manufactured out of coconut oil than there is at the present time. Now, the main objection your retailers have to oleomargarine is the fact that there is a special tax on it.

Mr. TAYLOR. The whole point of our appearance here, Mr. Andresen, is to oppose a continuation of the $6 tax and the $48 tax on retailers. Mr. ANDRESEN. That is all.

Mr. MURRAY. I just want to ask the witness if he knows if any of his members sell filled milk.

Mr. ZIMMERMAN. Let us not go into the filled milk. We are talking about margarine now.

Mr. MURRAY. It is right along this same line.

Mr. ZIMMERMAN. The Chair doesn't think so; and we want to get through with those witnesses who want to get away.

Mr. MURRAY. I would like to ask the gentleman that, and if he can't furnish the information, if he realizes that all the oleomargarine is being made at the present time that can be made, regardless of what happens to this particular bill.

Mr. TAYLOR. I am not informed, Mr. Murray, as to just what the supply and demand situation is. Do you mean

Mr. MURRAY. It is a matter of allocation of fats.

Mr. TAYLOR. As to your other suggestion, there I would have to plead the same kind of ignorance as did Mr. Guckenburger. This is the first time I ever heard of filled milk.

Mr. HILL. I have two questions in one; on page 3 you have some very interesting figures. You say that 70 percent of all the retail food stores in the United States do a business of less than $20,000. I am in the retail business. I would just like to know how reliable you think those figures are.

Mr. TAYLOR. I was amazed at them myself, Mr. Hill, when I first saw them, but they are Department of Commerce figures, and apparently they are accepted generally by the trade as being correct. Mr. HILL. Do you think those figures are reliable?

Mr. TAYLOR. Yes, sir. As I say, I had the same sense of shock you apparently had, when I first say them.

Mr. HILL. If you have the figures, I would like to have them as to the number of employees in these various stores as you have them classified here.

Mr. TAYLOR. I will do my best to supply that for the record. Mr. HILL. Thank you. That is a very interesting set of figures. Mr. McCORD. You spoke of being here in the interest of the removal of this $6 tax and the $600 tax?

Mr. TAYLOR. No, sir; the $48 tax.

Mr. McCORD. You also want that quarter of a cent tax removed, don't you?

Mr. TAYLOR. I am not authorized to speak for the association on that. Mr. McCORD. You just appear in the interest of the two you have mentioned?

Mr. TAYLOR. Exactly so, sir. That is, they are the only ones on which our board and conventions have acted up to the present time. Mr. ZIMMERMAN. Thank you for your appearance here and your

statement.

We have next representatives of hospitals. We will now hear from Mr. James Russell Clark, representing the American Hospital Association.

STATEMENT OF JAMES RUSSELL CLARK, REPRESENTING THE AMERICAN HOSPITAL ASSOCIATION, INC.

Mr. CLARK. Mr. Chairman, our association, organized in 1899 with 9 members, now has 3,250 institutional members and 2,500 personal members, a total of 5.750 members.

Mr. ZIMMERMAN. Where do you live, Mr. Clark?

Mr. CLARK. My home is in Washington at the present time.
Mr. ZIMMERMAN. And whom do you represent?

Mr. CLARK. The American Hospital Association; headquarters office in Chicago, at 18 East Division Street.

Mr. ZIMMERMAN. And you appear, speaking for that association? Mr. CLARK. That is correct.

Mr. ZIMMERMAN. You may proceed.

Mr. CLARK. The general purpose

Mr. HOPE. Is your appearance here by virtue of some action taken by the association?

Mr. CLARK. Yes; the national association asked me to speak here today, as well as the several State associations.

Mr. HOPE. What action was taken? In other words, what I want to know is whether all the 5,000 members of your association have authorized you to appear here, and whether they know you are appearing here today on their behalf.

Mr. CLARK. Yes; they know that.

Mr. HOPE. What action did the association take to authorize you to appear?

Mr. CLARK. At the last meeting of the joint committee which represent the three national hospital associations this matter was discussed, and we are here in support of the bill by direction of that group which represents all hospitals in the country.

Mr. HOPE. You are representing the officials or some committee of the association. You don't mean to say that every hospital has been notified that this question is coming up and was asked its opinion on it, and that opinion was sent in to you and you are authorized to speak for them?

Mr. CLARK. No, but the delegates appointed by the hospitals have advised me of their opinions. They have voiced their opinions. Mr. HOPE. This at a meeting similar to a national convention? Mr. CLARK. Similar to that.

