It has been my privilege to see the growth of the dairy industry in South Carolina. I am proud of this progress not only in my State but throughout the entire Southland. Would it be sound economy for the farm leaders, not only of the oil-producing States but the Nation as a whole, to impede the growth of the dairy industry to protect some other branch of agriculture? I think the answer to that is obvious.

Gentlemen, we are interested in butter and margarine. Both are needed in the food programs of our Nation. In the direct words of a well known business woman and mother in my State, I would like to quote a few words from her statement before the Senate Agriculture Subcommittee that visited Columbia, S. C. She said and I concur, "There is room for both butter and margarine in the market basket."

Butter and margarine have their own merits and the consuming public is demanding the privilege of recognizing these merits, without the strings of trade barriers.

In this Nation of ours and among representation here in our Congress are men who are interested in butter alone. To them I want to pass this warning. Beware that your selfish zeal may not be the tool to destroy instead of to protect. Sixty years ago, or more, there may have been some foundation for the margarine tax but that was years before our drastic food laws had been enacted for the purpose of correcting practices inimical to the welfare of the consuming public. As these practices were eliminated the laws should have been revised and the taxes removed but that has not been done, so today we face another era in our progress when the coloring tax on margarine has reached the point that it ill becomes its place on our tax books.

It has been said that early margarine manufacturers made their product from objectionable animal fats and foreign oils, and that the early product was inferior. A parallel statement can be made about butter because much of the early butter was made of rancid milk fat and was an inferior product.

The hypocrisy of the whole question is that margarine in its manufacturing process has the color properties desired by the consumer and their color must be bleached out. Butter on the other hand must often be colored to meet the requirements of the trade.

The problem facing butter is not margarine. A continuation of the Federal tax will not solve butter's problem. No, gentlemen; the age-old law of supply and demand is still the hurdle that butter or any food product must face.

The short supply and the present prices are the influences behind the declining consumer demand for butter. Butter, like any other product, can price itself out of the consumers' market.

To those who can see only one side of this argument, let me leave this warningdo not try to solve your problem by imposing trade barriers. The pendulum can swing back and strike on the other side.

There is a growing tendency, urged on by the consumer, that oil-producing States should sponsor retaliatory taxes. I have always fought trade barriers in South Carolina and I will continue to do so and I can state that the consuming public wants something done about the margarine tax barriers. There is no doubt the tax is discriminatory. It is class legislation and punitive and succeeds in

only one thing and that is to deprive the consumer of an accepted wholesome food at its market price.

I do not agree with the alarmist of the dairy lobby who says the repeal of margarine taxes will destroy a large part of the dairy industry. In the first place, separating fat from milk to make butter takes much whole milk from human consumption and the production and sale of whole milk is much more profitable to most farmers than is the production of fat for butter making. There is a shortage of whole milk for human consumption now.

Margarine is now an accepted food product. Dietitians recommend it in the Nation's food program. The consuming public has learned to enjoy it for its own properties and the price places it in the purchasing market of all groups. Since it is not the only food product that needs coloring and this color neither detracts nor injures, why should margarine be singled out and penalized for the same coloring that goes into butter?

The days of deception are over. Our pure food laws are much more drastic and far more efficiently administered to prevent any product of national consumption from being falsely marketed.

It

Gentlemen, the tax on margarine if ever necessary has served its purpose. cleaned up the "house of margarine,” it forced the production of another wholesome food product; it branded this product for what it is; it denied margarine the

privilege of parading under false colors and made it stand on its own merits or die in the market places.

Today, margarine is proud of its name, the manufacturers show absolutely no reluctance in advertising the ingredients and the public wants it. They want it yellow. They can have it yellow, fact is, it is naturally yellow, but Congress says, "no," if you want it yellow, you must pay a fine.

Congress said this tax was not a revenue-raising law but to protect the public. What protection does it or can it now afford?

Gentlemen, let me reiterate our stand. We have faith in both butter and margarine. Dairy products are used in the manufacture of margarine and the oil producers find a ready market for their cottonseed, soybean, peanut, and other meals on the dairy farms of the Nation.

Let me also reiterate that the tax on margarine has served its purpose, it has no further use and has no further right in our system of free enterprise.

On behalf of those I am privileged to represent and on behalf of the margarine consumers, I ask that you lend your every effort to see that this discriminatory trade barrier is removed from the tax laws of our Nation.

