without bringing the matter to your attention. I should like very much to hav the record corrected or if this is not feasible to have this letter filed with and made a part of my testimony. For the information of your committee I should like to say that from a ton of seed the average oil yield over the United States is 313 pounds. There are areas in which the yield is substantially lower and other areas in which it is substantially higher, but this is the average yield. For what it may be worth to your committee, I should like to make the following statement regarding the constituent parts into which a ton of seed is divided when initially processed by the crusher or oil mill. 1 ton of seed (2,000 pounds): Meal.. Hulls Oil... Linters Loss account waste and evaporation. Total_-. Pounds 822 585 313 180 100 2,000 The above figures are averages of the yields from the entire Cotton Belt. With regards, I am, Yours very truly, OSCAR JOHNSTON, President. Senator ELLENDER. Our next witness is Mr. Rowe. Will you give your name in full and your position for the record, Mr. Rowe? STATEMENT OF R. H. ROWE, EXECUTIVE VICE PRESIDENT, UNITED STATES WHOLESALE GROCERS' ASSOCIATION, INC., WASHINGTON, D. C. Mr. RowE. My name is R. H. Rowe. I am executive vice president of the United States Wholesale Grocers' Association, Inc., located in Washington, D. C. Senator ELLENDER. Do you desire to make your statement without interruption, or would you care to answer questions as you go along? Mr. RowE. I would rather make my statement first. I am agreeable to any procedure, however. Senator ELLENDER. You may proceed in your own way. Mr. Rowe. Our association is a national food trade organization with membership establishments located in 42 States, the District of Columbia, and Alaska. This is the first time our association has been represented at a hearing before a congressional committee on the question of removing the restrictions on the sale of margarine. We appear now at the request of our members, to present some data and comments that may be helpful to you in arriving at a decision. Our association, however, has passed at several of our annual conventions resolutions of which the following is typical: Resolved, That we hereby reaffirm our opposition to any legislation which purposes or is effective, through imposition of selective excise or license taxes arbitrarily to raise the price of one wholesome, nutritious food product in order to benefit another food product or class of producers, and that we hereby condemn such legislation as wrong in principle and wholly vicious in its potential consequences. In appearing as one of the proponents of this bill I do not think it necessary for me to repeat in detail any of the now famillar arguments in behalf of measures similar to this, but being a somewhat new participant in the controversy I would like to summarize the situation as it appears to us. Of course, you gentlemen realize that we approach the problem from a merchandising or distribution standpoint. We do not desire to do anything or advocate anything that will hamper or restrict the sale of even 1 pound of butter and we are just as firm in our belief that nothing should be done by way of legislation to hamper or restrict the sale of even 1 pound of margarine. We advocate the removal of restrictions on the sale of margarine such as is proposed by this bill, so that, so far as the Federal Government is concerned, margarine may on the basis of its merits find its own economic and competitive levels. We would vigorously oppose margarine being sold, offered for sale or supplied to traders or consumers under any pretext or pretense whatsoever that it is butter. We think of ourselves as friends of both butter and margarine. They are two wholesome but different food products. They should be allowed to go their separate ways in peace, and to acquire in ways appropriate to each, their own friends and patrons. The game should be open; the race without handicaps. I have an illustration which is not strictly analogous but I think it does have a bearing. When our association moved its headquarters to Washington in 1924, we had offices in a building where we are still located. In this building there were and still are a drug store and a cafeteria. The cafeteria's lease provided that no other concern in the building should serve food. The drug store wanted to expand but hesitated to do so without the privilege of selling sandwiches. Some years passed by. Leases came up for renewal. The drug store was finally permitted to sell sandwiches. It then took space in the building nearly three times as large as before and refitted the store and soda fountain equipment among the