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should all pause and examine carefully the implications of these laws before tampering with them. In 1946 only two-tenths of 1 percent of farm income was attributable to oleomargarine. On the other hand, farm income from dairy products was over a hundred times farm income from items attributable to oleomargarine. Even if farm income attributable to oleomargarine were doubled or trebled it would be small, less than 1 percent. Even for farmers who raised only cotton, but 1.45 percent of their cash farm income in 1946 came from cottonseed oil used in oleomargarine. In the 10 leading cotton States income to farmers from dairy products was 27 times as great as income from oleomargarine in the same year.
Farmers in certain States now raise soybeans. Taking this segment of the farming industry alone, but 5 percent of the income they enjoyed from soybeans came from oleomargarine in 1946.
To sum up, actually oleomargarine is not an important outlet for any farm product.
The following is an interesting extract from the booklet entitled “Oleomargarine and the Farmer” recently published by the National Cooperative Milk Producers Federation :
“During 1946 American consumers spent over $2,000,000,000 for the primary edible fats—butter, lard, vegetable shortening, and oleomargarine. Out of this $2,000,000,000 of consumers' money the American farmer received over 60 percent of $1,231,747,000, which was divided as follows:
income in 1946 Butter
$638, 011, 000 Lard
429, 647, 000 Vegetable shortening
124, 712, 000 Oleomargarine
39, 377, 000
1, 231, 747, 000 "Historical facts prove beyond a doubt that the quantity or poundage of fats used by the average American consumer stays about the same from year to year. Fluctuation occurs in the per capita consumption of the individual fats but an increase in the consumption of one fat generally results in an offsetting decline in another.”
Twenty-five percent of our dairy farmers depend largely upon the sale of cream for butter manufacture to maintain their dairy cows. If the oleomargarine laws were repealed over a million of this type of farmer would, in our opinion, be forced to sell most of his cows. The permanent reduction in this segment of our cattle population would affect not only our supply of milk and cream but also our supply of meat.
Inasmuch as butter traditionally has served as the outlet for all surplus supplies of milk after all other milk products (including bottled milk, ice cream, evaporated milk, dried milk, and cheese) have been supplied with their requirements, it is quite apparent that any action adversely affecting butter could create chaotic conditions in the supply and cost to the consumer of all other dairy products. It might well be that in the event that the price of butter were unduly depressed, bringing about substantially reduced production of milk in the over-all in this country, the price of bottled milk and all manufactured dairy products would at times be increased substantially to the consumer.
2. Butter alone is entitled to the yellow color because it alone is always naturally yellow-in varying shades thereof. It is morally entitled to make the claim; “Yellow is the trade-mark of butter.” Oleomargarine, on the other hand, if processed from vegetable oils from American farms (as it is largely today) cannot be made a natural yellow. These oils are bleached, not because of the Federal laws, but because it is necessary to remove undesirable colors. There has been a great deal of misinformation and misleading propaganda put out on this subject and the record should be set straight.
3. The present 10-cent tax on the sale of yellow oleomargarine reduces the incentive for fraud and assists the Federal authorities in detecting the presence of any considerable quantities that might be palmed off as butter. The monetary incentive to sell yellow oleomargarine at the price of and in the guise of butter is unique in our economy. No other kind of product affords a parallel for comparison. With the quantities of butter sold being so huge and the price spread between butter and oleomargarine so wide, the incentive for fraud is unparalleled. Fraud would undoubtedly be practiced if the persent laws were repealed. The frauds which existed when the sale of oleomargarine in this country was unregulated demonstrate this. Oleomargarine being more palatable and nutritious today, deception would be easier.
We should like to make clear at this point that in our opinion the regulatory tax on the retailer is scarcely necessary to effect proper regulation. It could well be removed.
4. Wherever large and healthy farm economies are in existence throughout the world, oleomargarine is under some form of government restriction and regulation. This is true of practically all of the countries of western Europe. In Canada its threat to a healthy economy is considered so serious that the sale of oleomargarine is completely prohibited. It is only during periods of high prices like the present that Canada ever seriously considers modification of its extreme position on oleomargarine.
