Since the dawn of history, every major war has been won by armies and civilian populations which possessed the most adequate food resources. Victorious America has never come to grips with a power backed by the agricultural resources possessed by Russia.

The purebred dairy cattle breeders of America ask each member of this committee to ponder soberly that statement. Is this the opportune time to enact legislation destined to stymie progress in a segment of America's agriculture which is admittedly producing nature's most nearly perfect nourishment for mankind?

The Oleomargarine Trust is demanding that Congress level the last barrier which prevents 100 percent imitation of natural dairy butter by oleo made from deodorized oils, synthetic vitamins, benzoate of soda, and artificial butter flavor, and packaged in historically established butter cartons. Should Congress vield, it is the considered judgment of the breeders of registered dairy cattle that an era of oleomargarine bootlegging, at wholesale level, will be touched off, the magnitude and scope of which will make the Volstead days seem mild and harmless by comparison.

With the powerful arm of the Federal Internal Revenue Department legislated out of the picture, and with the Pure Food and Drug Administration able to handle only cases of deception and fraud involving interstate shipment, there will be a monetary incentive to sell colored oleo at the price of, and in the guise of, dairy butter. The logical conclusion is that Nation-wide substitution of yellow oleo for dairy butter at butter prices will follow.

In summary, then, we urge you to consider the reasons why this oleo legislation, already so far advanced, must not become the law of our land.

First of all, consider the great value to every man, woman, and child of our Nation today of the progress made in a stable dairy world. Consider the blow to further progress which would be struck by repeal legislation doing drastic harm to the delicate balanced economy which has made possible our progress of the past.

Secondly, consider the effects on our all-important milk supply if the present seasonal balancing factor, manufacture of butter, is jeopardized. Remember while you think of this, that there is no substitute under the sun for fluid milk, for which butter is the balance wheel. Seasonal fluctuations, inevitable without a butter market, will mean long periods when milk will not be present on many tables.

Thirdly, think of our soils-national resources never to be replaced once lost. Recall what cash cropping has done to soils in our marginal farming areas.

And lastly, remember that the best way to fight crime, fraud, dishonesty, and profiteering is never to let it begin. You have seen what temptations lie ahead. Don't let it happen. Don't set off this wave of temptation. Once such temptation is loosed, policing will be far more costly than prevention of fraud in its present harmless state. As a representative of 227,500 independent dairy farmers, I say to you that legalizing the use of butter's yellow trade-mark by a synthetic, imitation product will have as devastating an effect on the morale of the American dairymen as did the dropping of the first atomic bomb on the morale of people of the Japanese Empire. The CHAIRMAN. Senator George?

Senator GEORGE I do not believe it is going to be quite as bad as you think.

Mr. HOUSEHOLDER. I do, Senator.

Senator GEORGE. Let me assure you that it will not. Milk and milk production and products of milk are not going to disappear in America. Mr. HOUSEHOLDER. Nobody argues that.

Senator GEORGE. They are going right on and you have to meet this competition as you are meeting it.

Mr. HOUSEHOLDER. We will meet every fair competition.

Senator GEORGE. You will have to meet it for oleomargarine. Mr. HOUSEHOLDER. We are meeting it today on a basis that we are entirely satisfied with because it is forced to identify itself.

Senator GEORGE. You are meeting it at a cost to other things which are being produced in this country and which made contributions to this country even to the winning of the war.

The CHAIRMAN. Mr. Householder, I notice you also refer to the yellow trade-mark. Are you referring to it in the legal sense?

Mr. HOUSEHOLDER. Senator I am referring-I presume you are a lawyer?

The CHAIRMAN. I was vaccinated but I do not know whether it ever took.

Mr. HOUSEHOLDER. In Colorado any road that has been used for 20 years is a public highway, it becomes a road by usage and it is established whether it was ever established by law or not and butter is entitled to the yellow trade-mark by 10,000 years of usage.

If you ever get time to read your Bible you will see that that is the first time yellow was used in connection with butter.

The CHAIRMAN. I am still pressing whether you have used it in a legal sense.

Mr. HOUSEHOLDER. If common sense is legal sense, that is the sense in which I refer to it.

