Senator BARKLEY. Will this general reduction affect oleomargarine while it is affecting butter?

Mr. BRANDT. It may, but you will take-there are fixed costs in merchandising and advertising and all of these items that bear a relationship to the total price, and when the butter and oleomargarine prices, get to a level where butter is a little more acceptable to the consumer, your 10-cent tax will be quite an advantage then, so far as the dairy industry is concerned, much more so than it is at the present time.

Senator BARKLEY. Of course, the closer the two come together in price, naturally the more advantage the tax would be. Has oleomargarine always sold cheaper than butter?

Mr. BRANDT. Always has, yes, sold cheaper than butter, and it was not until we ran into this situation of a price advance in butter, which was rather rapid, following the close of the war, and following the discontinuance of price regulations that brought the thing forcefully to the attention of the consumer. Butter at present price levels is no higher from the standpoint of its relationship to earnings and other products than other food items or cloth items, but we were held down; the consumers were buying butter during the wartime period for less money; they bought butter during the wartime period for 5 cents a pound less than they bought butter during the period of 1920 to 1929. That was because of price regulations and subsidies that were paid.

When those were removed, and butter took its proper relationship with other food items, it seemed like a tremendous price advance at that time, and you got consumer resistance, that you otherwise would not have had if you had the proper relationship all the way through.

You can buy-even at present price levels you can buy more butter for an hour's work-the general worker can buy more butter for an hour's work today than he could any time in your time or my time, so it is not out of line, but butter prices will go down along with other commodities, and as they go down, consumers will look at it in a little bit different light.

Senator LUCAS. When do you think those butter prices are going to decline?

Mr. BRANDT. When?

Senator LUCAS. Yes.

Mr. BRANDT. They already have gone down.
Senator LUCAS. What are they worth today!

Mr. BRANDT. I did not get your market today, but

your Chicago market has gone down about 10 cents in the last week's time. So your prices of butter are already on the decline.

We had an unusual situation so far as the butter market was concerned. We had an advance in the butter market just about the time we usually look for declines. Some of us have had just a little feeling that there was some advantage on the part of certain people in trying to bolster a butter market, at least until after these hearings were over, because you can continue the consumer resistance if you can keep them up. Some of us really feel that because it was entirely contrary to anything that was natural to expect at this time of the year.

Senator LUCAS. That is just mere suspicion on your part. You have no proof of that, have you?

Mr. BRANDT. I am giving it as a suspicion and my opinion. That is all I am giving. I am not taking it as proof. Possibly with some

investigations you might find where some of it, when the job has been done, I am giving it as my suspicion and my own personal opinion. You can take it for whatever it is worth.

Senator LUCAS. We get a lot of speculations of that kind around here. Let me ask you one question. Did I understand you to say, Mr. Brandt, that the cow population had decreased in this country?

Mr. BRANDT. The cow population, the dairy cow population in the States of Minnesota, North Dakota, South Dakota, Kansas, Oklahoma, and Nebraska have decreased by about 17 percent since 1942, and those are big butter-producing States.

Senator LUCAS. Is that true throughout the country?

Mr. BRANDT. Some of the other States, the decrease has not been noticeable. I think nationally you might have a decrease of 5 percent in cow population, 5 or 6 percent, in the last year but in your real butter-producing States, where this general situation has been most effective in the farm planning, you have had there the greatest decrease in the number of dairy cows on the farm.

Senator LUCAS. The testimony before the committee seems to be unchallenged that there is more milk produced today than any time in the history, and I was wondering how that comes about if the cow population was decreasing.

Mr. BRANDT. That statement is not true. The history of the facts of the case are that the total milk production is already on the decline, and has been for the last 2 years. We reached our peak when we produced 121,000,000,000 pounds, I think it was in 1946 or 1945, and then we have stayed rather level, and from that time our milk production is on its way down.

Senator LUCAS. I think Senator Fulbright testified yesterday morning, and I think maybe one or two other witnesses testified definitely that while we were consuming less butter per capita in this country, on the other hand there was more milk being produced than at any time in the history, and that is the reason I asked the question.

