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principle was recognized by the Congress of the United States ever since 1886, when the national policy was so ably stated by President Grover Cleveland, as follows:

"I am convinced that the taxes which it (the law) creates cannot possibly destroy the open and legitimate manufacture and sale of the thing upon which it is levied. If this article has the merit which its friends claim for it, and if the people of the land, with full knowledge of its real character, desire to purchase and use it, the taxes exacted by this bill will permit a fair profit to both manufacturer and dealer. If the existence of the commodity taxed and the profits of its manufacture and sale depend upon disposing of it to the people for something else which it deceitfully imitates, the entire enterprise is a fraud and not an industry; and if it cannot endure the exhibition of its real character which will be affected by the inspection, supervision, and stamping which this bill directs, the sooner it is destroyed the better, in the interest of fair dealing."

I have not attempted to go into the economic repercussions which would plague the American dairy farmer if this bill is enacted into law. I know this matter has been covered ably by others who have testified or submitted their statements. But one important point remains-that is the subject of filled milk.

If this bill passes the Senate and finally becomes law, then you will have perpetrated one of the greatest injuries possible to a wholesome part of American industry-the dairy farmer. You will invite and encourage the filled-milk industry to take over the evaporated-milk industry of the Nation. Filled milk is a product of skimmed milk and cottonseed oil. The manufacturers remove the butterfat from the whole milk or they buy skim milk, and they replace the butterfat with cottonseed oil-a compound of evaporated skim milk and cottonseed oil.

If you must take the butter market from the farmer, why not at the same stroke legalize filled evaporated milk, filled fluid milk, filled cheese, filled ice cream, and thus close scores of evaporated-milk plants, fluid milk, cream, cheese, and ice cream plants in Wisconsin and throughout the Nation, instead of prolonging the agony and the suffering of the dairy farmer?

Suffice it to say that the American farmer is beginning to learn who are his friends and who are his enemies by their actions. He knows how to work with his fellow farmer. And it is only natural that the American farmer will fight back with every weapon at his resource, including political, if this rightful market for his milk is shattered by individuals who have not thought the entire problem through to its logical conclusion.

This committee may think this bill incidental enough to receive only 4 hours at a time because of more pressing problems.

Let me assure this committee that 3,000,000 dairy farmers and their families consider this legislation one of the most important matters to come before this present Congress. And we respectfully assure this committee that every dairy farmer in the United States when asked to vote this fall is going to ask himself the following question:

"Where did this candidate or where did this party stand on the death sentence of butter?"

THE ROTARY CLUB OF ORD,
ORD, NEBR., May 14, 1948.

Senator EUGENE MILLIKIN,

Senate Office Building, Washington, D. C.

We have

DEAR SIR: I have your wire of May 12 and thank you for the same. been very much interested in the bill repealing the tax on oleo. It seems to us that it should not pass. This differential between butter and colored oleo has been in effect for many years. It is necessary if we are to have a continual manufacture of butter. The necessary work and expense connected with the production of butter is very much more than is required for the production of oleo. At the present time there is a fairly good market for butter and a reasonable measure of profit in the same but this is not in ordinary times. The production of butter in our locality makes a part of a manufacturing plant for each farmer. Only a few have more than 5 to 10 cows giving milk. During bad times and even during better times the weekly amount received by farmers for their butterfat is the fund which buys them their weekly supplies. Otherwise they would only receive money two or three times a year. If the production of butter was made unprofit

able it would gradually kill this industry. In poorer times the competition of oleo is very serious even with the present tax.

We sincerely hope that the committee hearing this matter and the Senate itself will refuse to pass this dangerous bill.

ED F. BERANEK, President.

RUTHERFORDTON, N. C., May 18, 1948.

Mr. EUGENE D. MILLIKIN,

Chairman, Senate Finance Committee, Washington, D. C.

DEAR MR. MILLIKIN: We respectfully submit the following as our testimony regarding the bill to remove the tax from oleomargarine.

In the beginning we wish to state that we recognize the merits of oleomargarine as a pure and wholesome food, and the rights of those people interested in this product to sell it on a free market, provided it is sold as oleomargarine and carrying the original and natural color of the product. On the other hand, we believe the dairymen should be free of the unfair and premediated scheming of the manufacturers of oleomargarine who use every means to imitate the appearance and flavor of butter and otherwise prepare their product and the packages containing same to deceive the consumer into thinking he is actually using butter.

