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TABLE 12.-Regulations pertaining to oleomargarine: Specified foreign countries, 1946–47

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Netherlands. Norway

Haiti (none).
Honduras (none).
Mexico (no specific regu-
with Department of
Public Health re.
quired of all packaged
New Zealand (manufac-

ture and importation
Nicaragua (none).
Panama (none).
Paraguay (none).

Source: Compiled from reports of Foreign Service Officers of the United States to the U. S. Department of Commerce. Some of the reports have been published in "Industry Reports, Fats and Oils" and World Trade in Commodities”; others were consulted in the offices of the Foodstuffs Division, Office of International Trade, U. S. Department of Commerce.

TABLE 13.–Violations of the oleomargarine law, number of violations, quantity

and value of oleomargarine involved, and penalties collected, 1992–1947

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1 “Several hundred thousand pounds."
Source: Compiled from reports of the Commissioner of Internal Revenue.

The CHAIRMAN. This morning the question came up as to how many men in the Bureau of Internal Revenue are devoting their time to checking up on oleo. The number, I am informed, is approximately 96 in the 64 collection districts, plus an additional 4 working in Washington, making a total of 100.

The next witness is Paul Potter, labor consultant for the dairy industry:

How do you do, Mr. Potter? Will you identify yourself for the reporter, please? STATEMENT OF PAUL POTTER, PARTNER, PAUL POTTER & ASSO


Mr. POTTER. My name is Paul Potter, of the firm of Paul Potter & Associates, Chicago.

We are labor-relations consultants for the dairy industry.

We requested an opportunity to appear before your committee today, because we thought we would be serving the interests of the committee as well as the dairy industry in bringing to your attention some of the possible impacts of this proposed legislation on the employment and the labor situation in the dairy industry.

I have been connected with the dairy industry in one capacity or another since 1922, and have had intimate opportunity to study the effect of various operations in the dairy industry upon employment.

In the first place, I think it is erroneous to get the impression that all labor is in favor of the repeal of oleomargarine taxes. I, per



sonally, have had an opportunity to talk with a number of influential labor representatives, officers of various unions in the last few days, whose membership would stand to lose by the passage of the repeal of these taxes. They would not only lose employment, but they would lose earnings, built up over a long period of time in this industry, which has a record of very fair wages, and very constant employment in the dairy industry.

These men give us three particular reasons why they are apprehensive about this legislation.

In the first place, the upsetting of the employment in the dairy industry would be unfavorable, especially to these local unions I have mentioned, members of the International Teamsters, the CIO, and the United Mine Workers, whose members are employed in the dairy industry.

In the second place, they are apprehensive because they are beginning to realize that instead of lowering the retail prices of butter and oleomargarine, which would be in favor of the consumers, actually, once oleomargarine could be sold to look like and replace butter, higher prices would be charged for it, and the consumer will actually not benefit thereby.

These men are also expressing concern about the fraudulent sales of oleomargarine which might take place without the proper safeguard, such as is now a matter of law.

I cite briefly here, as indications of this new trend which is taking place among these unions, the fact that the current issue of a newspaper published for all the CIO members of the State of Michigan carries a detailed article this week, this past week, warning its members that repeal of these taxes would mean an increase in the price for oleomargarine.

I cite also a resolution passed earlier this month by representatives of the various dairy plant workers in the State of Minnesota, meeting in Minneapolis, in which their resolution indicated in substance that they made no objection to the sale of oleomargarine as such, but they protested against any change in the laws which would permit oleomargarine to be sold as a substitute for butter.

I have talked with not only the local, but some of the national officials of these organizations, and they have a little different idea than they first had, when they were first told the story by the oleomargarine people, as to what might take place.

The second point I would like to emphasize is the serious maladjustment in employment in thousands of these local communities where creameries are a vital part of the local economy. We estimate there are approximately 4,000 creameries in the United States, engaged in the manufacture of butter, employing in excess of 40,000 workers.

This is in contrast to the 26 manufacturers of oleomargarine, whose plants are strategically located, and so operated as to employ less than 2,000 workers, and who are in position to increase the capacity of their plants without greatly increasing employment.

We would like to point out that many other people who work in these almost 4,000 local communities who depend for their livelihood upon the selling of supplies and services in connectnon with the handling of the cream from the farm to the creameries, and from the creameries to market, also would be affected, as well as all of the people who make the machinery and supplies that go into this very

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highly specialized business; and employment would be affected seriously in a great many interrelated lines. We would

like to mention also the thousands of men who are employed on the trucks which gather the cream, going up through the highways and byways of the country, just like the mailman does to deliver to the rural mailbox.

They are picking up the cream to be brought into the creamery, to be shipped by express or train, or be hauled by truck into the creamery. The livelihood of those men is at stake in this legislation.

I would like to call the attention of the committee to the threatened loss of jobs and income for thousands of men who are distributing butter to grocers and homes in hundreds of metropolitan areas throughout the Nation, as well as the loss of these convenient means of securing butter, so long enjoyed by the housewives of the Nation.

We have just made a survey which indicates that in excess of 72,000 milk-and-dairy products drivers and salesmen who derive their salaries and commissions from the sale of butter to grocers and homes in the metropolitan areas, will either lose their jobs, or their salaries and commissions will be affected by the outcome of this legislation.

In the fourth place, I would like to point out that labor receives more from the consumer's purchase of a pound of butter than does the manufacturer.

Labor's income from the sale of butter is exceeded only by the income received by the farmer who produces the butter fat.

Much of the criticism leveled at the butter industry for high prices since the war has come from the very workers whose products have increased in price as much as or more than butter.

We do expect to pay more for an automobile or a suit of clothes, or to build or repair a house than before the war. All of the major costs of living have increased directly as a result of higher labor costs, and butter is no exception to this.

I have some figures taken from the Bureau of Labor Statistics with respect to factory workers' earnings, showing the increase from 1939 to 1948. You will note that the hourly pay has gone from 631/3 cents in 1939, to $1.287 in 1948. It should be noted that butter prices have increased almost in line with workers' increased earnings, and I show here figures from the Bureau of Labor Statistics showing a percentage change to February 15, 1948, from August 15, 1939, of 195.7 percent.

Butter has always been regarded as one of the most efficient products of the farm. The dairy farmer gets a higher percentage of the consumer's butter dollar than for any other food product. The dairy farmer in 1947 received 76 percent of the retail price of butter. The oleomargarine industry, in sharp contrast, returned only 30 percent of the consumer's dollar to producers of oil.

Labor stands next to the farmer in securing a large share of the price paid by consumers for butter. The labor cost of butter production has been steadily mounting, not only in the direct processing of the butter, but in the cost of supplies, transportation, maintenance of plant and equipment, as well as overhead expenses.

Higher labor costs have been a problem for the dairy farmer. They have been a problem in transportation, and in the handling of the commodity all the way through to the consumer.

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