Mr. MURRAY. And is it not true that when we get the 165 percent of parity set up for flaxseed to provide this oil that is removed or put down in comparison to other crops, that there is a possibility of much larger quantities of soybean oil being used in connection with the paint industry?

Mr. CURTISS. I think that is so, Mr. Murray.

The CHAIRMAN. We thank you very much, Mr. Curtiss. The next witness is Mr. A. B. Tarwater, of Plainview, Tex.

STATEMENT OF A. B. TARWATER, HALE COUNTY, TEX.

Mr. TARWATER. Mr. Chairman and gentlemen of the committee, my name is A. B. Tarwater. I am engaged as a general farmer in Hale County, Tex., where I have lived for 35 years in the same house. I am one of the directors of the Plainview Cooperative, Inc., doing business in Plainview, Tex. The Plainview plant draws milk from about 2,500 producers located in 13 counties in the South Plains area of Texas, and is located in the center of the irrigation territory.

My information is that repeal was suggested and opposition made to this tax on oleo on the basis that it is a discriminatory tax and that it attempts to give an advantage to one commodity over another.

My position is most emphatic that it is not a discriminatory tax but that this tax on colored oleomargarine was found to be necessary and was enacted by Congress to prevent a synthetic product, and a cheap synthetic product at that, from being sold to the public without the public generally being able to know what they were getting. If cottonseed oil, peanut oil, cocoanut oil, and soybean oil and other vegetable and animal fats were the same type of oils or fats as that found in milk, it might be a discriminatory tax. But as they are not the same, I do not think that the tax on colored oleomargarine is discriminatory. Furthermore, this tax is levied on the mere coloring of the product. My idea of a discriminatory tax would be a tax on one type of vegetable oils when the other type of vegetable oils go tax-free. In other words, if a 10-cent tax was levied on oleomargarine made from soybean oil and not levied on cottonseed oil, the charge might be made that such a tax was discriminatory.

To illustrate my position on whether or not this is a discriminatory tax, I would like to call the committee's attention to the fact that in the State of Texas about 1933 or 1934, the legislature, with the support of those oleomargarine manufactures in the United States who wished to use domestic oils and fats, supported an act providing for a 10-cent per pound tax on all oleo sold in the State of Texas which contained any imported oils or fats. This act was enacted not for the purpose of protecting the consumers but for the purpose of protecting the domestic oils and fats from coconut oils and other oils being imported into the United States and used in the manufacture of oleomargarine. This law is now on the statute books of Texas and some of the very people who are now opposing the 10-cent tax on colored oleomargarines were very active in supporting and assisting in the passage of the measure.

I wish to repeat again that the 10-cent tax on colored oleo cannot rightfully be called a tax on the products that are used to make the colored oleo, but is rather a tax on the process used to make these synthetic products resemble butter. It is really a tax on the process

of coloring these oleomargarines rather than on the oleomargarines themselves.

At one time I made a rather careful study of the oleo tax and my definite recollection is that Congress originally provided this tax for the protection of the public. I do not believe that the dairy industry realized at that time that the 10-cent tax on colored oleo was a protection to them. They now recognize that it is a protection to them, but it also remains a protection to the general public. In early years many frauds were perpetrated upon the public as are shown by the records of the Internal Revenue Department. The number of these frauds has been materially reduced but the committee should remember that the main reason for this is because we have our present oleo statutes on the books.

I understand that the oleomargarine manufacturers in the United States consist of 26 organizations.

It has been frequently stated that the 10-cent tax on colored margarine is very expensive to the cotton growers.

I would like to stop right here to say that in our locality we raise a great deal of cotton. There are about two or three counties where we operate there, Lubbock and Lamb Counties being at the very top in the production of cotton in the State of Texas. Nueces County, I think, is the top county. But Lubbock and Lamb Counties come very close to the top. They now recognize that it is a protection to them.

I would also like to say that we are recently developing dairies in the State of Texas extensively and my guess at it-I do not have the figures on it—is that the amount of cottonseed meal that is consumed right now in Texas so far as the cotton grower is concerned, amounts to at least as much as perhaps many times more to the cotton grower as this use of the cottonseed oil amounts to.

I think it exceeds it.

As already stated, this is not a tax on the oil used in the oleo. It is a tax on the coloring of oleo.