ASSOCIATION, SOUTHERN COMMISSIONERS OF AGRICULTURE, By J. ROY JONES, Vice President.

STATE OF SOUTH CAROLINA,

By J. ROY JONES, Commissioner of Agriculture.

STATEMENT FILED ON BEHALF OF THE NATIONAL EDUCATION ASSOCIATION BY H. FRANCES BOYER, LEGISLATIVE-FEDERAL RELATIONS DIVISION

I represent the National Education Association, which has a present membership of over 300,000 teachers and administrators. Its, business is transacted through a representative assembly, boards, committees, and commissions.

Since the beginning of World War II living costs in the United States have steadily increased while the income of teachers has lagged far behind. This is to say, living costs have mounted more rapidly than teacher income. In many States today the buying power of teachers is below the 1935-39 level. It is an understatement rather than an overstatement to say that half of the teachers in our public schools today are forced to subsist on a near-poverty level.

The imposition of any tax upon any object that increases the cost of living is a direct attack not only upon the well-being of teachers but upon the basic educational safety of the Nation. The present tax program imposed upon oleomargarine is vicious and therefore unsound. It is offensive to the principle of justice and the spirit of fair play which lies at the very base of the American way of life. The tax on oleomargarine should accordingly be adjusted downward, if not entirely removed. This is in line with a basically sound economy. It treats the the consumer fairly. It places production on a sound basis. For these reasons the National Education Association supports the proposal to eliminate the inexcusable and unjustified levies now imposed upon oleomargarine.

The CHAIRMAN. Are there any others whose names have not been mentioned who desire to file a statement at this time on behalf of the legislation?

Mr. PATTON. I am Clifford Patton of the National Association of Consumers and I desire to file a statement.

The CHAIRMAN. If there is no objection to the requests that have been made that the organizations and individuals who have been named and others be permitted to file statements at this time, the Chair will state those statements will be made a part of the record at this point.

(The statement referred to above is as follows:)

STATEMENT IN BEHALF OF THE NATIONAL ASSOCIATION OF CONSUMERS MR. CHAIRMAN, MEMBERS OF THE COMMITTEE:

My name is Clifford Patton, and I am appearing here on behalf of the National Association of Consumers. The NAC is a politically nonpartisan, nonprofit, noncommercial organization devoted to the advancement and protection of the

economic welfare of Americans as consumers. Its board of directors, members, chapters, and affiliated groups represent a fair cross section of consumer interests of the Nation. Its monthly publication, Consumers on the March, goes to readers in 950 communities and in every State in the Union.

The National Association of Consumers strongly urges the repeal of Federal taxes and license fees on the manufacture and sale of margarine. It is an impelling necessity that this action be taken by the Congress. Repeal of these laws would benefit millions of families in the low-income bracket. All consumers should be

able to secure the best possible diet at the lowest cost. The average family, living under the impact of the high cost of foods, spends 40 percent of its income for food-the largest single item in the average family's budget. Millions of families desperately need protection against high prices. We see no reason why further unnecessary hardships should be imposed upon the consumer by a continuation of outmoded and antiquated tax and license fees upon margarine.

Of all the taxes levied against a commodity, that on margarine has been one of the most unfair and discriminatory. The forces making for these taxes and license fees have perpetuated a tax burden on the American consumer which was not of his making. The tax law no longer serves its original purpose. The trite contention that margarine would be misrepresented as butter has been refuted by experience. Margarine is sold and labeled for what it is. When it is colored, the colored matter is no more artificial than that used in butter and it is more honest, for colored butter is not so labeled.

According to the Bureau of Labor Statistics' recent report on the city workers' family budget, the cost of goods and services for a family of 4 ranges from $2,734 in New Orleans to $3,111 in Washington, D. C.-the lowest and highest cost cities among the 34 cities surveyed. The average family needs 79 pounds of butter or margarine annually, according to nutritional standards-but the consumption of both butter and margarine by an average family of 4 was about 64 pounds in 1947, as against 80 pounds in prewar years. The reason for this underconsumption is the exorbitant high price of butter and restrictive taxes and discriminatory legislation on margarine.

Only one industry in America the butter industry-has even been successful in securing Federal legislation for even a partial monopoly of a market for its product. In spite of this crippling legislation, the production of margarine and its popularity have increased greatly during the war and since.

