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This leads us to this positive, final statement: Any form of enterprise, be it cooperative, corporate, or individual, should have the right to do business, but it must be done on a basis of tax equality if we are to preserve our democratic system of free enterprise and produce the revenue necessary for the maintenance of good government.
The CHAIRMAN. Are there any questions?
If not, Mr. Elliott, we thank you very much for your appearance and the information given the committee.
Incidentally, Mr. Elliott, Mr. Jenkins had to leave to attend a very important meeting of another committee of which he is a member. He asked me to express his regrets.
Mr. ELLIOTT. That is perfectly all right, sir.
The CHAIRMAN. The next witness is Mr. Howard A, Parker. Mr. Parker, will you give us your name, address, and the capacity in which you appear! STATEMENT OF HOWARD A. PARKER, CHAIRMAN OF THE COX
MITTEE OF THE FERTILIZER INDUSTRY FOR TAX EQUALITY, CHICAGO, ILL.
Mr. PARKER. Mr. Chairman and gentlemen of the committee, my name is Howard A. Parker. I am from Sylacauga, Ala., a town of 15,000 people on the Coosa River, 50 miles east of Birmingham, Ala.
The CHAIRMAN. Can you complete your statement in the 5 minutes allotted to you, sir?
Mr. PARKER. Mr. Chairman, will you hold up your hand, so when my 5 minutes are over I will quit? Will that be satisfactory The CHAIRMAN. I will be glad to.
Mr. PARKER. Thank you, sir. My company is 54 years old. My father started this company in 1904. Four years ago, we celebrated our 50th anniversary, and Hon. Kenneth Roberts, a colleague of yours in this Congress, came down and helped us celebrate that anniversary. We found 7 farmers that had been doing business with us for 50 years
. Six of those farmers were presented gold watches. The seventh farmer, who was 86 years old, said, "I don't want a gold watch. I want a blue serge suit to be buried in." The old gentleman is still living. I am here to plead with you gentlemen to keep my company living so I can buy the old boy a $50 blue serge suit.
Mr. Chairman, I am here for another reason, sir. In July of 1956, I read your most interesting interview here entitled “Keep the Income Tax, But Make It Fair," in the U. S. News & World Report. Sir, I do not believe that you would change one thing today, because there was one paragraph in there where you invited people to come, and I am happy to live in a government where a little man can come.
I want to thank you for being here, gentlemen. Last week I wrote 15 letters to people like me. I used to be in the fertilizer business in Georgia. I knew those men. After World War I, we started out as small people. There are people there that I have known for 36 years. I wrote those people in Alabama and Georgia and asked them the letter is here, sir--what effect is the cooperative movement having on your business?
Mr. Chairman, I ask permission to put these letters in the record I have permission from every one of them through telegrams there to put those in the record.
The CHAIRMAN. Without objection, they will be inserted in the record. (The documents referred to follow:)
DUBLIN, GA., January 22, 1958. HOWARD E. PARKER,
LOUISE B. ROCHE.
DADEVILLE, ALA., January 22, 1958.
HOWARD E. PARKER,
BARNES Cox. DOTHAN, ALA., January 22, 1958.
HOWARD E. PARKER,
Mayflower Hotel: Retel, you most certainly can.
SAVANNAH, GA., January 22, 1958. HOWARD PARKER,
Mayflower Hotel: Quite satisfactory to use letter as public record or any other way you judge best.
CHARLES ELLIS, Jr.
ROANOKE, ALA., January 22, 1958. HOWARD E. PARKER,
Mayflower Hotel: You may use material in my letter re co-op competition for public record in your testimony.
J. H. OWENS.
SAVANNAH, GA., January 22, 1958. HOWARD E. PARKER,
Mayflower Hotel: Have no objection contents, repeat contents, my letter being read into record but you to retain letter itself as personal.
JOHN L. COPE.
WETUMPKA, ALA., January 22, 1958. HOWARD E. PARKER,
Mayflower Hotel: Permission gladly granted. Please see Benson, give him true farm picture.
J. D. LAW, Jr., President, Cantelou-Laro.
TROY, ALA., January 22, 1958. HOWARD E. PARKER,
Mayflower Hotel: You have permission to use my letter re co-op competition for public record in your testimony.
