oleomargarine taxable under this subchapter shall for each such offense be fined not exceeding $50, and imprisoned not less than ten days nor more than six months; and "(2) TRAFFICKING.-Any person who fraudulently gives away or accepts from another or who sells, buys, or uses for packing such taxable oleomargarine, any such stamped package, shall for each such offense be fined not exceeding $100, and be imprisoned not more than one year. "(d) IMPORTED OLEOMARGARINE.— "(1) FAILURE OF CUSTOMS OFFICER TO COMPLY WITH LAW.-Every officer of customs who permits any imported oleomargarine to pass out of his custody or control without compliance by the owner or importer thereof with the provisions of sectin 2300, relating thereto, shall be fined not less than $1,000 nor more than $5,000, and imprisoned not less than six months nor more than three years. "(2) SALE WHEN IMPROPERLY PACKED OR STAMPED.-Every person who sells or offers for sale any imported oleomargarine, or oleomargarine purporting or claimed to have been imported, not put up in packages and stamped as provided by this subchapter, shall be fined not less than $500 nor more than $5,000, and be imprisoned not less than six months nor more than two years. "(e) OFFENSES NOT SPECIFICALLY COVERED.-If any importer of oleomargarine shall knowingly or willfully omit, neglect, or refuse to do, or cause to be done, any of the things required by law in the carrying on or conducting of his business, or shall do anything by this subchapter prohibited, if there be no specific penalty or punishment imposed by any other provision of this subchapter for the neglecting, omitting, or refusing to do, or for the doing, or causing to be done, the things required or prohibited, he shall pay a penalty of $1,000." SEC. 4. Sections 2309 and 2310 of the Internal Revenue Code (U. S. C., 1940 edition, title 2, secs. 2309 and 2310) are amended to read as follows: "SEC. 2309. FORFEITURE. "(a) SPECIAL TAX ON IMPORTERS UNPAID.-Every person who knowingly purchases or receives for sale any oleomargarine from any importer or owner of imported oleomargarine who has not paid the special tax required under section 2306 shall be liable for each offense to a forfeiture of all articles so purchased or received, or of the full value thereof. "(b) PACKAGES UNSTAMPED OR UNMARKED.-All packages of oleomargarine subject to tax under this subchapter that shall be found without stamps or marks as herein provided shall be forfeited to the United States. "(d) OFFENSES NOT SPECIFICALLY COVERED.-If any importer or owner of imported oleomargarine shall knowingly or willfully omit, neglect, or refuse to do, or cause to be done, any of the things required by law in the carrying on or conducting of his business, or shall do anything by this subchapter prohibited, all the oleomargarine owned by him, or in which he has any interest as owner, shall be forfeited to the United States. "SEC. 2310. RECOVERY OF FINES AND PENALTIES. "All fines, penalties, and forfeitures imposed by this subchapter may be recovered in any court of competent jurisdiction." SEC. 5. Sections 2313 and 2314 of the Internal Revenue Code (U. S. C., 1040 edition, title 26, secs. 2313 and 2314) are amended to read as follows: "SEC. 2313. TOBACCO STAMP LAWS APPLICABLE. "The provisions of law governing the engraving, issue, sale, accountability, effacement, and destruction of stamps relating to tobacco and snuff, as far as applicable, shall apply to stamps provided for by section 2306. "SEC. 2314. REGULATIONS. "For authority of the Commissioner, with the approval of the Secretary, to make all needful regulations for the carrying into effect of this subchapter, see section 3791." We have quite a number of gentlemen here who want to be heard on this bill at this time, and there are others who want to be heard later, and we will have additional hearings after finishing the hearings at this time, on the 15th of November, so that the others may be heard who stated that they would be unable to appear before that time. Mr. ANDRESEN. May I make an inquiry? The CHAIRMAN. Yes. Mr. ANDRESEN. It is the understanding, is it not, that the opposition to this bill wil be given their hearings on November 15? The CHAIRMAN. On November 15; that is right. And I want to say at this point that we want to give each and every one complete opportunity to be heard for and against this bill. We are delighted to have with us this morning the Speaker of the House and will be very glad to have a word from him. STATEMENT OF HON. SAM RAYBURN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS AND SPEAKER OF THE HOUSE OF REPRESENTATIVES The SPEAKER. Mr. Chairman, I am not here to testify, because I am not supposed to have any position on legislation. However, I did come over this morning with Mr. Arthur Hopkins, of Sherman, Tex. He happens to be in the district that I represent. He is head of the Meadolake Foods. They produce milk. They buy milk. They produce margarine. He is a man of long and wide experience, and any statement that he makes for the record is a true statement as far as he, himself, knows. He comes here representing the margarine industry, who think that they should still be treated as a food product and should not be penalized simply because they might come into competition with someone else, and I simply wanted the committee to know that I know Mr. Hopkins, I know his capabilities, I know his splendid work both in milk production and in the production of cottonseed products, and when he comes before you you will have a man before you who has been designated by this great