A valuable byproduct of consumer rationing during the war was that it induced millions of consumers to try margarine for the first time, because of the large savings in red points made possible thereby. Since the end of the OPA, dollar savings have taken the place of red point savings. Butter at 79 cents to $1—even $1.20 a pound is not for the masses of housewives in America today. It is significant that margarine retails for about 40 cents a pound-yet the price would be greatly reduced, were it not for the taxes and license fees on the manufacture and sale of margarine.

To say that the average butter consumption is at the rate of 11 pounds per capita per year is to cover up the fact that the figure is much higher for the well to do and is much lower for those whom the high cost of living really pinches. Because of the progress which margarine has made, the opponents of margarine now state that they have no objection to the sale of margarine white. For example, the National Cooperative Milk Producers' Federation, in its News for Dairy Co-ops, under the date January 17, 1948, states, "Dairy farmers are not opposed to the sale and use of oleomargarine. They do object to permitting yellow oleomargarine without legal protection in behalf of both consumers and the dairy industry.'

The opponents have repeatedly said that "yellow" is "butter's trade-mark," and that the coloring of margarine by the manufacturer is a "fraud." To ask the average consumer to take this argument at its face value is to insult his intelligence. The National Cooperative Milk Producers' Federation has a booklet How's That Again? in which a housewife is portrayed enjoying coloring margarine in the kitchen. To us, this is nonsense. Furthermore, in approving of the housewife having fun in this way, the booklet actually approves of the addition of "Butter's trade-mark" in the home, while it disapproves of its addition by the manufacturer. We know that the busy housewife does not cherish the extra chore of coloring margarine. Moreover, this home process results in wasting 2 to 22 percent of each pound colored. Thus an estimated 15,000,000 to 18,000,000 pounds of margarine were wasted in 1947. If there ever was a time when American consumers should conserve food, now is the time.

The National Cooperative Milk Producers' Federation has another booklet, Colored Oleo Sold As Butter, in which it plays up the danger of margarine being sold in butter wrappers by crooked middlemen and argues that this danger would be much greater if margarine were colored yellow by the manufacturers. We concede that there is nothing to fear from the manufacturer on this score. We know very well that nearly all margarine is distributed by the manufacturers through their own branch houses, or is shipped direct to chain-store warehouses. As a general rule, margarine is not simply turned loose by the manufacturer to be marketed by anyone who wants to get his hands on it. It violates every article of common sense to imagine that packages of margarine in great numbers would be unwrapped and wrapped again and labeled "butter."

In an attempt to strangle the margarine industry, the opponents of margarine frequently cite six old cases of the fraudulent sale of margarine sold as butter. But according to notices of judgments under the Federal Food, Drug, and Cosmetic Act, in the period between 1933 and June 1947, when butter's volume was 4 to 5 times that of margarine, butter was seized for various reasons 2,292 times as compared with 21 times for margarine-a ratio of 100 to 1. But at no time was margarine seized for contamination, filth, addition of foreign matter, decomposition, or for similar reasons. Margarine's only seizure under the Food and Drug Administration-21 in number-were for slightly less than 80 percent fat content. Margarine is probably the most closely regulated product on the grocery market, and will remain so, if the legislation before this committee passes. It is controlled by the Pure Food and Drug Administration. It is manufactured in accordance with the standards of the Federal Trade Commission. Labeling requirements are set out in the greatest detail. State agents are on the look-out for any possible misrepresentation. There is not the slightest danger that consumers will be the victims of fraudulent packaging of margarine as butter if adequate repeal legislation is enacted.

The consumer looks in vain for a simple, direct answer from the opponents of margarine to a question asked thousands of times: if margarine should be taxed because it is butter yellow, why should not Koroseal be taxed because it imitates leather almost perfectly in appearance, or why should not metal furniture, finished to resemble wood furniture, be taxed to protect the "natural" product?-or why should not vegetable shortening be taxed because it resembles lard?—and so on, ad infinitum. The plain fact is that the opponents of margarine want to discourage the consumption of margarine by compelling the housewife to take it in a form that is much less attractive to her than the manufacturer could make it without additional cost.

Gentlemen, repeal of the Federal taxes on margarine will benefit the consumer in three specific ways: first, in terms of price; second, in terms of convenience; and third, in terms of additional consumption of a basic food.

