am opposed to is taking off this quarter-of-a-cent tax and trying to make believe it has something to do with the cost of living.

Mr. MONTGOMERY. We want all the taxes and frustrations taken off this product.

The CHAIRMAN. We thank you very much.

Mr. MONTGOMERY. Thank you.

(The complete statement of Mr. Montgomery is as follows:)

BEFORE THE HOUSE COMMITTEE ON AGRICULTURE, IN SUPPORT OF H. R. 4681, TO REMOVE ALL TAXES ON MARGARINE

By Donald Montgomery, Washington representative, UAW-CIO, representing Congress of Industrial Organizations

Restrictions on the manufacture and sale of oleomargarine are unjust and injurious to consumers and farmers alike. I do not refer to just a small section of our farmers. I mean American agriculture as a whole. I do not refer to lowincome consumers only. I mean American consumers as a whole.

Congress rarely has such an opportunity as this to advance the welfare of so many consumers and so many farmers by a single act. That act is to remove all

taxes and license fees on oleomargarine from the statute books.

Removal of restrictions from the manufacture, sale, and consumption of oleomargarine will aid American farmers by enlarging the markets for farm products. Dairy farmers are finding a better use for milk than churning it into butter. Farmers can be given an opportunity to make up the shortage of butter with soybeans, cottonseed, and peanuts. Total outlet for farm products will be expanded. American agriculture as a whole will benefit.

The supply of fats and oils to American consumers is inadequate to meet the public demand or to meet dietary requirements. This is especially true of table fats. It is particularly true of butter. Butter production has dropped one-third below the prewar volume. Substantial increase in the production of oleomargarine is necessary to make up this deficit. Restrictions on the sale of oleomargarine must be removed. There is no other way to provide an adequate supply of fats and oils. American consumers as a whole will benefit. Here are the facts in support of these statements:

BUTTER PRODUCTION HAS GONE DOWN

Butter available for civilian consumption was: 2,130,000,000 pounds per year in 1925-29; 2,243,000,000 pounds per year in 1930-34; 2,171,000,000 pounds per year in 1935-39. But in recent years it has been: 1,399,000,000 pounds in 1945; 1,423,000,000 pounds in 1946; 1,500,000,000 pounds in 1947, and the supply forecast for 1948 is about the same as in 1947.

Reduction in the per capita butter supply has been even greater:

The 1946 supply was 42.5 percent below the 17.9 pounds available from 1925 to 1934, inclusive. 1947 was 37.4 percent below. The forecast for 1948 is 38.5 percent below the earlier rate of consumption.

Consumption of butter and oleomargarine combined was 20.1 pounds per capita in the 10 years 1925-34. In 1947 the total was 16.2 pounds, a drop of 20 percent.

DIETARY REQUIREMENTS ARE NOT BEING MET

The Government's standard for an Adequate Diet at Moderate Cost, published in 1933 by the Bureau of Home Economics, calls for 35 pounds of butter, 7 pounds of lard, 7 pounds of vegetable oils and shortening, 1 pound of oleomargarine, and 2 pounds of fat pork. The total is 50 pounds of fats and oils per person per year excluding pork.

Here is what we have been getting:

The forecast for 1948 is the same supply per capita as in 1947. It is nearly 6 pounds (or 12 percent) short of the dietary requirements of 50 pounds for these fats and oils. Butter and oleomargarine will total approximately 16 pounds per capita, as against 36 pounds recommended for use as table fats in the Government's diet.

WHY CAN'T WE GET MORE BUTTER?

There are two good reasons for this drastic decline in butter production since the war. One good reason is that farmers have found a more profitable use for their milk. The other good reason is that consumers prefer to buy milk in whole milk products rather than as butterfat.

These reasons are good because they reflect better incomes for farmers, better incomes among consumers, and above all a very great improvement in the diet of the American people. Not even the butter lobby will argue that consumers should be forced to consume butter in preference to whole-milk products. That lobby has long forced low-income consumers to eat pork fat and pan grease in place of oleomargarine. But it does not object when consumers with money to spend switch from butter to fluid milk, ice cream, and various whole-milk products. Dairy farmers and consumers go along together on that-it benefits both.

