale of various types of consumer goods. They were largely instrumental in securing the enactment of the so-called truth-infabrics bill which makes it illegal to sell clothing and wearing apparel unless the type of material used in its manufacture is plainly stated on each garment. We believe that that law protects the producer of the raw material, the honest manufacturer, and the consuming public.
It is my considered opinion that the present Federal taxes on oleomargarine accomplish the same result so far as the sale of oleomargarine and butter is concerned.
In certain parts of Europe horse meat is a recognized food, but it is sold as such, and the consumer isn't fooled into thinking he is getting beefsteak. If the American consumer prefers oleomargarine, that is his prerogative—but let him know what he is eating. The dairy farmers of this Națion do not care how much oleomargarine is manufactured or sold so long as it is sold for what it is and the consumer knows what he is buying. Horse meat is not beefsteak in any language, and oleomargarine is not butter, no matter how skillfully disguised.
Present Federal oleomargarine laws were good when first enacted; they are still good, and it is to the public interest that they be retained. Respectfully submitted.
ROBERT SCHIERING, President, the Co-Operative Pure Milk Association. CINCINNATI, OHIO, May 17, 1948.
STATEMENT OF THE CUDAHY PACKING CO., 221 NORTH LA SALLE STREET, CHICAGO
Our company is engaged not only in the business of slaughtering, processing, and selling meat and meat products but also in the production and sale of butter and oleomargarine. We are, in fact, one of the largest manufacturers of margarine in the United States today. Our interest in the controversy over the present oleomargarine laws is, therefore, not one-sided. We stated in a communication to Congressman Anton J. Johnson, of Illinois, several weeks ago that we are not asking for repeal of any of the present laws relating to the manufacture and sale of oleomargarine. In our opinion, looking at the laws from the standpoint of the welfare of all segments of our economy, no change need be made. In order that you may know the reasons for our position, we shall set them forth. They are as follows:
1. The present laws are not unfair or unjust.
(a) The dairy farmer is entitled to the protection of these laws. They protect his market for butterfat against unfair competition from an imitation product. Any businessman is entitled to protection against limitation of his manufacured merchandise.
(b) The consumer is not hurt by these laws.
The tax of one-fourth cent per pound on oleomargarine not colored yellow is small. The license fees which must be paid by the retailer, wholesaler, and the manufacturer are also small when passed on to the consumer, as they undoubtedly are. Applying the total of all these taxes to a family that consumes 3 pounds of oleomargarine per week, every week of the year (156 pounds per year), the total amount of taxes does not exceed 40 cents per year, less than 1 cent per week.
By comparison, the cost of adding vitamin A to oleomargarine is more than three times the amount of the tax, and the cost of advertising the leading brands of oleomargarine normally runs from four to seven times the amount of the tax.
There is no reason why oleo margarine cannot be served white, which is its natural manufactured color, but if the consumer desires to color it, modern packaging enables her to do so without waste of time or product.
Nor have the present laws had any detrimental effect on our national diet or nutrition. Our per capita consumption of fats has increased steadily during the past several decades, rising from 39 pounds in 1912 to 51 pounds in 1941. It declined slightly during the war, but since then has been rising again.
When all elements are carefully considered it can be stated with fairness that these margarine laws have helped the consumer rather than hurt him. Among other things, we can thank these laws for placing the oleomargarine industry on its good behavior, and prompting it to use American-produced oils and to improve its product to a point where it approximates the palatability and nutritional equivalency of butter.
(c) The oleomargarine industry has not been hurt by these laws. Over the past several decades sales have been on a gradually ascending curve. hurt has come to the oleomargarine industry it has been self-inflicted. During the past several decades the industry has encouraged rather than discouraged the consumer to take the time and trouble to color her oleomargarine yellow. All of the industry's advertisements have encouraged this practice. Had the industry, on the other hand, spent its millions of advertising dollars encouraging the consumer to serve oleomargarine white, she would probably have become accustomed to using it that way today.
Other industries in food, drugs, clothing and shelter have gotten us to change our living habits without resorting to a complete imitation of competing articles and the oleomargarine industry could and should do the same without imitating the color of butter.
(d) Our general economy would be seriously affected by a change in these laws.
The uncertain benefits that might accrue to cotton and soybean farmers are so insignificant compared with the certain disastrous effects that would be produced for dairymen by reducing the tax on yellow oleomargarine that we