The Federal antimargarine law is the cornerstone of a structure of legislation which adds cents per pound to the price which the consumer pays. This law has forced the low-income group to pay higher prices for one of the essential foods, when it is to the best interest of this country to keep unnecessary prices down. Failure to protect the consumer's economic welfare at this time would add fuel to the pent-up resentment of the consumer toward high prices, and the difficulties of obtaining basic foods. With milk at such fantastic prices, many consumers have cut down their consumption of this essential food. Many mothers have to manage for their families with less of the protective foods, and they have felt outraged and helpless as they have seen their living standards going steadily downward because of high prices.

With more margarine on the market and available at more neighborhood stores, consumers could afford more of this and other nutritious foods. At the retail level, only one half of the grocery stores handle uncolored margarine. The small neighborhood grocer is unable to pay the fees or is unable to cope with the restrictive legislation. Even a volume which totaled 725 million pounds in 1947 could not tip the scales of a $6 license fee for one grocer out of two. As for colored margarine, for which the retail license fee is $48, and the consumer price is upped by 10 cents a pound, only a handful of grocers are licensed to handle the product, even in States where no local prohibitions are in effect. Thus, at every step, the development of the industry to optimum efficiency is hindered and free competition is discouraged. The consumer pays the bill. If State and Federal taxes and license fees on margarine were repealed, the consumer would save an estimated 19 million dollars a year.

Butter consumption per capita has decreased from 18 pounds prewar to 11 pounds in 1947. No one will argue that the price is beyond reach of most consumers, especially families below the middle-income groups. Up until these hearings, the Federal Government has held out no hope that this situation will materially improve, and the president of one of the Nation's largest dairy companies, on January 28, 1948, advised his stockholders that if butter production is to rise under present conditions, the price "would have to rise considerably above the present level." This is the prospect which the opponents of margarine hold out while trying to perpetuate their semimonopoly.

The Assistant Secretary of Agriculture, testifying before the Senate Committee on Banking and Currency on January 29, 1948, referred at length to the prospective shortage of meat and to the fact that a rationing program restricted to meat alone would raise supply and price problems in other fields. He then said: "Topmost on the list of competitive and related foods are the food fats and oils * * * their interrelationship with other foods and especially with meat is surprisingly close. Cause and effect would thus reach butter, oleomargarine, and shortenings of vegetable origin. They also could become problems to be quickly encountered as the result of limited rationing."

Regardless of the question of rationing, certainly most consumers will agree that shortages which prevail at the present time should not be deliberately perpetuated. The Federal antimargarine law does precisely that. In view of present shortages, the remarkable fact is that per capita consumption of margarine has increased only from 3 pounds to 5 pounds annually, while butter has declined from 18 pounds to 11 pounds per capita. A substantial gap remains between the consumption of both spreads before the war (reaching a between-war peak of 20.5 pounds in 1926) and now. Margarine could fill up this gap economically and with equal nutritional advantage, if antimargarine laws did not hold down margarine consumption. Thus, it is obvious that for these foods, total consumption today is much lower than it was before the war, and is much less well distributed among consumer groups. Most consumers below the middle-income bracket have forgotten the taste of butter.

What consumers need and want is a palatable, nutritious, and attractive table spread at a reasonable price. The repeal of the antimargarine laws would contribute to the fulfillment of this need." The National Association of Consumers, therefore, urges this committee to wipe the slate clean of the long-standing discriminatory legislation perpetuated by the opponents of margarine.

Mr. MURRAY. I ask unanimous consent, Mr. Chairman, at this juncture in the record if any experiment has been put on in the United States showing that a vegetable oil is equal to animal fat, that it be put in at this point.

The CHAIRMAN. If anyone has the answer to that question, we will be glad to put it in the record.

The committee will adjourn until 10 o'clock tomorrow morning. (The following statements were subsequently submitted for the record:)

THE RHODE ISLAND FEDERATION OF BUSINESS AND PROFESSIONAL WOMEN'S CLUBS, Providence 5, R. I., March 18, 1948.

Representative CLIFFORD R. HOPE,

Chairman, House Committee on Agriculture,

New House Office Building, Washington 25, D. C.

MY DEAR MR. HOPE: At a State board meeting held on March 10 of the Rhode Island Federation of Business and Professional Women's Clubs, it was voted that I write direct to you, suggesting that this letter be made a part of the record of the hearings to repeal or modify the Federal antimargarine law.

We feel that the housewife should not be compelled to continue paying a tax of 10 cents per pound to purchase yellow margarine, but rather that it should be colored at the factory at no extra cost to the consumer.

Sincerely yours,

JANE MANN, Chairman Legislation.