5. It has been claimed that present oleomargarine laws are a misuse of the Federal taxing power. Actually, only by levying Federal taxes can the Federal Government effectively watch the sale of oleomargarine. The pure food and drug laws are helpless in this regard because they have no jurisdiction over intrastate traffic. However, the Revenue Department can and does enforce the present laws.
We hope that you will study the considerations involved in this butter-oleomargarine controversy and that your decision will not be based upon the exigencies or pressures of the moment, which are transitory. Sincerely,
F. W. HOFFMAN, President, the Cudahy Packing Co.
DAIRYMEN'S COOPERATIVE SALES ASSOCIATION,
Pittsburgh, Pa., May 13, 1948. Hon. EUGENE D. MILLIKIN, Chairman, Senate Finance Committee, and Member of
Finance Committee, 312 Senate Office Building, Washington, D. C. DEAR SIR: As president of Dairymen's Cooperative Sales Association and a representative of its 10,325 dairy farmers located in western Pennsylvania, eastern Ohio, and West Virginia, I wish to state their position, as well as mine, in regard to the repeal of the tax on oleomargarine.
Dairy farmers in our territory feel definitely that the taxing of oleomargarine is strictly a matter for the Finance Committee of the Senate to decide. The matter of allowing the sale of oleo in any way to mislead the purchaser is a question of vital interest to the dairy farmers. It is our feeling that oleo should not be allowed to parade as a butter substitute. When the use of butter flavor is allowed in oleo, the purchaser is then being deceived as to its flavor. When color is being used, every opportunity is offered for it to masquerade as butter and the purchaser is again being deceived.
When the oleo bill is finally formed and voted upon, we ask that the products of the dairy farm not be allowed to be imitated so that fraud can be practiced on the consumer. We therefore oppose the use of butter flavor and the color of yellow, and urge that every means be taken to prevent the practice of the imitation of butter or the fraudulent practices that might result in the sale of oleomargarine as butter. Sincerely yours,
W. W. BULLARD, President.
DAIRYMEN'S LEAGUE COOPERATIVE ASSOCIATION, INC.,
New York 18, N. Y., May 13, 1948 Hon. EUGENE D. MILLIKIN, Chairman, Senate Finance Committee,
312 Senate House Building, Washington, D. C. MY DEAR SENATOR: In answer to your telegram of May 11, 1948, I would like to submit the following statement:
Butter has a natural yellow color. It is true there is some variance in color especially when produced in winter months and therefore butter coloring is used in a slight degree only for uniformity, but such use does not involve any definite departure from the fact that the coloring of butter is naturally yellow.
Oleos do not have the color of butter and the whole purpose of the presentation by the oleo industry is to enable the sale of a product in imitation of butter with the result not only that the product when used on the table will tend to cause consumers to believe that the product is butter, and likewise enable stores to sell their product as butter. In view of this there is no fair or logical argument against a requirement for a distinguishing of oleo from the form in which butter for decades has been sold. In other words, a requirement that oleo should be sold in packages in triangular or circular form so as to distinguish it from butter is entirely reasonable and proper.
I am not opposed to the sale of oleomargarine if the public desires it, but there should be a clear demarcation from butter so that the consumer may be sure as to the product he purchases and the public should be safeguarded against deception. If the public believes that oleo is an excellent food, then why should it object to purchasing it in its natural color rather than a color simulating butter?
In my opinion, Congress should insist on such a differentiation. I am not arguing that these suggested forms are the only proper methods of distinguishing the products. It might be in color, but some distinction is necessary to protect the consuming public, as well as the butter industry. Not only have the laws of the various states and of the United States relating to food products gone to great length and have been upheld by the courts as to simulation of a product, especially of a well-established product, but the Supreme Court has gone to great length in protection of industry in the regulation of sale of prison-made goods.
The foregoing suggestions as to distinguishing form are therefore in line with our National and State policies.
Likewise, the experience of the Government in enforcement of the Pure Food Act and oleo and butter statutes clearly shows that some form of licensing under the tax power is imperative in order to permit inspection and obtain evidence to prevent fraud and deception in sales.
I, therefore, respectfully urge on behalf of the milk producers of the New York milk shed, as well as for the members of our association, who represent a considerable part of the consuming public, that this bill be amended in accordance with the foregoing suggestions or along similar lines.