most attractive in Washington. The cafeteria also expanded, opening a sandwich room. They both prospered and this was before the great migration of defense and war employees to Washington. There was room for both. Each served its patrons in the way the individual patron wanted to be served. We think that principle underlies all successful retail businesses in our country. While the drug store was hobbled by the cafeteria both did pretty well, but "pretty well" will not be accepted as the goal of any American business. Cut loose from each other, the drug store and the cafeteria have been outstandingly successful. That is America. In this vast and varied country I think you gentlemen will make a mistake if you decide there is not room enough for the prosperity of both butter and margarine. Let the housewife, wherever she may be, appraise butter and margarine according to her palate and food budget requirements. So far as you can, let the consumer, herself, decide this perennial controversy in her own way. In preparation for this presentation we mailed to our member establishments on May 24, 1944, a questionnaire on S. 1744 accompanied by a copy of the bill. We asked the following questions: Do you or do you not favor the Smith bill, S. 1744. Do you now sell margarine? Estimate amount of your margarine sales in past 12 months, or in year 1943. If now selling margarine, would you probably deal in it if present law is changed. Do you handle butter? Estimate the amount of butter sold by you in last 12 months or in 1943. We received from 31 States, 200 replies or nearly 24 percent of the questionnaires mailed. Of the 200 who replied 167 or 83.5 percent favored the Smith bill. Twelve, or 6 percent, opposed. Twenty-one, or 10.5 percent, were either noncommittal or gave conditional answers. The 167 wholesale grocers favoring the bill are located in 30 States as follows: Alabama, Arkansas, Arizona, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Mississippi, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Virginia, West Virginia, Wisconsin, and Wyoming. The 12 which opposed the bill outright are located in 9 States; namely, Arkansas, Colorado, Georgia, Louisiana, Minnesota, North Carolina, South Carolina, South Dakota, and Wisconsin. Senator AIKEN. Were these questionnaires sent to wholesale grocers? Mr. Rowe. They were sent to our member wholesale grocers. Senator AIKEN. Do the packers belong to the Wholesale Grocers' Association? Mr. RowE. No, sir. Senator AIKEN. They do not? Mr. RowE. No, sir. Senator ELLENDER. I want to ask you a little more about this United States Wholesale Grocers' Association. What is your membership, Mr. Rowe? Mr. Rowe. Our membership is approximately 850 establishments. Senator ELLENDER. What percentage of the total amount in the United States is that, approximately? Mr. RowE. Let me give it to you in this way, Senator Ellender. It is rather difficult to give you the number of wholesale grocers or what you consider or we consider or somebody else considers the wholesale grocers. We consider, for the purposes of our association, that there are about 3,100. Senator Ellender. And you have a membership of 800? Senator ELLENDER. How is your association maintained? Mr. Rowe. It is maintained by dues paid by our members who join our association voluntarily. It is a voluntary membership, and they pay annual dues based on volume of sales. Senator ELLENDER. And all your activities are carried on from the proceeds of these dues? Mr. RowE. Yes, sir. Senator ELLENDER. You get no outside funds? for special things in addition to the dues. We have some special funds Senator ELLENDER. How are they collected, or who pays them? Mr. RowE. The members pay them. Senator ELLENDER. Is that an extra assessment? Mr. RowE. That is not an extra assessment. It is a voluntary thing. For instance, we have an emergency fund for excess war activities. That is not an assessment. It is just a voluntary con tribution. Senator ELLENDER. But all of the funds come from your membership? Mr. RowE. All of it comes from the members; yes. Senator ELLENDER. Do you know what volume of business is done by your membership? Mr. RowE. Well, I don't have that figured out. I can give you something on that. These are 1934 figures. The total given here is $1,953,000,000 in round figures. That is for all of the 3,833. The way they have got it classified here, there are 3,833 establishments. Of course, they are broken down into certain types, and they include here well, I would say it is nearer 3,500 than 3,800, because they have retailer cooperative warehouses and other types, and retail cooperatives. That is where the retailer owns his own group, their own wholesale