The CHAIRMAN. Getting back to the carton, do you feel that the carton gives you legal protection against a similar carton used by the oleo?

Mr. HOUSEHOLDER. The oleo has taken the butter shape and butter color and in innumerable times putting pictures of dairy cows on the carton, and that is what I refer to. If that is not usurping butter's carton, then I would not ask for it.

The CHAIRMAN. We have asked for a legal memorandum on the subject whether such a right in butter exists.

Mr. HOUSEHOLDER. Do you not agree with me that through usage butter has the yellow trade-mark?

The CHAIRMAN. I do not agree to anything because I am not answering the questions.

Thank you, Mr. Householder.

The CHAIRMAN. Mr. Peters?

STATEMENT OF LEO PETERS, EVANSTON, ILL.

The CHAIRMAN. Mr. Peters, will you be seated and identify yourself?

Mr. PETERS. My name is Leo Peters from Evanston, Ill.

I have had the misfortune, Senator Millikin, to invent a package that is surrounded with political implications. I have been asked to demonstrate it to your committee.

The CHAIRMAN. Is that a bomb of the type referred to by a previous witness?

Mr. PETERS. This is probably the detonator, not the bomb itself; it is the cap.

This package packages margarine in a plastic film and the color is on the inside. To color it a woman just squeezes it and kneads. She can break the capsule simply by a little pinch like that.

The CHAIRMAN. She milks the package instead of the cow?

Senator GEORGE. You are making crime easy from the standpoint of our dairy interests.

Mr. PETERS. From the standpoint of the consumer. It takes about 2 minutes to color the package.

The CHAIRMAN. How do you keep the color separated from the rest of it?

Mr. PETERS. It is in a capsule.

The CHAIRMAN. That breaks how, just by pressure?

Mr. PETERS. Just by pinching it, it is a gelatin capsule.

This eliminates all waste, it eliminates the lengthy time in coloring. From the standpoint of the sequence of events as they are now before Congress I think it can be stated with a fair interpretation of the historical sequence that you would not be sitting here today if it were not for this invention.

I will elaborate on that a little later.

The CHAIRMAN. We would be sitting here today but we would have other business.

Whatever put that invention in your head?

Mr. PETERS. The recognition of a problem and the effort to do something about it.

The CHAIRMAN. You certainly did it, did you not?

Mr. PETERS. It looks that way.

Senator GEORGE. How much does that cost the consumer per unit? Mr. PETERS. It costs her today 2 cents more than the old-style package.

Senator GEORGE. Two cents more?

Mr. PETERS. Yes.

Senator GEORGE. Plus the muscular exertion of the housewife to get it mixed?

Mr. PETERS. That is right.

The CHAIRMAN. I have not been timing you; how long does that take?

Mr. PETERS. It takes 2 to 212 minutes. You see it is colored now. This spot here, that represents broken fragments of the capsule and it does not create a heavier spot of color at that point. After you put it back in the carton that reshapes it, you see.

I have offered to sell this package to the margarine industry for the total consideration of $1 if the industry would agree with the Government never to produce or sell any more yellow oleo for domestic use. The CHAIRMAN. Would you mind repeating that so that the audience can hear you?

Mr. PETERS. I made an offer and I repeat it here that I will sell all my patent rights on this package for $1 if the oleomargarine industry will agree voluntarily with the Government never to produce or sell any more yellow-colored oleomargarine for domestic use.

The CHAIRMAN. Have you another invention up your sleeve? Mr. PETERS. Well I have some but I do not need this to make my living. I like a good income like you do but I do not want you to think that this offer is a quixotic one and that I am one of these socalled crack-brained inventors the way some people look on some inventors; that they do not have a balanced judgment on life.

I was confronted with this situation when I decided to take that course of action.

In 1947, after a number of years of experimentation, in the beginning of that year, my package was introduced to the American public and at the beginning of that year also the margarine makers in a formal resolution in their association decided not to make any more attempts to change the Federal regulation on margarine. The reason they did that, one of the reasons they did that, was because the Republicans were back in control of the Congress and the traditional position of the Republican Party was against any change. This was in the spring of 1947.