I will add that there is another important reason from the standpoint of the dairy industry why this bill should not pass in its present form. While it is true that at the present time the production of butter is abnormally low in amount due to the war and postwar demands for milk in fluid form or in the form of ice cream, etc., nevertheless, this abnormal condition is not of long duration and in the near future dairymen will be forced to manufacture a large part of their milk into butter. Also the price of butter is generally, under milk-control orders, one of the bases of the fluid milk and cream pricing. If this bill is enacted into law, the sharp competition of the oleo at lower price will undoubtedly result in a depression of the prices of butter and discourage the production of milk. It will, therefore, detrimentally affect the entire milk industry which is not only one of the Nation's basic industries, but also one vitally important to the health and welfare of the people of this Nation. Respectfully submitted.
H. H. RATHBUN, President.
DENVER MILK PRODUCERS, INC.,
Denver 4, Colo., May 15, 1948. Senator EUGENE D. MILLIKIN,
312 Senate Office Building, Washington, D. C. DEAR SENATOR MILLIKIN: Thank you for your two telegrams regarding the Senate hearing on the oleomargarine bill.
Our dairy farmers are very much concerned over the possibility of repeal of the present oleomargarine law and the effect such action by Congress will have on both the dairy farmer and the consumer.
The pressure being put on Congress to repeal the tax on each pound of oleomargarine that is colored to imitate butter is rather confusing, since the interests that are pushing the matter are the same interests that have spent millions of dollars telling the housewife how easy it is to color their product yellow in the home. These same interests do not seem to have been injured by the present law, as their production has more than doubled since 1941, and now have 54 percent of the combined butter and oleomargarine sales.
However, the real danger in the situation seems to us to be in the great possibility of unscrupulous dealers putting oleomargarine in cartons labeled “butter."
Enforcement of the present regulations is in the hands of the internal-revenue department, probably the most efficient enforcement department in Government, and still that department reported almost 30,000 cases of violations. With oleomargarine colored yellow at the factory, it will be very easy for any dealer to change the carton in which the product is sold.
No consumer should be denied the privilege of purchasing oleomargarine if they so desire, but everyone should be protected against the fraud that is almost sure to develop if the process of fraud is made so easy, as it will be if factories color their product to imitate butter.
The effect of repeal of the present act on the dairy farmer will be serious and will force many cream shippers out of production and will have a serious effect a little later on the fluid-milk shippers. The Nation can ill afford a setback to this important segment of our national economy. Our human population is continually growing while our dairy-cow population is continually declining. It means higher prices for fluid milk, cheese, evaporated milk, dry milk, and ice cream-all of which are essential to the health and well-being of our people.
Thanking you for your fine consideration and with kindest personal regards,
DENVER MILK PRODUCERS, INC.,
STATEMENT OF THE DISTRICT OF COLUMBIA FEDERATION OF WOMEN'S CLUBS
CONCERNING MARGARINE Tax REPEAL Filed with the Senate Committee on Finance by Mrs. Harvey W. Wiley,
Legislative Chairman, DCFWC I represent the District of Columbia Federal of Women's Clubs, with an aggregate membership of approximately 6,000 women. I am chairman of the department of legislation and I was formerly president of the federation.
Our DCFWC official policy on oleomargarine legislation dates as far back as February 1942 when a resolution was passed favoring the repeal of all special taxes on oleomargarine. Our belief that the discriminatory taxes on oleomargarine should be removed stems from the fact that on June 6, 1941, the Federal Security Administrator signed a definition and standard of identity for oleomargarine to the effect that the fat content of the product, either animal or vegetable fat, should be 80 percent of the finished product, with the remaining 20 percent to be formed of milk and milk products, together with artificial flavoring and coloring. When this action took place oleomargarine became a specific substance, in its own right, no longer a substitute for butter, but an article which could stand on its own merits. Moreover, today 98 percent of all oleomargarine is fortified with vitamin A.
For 62 years oleomargarine has been subjected to special taxes which are a quarter of a cent on uncolored margarine and 10 cents a pound on yellow margarine. In addition there are also occupational taxes on margarine handlers, such as manufacturers, $600 a year; wholesalers, $480 a year for colored margarine and $200 for uncolored ; and retailers, $48 a year for colored and $6 for uncolored. Space forbids giving the many state taxes and restrictions.