The dairy business in the South is just in its infancy and the unfair competition from tax-free artificially colored oleo could easily result in the depression of prices of dairy products to the extent that the growth in this business would be greatly retarded. No one familiar with the South and its soil erosion would deny that the growth of the dairy industry in the South would be the best thing that could possibly happen to conserve our soils and increase our farm income as cotton and other of the old-line crops are forced out for various reasons. Further, the dairy industry contributes many times more money through the use of feed products to those interested in the sale of fats and oils to the oleo industry than does the oleo industry itself. To those producing soy beans, cottonseed, peanuts, etc., any bill detrimental to the dairy industry is, in effect, killing the goose that lays the golden egg.

In conclusion and summary, we repeat and emphasize our willingness for the tax to be removed from oleo provided Congress will make it unlawful for oleo to be made and sold in the imitation of butter, either wholesale or retail, or when sold in public eating places. However, it would give this artificial product an unfair advantage in competition with butter-should it be lawful for oleomargarine to be colored to imitate butter and that the simplest and most effective means of insuring against such unfairness is to make it unlawful for color in the imitation of butter prior to sale to be added, regardless of the circumstances under which it is sold. Dairying is a fundamental and basic industry and any damage rendered it would be felt keenly by many groups not actually engaged in the business.

Thanking you for this privilege of submitting our testimony, we are,
Sincerely yours,

JACK CAMP, Jr.,
J. J. HAMLIN, Jr.,

Cochairmen of the Rutherford County Milk Producers Association.

Hon. EUGENE D. MILLIKIN,

Chairman Senate Finance Committee,

Senate Office Building, Washington, D. C.

PAUL A. SCHULTZE CO.
St. Louis 3, Mo., May 13, 1948.

DEAR SENATOR MILLIKIN: I appreciate your telegram received today. The fact that the oleo manufacturers are so intensely bent on the repealing of the oleo tax law evidences the importance to them of their product as a butter imitation; and it must be true that it is expected that the oleo sales will then soar. Already there are many places where yellow oleo is served and in some highclass places too, where people who eat it do so for butter. Oleomargarine is already being sold in vast amounts since butter has been high, but butter is not higher than anything else in the food line, comparatively, or in any other line for that matter. Oleo is already doing a big job and it can easily disturb the equilibrium of a profitable return to the farmer producing butterfat.

At this time, the price of butterfat matches in pretty well with the value of the whole milk in the many forms in which it is sold but should the selling price of butter go down below that which is based on the cost of feed which makes it either profitable or unprofitable to the farmer and when this price gets low enough that it won't pay him, he is naturally going to quit producing milk for the purpose of making butter.

I might say also that since our standard of living has risen in the past years due to more employment and high wages, the production of butter has been reduced, considerably—in fact, to the extent of 20 percent, for the reason that there has been a greater demand for the products in which the whole milk is used-ice cream, cheese, etc., and has taken this volume away from the butter production, which is the ultimate goal of the cream when there is a surplus.

With the production of butter already suffering for the reason mentioned and with the addition of the tax appeal, I am sure will reduce the butter production even more, which I believe will not be the best for the industry or farmers all over the country.

The old saying, "Bread and butter is the staff of life”—Are you going to let this be imitated out of American Popularity?

Considering the fact that butter is such an important food and we are a butter country, it looks rather singular that this should be picked on continually for the purpose of putting in its place an imitation. It should be the interest of all of us to make a good butter and keep good butter on the American table. These are some of the facts as I see them and thank you for your consideration. Sincerely. PAUL A. SCHULTZE,

RESOLUTION OF LOCALS 262 AND 264, UNITED PAPERWORKERS OF AMERICA, CIO, AND THE LABOR COUNCIL OF KNOX COUNTY OHIO, COMPOSED OF ALL OF THE UNIONS IN KNOX COUNTY, OHIO

This resolution represents 800 members of the two local unions mentioned above and 3,500 mentioned in the council. We are opposed to any change in the present laws regulating the sale of oleomargarine which will permit this product to be sold yellow.