You undoubtedly have the facts before you on this major shift that has taken place in the utilization of milk. I attach a table which shows the changes in per capita consumption of dairy products since the years before the war. Fluid milk consumption is 14 percent greater, ice cream 120 percent greater, various whole-milk products 64 percent greater, and butter consumption is 37.4 percent less.

This revolution in the use that we are making of milk has made butter much less important to dairy farmers than it was before the war. Note the changes which have taken place:

The same story is told by the figures of dairy farmers' cash income from the sale of milk and cream:

These are the answers to why we can't get more butter. Milk is being sold by dairy farmers into more profitable uses. And for consumers it is more profitable also. This shift from butter to whole-milk products is probably the most striking revolution in American food habits that has ever taken place within so short a time. In the health and growth of children we cannot begin to evaluate what this better use of milk means to us. It is one first bit of tangible evidence of the good things that can be done in this country if we ever succeed in maintaining full employment and full pay rolls year after year.

This is why we are producing less butter than we want and need: Full employment means fuller use of whole milk; prosperity means less milk diverted to the making of butter.

SO WHAT SHALL WE DO ABOUT IT?

The butter lobby has an answer to that. Their answer is "Butter or nothing." What they say is, "We have cut butter production by a third because we have better outlets for our milk. Nowadays people want to buy fluid milk, ice cream and whole-milk products and will pay more for them, so we do not find it profitable to produce enough butter to meet your needs. But nevertheless and in spite of all this, you shall spread butter upon your bread or you shall eat it dry."

Look at Wisconsin. It has virtually banned oleomargarine to its people for a long period of years. Yet, any Wisconsin politician will tell you, is to protect its dairy farmers. Yet the Wisconsin farmers are putting only a dribble of their tremendous milk output into butter. In 1936 only 21 percent of their cash income from milk was derived from the sale of butterfat and farm butter. In 1946 the share contributed by butterfat and farm butter had dropped to 1.36 percent. If the Wisdonsin dairy farmer has no obligation to put milk into butter, why has the Wisconsin consumer an obligation to spread his bread with butter—or nothing? Butter or nothing. That's the issue the butter lobby puts up to this committee. This committee can't do anything about getting dairy farmers to produce more butter. It shouldn't if it could. Because what dairy farmers are doing makes sense to them and makes sense to consumers.

But this committee does not have to accept the false issue which the butter lobby attempts to force upon it and upon the American people. The issue is not "Butter or nothing." It is "Butter or something.' The something, obviously, is oleomargarine.

The butter lobby would have you ignore the facts of the butter industry. Its demand for these margarine restrictions were never justified in the public interest, but many years ago they did at least make sense in terms of cash to dairy farmers. Today they don't make sense in anybody's language.

There is only one answer. It is the same answer that this committee would give if a witness who, for the purposes of this testimony may, be called Holey Charlman, should come before it representing the National Harness Producers Cooperative Federation to demand that Congress place a tax of 10 cents a pound on colored automobiles in order to force consumers either to paint their own cars or to drive a horse. There are approximately 1,000,000 organized auto workers who will understand exactly what I mean.

The only real beneficiaries of continuing these restrictions on oleomargarine are the bleach and dye manufacturers, whoever they may be. When it is arranged by the laws of our Government that all fats and oils used in one kind of spread for bread shall be bleached to a ghastly white, while the fat which is used for another kind of spread for bread may artificially, and without disclosure, be dyed a gorgeous springtime yellow, then, we submit, featherbedding has been carried too far.

This Eightieth Congress, which was so eager to attack the alleged featherbedding of labor unions, would do well to examine the featherbedding which is required by oleomargarine and dairy legislation.

If the House Committee on Un-American Activities which the Eightieth Congress provides with funds is really to serve some purpose in exposing un-American activities, let it look to the statute books and put an end to this outmoded and unjustified regimentation of the manufacture, sale, and consumption of oleomargarine. That legislation was un-American at birth. It has not acquired citizenship by its long residence among us. Pick out a nice quiet country where the government does what it pleases and the people do what they're told and send these statutes to that country by the first boat.

