request of the present administration to appear here and ask this committee to take it under consideration, you have done so?

Mr. WIGGINS. The Treasury Department for years has asked that this tax be removed and we are merely following the same policy position that is the historical position of the Treasury Department for many years.

Mr. FULLER. Do you know of any other tax that they ever felt that way about?

Mr. WIGGINS. I have been trying to think of any other punitive tax and I do not recall that there are other punitive taxes.

Mr. FULLER. Let us leave the word punitive out and just leave it yellow.

Mr. WIGGINS. We regard this as a punitive tax which distinguishes it from ordinary regulatory taxes and revenue taxes. We consider this neither.

Mr. FULLER. But it is an annoyance, is that it?

Mr. WIGGINS. Yes.

Mr. FULLER. I hope that our present administration will remember that in some of these other taxes that some of us have been trying to get off, we cannot do it.

Mr. ABERNETHY. Will the gentleman yield to me?

Mr. FULLER. Yes.

Mr. ABERNETHY. I would appreciate it if the gentleman would submit that recommendation to the Republican Representatives in control of the Ways and Means Committee.

Mr. FULLER. We are trying to do that every day.

The CHAIRMAN. Mr. Cotton has a question.

Mr. COTTON. Mr. Wiggins, referring again to Mr. Pace's analogy between the bier and the cotton, certainly I do not want to do anything to hurt cotton, but there is another difference, is there not? If the cotton farmer ceased to raise cotton, none of us would probably freeze to death or go out in the streets naked, but if the dairy industry is given to curtailing its production materially so we feel it in the milk market, somebody is going to suffer. Is there not that difference in the two cases?

Mr. WIGGINS. I think all of us agree that it would be desirable if more milk were produced and more milk consumed.

Mr. ABERNETHY. May I ask a question there, Mr. Chairman?
The CHAIRMAN. Mr. Abernethy.

Mr. ABERNETHY. I hope I have not misread all of this literature sent out to our offices by the National Cooperative Milk Producers Association, the director of which, incidentally, is my friend and happens to have been born down in my district in Mississippi. But, as I understand this literature which consists of seven or eight pamphlets and bulletins here, it is not the position of the milk producers that they are trying to keep anyone from producing margarine. It is their position that they only desire to prevent oleo from being put on the market as a product comparable to their product. They do not take the position that this would put them out of business. They take the position that the oleo people would practice a fraud on the American people by selling oleo as butter.

Now, I submit in answer to that, Mr. Wiggins, that that is not a function of the milk people or the producer of any other commodity. It is the function and the duty of the Department of Justice and the

Mr. ZIMMERMAN. I do not know whether you were before this committee about 3 years ago when this question was thoroughly explored, but a lot of people testified that they did not want to handle the product because of the inconvenience of making reports to the Government and being sure that they paid this Federal tax and rather than be bothered with that, they would not handle it at all and people could not get it. Do you know anything about that situation?

Mr. WIGGINS. I think practically a number of people do not handle it because of the trouble that they have with their reports.

Mr. ZIMMERMAN. Small people where they have little profit in handling a small amount of it, rather than to handle it at all and pay this tax, just refuse to handle it at all and it deprives the people of any chance to buy oleo in many communities.

Mr. WORLEY. Will the gentleman yield?

Mr. ZIMMERMAN. Yes.

Mr. WORLEY. Do you have any idea of how much it would cost in overhead to collect these taxes?

Mr. WIGGINS. That would be almost impossible to determine because it is handled by a division that handles other excise taxes. It would be difficult to allocate the cost of collecting this 6 or 7 million dollars a year.

Mr. ZIMMERMAN. The gentleman who was former president of the American Bankers Association is pretty closely related to rural life in South Carolina, is that not true?

Mr. WIGGINS. Í am very proud to say it is.

Mr. ZIMMERMAN. In other words, that is the 1eputation that you have always had, of a very close relationship to the rural life of this country.

Now, I will ask you if it is a fact that the average country grocery man, the grocery man way down on the corner, who keeps books on his cuff, so to speak, and uses a lead pencil, is not going to keep an account of the tax of the little margarine buyers and make these reports to the Government, but he will stay out of the business of selling margarine rather than to go to that trouble, is that not right? Mr. WIGGINS. Some of them do.

Mr. ZIMMERMAN. A great many of them.

The CHAIRMAN. Mr. Fuller has a question.