Mr. BRANDT. That is an easy question to answer. I am giving you my opinion on it, and from my information and for what it is worth. Senator LUCAS. As I recall, the Senator quoted facts that he had, figures that he had received from the Bureau of Agricultural Statistics. Mr. BRANDT. If those are facts, then my statement is wrong. I still maintain that we are producing less milk today than we did 2 years ago.

Senator LUCAS. All right. Thank you.

Senator BARKLEY. As a matter of fact, the cattle population generally has declined. There are fewer cattle on the farms in this country now than at any time in the last 10 years.

Mr. BRANDT. That is right.

Senator BARKLEY. That is due partly to the price of feed, to keep them through the winter; it is due partly to the price of cattle which are bringing a high price on the market, so that those two things working together have tended to reduce the cattle population, and naturally the milk cattle population would go down about the same proportion, I guess.

Mr. BRANDT. Yes. In the butter-producing States, your dairy cattle numbers are down further than the beef production. In those States where we have the main part of your butter production, those seven States are down 17 percent.

Answering your question, Senator Lucas, as to this question of milk, we reached our peak in 1946 of 121,000,000,000 in round figures, and in 1947 we were 119,000,000,000 pounds of production, so whoever made the statement before, these are actual figures from the United States Department of Agriculture, was not quite right in his figures. I am a little nearer right than he is, at least.

Senator FULBRIGHT. May I make a comment there? The figures I quoted came from the Department of Agriculture, and were over a 10-year period 1936 to 1946, and I quoted there 120,000,000,000 pounds plus.

Mr. BRANDT. One hundred and twenty-one billion was your peak. Senator FULBRIGHT. The increase from 1936 to 1946, I think the percentage was from 102,000,000,000 to 120,000,000,000. I have forgotten the percentage. That same period there was a decrease of approximately 29 percent in the production of butter. The only point was that the greater part of the production of milk had gone into other items, such as cheese, dried milk, and condensed milk than had gone into butter.

Mr. BRANDT. That is right.

Senator FULBRIGHT. I do not think there is any difference in the figures. My figure stopped at 1946, which was taking the 10-year period.

Mr. BRANDT. Your 1946 was 121,000,000,000, and last year it was 119,000,000,000, and a part of your fat was due to foreign exports. They have had quite a lot of that, and then you have had an increase in the consumption of milk and cream and ice cream in that period

of time.

Senator THYE. Would I be out of order if I were to make a comment right here?

The CHAIRMAN. Please do.

Senator THYE. We have been talking about the decrease in number of dairy cows, and I would like to draw this comparison: In 1938 we had 34,774,000 cows, that is, for milk, and we had as beef cattle. and other cattle 30,475,000, so you will notice that the dairy cows there were above the number of beef cattle and other cattle registered.

Now, we will drop down to the last official figures, which is 1947, in order that we may have there again the comparison which is given years later. Your dairy cows are 38,468,000; your beef cattle, you will note, are up to 42,739,000. So your dairy cows have dropped, whereas your beef cattle have been on the increase, and the highest number of beef cattle were in the year of 1944, when you had 44,077,000, but at that particular time the dairy cow was away up to 41,257,000.

So that the fact is, as Mr. Brandt stated, that the disparity between dairy prices and the actual beef and grain prices had been so great that there was a tendency to actually discourage the dairy, and where it was an attempt to increase or encourage the expansion of beef cattle. I thought that these figures should go into the record there, because you can see that the dairy industry is actually being depressed in the United States, particularly in the heavy dairy States.

The South, because of soil-conservation practices brought about by Federal appropriations, there they have actually held or increased the number of dairy cows in order to utilize the feeds that the soil-conser

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vation program brings about in the planting of legumes and grasses in the soil protection.

I thank you, Mr. Chairman, for permitting me to make these remarks.

The CHAIRMAN. Proceed, please.

Mr. BRANDT. I should like to enter into the record here a survey on prices of oleomargarine, both colored and uncolored, at five points in the United States, to prove my statement that when you repeal the tax it is not going to save the consumer any money, because it is going to be a merchandising advantage to the oleomargarine manufacturer rather than a saving to the consumer.