While you are getting rid of this legislation, get rid of all of it. Knocking off the 10-cent tax is not enough. Knock off also the bothersome meaningless fees imposed upon manufacturers, wholesalers, retailers, hospitals, boarding houses, and restaurants. People want to be able to buy oleomargarine wherever they buy other groceries. Only half of the country's retail stores now handle oleomargarine. Open it up. Give every small guy that wants to set himself up to manufacture oleomargarine a chance to find an outlet to the consumer. Give consumers who buy from small country stores and neighborhood stores a chance to buy oleomargarine wherever they shop. We know the big margarine manufacturer will find outlets. We want the little ones to find outlets too.

Don't do half a job. Take the butter lobby off of our backs, but don't replace it with a small group of big margarine manufacturers who know how to make the most of a good thing.

Today the materials that go into oleomargarine sell at about one-third the price of butterfat. But in retail stores oleomargarine sells for one-half the price of butter. That gives you the idea. We want the right to buy oleomargarine without restriction and we want to see the beginning of some active competition among margarine manufacturers.

These are thoroughly American aspirations. On behalf of our members, and especially their wives, I ask this committee to ask Congress to promote these aims by repealing all of the Federal frustrations now imposed by law upon the manufacture, sale, and use of oleomargarine.

Civilian consumption of dairy products (pounds per capita)

The CHAIRMAN. The next witness will be Mr. John H. Hayes, representing the American Hospital Association.

STATEMENT OF JOHN H. HAYES, AMERICAN HOSPITAL

ASSOCIATION

Mr. HAYES. Mr. Chairman and gentlemen of the committee, I think I shall need only 3 minutes. I am superintendent of Lenox Hill Hospital, New York, immediate past president of the American Hospital Association.

Mr. John Hatfield, the chairman of our council on Government relations, has submitted to you a brief. I strongly urge all of you to

read that brief because I know that in there he states better than I will what our position is.

We in the hospitals of this country, those represented by my association, represent about 90 percent of the beds. We feed approximately 2,000,000 people a day. I do not believe it is necessary to tell you gentlemen-in fact, very many people in this country-of the plight of hospitals today. We have perhaps been hit harder than any other group in the mounting spiral of costs. We are not in the same position as the other groups. We cannot continue to go on increasing our prices. The free patient pays us no more today with a higher charge than he did when the charge was lower.

Philanthropy, although it has gone along at an even keel, needs to be at least two or three times as strong in its support of hospitals if we are to survive. We cannot take away from our patients those things that are needed mostly for their care, such as the expensive new drugs of today, and so forth. We cannot reduce our pay rolls. In fact, we should increase them. We are short of help. Therefore, we have to look to every possible means to reduce our cost of operation. In connection with the use of margarine, this is one of those means. It seems like a small amount, perhaps, in one hospital, but over the country in the entire health bill it means a tremendous amount of money. It does not take away from the nutrition values we give to our patients and therefore we feel that in promoting the health of the country, being able to carry on and take care of our increasing loads, we strongly urge upon you the repeal of those laws which now make it impossible for us to use margarine except at a higher cost.

That is all I have to say.

Mr. ANDRESEN. May I ask a question?

Mr. HAYES. Yes.

Mr. ANDRESEN. Then, it is the intention of the hospital association to serve oleomargarine to the patients instead of butter?

Mr. HAYES. Not entirely; no, sir.

Mr. ANDRESEN. But wherever it could be done?

Mr. HAYES. Yes, sir.

Mr. ANDRESEN. Of course, I recognize that the hospital costs are very high, at least around Washington, where you pay from $12 to $50 a day if you have nurses, to get a room and stay in a hospital. There may be other reasons for the high cost other than the quarter cent tax on oleomargarine.

Mr. HAYES. There are many of them, sir. It requires almost two persons for each patient a hospital has, and at today's wages you can readily understand why the cost of taking care of a patient with all of the other high costs runs up to $14 or $16 a day.

As I say, every possible means that can be found to reduce costs that do not affect the care of the patient, we have to look for them. Mr. ANDRESEN. Your organization is assuming the same attitude as I expect representatives of the restaurant organization would state, that they want to serve oleomargarine instead of butter in the

restaurants.

Now, do you have any objection to advising each patient that you have that oleomargarine is being served?

Mr. HAYES. I personally see no reason why we should so long as we are handing him something that is tasty and nutritious. I do not believe that is necessary any more than we should tell them we are giving them homogenized milk rather than grade B or something else.