E. L. BOATNER, President, Alabama Warehouse Co.
HURTSBORO, ALA., January 22, 1958. HOWARD E. PARKER,
HURTSBORO FERTILIZER Co.,
S. B. WILLIAMS.
EUFAULA, ALA., January 22, 1958. HOWARD E. PARKER,
EUFAULA COTTON OIL,
MOULTRIE, GA., January 22, 1598. HOWARD E. PARKER,
C. 0. SMITH.
SOPERTON, GA., January 22, 1958. HOWARD E. PARKER,
J. E. HALL.
Savannah, Ga., January 20, 1958. Mr. HOWARD PARKER, Sylacauga Fertilizer Co.,
Sylacauga, Ala. DEAR MR. PARKER: I was delighted to receive your letter the other day and hope that my reply will be in time for you to use.
The tax advantage that the co-ops have in selling fertilizer is becoming more and more vicious every year. In some localities in our trade area this advantage that they have over the rest of us permits them to offer fertilizer at prices less than our cost, and in addition to that, they give a patronage dividend—not after the selling season is over, but they wait until the beginning of the selling season of the following year, then go around passing out these checks to prospective buyers during that following season.
Of course, from the point of view of the farmer himself, he is not receiving his fertilizer at any lower price. The Government has to obtain a certain amount of tax money to run this Nation of ours and if the Co-ops are exempt from tax, then the farmer himself has to reach in and make up the difference along with the rest of us.
What will the ultimate be if more and more businesses become cooperatives? It seems that fewer and fewer of us in private enterprise are taking more and more of the load from those who are becoming cooperatives and if this process becomes too widespread, then the tax laws will have to be completely revised and start all over again with a tax on everybody. I am wondering if that situation is not reached at the present time. It is high time that laws be revised and everybody be taxed, rather than a few. I wish you every success in your trip to Washington, Sincerely yours,
CHARLES ELLIS, Jr., President.
SOPERTON GUANO Co.,
Soperton, Ga., January 20, 1958. Mr. HOWARD PARKER, Sylacauga Fertilizer Co.,
Sylacauga, Ala. DEAR MR. PARKER: Your letter of the 14th telling me that you were going to appear before the Ways and Means Committee to make a statement regarding unfairness in tax situations, with reference to co-ops. I am glad to hear and know that you are taking an active interest in this matter, as it is something that I have been working on, contributing to, and wanted to see corrected.
We have, for a number of years, given contributions to the National Tax Equality Association both for the bank and our fertilizer company.
I am familiar with the inroads that these tax-free enterprises have made and are giving them a big advantage taxwise between them and other business enterprises. These people are so powerful, it seems to be a big job to get the Congress to put them on the basis that other corporations that are engaged in business. As a matter of fact, they borrow money from the United States Gor. ernment at a very low rate of interest which you and I and other people furnish by paying our taxes to the Federal Government. I am not opposed to coopera. tives. All I would ask is to put them on the same basis as the balance of us insofar as tax is concerned, and if they can prosper and do well under those conditions, it would be mighty fine.
I know you will make a good statement when you appear before the committee and I hope your statement and statements of others that are made before the committee may be sufficient to convince the committee that it is unfair to have these tax-free people continue as now when the Federal Government needs tax money from all peoples and enterprises with the expansion of the public debt and a large amount of interest which they are necessarily having to pay. This should be a golden opportunity for the Congress to tax the untaxed. With regards and best wishes. Sincerely yours,
J. E. HALL, President. ROCHE MANUFACTURING CO.,
Dublin, Ga., January 17, 1958. Mr. H. A. PARKER, President, Sylacauga Fertilizer Co.,
Sylacauga, Ala. DEAR MR. PARKER: I understand that you are to appear before the Ways and Means Committee on January 23 with reference to the unfair concessions granted co-op organizations. As you know, we are engaged in the manufacture of mixed fertilizers and feel the impact of this unfair competition on every hand.
