2. Records of the number of pounds in each consignment received, name and address of consignee, and date of receipt. 3. Number of pounds in each lot disposed of, name of the consignee, address to which delivered, and date of shipment. 4. Separate records of deliveries to each retail store where the purchaser operates more than one store. 5. Special record of persons ordering oleomargarine for shipment or delivery to others. 6. Separate records of oleomargarine returned by customers. 7. Separate records of oleomargarine returned by the wholesaler to the manufacturer or other seller. Reports under oath of the following items of information must be made for each month, by the 15th of the following month (separate reports for uncolored and for colored oleomargarine if any), and copies kept for 4 years (Forms 217 and 217a): 1. Total pounds on hand at the beginning of the month. 2. Total pounds received during the month. 3. Total receipts of returned goods. 4. Total pounds disposed of during the month. 5. Total pounds on hand at the end of the month. 6. Total pounds accidentally destroyed, lost in transit, or unaccounted for, with explanations. 7. Statement of each individual shipment received during the month, including date of invoice, name and address of consignor, whether consignor is a manufacturer or a dealer, and number of pounds, with an explanation if there is any difference between invoice and actual poundage. 8. Statement of each individual shipment or delivery to other wholesalers during the month, including date of invoice, name and address of consignee (if name of consignee is a trade name, the names of owners must also be given; names and addresses on customers' special-tax stamps must be given, and if the shipment or delivery is to a different address that must also be given), number of pounds, and (for the States of California, Illinois, Missouri, New Jersey, New York, Ohio, Pennsylvania, and Texas) the county in which consignee is located. These statements must be entered on the form under a heading "Disposals to wholesale dealers" typewritten in capital letters in the center of the page, and must be arranged with names of consignees in alphabetical order, and all shipments or deliveries to each consignee grouped together, in order by dates. 9. Statements of shipments or deliveries to retailers and consumers during the month, including the same details as item 7 above, but giving the aggregate quantity for each customer at each point of delivery. These statements must be entered on the form under a heading "Disposals to Retail Dealers and Consumers" typewritten in capital letters in the center of the page, and must be arranged by States (with State names typewritten in capital letters in the center of the page), and with surnames of consignees arranged in alphabetical order for each State. Where a purchaser has a number of stores to which shipments or deliveries were made, entries for the separate stores must be arranged alphabetically by names of the cities or towns, alphabetically by names of streets, and numerically by street number where there are two or more stores on the same street. 10. Statement of each individual shipment or delivery of oleomargarine returned to suppliers during the month, including date of consignment, name and address of consignee and number of pounds. These statements must be entered on the form under a heading "Returned to Shipper" typewritten in capital letters in the center of the page. 11. Similar statements, under separate headings, on oleomargarine disposed of as grease or for other inedible purposes or destroyed. And the wholesale grocer is subject to these among other penalties, in addition to tax of $200, or of $480 for those who handle any colored oleomargarine: 1. Fine of $500 to $2,000 for nonpayment of special tax (liability for special tax is incurred at each place other than registered premises where oleomargarine is sold or offered for sale). 2. Penalty of $1,000 and forfeiture to the Government of all oleomargarine owned by him, or in which he has any ownership interest, for selling oleomargarine other than in original stamped packages ($2,000 penalty, and forfeiture, if quantity sold is less than 10 pounds). 3. Penalty of $1,000, and forfeiture of all olemargarine, for making any sale unless the order is received and the sale consummated, the oleomargarine ad dressed and billed, and the sale recorded, at the wholesale grocer's registered place of business. 4. Separate and additional special-tax for each place of delivery when a purchase money draft is attached to bill of lading unless the bill of lading is endorsed specifically and not in blank to and the draft drawn on the person ordering. 5. Penalty of $1,000, and forfeiture of all oleomargarine, for having colored oleomargarine on the wholesale grocer's premises if he has not paid special tax as a dealer in colored margarine. 6. Fine of $50 to $500, and imprisonment for 30 days to 6 months, for each violation of requirements as to records or reports. 7. Fine of up to $1,000 and imprisonment up to 2 years, for selling, offering for sale, delivering, or offering for delivery, any oleomargarine not in prescribed new wooden, tin plate, or paper packages. 8. Penalty of $50 for each purchase or receipt of any oleomargarine not branded or stamped as required. 