Not until the summer of 1947 did my package make a serious impact on the national market and then it began taking a very sizable piece of the total margarine market.

Some of the manufacturers who were not using it became alarmed at their competitive position. In the fall of 1947, on December 4, in Chicago-and I am not speaking from gossip now, but I am speaking from facts which I can back-Mr. Paul Truitt stated before the manufacturers gathered there that Best Foods, who was not a member of their association and never had been, would like them to reconsider their policy regarding a change in Federal regulation.

Mr. Paul Truitt stated that Best Foods was prepared to make an initial contribution of $50,000. He asked the members of the association, comprised of about 20 members to contribute $7,500 each, bringing the total sum, if it were all contributed, to $200,000 to be used in efforts directly to change the present Federal law.

The whole tenor of the meeting from remarks made indicated that if it had not been for the competitive impact of this package the meeting would not have been called. When I realized that, I realized that I was contributing to a fight which in my estimation would be harmful to the dairy industry, seriously harmful.

I realized that that was going to be a fight to the finish this time because some business lifeblood was at stake. That was one of the reasons I was motivated to speak up.

I had another reason. In testimony before your Agricultural Committee of the House in 1943 and in testimony again before the Senate Committee on Agriculture and Forestry in 1944 the margarine manufacturers' association made clearly and without equivocation statements that oleomargarine manufactured from cottonseed and soybean oils is a natural yellow if it is not bleached. Those statements were not true. Those statements during the ensuing years were picked up by reputable periodicals and newspapers; and again in the November issue of Fortune magazine of 1944, a few months after the Senate hearings, Mr. Paul Truitt made the statement in that magazine, and I can quote it.

The CHAIRMAN. Which magazine is this?

Mr. PETERS. This is Fortune magazine of November 1944. In that magazine Mr. Truitt stated, and I quote:

The Federal law requires that margarine-oil ingredients be bleached so that the resultant product will be artificially white. The natural color (of margarine) is a yellow tint.

The CHAIRMAN. Will you let me look at that case in which the package came?

Mr. PETERS. Yes.

The CHAIRMAN. Go right ahead with your statement.

Mr. PETERS. Since those statements in 1943 and 1944 the public press is replete with examples of similar statements, and the margarine manufacturers' association even submitted as a part of the record at the House hearings in March of this year editorials and periodicals making the identical statement.

Now I knew that the statements were false. When you attend oil chemists' meetings in this country in the past they have all bellyached and grumbled about those statements-it disturbs them. Apparently the dairy industry was not informed.

Knowing what I had contributed to the fight in the way of this package, knowing what I did about these statements that had filled the records, I ask you what would you have done if you would have been in my position? Would you have kept your mouth shut or have spoken out?

The CHAIRMAN. I will answer that one; being a Senator I probably would have talked.

Mr. PETERS. I felt that if I talked, the finger of self-interest would have immediately been pointed at me, and even though I was not motivated by self-interest, it still would have been leveled, so I decided to tell what I knew. In order to avoid having the finger of self-interest pointed at me, I decided to make the offer I did. The CHAIRMAN. Have you any licensees to your patent?

Mr. PETERS. At present there are eight licensees.

The CHAIRMAN. Have they the perpetual right?

Have they a right to the patent during its life extensions?

Mr. PETERS. Yes, sir. There are no extensions of the patent. The CHAIRMAN. Can you not improve it?

Mr. PETERS. Yes; but then they are new patents.

The CHAIRMAN. Do they have the right to improvements?
Mr. PETERS. Yes, sir.

The CHAIRMAN. What then would you be selling for the dollar? Mr. PETERS. I would be selling royalty-free rights to their usage, to the usage of the patent.

The CHAIRMAN. To those who have your patent at the present time? Mr. PETERS. Yes.

The CHAIRMAN. They would no longer have to pay you?

Mr. PETERS. That is right.

I was further motivated by this, Senator Millikin.

The CHAIRMAN. May I ask you, if you do not mind, what is your business when you are not inventing?

Mr. PETERS. I am an engineer and in the past I have not worked at my profession entirely, I was with one of the big packers for 10 years, 4 of which were spent in their research department and at present this patent and some others that I have take my entire time.