Take Birmingham, Ala., and these are actual surveys: Uncolored oleomargarine sold for 41 cents, colored for 54 cents. Arkansas, Fort Smith, 41 cents for uncolored, 55 cents for colored.

Senator CONNALLY. Where was that?

Mr. BRANDT. That is in Fort Smith, Kans.

Senator CONNALLY. Fort Smith is Arkansas, I think.

Mr. BRANDT. And Colorado, Denver, 40 cents for uncolored, 52 for colored. Florida, Miami, 41 for uncolored, 52 for colored. Georgia, Atlanta, 41-these are several places there-41 for uncolored, 52 for colored, and 33 for uncolored and 55 for colored. That is another point. Thirty-five for uncolored and 55 for colored.

Then in Indiana, Evansville, 41 for uncolored, 53 for colored; 43 for uncolored and 55 for colored. And then another point, 47 for uncolored and 59 for colored. South Bend, 41 for uncolored, 57 for colored. In Terre Haute, Ind., 32 for uncolored, 59 for colored.

There is a rather uniformly higher price for colored than there is for uncolored, and more than the 10-cent tax. It ranges from Louisville, Ky., here is a range in Louisville, Ky., 39 for uncolored, 52 for colored, 40 for uncolored, 53 for colored, 43 for uncolored, 59 for colored, 45 for uncolored, and 55 for colored, 45 for uncolored, 57 for colored, and here is the extreme of 47 for uncolored and 60 for colored. I will not read this whole survey. I will enter it in the record to show you that after all there is more than the 10-cent charge placed on the uncolored oleomargarine wherever it is being merchandised as uncolored.

2 Placard above box containing oleo stated: Colored oleo-Looks and tastes like real butter.

3 Colored oleo not available now-sold last November in Memphis for 63 cents. Sold last October in Knoxville for 64 cents.

4 No colored oleo found on sale.

Mr. BRANDT. I have given you about the general consensus of my opinion on this subject. I will be glad to answer any questions you may want to answer.

Generally that is my story on the product. The statement to the effect that the oleomargarine people have to bleach their product before they can manufacture it to make it white is unfounded because all oleomargarine manufacturers have to hydrogenate cottonseed and soybean oil before they can get the foundation stock to manufacture oleomargarine out of it, and in turn they have to add the color. Otherwise they would have a dirty white or a green tinge to it, and it is part of the process of manufacturing to bleach it. We could not bleach, we could not renovate, we could not clarify, we could not clean up a dairy product, and then manufacture it the way the oleomargarine people do and get by the Food and Drug Administration for the definition for butter. We cannot use a preservative and they do use a preservative. That is generally my statement on the subject. (The prepared statement of Mr. Brandt follows:)

STATEMENT OF JOHN BRANDT, LITCHFIELD, MINN., PRESIDENT, NATIONAL COOPERATIVE MILK PRODUCERS FEDERATION; PRESIDENT, LAND O' LAKES CREAMERIES, INC., BEFORE THE SENATE FINANCE COMMITTEE ON H. R. 2245, A BILL TO REPEAL THE TAX ON OLEOMARGARINE

Mr. Chairman and gentlemen, I am appearing in opposition to the legislation now under consideration by the committee, H. R. 2245. This bill, as it came from the House, cuts the heart out of the Federal control of oleomargarine. Federal enforcement of oleomargarine regulations is based on the exercise of the taxation power of the Congress. The bill leaves the regulations and penalties to benefit books but eliminates the taxes. The regulations are the basis for collecting the taxes. If the taxes are removed, the regulations go by the boards.

The bill is represented by its proponents as a piece of legislation to benefit consumers. Actually it is a bill to confer a trade benefit to a butter substitute. It legalizes the manufacture and sale of a product that is as complete an imitation of butter as is humanly possible, and it denies to butter any effective protection against this almost identical imitation. To give such legal sanction to an imitation with no protection to the genuine product is an unprecedented reversal of legislative policy and of the ordinary rules of fair play.