9. Penalty of $100 for each purchase or receipt of any oleomargarine from a manufacturer who has not paid the special tax, and forfeiture of such oleomargarine. And various other penalties. The CHAIRMAN. The next witness will be Mr. Lewis G. Hines representing the American Federation of Labor. STATEMENT OF LEWIS G. HINES, REPRESENTING THE AMERICAN FEDERATION OF LABOR Mr. HINES. Mr. Chairman, I come here representing 5,000,000 members. I cannot get my full testimony in in 5 minutes. I would like to get in as much as I can and be prepared to enter the brief I have prepared for the record. First of all, let me say that the American Federation of Labor has consistently favored the repeal of all taxes and restrictions on margarine. By restrictions, I mean the restrictions on its sale in competition with butter. We feel there is ample protection to the consumer under the Pure Food, Drug and Cosmetics Act to prevent the fraudulent substitution of margarine for butter. We believe at a time like this when we are bolstering the democratic nations of Europe and America is looked upon as the bread basket of the world and we are asked to eat less high-cost food, a law that artificially boosts prices and bars the consumption of a nutritious margarine is unconscionable. The ancient arguments that have been used in favor of these taxes are absolutely obsolete. The findings of numerous scientific investigations have been presented to this committee both here at this present time and in the past. They indicate that there is absolutely no justification for the argument that butter interests must be protected against margarine because of any fraudulent substitution or otherwise. The Food, Drug, and Cosmetics Act of 1938 and the definition and standards of identity for margarine promulgated under that date of June 6, 1941, cover this situation completely. There are full powers and penalties necessary to prevent such fraud under the abovementioned act without the retention of the present restrictive taxes. I am sure that no member of this committee believes that the present tax and license fees were enacted for revenue purposes, since the revenue received is negligible. This is what it has done: Excessive license fees have succeeded in preventing two-thirds of the Nation's grocers from selling this highly nutritious low-cost food. There is no use of my going into that. There has been ample testimony here to justify that statement. I might say that from experience, Mr. Chairman, we have found in our household that we cannot afford to pay the price for butter. We have been using margarine for the last 5 years. It has been my job, as head of the household, to color this margarine. I was much interested in what the representatives of the AMVETS had to say because there are millions of hours lost every year in coloring margarine and many times the person in charge, which happens to be me in my household, loses faith because the color is not smoothly applied. It is a rather tedious process. I might say that perhaps I have a personal interest in the elimination of these taxes so that the margarine will come in a colored form. Now, I have covered all the highlights of this subject, Mr. Chairman, in my brief, which I would like to file with the committee. I might point out that the American Federation of Labor at all of its recent conventions in the past several years has gone on record in favor of the repeal of these taxes. I would like to have your committee give consideration to this appeal coming from these seven and a half million members. We feel that the taxes are discriminatory. We feel they are not only discriminatory against us, but against the grocer and the producers. I might mention the fact that we have quite a large number of people employed in these plants that are members of the American Federation of Labor. The CHAIRMAN. Your time has expired. Mr. HINES. I want to thank you for the opportunity of appearing before your committee and urge your consideration. Mr. ANDRESEN. I would like to ask the gentleman a question. In view of your statement that the American Federation of Labor favors the repeal of all these taxes on margarine and oleomargarine, I am asking you if you are now repudiating the action taken at your fiftyfifth annual convention held on October 7, 1935, at Atlantic City, N. J., in which the following resolution was adopted? Resolved, That we pledge our support to the dairy farmers of this country in securing legislation which will insure protection against these substitutes and at the same time require that these substitutes pay their proportionate share of the local, State, and Federal tax burden as it now or may be imposed upon those engaged in the dairy industry. Mr. HINES. I have answered that question several times before this committee in the past, and my answer today is his, That was passed nearly 13 years ago. Conditions have changed and I point to the recent actions of the American Federation of Labor, which is on record in favor of repeal of these taxes. Mr. ANDRESEN. Then you are here this morning in behalf of the— Mr. HINES. I am here as the legislative representative, carrying out the mandates of the convention of our organization. Mr. ANDRESEN. You repudiate that action? Mr. HINES. I am not going to use the term "repudiate." I am simply telling you what has happened, that we adopted that resolution at that time. Since that time the delegates to the convention representing the membership of our organization have changed their minds, perhaps, but we are now on record for the past several conventions as consistently opposing these taxes. That is the position taken today, Mr. Andersen. Mr. ANDRESEN. You have changed your position then? Mr. HINES. That is right. Mr. ANDRESEN. That is all. Mr. HINES. Thank you. The CHAIRMAN. Mr. Zimmerman has a question. Mr. ZIMMERMAN. Speaking of a tax on margarine, colored and white margarine, do you know if a man is required to get a license or pay a tax to the manufacturer? Mr. HINES. That is right. Mr. ZIMMERMAN. If he wants to even manufacture the white margarine? Mr. HINES. That is right. Mr. ZIMMERMAN. He has to pay a tax. Is that right? Mr. ZIMMERMAN. And a bigger tax if he manufactures the colored margarine? Mr. HINES. Any tax that is imposed on margarine that is not imposed on butter is a discriminatory tax and a discrimination against our members who have to use margarine because they cannot afford to buy butter. Mr. ZIMMERMAN. All right. Now, if a little corner grocer down here wants to sell some margarine because some customers ask for it—he sells butter