industry to represent it here and one who knows something about it. The CHAIRMAN. Thank you very much, Mr. Speaker. We will be glad to hear the gentleman later on. At this time, or at the beginning of our hearings, I would like to insert in the record an analysis of the bill, "Why, H. R. 2400?" (The analysis referred to follows:) WHY, H. R. 2400? For many years the following Federal taxes and license fees have been imposed on margarine: Ten cents per pound on yellow colored margarine. One-fourth cent per pound on uncolored margarine. Six hundred dollars per year on manufacturers. Four hundred and eighty dollars per year on wholesalers of colored margarine. Six dollars per year on retailers of uncolored margarine. H. R. 2400 is a bill to eliminate these Federal restrictions, disguised as a revenue measure, against domestic margarine by repealing: 1. The excessive excise tax of 10 cents per pound on yellow colored margarine and one-fourth per pound on uncolored margarine. 2. The additional and unreasonable annual tax of $600 for manufacturers, $480 for wholesale dealers and $48 for retail dealers of margarine (if wholesale or retail dealers sell only uncolored margarine, the annual tax is reduced to $200 and $6, respectively). 3. Related restrictive provisions. For example: A restaurant or boarding house that now serves margarine and colors it is classed as a manufacturer and forced to pay the annual tax of $600 in addition to the per pound tax of 10 cents. The Federal margarine tax and license fees were never intended to produce revenue, and in fact, over a period of years have produced a negligible amount. H. R. 2400 repeals all taxes, license fees, and related provisions, regarding domestic margarine. A tax for revenue purposes would not be justified if levied only on one particular food product. It is certainly not necessary, however, small, for the purpose of policing the margarine industry. The Food, Drug and Cosmetic Act of 1938 and the definition and standard of identity for margarine promulgated thereunder, provide sufficient protection to the consumer concerning the content and the labeling of the product. This was the basis on which the standard was promulgated. The bill does not affect, and the consumer will continue to enjoy the benefit of the method by which margarine is now manufactured and labeled under the definition and standard of identity for margarine administered by the Federal food and drug authorities to promote honesty and fair dealing in the interest of the consumer. Two-thirds of the Nation's retail grocers cannot now handle margarine because of the existing taxes; consequently, millions of consumers are now deprived of the opportunity to purchase a low-cost, healthful table fat and a substantial market is closed to important farm products, vegetable oils and animal fats, the major ingredients of margarine. The enactment of this bill will free the consumer from the fat-wasting and time-wasting jobs of adding color to margarine in her own kitchen—a manufacturing process which should be done at the factory. Margarine, a wholesome and nutritious food, is entitled to the same legal rights and should be subject only to the same legal responsibility under Federal law as all other foods. This bill, if enacted, will accomplish that result. The CHAIRMAN. At this time we will call on Dr. Carlson, University of Chicago. Dr. Carlson, we are very glad to have you appear before the committee. Mr. PACE. May I make an insertion in the record before you begin? I would like to insert in the record a telegram that I received this morning from the Toledo Food Distributors Association, which is as follows: Please listen to our Mr. Tyre Taylor and his plea for repeal of all Federal taxes on oleomargarine when your House Committee on Agriculture holds hearings on H. R. 2400 starting tomorrow. We hope you vote to do away with this discriminatory tax which is not justified either as a revenue or a regulatory measure. TOLEDO FOOD DISTRIBUTORS ASSOCIATION. STATEMENT OF DR. ANTON J. CARLSON, UNIVERSITY OF CHICAGO Dr. CARLSON. My name is A. J. Carlson. I received my education at a little college in Illinois, Augustana College, and my graduate education at Stanford University, Calif., where I received the Ph. D. degree in 1902. For a year I was research associate of the Carnegie Institution of Washington, and a short time thereafter a member of the faculty of the University of Pennsylvania's Medical School. From 1904 to 1940 I was an active member of the medical and biological faculty of the University of Chicago. For the last 25 years I have been chairman of the department, and for the last 10 years I have held one of the 10 distinguished-service professorships in the university. I am a member of a great many scientific and medical organizations in this country and abroad-the National Academy of Sciences, Na tional Research Council, American Institution of Nutrition, American Medical Association, American College of Physicians, Federation of American Biological Societies, Institute of Medicine, American Academy of Pediatrics, and so forth. In the way of public service, I was a lieutenant colonel in the United States Army, World War I, serving nearly all the time in the A. E. F. in foods and nutrition. After the Armistice in 1918, I was with the American Relief Administration with headquarters in Paris, and served there to the middle of 1919. I have for years been a consultant with the United States Food and Drug Administration. I am a member of the public advisory committee of the United States Public Health Service. I was