OLEOMARGARINE TAX REPEAL MONDAY, MAY 17, 1948 UNITED STATES SENATE, The committee met, pursuant to call, at 10 a. m., Senator Eugene D. Millikin (chairman) presiding. Present: Senators Millikin (chairman), Taft, Butler, Hawkes, Martin, George, Barkley, Johnson of Colorado, and Lucas. Also present: Senator Johnston of South Carolina. The CHAIRMAN. The meeting will come to order, please. The hearing is on H. R. 2245, an act to repeal the tax on oleomargarine. The bill will be put in the record at this point. (H. R. 2245 is as follows:) [H. R. 2245, 80th Cong., 2d sess.] AN ACT To repeal the tax on oleomargarine Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That (a) section 2301 of the Internal Revenue Code (relating to the tax on oleomargarine) is repealed. (b) The amendment made by subsection (a) shall take effect on the day following the date of the enactment of this act. SEC. 2. Effective July 1, 1948, part I of subchapter A of chapter 27 of the Internal Revenue Code (relating to the occupational tax on manufacturers, wholesalers, and retailers of oleomargarine) is repealed. Beginning with the day after the date of the enactment of this Act and until July 1, 1948, wholesale dealers in oleomargarine who vend no other oleomargarine except that upon which a tax of one-fourth of 1 cent per pound would have been imposed by section 2301 (a) of the Internal Revenue Code if such section had not been repealed shall pay the lower tax prescribed in section 3200 (b) (1) of such code. Beginning with the day after the date of the enactment of this Act and until July 1, 1948, retail dealers in oleomargarine who vend no other oleomaragarine except that upon which a tax of one-fourth of 1 cent per pound would have been imposed by section 2301 (a) of the Internal Revenue Code if such section had not been repealed shall pay the lower tax prescribed in section 3200 (c) of such code. Passed the House of Representatives April 28, 1948. Attest: JOHN ANDREWS, Clerk. The CHAIRMAN. The chairman has had occasion to send a letter to a number of Senators. I should like to read into the record the form of that letter. [Reading:] Thank you very much for your letter attaching telegram from a constituent of yours regarding the time assigned for hearings by the Senate Finance Committee on the oleomargarine tax repeal bill, H. R. 2245. The Senate Finance Committee in normal course conducts hearings which give generous opportunity for oral presentations. These often extend, as you know from your own committee experience, into sterile repetition. Within reasonable limits repetition is accepted, because it is recognized that oral hearings, while primarily for the instruction of the committee, also serve publicity, prestige, and other purposes of chief concern to the witnesses and which need not be discouraged when there is time to spare. 1 In the instant matter, however, we are operating against obvious and compelling time limits. Prior to the end of this session the Senate Finance Committeee must allow time for the consideration and hearing of this bill and also of major matters such as Veterans' legislation, tax revision, reciprocal trade, and social security. Also, there is a heavy load of committee work which, while not necessarily major in character, is important and must receive attention. Also, due consideration must be given to the other duties of the members and their heavy burdens in connection with their assignments on other committees. This situation requires that we eliminate repetitive testimony and without waste of time get to the gist of the business. It is believed that 2 days of well-organized and precise presentation, with the other measures to be taken as hereinafter mentioned, will provide adequate instruction for the committee and thus satisfy the main purpose of the hearings. In this connection it should not be forgotten that neither the Congress nor any member of the committee is a complete stranger to the subject. Committee hearings are available, and the matter has been debated ably and at length. We have received more than a hundred requests to make oral presentations. We do not wish to foreclose the slightest instruction which might have been received by us had time permitted our hearing all of those applicants. Therefore, we have telegraphed each one of those applicants who will not appear an invitation to give the committee the benefit of his written statement. To assure that the substance of such written statements will come to the attention of the committee, the following procedure is under way: A team of qualified persons has been busily at work digesting, organizing, and collating all of the testimony and debates on the subject during this session. The same team will give the same treatment to all written statements which may be submitted and the authors will receive due credit. The Chairman of the committee will make it his business to see that all of this material so digested, organized, and collated is brought to the attention of the members of the committee. Thus in real effect and substance, so far as the instruction