too-but he sells what the people ask for. If somebody comes in there and asks him to sell some margarine, does he have to get a license before he can sell it? Mr. HINES. That is a discrimination against him. Mr. ZIMMERMAN. In other words, they require that little grocer to buy a license before he can sell a pound of margarine if a customer asks for it. Mr. HINES. And that applies to millions of our members that are located in various outlying sections of the country. Mr. ZIMMERMAN. And the question 4 years ago before this committee was, as I remember, from the State of Oregon and the Pacific coast, where they testified that men refused to handle the butter because they did not want to be worried with going down and getting a license to sell a few pounds of something, so the customer went without margarine and had to take something else he did not want. Now, that is the effect of this legislation on a large group of people in this country today. Is that a fact? Mr. HINES. In other words, the grocer is compelled to sell the article for 83 cents that could be sold for 37? Mr. ZIMMERMAN. But before he can sell, he has to get a license to do that and then account for every pound in the way of a report to the Government. Mr. HINES. That is right. He is harassed because he wants to sell a substitute for butter that is just as good as butter in the estimation of a lot of people, and that goes for me. Mr. ZIMMERMAN. And then that goes to the Government. The CHAIRMAN. The remainder of Mr. Hines' statement will be incorporated into the record. (Complete statement of Mr. Hines is as follows:) STATEMENT OF LEWIS G. HINES, NATIONAL LEGISLATIVE REPRESENTATIVE OF THE AMERICAN FEDERATION OF LABOR, BEFORE THE HOUSE AGRICULTURE COMMITTEE DEALING WITH VARIOUS BILLS PERTAINING ΤΟ TAX ON MARGARINE The American Federation of Labor desires to register its support of the legis lation before this committee which proposes to eliminate discriminatory margarine tax on margarine. At a time when the bolstering of democratic nations throughout the world is dependent upon the American bread basket and our people are asked to ease inflation by eating less high-cost food, a law that artificially boosts prices and bars the consumption of nutritious margarine is unconscionable. The ancient arguments voiced in support of the present legislation when it was enacted more than 60 years ago are no longer valid. The arguments have generally been that margarine was an inferior substitute as a table fat, that the law was necessary to prevent fraudulent sale of colored margarine as butter, and that production by the dairy industry must be encouraged and protected against unfair competition. Let us take a quick look at these obsolete arguments: Is margarine inferior to butter? The findings of numerous scientific investigations have been presented to this committee both in past and present sessions. It has been conclusively proved that high-quality margarine, when fortified with vitamins A and D, has the same nutritional value as high-quality butter. I do not presume to be a food expert, but for several years I have heard expert testimony before this committee that the possibilities of impurities and variation in nutritional content are as great in butter as in margarine. For instance, it is a well-known fact that the vitamin A and D content of butter is dependent not upon the cow, but upon the diet and sunshine received by the cow. It is well-known that butter is artificially colored for approximately 8 months out of the year because, except in the summer months, there is insufficient provitamin A-carotenes-to give the butter a rich yellow shade. There is a greater amount of human handling and the possibility of bovine tuberculosis in butter. It would appear to me that consistent standards of purity and high nutritional content are much easier to maintain in synthetically prepared margarine than in natural butter. If anything, we need a law requiring vitamin fortification of natural butter and labeling of the exact nutritional content of the butter. Will colored margarine be sold fraudulently as butter? The Food, Drug, and Cosmetics Act of 1938 and the definition and standard of identity for margarine promulgated thereunder on June 6, 1941, cover this situation completely. There are full powers and penalties necessary to prevent such fraud under the above-mentioned act without the retention of the present restrictive taxes. I am sure that no member of this committee believes that the present tax and license fees were enacted for revenue purposes, since the revenue received is negligible. This is what they have done: The excessive license fees have succeeded in preventing two-thirds of the Nation's grocers from selling this highly nutritious, low-cost food. The 10-cent tax on colored margarine has succeeded in driving colored margarine almost completely off the market, and forced the consumer to engage in the time-wasting and irritating operation of coloring it himself. * * * I speak from experience and with a personal interest in this matter. First, because of the number of ration points necessary to purchase butter, and then because of the exorbitant price of butter since the end of rationing and price control, we have been using margarine almost exclusively in our household for several years. As head of the household, the duty of coloring the margarine has fallen upon me. If my case is any example, the bothersome nuisance of this operation and the serious loss of face that befalls the head of the household when the color is not smoothly applied, certainly serves as a strong deterrent to the widespread use of this otherwise excellent table fat. Does the dairy industry need protection? By coincidence, while I was preparing this testimony, I came across an item in the New York Herald Tribune, February 26, 1948, announcing that the farmers of Wisconsin were supporting the repeal of their particularly vicious State law 74354-48- -12 |