business. Senator AIKEN. You have no data showing what percentage of oil margarine is sold through wholesale grocers? Mr. RowE. No, sir. I have some figures on the sale of margarine, though. Senator AIKEN. I wonder what percentage was sold directly by Swift and Armour and Wilson and the packers. Mr. Rowe. I do not have the figures on that. Senator ELLENDER. You gave a list of the States that were in favor of the bill, as I recall. Mr. RowE. I mean the wholesale grocers who favor the bill, as located in the States. Senator ELLENDER. That is what I am talking about. Of course, I am talking about your membership. Have you a list of the States that are opposed, that is, a list of the wholesalers located in the States who are opposed? Mr. Rowe. Yes; 12 who opposed the bill outright are located in 9 States-Arkansas, Colorado, Georgia, Louisiana, Minnesota, North Carolina, South Carolina, South Dakota, and Wisconsin. Some of these are for it and others in the same States are against it. Senator ELLENDER. I notice you mentioned Louisiana in both groups, those who favor and those who oppose the bill. Why is that? Mr. Rowe. Well, some of them voted for the bill and some against it. Serator ELLENDER. Did a majority of your membership in the States vote for or against? Mr. RowE. In Louisiana I have a total of 10 votes here with 6 "Yes" and 1 "No." Senator WILSON. What about South Dakota? Mr. RowE. There were only 3 voted from South Carolina-2 "Yes" and 1 "No." Senator WILSON. Are you talking of South Carolina or South Dakota now? Mr. RowE. South Dakota. Pardon me. Senator ELLENDER. I notice you mentioned the State of Iowa among those favoring the bill. That is Senator Wilson's State. Mr. RowE. Yes. We have only 1 vote from Iowa, and he is for the bill. Senator WILSON. How many members do you have in Iowa? Mr. Rowe. I don't know without my book. We have a fairly good. representation, but I might call attention to the fact, gentlemen, that there is another association in our field called the National American Association. 62295-44- -8 Senator ELLENDER. Since you have brought this matter into the picture, I wonder if you would be good enough to prepare a statement for us showing your membership in each State your entire membership in each State in one column; then in the next column, show those who voted for the bill, and those who voted against the bill. Mr. Rowe. I will be glad to do that. You understand that this vote is only 20 percent of the membership. It is just a sample. Senator ELLENDER. I understand that. Mr. RowE. The effect of what I am telling you here is a sample, but I think it will run true pretty well. Now, you want the total membership in these States in this column? Senator ELLENDER. Yes; for instance, name your State and give the total membership in each State. Mr. RowE. That is, the total vote, and then the rest of it. Senator ELLENDER. Yes. This same figure could be used to show the total votes, but I think, in order to present a fair picture of it, the total membership should be given to show the percentage. Then at the end of that you might put any explanatory note you may desire. Mr. Rowe. You understand this represents only about 24 percent of the total membership. Senator ELLENDER. You could explain that in a footnote. Mr. RowE. That is pretty good in these times when they have got so many Government reports to make and regulations to follow. It is pretty good. Senator WILSON. Would that statement also show the total number of wholesalers in the Nation? Mr. RowE. We will have to give that to you, Senator, I presume, according to our records. As I said, there is the difficulty of saying what is and what is not a wholesaler. I think probably there are some 6,000 wholesale outlets, but those include manufacturers' outlets, chain-store warehouses, retailer cooperatives, and a great many others. Senator ELLENDER. I presume it would be quite a job now to contact all the wholesalers in the respective States. Mr. RowE. We could get all the wholesalers in the respective States according to our way of classifying, and that is about all we can do. Senator ELLENDER. I presume that is about what we want. Mr. RowE. Further résumé of the results of the questionnaire shows: Noncommittal Usually handle butter. Quantity of butfer sold in 12 months by those reporting-519,619 pounds. 75.5 52.0 23.0 25.0 20.0 78.0 5.5 Gentlemen, I believe that is the end of my direct testimony. Senator ELLENDER. I would like to ask you one question that I propounded to Mr. Johnston awhile ago. Would you have any view to express as to the additional amount of margarine that might be sold by wholesalers and retailers if, instead of licensing them, a higher |