of the committee is concerned, and I take the liberty of repeating that this is the main purpose of the hearing, all that has gone on in the subject during this session and all of the written statements so invited and received, will have fair consideration along with the matters which may be presented orally. Please feel free to write any of your constituents to submit such written statements to arrive here prior to May 19, and in doing so you may assure them that they will be handled in the manner mentioned. Immediately following this, Mr. Reporter, we will insert in the record the digest and classifications of arguments for and against taxation of oleomargarine made from the hearings in the House, and from the debates in the House. (The information is as follows :) CLASSIFICATION OF ARGUMENTS FOR AND AGAINST TAXATION OF OLEOMARGARINE [Page citations to hearings before the House Committee on Agriculture, March 8, 9, 10, 11, 12, 1948.] For the tax Oleomargarine is a good source of food, but it is not as good as butter1. Wilson F. Douglas, Cudahy Packing Co. (p. 304). "Scientific research shows that butter contains essential nutritional properties superior to those of substitute products" 1. R. C. Beezley, from resolution of the Kansas State Board of Agriculture (p. 483). "The first thing a doctor does when ulcers are diagnosed is to insist that the patient cease using foods cooked in vegetable fats. This is for the simple reason that vegetable fats do not dissolve at body temperature. A normally healthy person can digest vegetable fats, but many of us cannot. Animal fats, such as butter, will dissolve at body temperature." 1. Representative Charles R. Robertson, North Dakota (p. 485). "Mother Nature put something into milk in the way of fatty acids that are not found in vegetable oils and which the scientists have not been able to duplicate as yet and probably never will be. These animal fats, naturally present in butterfat, contain a certain unidentified growth-promoting factor not present in natural or fortified vegetable oil products. This growth-promoting factor in butterfat, which is not found in vegetable oils, is essential in the diets of infants and growing children." 6. William Rhea Blake, National Cotton Council of America (p. 151). 7. Lewis G. Hines, American Federation of Labor (p. 173). 8. Mrs. Rena Cohen, National League of Women Shoppers (p. 185). 9. Mrs. Florence Geiger, National Council of Jewish Women (p. 188). 10. Margaret F. Stone, National Women's Trade Union League of America (p. 190). 11. Mrs. Dennis E. Jackson, ConsumConference, Greater Cincinnati, Ohio (p. 194). ers 12. Mrs. Gertrude Parks, District of Columbia Federation of Women's Clubs (p. 199). 13. Senator Burnet R. Maybank, South Carolina (p. 201). 14. Ella H. McNaughton, American Home Economics Association (p. 205). 15. Sylvia B. Gottleib, Communications Workers of America (p. 206). 16. Harvey W. Brown, International Association of Machinists (p. 215). 17. American Association of University Women, Washington, D. C. (p. 486). 18. American Association of University Women, Wisconsin division (p. 490). Fortified oleomargarine has high nutritional value 1. Representative E. A. Mitchell, Indiana (p. 119). 2. J. D. Henderson, American Association of Small Business (p. 123). 3. Miss Jean L. Whitehill, Consumers Union (p. 158). 4. Mrs. E. G. Chamberlain, National Federation of Settlements (p. 191). 5. John N. Hatfield, American Hospital Association (p. 203). 6. J. Roy Jones, Southern Association of Commissioners of Agriculture (p. 208). 7. Mrs. J. Fichtmueller, Jr., League of Women Voters of City of New York (p. 487). "There are several so-called unsaturated or essential fatty acids which cannot be manufactured in the body and which must be taken along with the food * * * Margarine is an equally good source of such unsaturated fatty acids as is butter." 1. Dr. H. J. Deuel, Jr., School of Medicine, University of Southern California (p. 49). "Cow's butterfat is not necessarily essential for children * ** * because the composition of such butterfat is en For the tax 1. Mr. J. C. Mohler, Kansas State Board of Agriculture (p. 225), from statement submitted by Mr. Charles W. Holman. "The Leichenger, Eisenberg, and Carlson study is based on records ranging from 6 months to 24 months. Loose reference has been made, and is made in the conclusions of that study, referring to it as a 2-year study, but there is nothing to indicate how many or how few records actually ran to 2 years. In any case the duration is only a small fraction of a generation time, or for that matter, only a small fraction of the human growth period. The article is * ** ** uninformative as to the complete diet." 1. Hugo H. Sommer, professor of dairy industry, University of Wisconsin (p. 402). 2. Statement by Ancel Keys, director of Laboratory of Physiological Hygiene, University of Minnesota, submitted by Hugo H. Sommer (p. 404). Against the tax tirely different from the fat obtained from human milk. 'Human milk fat in regard to its component acids has more resemblance to a typical margarine fat blend than to butterfat." 