Color seems to be the crux of the situation. No one wants to use a spread for bread which looks like lard, hence the desire for margarine with the normal yellow color. Coloring the margarine herself is a time-consuming and messy process for the housewife. Butter has a deep yellow color only during certain seasons and is colored with the same coloring matter used for margarine about 8 months of the year, without penalty. No label on the package is even required to the effect that artificial coloring has been added. Oleomargarine is thus penalized to aid butter. It is the only instance of one food being taxed to protect another. The fear expressed by the dairy interests that adulteration and misbranding would follow the repeal of the discriminatory taxes, to my mind, is unfounded. Our Federal food law and the State food laws are enforced by competent, able, and honest men who would not allow oleomargarine to masquerade as butter, any more than they would permit any other adulteration, fraud, or misbranding.
In conclusion I take pleasure in quoting my late husband, Dr. Harvey W. Wiley, father of the pure-food law, who said in 1924 in Good Housekeeping Magazine:
“It would seem incredible that any legislative body would undertake to prohibit the consumption of either a vegetable oil or an animal fat on any physiologic or economic ground. When such an attempt is made, it is evident that it necessarily must be for a discriminatory purpose. This discrimination brings it into the forbidden field which I have already pointed out as being illogical, unjust, and unwise.
"Butter and margarine of all kinds are manufactured articles but strictly the products of agricultural industry, one as much as the other.
"I have invested in the dairy industry at the present time about $80,000. I would blush with shame to try to add one penny to the value of my products by denying my brother farmer the right to sell any edible meat, fat, or oil that he could grow and find a market for.”
On the dairy farm alluded to above Dr. Wiley carried on a dairy business until the time of his death.
CLEVELAND, OHIO, May 19, 1948. Chairman EUGENE D. MILLIKIN,
Senate Committee on Finance: Witness Joseph Fightner, master of Ohio Grange, indicated in his testimony that the four Ohio margarine manufacturers are opposed to H. R. 2245 because of their inability to make or sell colored margarine until present Ohio law is repealed. Witness did not mention Ohio initiative now under way which will repeal present Ohio prohibition against manufacture and sale of yellow margarine. We are definitely in favor of immediate enactment of H. R. 2245. Witness does not reflect views of Ohio margarine manufacturers, of which we Would appreciate your placing our telegram in the record.
DURKEE FAMOUS FOODS.
ENID COOPERATIVE CREAMERY ASSOCIATION,
Enid, Okla., May 15, 1948, EUGENE D. MILLIKIN, Chairman, Finance Committee,
312 Senate Office Building, Washington, D. C. GENTLEMEN : Our 8,000 dairy producers 'are very much interested in maintain. ing the present 10-cent tax on yellow colored oleo so that it cannot be sold or used to imitate butter. Dairymen resent attempts to imitate butter. I think consumers should understand why dairymen feel it is an unfair infringement for oleomargarine to be made in the imitation of yellow butter. For score than a thousand years the natural yellow color of butter and its typical flavor have been universally recognized and accepted among all people. The producers and consumers know that butter is both a food and a flavor. To them color and. flavor are the evidence of its identity. They believe that the consumer is entitled to buy either oleo or butter with the feeling of assurance that there will be no confusion, no uncertainty, no parading in false colors. Labeling the package does not identify oleo on the table.
Members of your committee should realize that the dairy farmers are not only the producers of the finest food possible to produce but are also the best farmers for the maintenance of soil fertility. Every citizen of the United States should be interested in maintaining the soil fertility of our farins, and no other group of farmers maintain the soil as well as our dairymen.
The dairy cows are one of the largest group of consumers of cottonseed meal and soybean meal in the United States. Much of this outlet could be lost if a cheap product like oleo is allowed to parade under the yellow color.
Other imitations of good butter are taxed; why should oleo be exempted ? Adulterated butter—which, like oleo, is an imitation of good butter-carries the same per pound tax and the same manufacturers', wholesalers', and retailers' occupational taxes as does colored oleo. Renovated or process butter carries the same per pound tax as uncolored oleo. There is no reason why an exception should be made for oleomargarine. Yours very truly,
RALPH T. GOLEY, Manager.