Any effort that you might put forth to correct this inequality, especially in the fertilizer industry, will be greatly appreciated by the undersigned. With kindest regards, I remain Sincerely,
LOUISE B. ROCHE HURTSBORO FERTILIZER CO.,
Hurtsboro, Ala., January 17, 1958. Mr. W. A. PARKER, Sylacauga Fertilizer Co.,
Sylacauga, Ala. DEAR MR. PARKER: We have your letter of the 14th and heartily agree with you in your effort to see that co-op fertilizer manufacturers and dealers pay their equal portion of taxes. It is certainly unfair for individuals and corporations to be taxed and Government-sponsored agencies go free. It is also unfair for a part of American industry and American earnings to be taxed to pay the foolish losses sustained by Government's inefficient operations. If we can be of any service to you in your efforts, we shall be happy to do so. Yours very truly,
S. B. WILLIAMS.
CANTELOU-LAW GIN & WAREHOUSE Co.,
Wetumpka, Ala., January 15, 1958. Mr. HOWARD PARKER, Sylacauga Fertilizer Co.,
Sylacauga, Ala. DEAR MR. PARKER: The unfair advantages, taxwise, enjoyed, by socalled cooperatives has been a sore spot with us for years.
Our contention is that to be truly cooperative the co-op should return in 1958 to its members the profits made in 1958 or else pay taxes on those profits.
The local co-op paid in 1957, as dividends a small portion of their profits earned in 1947, 10 years ago.
They are allowed to retain these profits, tax free, to further their expansion programs to enter all fields of business.
This same co-op was organized 20 years ago as a small seed and fertilizer dealership. Now they own their building and have expanded into a seedcleaning business and a feed mill and are contemplating a fertilizer plant.
We object to their continual expansion with tax-free profits. They could not possibly do these things if they were taxed as we are. Drop by to see us when you are in this vicinity. Yours,
ALABAMA WAREHOUSE Co., INC.,
Troy, Ala., January 16, 1958. Mr. HOWARD PARKER, Sylacauga Fertilizer Co.,
Sylacauga, Alas DEAR MR. PARKER: Your letter addressed to Mr. E. C. Bassett has been received by our company. Mr. Bassett passed away in 1956, and the writer of this letter is now president of the company.
We cannot find words to express our feeling in regards to the cooperative tax-free movement that is taking place in our country. Unless something is done soon all businesses, and especially the so-called small businesses, are going to be in great danger of being eliminated from our economic system. We certainly concur with you that these groups should be taxed just as you and I are taxed, and that the Congress and other officials of the Federal Government should be made to realize the grave dangers that threaten us all in this move ment.
You certainly have our best wishes in your appearance before the Ways and
D. L. BOATNER, President.
DOTHAN GUANO Co.,
Dothan, Ala., January 17, 1958. Mr. HOWARD PARKER, Care of Sylacauga Fertilizer Co.,
Sylacauga, Ala. DEAR MR. PARKER: I am writing you regarding a subject that is vital to you and me and all fertilizer manufacturers who are not co-ops. Needless to say that neither you nor any other manufacturer who wants to be fair to his customers objects to competition on equal terms, but today we are facing most unfair and unjust terms. Any organization that is exempt, or partly exempt, from paying Federal tax as high as it is today, and with the chances it will get higher, is unfair to that organization that is forced to compete along such lines. You know and I know that we have got to be taxed, and we are willing and ready to pay our just taxes, but to tax one business competing in the same field and not to tax another is not democratic.
Co-ops are growing, and the ones that started several years ago have grown to be big organizations. Any business can grow if it is free of taxes and than go out in the market and compete with a business that is taxed. Most of the 80-called patronage dividends are I. 0. U.'s. The I. O. U.'s can be added to the surplus of the business as there is no tax to be paid. If the co-ops are allowed to continue on the same basis that they have in the past, I wonder what the Gov. ernment is going to do about the tax situation. Unless it collects taxes from the Co-ops as it does from you and other manufacturers, soon there will be no taxes to collect, because they are certainly driving us out of business by not paying taxes and competing with those of us who do pay taxes.
I could go on and on and give you any number of cases where organizations are going out of business on account of this situation. You know about this, and it would take too long to write down even the ones that I know about in my own section. If you would like to get the facts on this in my section, I will be glad to furnish you with them.