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 Nation 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. Over the (c) The oleomargarine industry has not been hurt by these laws. 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 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: Butter. Lard Vegetable shortening. Total_ Cash farm income in 1946 $638, 011, 000 429, 647, 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, 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. DAIRY MEN'S LEAGUE COOPERATIVE ASSOCIATION, INC., 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., 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." |