I am quoting here from the United States Census Bureau. I have to rely on them for their accuracy and authenticity in these figures. In 1946, 19.9 percent of the total production of cottonseed oil went into the production of oleomargarines; 44.7 percent into shortenings where it belongs. We have no quarrel with anybody if they will put these oils, whether of vegetable or animal fat, in the category where they belong. You would not be troubled here now. It is rightfully classified as a grease to be used for shortening, soap or anything of that type and certainly is not and cannot be classed with butterfat coming from silk. The proportion of cottonseed oil going into other edible products is 26.8 percent, and in soap, and so forth, 8.6 percent.

In discussing this matter, the attention of the committee is called to the fact that as far as the cotton grower is concerned, the purpose for which cottonseed oil is used is not reflected (the profit) at all in the price paid for the raw commodity. In other words, cottonseed oil going into oleomargarine brings the same price to cotton growers as cottonseed oil going into any other cheaper manufactured products. The statement that I make also applies, I presume, to soybeans and peanuts. The profits to be made from the use of any of these oils in oleomargarine are not passed on to the producers. Such profits are retained by the manufacturers and handlers of oleomargarine.

The attention of the committee is also called to the interest shown by the consuming public in abolishing this tax. If the 10-cent tax tax on the coloring process were abolished so that oleo could be packaged, handled and in every other way resemble butter, it is certain that this reduction in the cost of placing colored oleomargarine on the market would not be reflected in the price that the consumer pays for the product.

My judgment is that should the tax be repealed the producers of oleomargarine will take every advantage of the repeal, and not pass any of it on to the public. This is particularly true at this time when the amount of butter now being produced is so far below the average production in the United States. Rather than reducing the price of oleo to the consuming public, if the tax is repealed, I think it is almost certain that the price of oleo to the consumer will advance. The CHAIRMAN. We thank you very much, Mr. Tarwater. Mr. MURRAY. Mr. Chairman, may I ask a question?

The CHAIRMAN. All right.

Mr. MURRAY. Did I understand the witness to say that there is a 10-cent a pound State tax in the State of Texas?

Mr. TARWATER. No, sir.

Mr. MURRAY. No tax?

Mr. TARWATER. No. There is a 10-cent tax in the State of Texas levied on every pound of oleomargarine sold in Texas which contains any imported oils or fats.

Mr. MURRAY. Oh, I see.

Thank you.

Mr. TARWATER. If there is such a thing as a discriminatory tax, I think that is one.

Mr. GRANGER. I have just one question.

Mr. TARWATER. However, I had a hand in passing it, and I would do the same thing again.

The CHAIRMAN. Mr. Granger has a question.

Mr. GRANGER. Did I understand you to say that you thought the farmers got more out of feeding cottonseed meal to their cattle than they did from the oil?

Mr. TARWATER. I think so.

Mr. PACE. Well, let us see about that.

Mr. TARWATER. I said

Mr. PACE. How many pounds of hulls are there in a ton of cottonseed?

Mr. TARWATER. I do not know. We do not feed hulls very often. They do not bring very much.

Mr. PACE. The amount of hulls you have must be deducted from the amount of oil. How much oil in a ton of cottonseed?

Mr. TARWATER. I do not know that either. I never had any connection with the crushing of cottonseed oil.

Mr. PACE. How do you sustain your statement, then, if you do not know how much oil is in a ton?

Mr. TARWATER. I know from the Bureau of the Census.
Mr. PACE. What are the Bureau of Census figures?

Mr. TARWATER. Wait. I have not answered your question. I know from the Bureau of the Census just quoted here what the consumption of cottonseed oil is in the manufacturing of oleo, to the farmer, the percentage of it. Now, then, I have not looked into that matter. I said, to begin with, that I did not know, but I thought,

and I still think so, and I believe an examination of the census reports will probably show the statement that I made will probably stand up. Mr. PACE. You make the statement that the farmer gets more from feeding his meals than he does out of his oil.

Mr. TARWATER. I made the statement that the cotton grower-I did not say the farmer-I made the statement that the cotton grower's interest in the cottonseed was probably equal-feeding this meal amounted to as much in the income of the cotton grower as the amount of cottonseed oil that went into the oleomargarine.

Mr. PACE. But you cannot tell us how much meal he gets out of

the ton of seed?

Mr. TARWATER. No, sir.

Mr. PACE. You cannot tell us how much oil he gets out of the ton of seed?

Mr. TARWATER. No, sir.

Mr. PACE. Or how much hulls?

Mr. TARWATER. No, sir.

Mr. PACE. Or how much linters?