Such

We are not opposed to the removal of certain taxes on oleomargarine. taxes which we believe to be unnecessary are the retail taxes and the State taxes. However, we do feel that the tax of one-quarter of a cent per pound on the manufacture of oleomargarine is necessary to provide the funds for policing the industry. This we believe to be necessary to help assure the consumer the best possible product for the price paid.

We want oleomargarine to be sold as oleomargarine, with the reduction in the taxes to enable the consumer to benefit by the reduction rather than to have the savings eaten up by the oleomargarine industry. Our people want the privilege of coloring their own oleomargarine at a definite savings to themselves as

consumers.

We feel that if we allow the industry to sell colored oleomargarine, we will be actually allowing them the privilege of increasing the cost to the consumer. This fact has been proven to our satisfaction by a national survey of the comparative prices of colored and uncolored oleomargarine. In States where colored oleomargarine is permitted to be sold, the price of the colored product ranges to as high as 27 cents above the price of the uncolored product. This provides an opportunity of taking unfair advantage of the consumer.

By no stretch of the imagination could the tax of one-quarter of a cent per pound on uncolored oleomargarine be called a burdensome tax. Yet it does assure the consumer the privilege of buying a wholesome and nutritious spread and of serving it either colored or uncolored to suit his taste.

One point that we can't stress too much is the possibility of fraud. Realizing that the quantities of butter sold are so huge and that the price range between oleomargarine and butter is such that we believe there would be a tremendous incentive for substitution and fraud if the sale of colored oleomargarine were permitted.

In our estimation, we feel that people are mistakenly being led to believe that the removal of the present tax would bring a saving to the consumer. We, therefore, feel that there should be some Government restriction that would compel the sale of oleomargarine as oleomargarine in an uncolored state for the ultimate protection of all the consumers.

HENRY BROWN,

President, Local 262, United Paperworkers of America, CIO.

STATEMENT OF E. S. TRASK, GENERAL MANAGER OF THE UPPER SNAKE RIVER VALLEY DAIRYMEN'S ASSOCIATION, INC., IDAHO FALLS, IDAHO

The above-named association is now in its eighteenth year and has served 8,193 patrons during that time however, less than 3,000 are active now.

1. Claims have been made that the passage of this oleo legislation would reduce the cost of living. This we deny, but admit that it would save the housewife a little trouble in mixing her own coloring.

2. We have no objection to oleo choosing a color of its own different from butter.

3. The most progressive countries in the world are those which use plenty of dairy products.

4. The dairy industry is responsible for a very large portion of the agricultural income in this country. The reduction of that income would have an immediate and permanent effect upon national economy.

5. We believe the ingredients compounded into oleo should pass the same rigid inspection as the ingredients that are made into butter. The long-range future of agriculture in this country as well as every other depends to a great extent upon the production of livestock to replenish the ingredients taken out by crops.

6. Dairying has been handicapped during the last year or so to the extent that a great many farmers have discontinued. The unrestriction of colored oleo would be another discouraging factor to those who milk cows.

7. It is not the intention of the dairy industry to try to prohibit the manufacture of oleo even if they had the power. The American people have a right to eat what they please. We believe the trade-mark of butter is the yellow color and if that is not infringed upon, it is doubtful whether there would exist any quarrel between oleo and butter.

Oleo originated out of the necessity of war in Europe and it is our opinion that if and when normal times come again this wartime scare will be over. Those who represent from 20 to 25 percent of the agriculture in the country plead with your committee to postpone action on the oleo question.

STATEMENT OF F. L. HAMMACK, MANAGER, VIGO CO-OPERATIVE MILK MARKETING CO., INC., TERRE HAUTE, IND.

The real issue in the oleomargarine tax repeal measure is whether or not imitation and substitute products are to be allowed to be sold without being clearly identified as imitations and substitutes. All of the arguments about lower taxes, lower prices to the consumer, boom to the soybean and cotton farmer, are beside the point and in general very misleading. They are merely a smoke screen to cloud the real issue.

On April 28 the House of Representatives voted to repeal all Federal oleo taxes without any restrictions to prevent an imitation from being sold as the natural product. This is the beginning of legalizing imitations so manufacturers can duplicate as many of the features of the natural product as possible, so long as they do not use exactly the same name for the product. If the Senate reacts in the same way there will be opened many fields for many imitation foods of all kinds much of which would not be known by the consumer.