Mr. FULLER. Mr. Wiggins, this is what you state: The taxes increase the cost of the product. They interfere with the consumer's freedom of choice in satisfying personal wants. How do you feel about the taxes on cigarettes from the standpoint of the smokers? Do those interfere with satisfying your taste?

Mr. WIGGINS. No; you can buy any brand you want with the same tax. So far as the choice of brands, I do not think it interferes at all.

Mr. FULLER. During your tenure of office, have you ever before appeared before any congressional committee and appealed or asked them to take off a Federal tax of any commodity?

Mr. WIGGINS. No excise tax, that I know of, in the 13 months that I have been here. We have not asked the removal of an excise tax until the present time.

Mr. FULLER. You have never before had the pleasure of appearing before a committee and begging them to take off a tax, is that correct? Mr. WIGGINS. That is correct, as far as I am concerned.

Mr. FULLER. But you feel that this time it is your duty and at the

request of the present administration to appear here and ask this committee to take it under consideration, you have done so?

Mr. WIGGINS. The Treasury Department for years has asked that this tax be removed and we are merely following the same policy. position that is the historical position of the Treasury Department for many years.

Mr. FULLER. Do you know of any other tax that they ever felt that way about?

Mr. WIGGINS. I have been trying to think of any other punitive tax and I do not recall that there are other punitive taxes.

Mr. FULLER. Let us leave the word punitive out and just leave it yellow.

Mr. WIGGINS. We regard this as a punitive tax which distinguishes it from ordinary regulatory taxes and revenue taxes. We consider this neither.

Mr. FULLER. But it is an annoyance, is that it?

Mr. WIGGINS. Yes.

Mr. FULLER. I hope that our present administration will remember that in some of these other taxes that some of us have been trying to get off, we cannot do it.

Mr. ABERNETHY. Will the gentleman yield to me?

Mr. FULLER. Yes.

Mr. ABERNETHY. I would appreciate it if the gentleman would submit that recommendation to the Republican Representatives in control of the Ways and Means Committee.

Mr. FULLER. We are trying to do that every day.
The CHAIRMAN. Mr. Cotton has a question.

Mr. COTTON. Mr. Wiggins, referring again to Mr. Pace's analogy between the bier and the cotton, certainly I do not want to do anything to hurt cotton, but there is another difference, is there not? If the cotton farmer ceased to raise cotton, none of us would probably freeze to death or go out in the streets naked, but if the dairy industry is given to curtailing its production materially so we feel it in the milk market, somebody is going to suffer. Is there not that difference in the two cases?

Mr. WIGGINS. I think all of us agree that it would be desirable if more milk were produced and more milk consumed.

Mr. ABERNETHY. May I ask a question there, Mr. Chairman?
The CHAIRMAN. Mr. Abernethy.

Mr. ABERNETHY. I hope I have not misread all of this literature sent out to our offices by the National Cooperative Milk Producers Association, the director of which, incidentally, is my friend and happens to have been born down in my district in Mississippi. But, as I understand this literature which consists of seven or eight pamphlets and bulletins here, it is not the position of the milk producers that they are trying to keep anyone from producing margarine. It is their position that they only desire to prevent oleo from being put on the market as a product comparable to their product. They do not take the position that this would put them out of business. They take the position that the oleo people would practice a fraud on the American people by selling oleo as butter.

Now, I submit in answer to that, Mr. Wiggins, that that is not a function of the milk people or the producer of any other commodity. It is the function and the duty of the Department of Justice and the

police departments and the sheriffs' offices to enforce the laws against fraudulent sales. I would like to make one other observation. This is nothing short of Federal control of a certain commodity, is it not? The oleo taxes are simply a form of Federal control of a commodity. It attemps to control the production and distribution of that product. Mr. WIGGINS. I think it is a penalizing of the production.

Mr. ABERNETHY. That is really what is behind it all. Do you believe in the system of free enterprise?

Mr. WIGGINS. Very much so.

Mr. ABERNETHY. I have heard my friends from Wisconsin and Minnesota use the words, "free enterprise," time and time again in the last 2 or 3 years and complain about Federal control. I have attended several dinners which I enjoyed very much with the dairy people downtown, who, incidentally, have just about as strong a lobby in Washington as any group of people I know of. They have complained most vociferously about Federal controls.

Last year, and year before, and the year before that, they complained time and again about Federal control. Yet on the other hand, is it not a fact that they have come here and asked this Congress to continue a Federal control which is nothing less than a violation of the system of free enterprise? Is that not true?