1. Dr. Deuel, quoting Hilditch and Meara from the British Biochemical Journal (p. 51). "The results conclusively establish that growing children experience normal growth in height and weight when their diets contain only fortified margarine as table fat, as shown by a comparison with children fed on similar diets with butter as the source of table fat and by comparison with standard height and weight tables* * *。 There is no evidence that there is any growth factor present in butter which is not present in margarine." 1. Dr. Anton J. Carlson (Drs. Leichenger and Eisenberg), University of Chicago (pp. 470-471). PROTECTION OF CONSUMER Colored oleomargarine cannot easily be distinguished from butter, and is not a substitute but an imitation. 1. Representative Clifford R. Hope, Kansas (p. 15). 2. Representative Reid Murray, Wisconsin (p. 34). 3. J. C. Mohler, secretary, Kansas State Board of Agriculture, statement submitted by Charles W. Holman, secretary, National Cooperative Milk Producers Federation (p. 225). 4. H. W. Curtiss, Illinois Agricultural Association (p. 421). 5. A. B. Tarwater, Plainview (Tex.) Cooperative, Inc. (p. 424). Hoard's 6. "Oleo and Soybeans," Dairyman, March 10, 1948, submitted by Charles W. Holman (p. 344). 7. Statement by Representative John Byrnes, Wisconsin, submitted by Representative Reid F. Murray, Wisconsin (p. 346). The Food and Drug Administration finds itself powerless to enforce oleomargarine regulations where the prod Oleomargarine taxes limit or remove consumers' freedom of choice by penalizing the sale of artificially colored oleomargarine and not the sale of artificially colored butter. 1. Representative W. R. Poage, Texas (p. 27). 2. Representative Orville Zimmerman, Missouri (p. 18). 3. Representative L. Mendel Rivers, South Carolina (p. 38). 4. Representative Robert J. Corbett, Pennsylvania (p. 109). 5. C. P. Key, master, South Carolina State Grange (p. 220). 6. Miss Anna Lord Strauss, League of Women Voters (p. 155). 7. Miss Jean L. Whitehill, Consumers Union (pp. 156-157). 8. Mr. Tyre Taylor, National Association of Retail Grocers (p. 162). 9. Mr. Lewis G. Hines, American Federation of Labor (p. 172). 10. Mr. Donald Montgomery, Congress of Industrial Organizations (p. 179). 11. Mrs. Rena Cohen, National League of Women Shoppers (p. 185). 12. Representative Robert Nodar, Jr., New York (p. 200). 13. Ella H. McNaughton, American Home Economics Association (p. 205). Public health is safeguarded by purefood laws and punitive oleomargarine taxes are not necessary for this purpose. For the tax uct is produced, distributed, and consumed within the borders of any one State. 1. Charles W. Holman, secretary, National Cooperative Milk Producers Federation (p. 299). 2. Representative Charles R. Robertson, North Dakota (p. 485). A new package for oleomargarine now used by eight manufacturers facilitates coloring the product and eliminates greasy hands and utensils, eliminates wasted product, and colors without any streaks in 2 or 3 minutes. 1. Leo Peters developed the package referred to (pp. 412-413). Against the tax 1. Representative W. R. Poage, Texas (pp. 29, 31). 2. Representative Thomas G. Abernethy, Mississippi (pp. 19-20). 3. A. Lee M. Wiggins, Under Secretary of the Treasury (p. 20). 4. Shoreline Times, as quoted by Representative Ellsworth B. Foote, Connecticut (p. 106). 5. Representative Brooks Hays, Arkansas (p. 107). 6. Mr. Edgar C. Corry, Jr., American Veterans of World War II (p. 153). 7. C. P. Key, master, South Carolina State Grange (p. 220). 8. Miss Anna Lord Strauss, League of Women Voters (p. 155). 9. Miss Jean L. Whitehill, Consumers Union (pp. 156-157): 10. Mr. Tyre Taylor, National Association of Retail Grocers (p. 164). 11. Mr. Lewis G. Hines, American Federation of Labor (p. 170). 12. Mrs. Rena Cohen, National League of Women Shoppers (p. 186). 13. Mrs. Gertrude Parks, District of Columbia Federation of Women's Clubs (p. 199). 14. Mr. J. Roy Jones, Commissioner of Agriculture, South Carolina (p. 209). 15. Mr. Clifford Patton, National Association of Consumers (p. 212). 16. N. B. Betzold, Durkee Famous Foods (p. 435). 17. Representative John L. McMillan, South Carolina (p. 382). Coloring of oleomargarine in the home results in waste of time, effort, and of the product itself. 1. Representative W. R. Poage, Texas (p. 31). 2. Representative Robert J. Corbett, Pennsylvania (p. 112). 3. Representative Ellsworth B. Buck, New York (p. 117). 4. Representative Texas (p. 104). Omar Burleson, 5. Mr. Edgar C. Corry, Jr., American Veterans of World War II (p. 153). 6. Mr. Lewis G. Hines, American Federation of Labor (p. 171). 7. Mrs. Rena Cohen, National League of Women Shoppers (p. 185). 8. Mrs. E. G. Chamberlain, National Federation of Settlements (p. 192). 9. Mrs. Dennis E. Jackson, Consumers Conference of Greater Cincinnati, Ohio (p. 194). 10. Mrs. Gertrude Parks, District of Columbia Federation of Women's Clubs (p. 197). 11. Representative Robert Nodar, Jr., New York (p. 200). 12. Ella H. McNaughton, American Home Economics Association (p. 205). |