for 15 years a member of the council of pharmacology and chemistry, American Medical Association. I have for 5 years been, and still am, a member of the National Foundation for Infantile Paralysis. I was a member of the White House Conference on Child Health and Protection. I have been consulted again and again as an expert by the Federal Trade Commission, and I am now working with the Federal Trade Commission. In 1935, under the auspices of the Rockefeller Foundation, I was a lecturer in Peking, Nanking, and Shanghai. I have the honorary M. D., doctor of law, and doctor of science from several institutions here and abroad. I am a foreign member of medical and biological societies in France, Germany, China, Argentina, and Sweden. A year ago, much to my surprise, the Minnesota State Medical Association voted me a certificate of distinguished service. I am president now of the Society of Experimental Biology and Medicine, American Biological Society; Research Counsel on the Problem of Alcohol. I am past president of the American Physiological Society, the Institute of Medicine, the Society of Internal Medicine, Section on Pathology and Physiology, American Medical Association, American Association for the Advancement of Science, and so forth. I am still editor of the Physiological Review, Biological Abstract, and the Annual Review of Psychology. In the way of publications, I have written two books of some two or three hundred scientific pages. Mr. Chairman, I have always opposed the prohibitive and discriminatory legislation against margarine, so my being here today is nothing new. And I urge, therefore, the passage of this bill repealing these discriminatory laws so far as Federal legislation is concerned, and these are my reasons: First, it is fair to state that at the time when some of these present restrictive and prohibitive laws in regard to margarine were enacted by Congress and by the several States that this bill aims to repeal, we did not have the amount of accurate information touching on the nutritive values for man of butter and other animal fats or of vegetable fats, such as in margarine, now at our disposal. It will also be granted that few, if any, of the food industries concerned had at that time the knowledge, the experience, and the skill to produce the good margarine manufactured today. It will also be conceded that in those days individual retail dealers occasionally practiced fraud on the consumer by selling colored margarine as butter and at the then current price of butter. This factor of fraud, so far as it can be handled by Federal legislation, is now adequately taken care of by the new Food, Drug, and Cosmetic Act, and the regulations authorized by that act. I know their work. I have been a consultant of theirs for 30 years, and that present Food and Drugs Act takes care of fraud so far as any competent Federal agency can take care of food frauds. Second, while it is a fact that the fat in cows' milk-that is, butter-differs chemically from other animal fats, as well as from the vegetable fats used in the production of margarine, it is now well established that the digestibility, the energy, and the over-all nutritive value of all these fats as food for man are so nearly identical that when butter or margarine made from these fats forms the usual part of our American diet, no difference can be detected except possibly in content of vitamin A and D, in color, and in flavor. The apparent superiority of butterfat over vegetable fats in flavoring, for a few days, the more rapid growth of weanling or preweanling rats reported by some investigators, has not been confirmed. In fact, it has been disproved. Mr. MURRAY. Mr. Chairman, I ask unanimous consent to answer that part of the statement he has made in the record. Dr. CARLSON. I am glad to yield. Mr. MURRAY. I ask for unanimous consent to answer that part of your statement in the record. Dr. CARLSON. I have the data here for the committee, and I can be questioned at the end, if the chairman so desires. Now, this is in line with history and the lessons of nature. Man is the only animal using milk as food after weaning, except some of our other domestic animals. The domestication of the cow and the goat came very late in human evolution and is not yet universal in all lands. It is, therefore, clear that the individual man has attained and can maintain his present physical and mental stature on other foods than milk or butter after his mother's breast dries up. Now, that does not mean, as I shall point out in a minute, that milk and milk products are not one of our best, one of our most excellent foods, but they are not an essential food for man after weaning. Now, I am familiar with the arguments that lead to the present legislation which this bill attempts to repeal. This is my third point, and it concerns vitamins A and D in butter. Now, the amounts of vitamin A-and provitamin A, carotenesand of vitamin D in butter depends on the nature of the diet of the cow, and on the amount of exposure of the cow to sunlight. The cow does not make vitamin A or vitamin D. Vitamin A has got to come from the food; vitamin D partly from food and partly from exposure to sunlight. The green, out-of-door pasture of the summer yields milk and butter high enough in vitamin A to be significant in our national nutrition and health, to the extent that we eat milk, cream, and butter. The carotenes-provitamin A-give the yellow color to good summer butter. Everybody knows, or should know, that winter butter is less yellow. It is gray or white, unless artificially colored. |