Mr. WIGGINS. You are referring to representations that I am not familiar with.

Mr. ABERNETHY. Well, I think the question answers itself.
Mr. HOEVEN. Mr. Chairman.

The CHAIRMAN. Mr. Hoeven.

Mr. HOEVEN. Mr. Chairman, as long as the members of this committee are doing most of the testifying, I would like to say that the party in power, to which my good friend from Mississippi belongs, has been in complete charge of the Government for about 14 years and has never made any effort to repeal this tax.

Mr. ABERNETHY. Will the gentleman yield there?

Mr. HOEVEN. I would like to ask the witness one question. Mr. Wiggins, you say in your statement on page 4 that if the Congress deems the continued use of the taxing power for this purpose to be necessary, then such taxes should be imposed at nominal rates sufficient only for regulatory purposes. Will you give the committee the benefit of your views as to what those regulatory taxes should be? Mr. WIGGINS. We have just assumed that probably a quarter of 1 cent per pound, rather a nominal amount, would be adequate both on colored and uncolored margarine, for any regulatory purposes the Congress might decide were necessary in connection with the sale of these products. As a matter of fact, the Pure Food and Drugs Act is designed to regulate oleomargarine from the standpoint of pure foods.

that

Mr. HOEVEN. On what do you base the assertion that one quarter of a cent a pound is sufficient?

Mr. WIGGINS. Merely to have some tax.

Mr. HOEVEN. Have you any facts or figures to present to this committee that one-quarter cent is sufficient for regulatory purposes? Mr. WIGGINS. It could be one eighth.

Mr. HOEVEN. You are just guessing at that, are you not?

Mr. WIGGINS. It could be any amount so long as a tax is imposed. Then you have the power of regulation.

Mr. HOEVEN. What I want to know is how much tax do

you need

to properly regulate it?

Mr. WIGGINS. It is not a question of producing the revenue to regulate.

You say You say

Mr. HOEVEN. I am not talking about sufficient revenue. you are imposing a tax sufficient for regulatory purposes. it should be between one-fourth and one-eighth cent per pound. Mr. WIGGINS. I would say any amount. You can impose any amount and have a regulatory tax. The amount of the tax, so long as it is nondiscriminatory, is immaterial. That might well apply to butter. If you wanted to regulate, we will say, substitutes or adulterated butter, you could impose a tax and have regulatory supervision. Mr. HOEVEN. I appreciate that, but what is the sufficient tax that you are talking about, sufficient for regulatory purposes?

Mr. WIGGINS. It is not a matter of sufficiency, it is a matter of having a tax.

Mr. HOEVEN. But you say here," sufficient for regulatory purposes." I want to know whether it should be one-eighth of a cent a pound or one-quarter or more?

Mr. WIGGINS. I say any amount is sufficient so long as it is a tax for regulatory purposes.

Mr. ANDRESEN. Will the gentleman yield?

Mr. HOEVEN, Yes.

Mr. ANDRESEN. I would also like to know if the representative of the Treasury Department would remove the quarter of a cent tax on reprocessed butter?

Mr. WIGGINS. As I understand, that is designed for regulatory purposes and not for revenue purposes.

Mr. ANDRESEN. You would not remove that tax then?

Mr. WIGGINS. If it is deemed that regulatory requirements are proper for reprocessed butter, that amount of tax is nominal and is adequate for regulatory purposes.

Mr. ANDRESEN. Have there been any prosecutions on the part of the Treasury Department against dealers in oleomargarine who have sold oleomargarine as butter?

Mr. WIGGINS. That, I think, Mr. Andresen, would be a matter for the Department of Justice. I would not know.

Mr. ANDRESEN. The Treasury Department enforces the law. Will you submit for the record all of the prosecutions that have taken place at the instance of the Treasury Department against dealers in oleomargarine who have sold it as butter?

Mr. WIGGINS. We will be glad to submit to the committee, if you so desire

Mr. ANDRESEN. I am asking you to do that, if you please.

Mr. WIGGINS. A report on any prosecutions recommended by the Treasury Department. Of course, the prosecutions are made by the Department of Justice.

Mr. ANDRESEN. I would say in the last 10 years, showing the number of prosecutions, where they were, who the individuals were, and the findings of such prosecutions. We would like to have that information and we would like to have it as a part of your testimony.

Mr. WIGGINS. I think, Mr. Chairman, that they would be prohibited from giving you a list of individuals, but we can give you the num