It would bring out on the market imitation milk with vegetable fats which could be produced in large manufacturing plants in large quantities. We have some of this product on the market today. It would only be a short step to making of a synthetic ice cream and many other imitation products.

Only a short time ago a scientist announced having made an imitation meat that could hardly be told from beef. This product also comes from the grain and vegetable field. Widespread sale of these imitations without regulations to force their proper identification as a substitute regardless of how, when or where they are sold would mean complete strangulation of the dairy industry.

This strangulation of the dairy industry which accounts for approximately 30 percent of our national farm income would wreck havoc with our national farm economy. The first step has been made by the House of Representatives to allow exact imitation to be sold without regulation and no doubt must lead to the same treatment of all imitations, not only in the butter field. Just how far this might lead no one can estimate, but it is a problem that merits very close study before final action is taken.

Meat, milk, and their byproducts amount to approximately 50 percent of our national farm income. The effects of the loss of a large portion of this income would cause a great economic reaction on our farm economy. No doubt our cattle population would decrease with great rapidity. Farmers would be forced to turn to other fields for their living, millions of employees of dairy processing plants would lose their job. Delivery of dairy products uses more trucks than any other commodity to deliver products to the consumer. This would be greatly curtailed. It is very definitely a question of great economic importance.

It is a question of importance to the health, intelligence, and strength of our nation. Statistics and history tells us that people who live in a land where livestock numbers are high are healthier, more intelligent, live longer, and maintain a higher standard of living. Many of the old countries who have a few cattle and produce very little milk and meat, and who depend largely upon grain and continuously faced with starvation, short life span, and poor intellectually and have a very low standard of living.

It has an important bearing on soil fertility. Soil conservationists today are emphatically pointing to the necessity of a farm program that will halt the rapid depletion of our soil. They point out that if we continue to deplete the soil at the rate of previous years and continue to increase in population we will soon not be able to produce food to supply the nation.

Stock farming does not deplete the soil as rapidly as does grain farming. The decrease in livestock population and the stepping up of grain farming would hasten soil depletion. True, commercial fertilizer could replace some of this loss. Use of commercial fertilizer would increase the cost of the product. much of the commercial fertilizer is a byproduct of the meat packing industry which would be greatly curtailed.

Also

We have many, many imitation and synthetic products on the market which in some instances can hardly be told from the natural product. They can be sold cheaper and fill a need for those people with a low income. They certainly have a place on that market. No one could deny that. We do have however, many regulations and restrictions on how those products are advertised and sold to prevent fraudulent sales.

Patents protect infringement upon many items from substitutes or imitations. Copyrights protects the writer from being copied, regulations require goods to be labeled, as to the percent of wool used in manufacture. Most of those items which have been created by the scientific and inventive power of man are controlled by regulatory laws. Substitutes and imitations are required to so advertise and label that any consumer will know what material they are purchasing. Those natural products cannot be patented and are protected from duplication by various laws and regulations.

The purpose of such regulations is not to grant a monopoly on any product but to insure the consumer that the product they purchased was exactly as represented and that it plainly identified as an imitation or substitute.

The repeal of oleo taxes alone would not in itself bring about all these things. The precedent, established in permitting an imitation and substitute to be sold without any regulatory measures is the issue that is very serious and would lead to wholesale of substitutes and imitations as the genuine product. This problem merits some very serious thought from every individual as well as our Senators.

Are we going to take the first step toward increasing our grain production and decreasing livestock production and in a few generations find our nation faced with the same problers of hunger and low standard of living that we find today in Europe and the Far East?

Substitutes and imitations are usually much cheaper and could wreck the market for natural products if not properly identified to all consumers.

Our Congress is charged with the responsibility of protecting the independence, health, wealth and welfare of the Nation as a whole and its people individually. Before any decision is made, serious consideration and careful thought should be given, to be sure they are meeting that charge not only today but in years to

come.

The Creator has put into natural products numerous qualities, such as the rich wholesome goodness of flavor and nutrition, that man has tried vainly to duplicate. Many of these imitation or substitute products cannot be readily identified by sight or taste. Because of mass production methods imitations are usually lower in price and many of the lower income groups must accept the substitute in lieu of the natural product, which by virtue of its source, is higher in price. These people go to the market and buy those substitutes and know full well they are imitation products.

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