Mr. TARWATER. I cannot tell about that. I can tell about how much cotton he gets, but how much linters he gets depends on how much time he puts in stripping this cotton off the hulls.

Mr. PACE. Have you ever grown any cotton?

Mr. TARWATER. Yes, sir.

Mr. POAGE. Mr. Tarwater, you live in Hale County, do you not? Mr. TARWATER. I do.

Mr. POAGE. That is just the northern edge of the Cotton Beltthe last cotton grown, going north, is in Hale County, is it not? Lubbock County grows lots of cotton?

Mr. TARWATER. I made the statement Lubbock and Lamb probably stood around the top.

Mr. POAGE. That is right, but you are just at the north edge of the Cotton Belt, are you not?

Mr. TARWATER. No; we grew 35,000 pounds of cotton last year throughout Hale County.

Mr. POAGE. You did not grow cotton north of that, did you?
Mr. TARWATER. Were you talking about Hale County?

Mr. POAGE. I am, and I am trying to locate it.

Mr. TARWATER. The north line of Hale County is the north line of the cotton area, but Hale County, as a whole, grew 35,000 bales of cotton.

Mr. POAGE. Most of it was grown down around Abernethy?

Mr. TARWATER. No, sir. I could not tell you how much they gin, but Plainview ginned considerably more cotton than any other gin in any other county.

Mr. POAGE. It is much the largest town, of course?

Mr. TARWATER. They do not grow cotton in town. It is in the area around the town.

Mr. PACE. May I ask one more question. If you are a cotton grower and you do not know how much linters and how much meal and how much hulls or how much oil there is in your seed, and you do not know the price of each one of them, how do you know what your seed is worth when you take it to the market?

Mr. TARWATER. We do not know, and we have been skinned on the price of seed more than once.

Mr. PACE. Well, most people on this earth that I know of that do not go to the trouble to find out what their commodity is worth, usually get skinned and, very few people have sympathy with them.

Mr. TARWATER. I will say this that we, real farmers out in the country, do not have very much time, and particularly in the last 4 or 5 or 6 years, and with the high price of labor, to go to one of these gins and look up all those records, and we would not be very welcome there if we did take that time.

Mr. PACE. Do you not have a county agent in your county?

Mr. TARWATER. But he is like the farmers. He has a lot of things he tries to do, and a whole lot of them he cannot cover. While I am here, I want to make this statement: If I came here for the purpose of telling you or this committee how you crushed cottonseed and made the oil and all that, I would have informed myself, but to have gone to the trouble that you speak of, I just do not think-I could not answer those questions because it would take a considerable investigation to do it and I would not want to do that.

Mr. POAGE. Mr. Tarwater, do you grow any cotton?

Mr. TARWATER. Yes, sir.

Mr. POAGE. Do you feed the seed?

Mr. TARWATER. I have.

Mr. POAGE. Did you feed any last winter?

Mr. TARWATER. No.

Mr. POAGE. You sold that seed because you thought it was worth You sold that seed, did you not?

more.

Mr. TARWATER. No, I never feed any cottonseed only when cottonseed was so cheap that I did not feel like it was worth hauling it to town. I knew it was not an economic thing to do, to feed cottonseed, and I do not think you got a good dairy product out of the whole cottonseed, but it will operate pretty well if you want to do it that

way.

Mr. POAGE. But you thought you could make more out of taking it to somebody to crush it and having the oil separated from the meal? Mr. TARWATER. No; I do not know that I made any more out of it, but I would have made this oil available and I would also have had a better feed.

Mr. POAGE. In other words, you just hauled it to town just to make oil available to the public?

Mr. TARWATER. No; I did not say that. Of course, I had a little interest in what I could get out of it.

The CHAIRMAN. We thank you very much, Mr. Tarwater.
Mr. TARWATER. Yes, sir. I thank the committee.

The CHAIRMAN. The next witness is our colleague Mr. Plumley, from Vermont.

STATEMENT OF THE HONORABLE CHARLES A. PLUMLEY, REPRESENTATIVE AT LARGE, VERMONT

Mr. PLUMLEY. Mr. Chairman, I am sorry to take your time. The CHAIRMAN. We are very happy to have you with us today. Mr. PLUMLEY. You see, the situation up in my area is that we have more cows than we have people and, therefore, we are a dairy State. I would not dare go back to Vermont to even look a cow or a bull, not to say a voter, in the face if I did not come here to oppose this measure.