Mr. HOPE. How large was the attendance at that meeting?

Mr. CLARK. Usually about 4,000. The last meeting we had was at Buffalo.

Mr. HOPE. Four thousand delegates?

Mr. CLARK. Yes.

Mr. HOPE. Representing how many hospitals?

Mr. CLARK. They represent 5,000 hospitals, on the average.

Mr. HOPE. At this meeting the question of oleomargarine was considered and the meeting went on record as being in favor of this legislation, is that correct?

Mr. CLARK. That is correct.

Mr. HOPE. Do you have a copy of that resolution with you?

Mr. CLARK. No; I don't happen to have that here, but I have a statement which is essentially the same.

Mr. HOPE. Can you furnish the committee with a copy of that resolution?

Mr. CLARK. I will get that.

Mr. HOPE. What was the date of the meeting?

Mr. CLARK. September 17, in Buffalo.

Mr. HOPE. This year?

Mr. CLARK. Yes.

Mr. HOPE. I would be very glad if you would furnish the committee with a copy of the resolution.

Mr. ZIMMERMAN. Now you may proceed.

Mr. CLARK. The general purpose of the American Hospital Association is to promote the welfare of the people through the development of hospital service. The problem of properly meeting the people's health and hospital needs through cooperative action on the part of hospitals is extremely complex, involving ramifications into social, professional, technical, political, and economic fields.

Hospitals today constitute perhaps the most indispensable and certainly the largest block of social agencies in this country, for today there are more than 7,500 of these basic social institutions engaged in a most vital activity-the preservation of life and health.

I am appearing today on behalf of the American Hospital Association in support of H. R. 2400, because the payment of taxes on oleomargarine now required by Federal law presents a serious handicap in the conduct of the dietary departments of hospitals.

The present holocaust, bringing with it food rationing, has focused our attention on the discrimination which now exists in the legislation in connection with the payment of taxes on oleomargarine of $600 per annum if they color it on the premises, and 10 cents per pound, whereas voluntary nonprofit hospitals are performing essential governmental functions in the care of public charges at a less-thancost basis, they must pay these taxes while Government hospitals are exempt.

Butter is almost impossible to obtain in large quantities for use in hospitals, because of the shortage and because maximum price regulations encourage dealers to sell small consumers, being permitted to charge up to 2 cents per pound more in these cases. Butter costs 16 points per pound under the point-rationing system, while oleomargarine costs 6 points per pound. The cost of oleomargarine on a cash basis tax-free would be about one-half the cost of butter. We have been advised through the War Food Administration sources that butter will be 20 percent short of supply as compared with last year for civilians, whereas the supply of oleomargarine will be 27 percent greater. Therefore, we urge the passage of H. R. 2400 so that the tax restrictions on oleomargarine may be lifted and afford hospitals a better opportunity to adequately meet the dietary needs of their patients.

Mr. ZIMMERMAN. We thank you for your appearance and for your

statement.

We will now hear Dr. John G. Martin, who represents the American Protestant Hospital Association.

Dr. Martin, will you give your name and residence, please?

STATEMENT OF DR. JOHN G. MARTIN, REPRESENTING THE AMERICAN PROTESTANT HOSPITAL ASSOCIATION

Dr. MARTIN. My name is John G. Martin; I am president of the American Protestant Hospital Association.

Mr. ZIMMERMAN. Will you elaborate on that a little bit-who the association is made up of, what groups, your membership, and so on? Dr. MARTIN. The membership of the American Protestant Hospital Association is approximately 250 hospitals of Protestant denomination throughout the country. Practically all of these hospitals are also members of the American Hospital Association and participate in the activities of the American Hospital Association, so that the effect of my remarks will be to corroborate and endorse the statements made by the previous speaker, the representative of the Amer ican Hospital Association.

Mr. ZIMMERMAN. Did your group authorize you to come here today and speak?

Dr. MARTIN. Not specifically upon this question; no sir. I come here merely as the president of the association with personal knowledge of the opinions of the group and as a hospital administrator myself. I am the superintendent of the Hospital of St. Barnabas, in Newark, N. J., and my knowledge of the activities in that hospital have a bearing upon the case.

We find that the imposition of the $600 tax prevents us from using oleomargarine as we would like to do in view of the fact that butter is so scarce that we cannot serve butter to our patients and employees in the hospital as we would like to do.

Oleomargarine is used in the kitchen of the hospital for cooking purposes, and we consider oleomargarine, not an imitation of butter, but a substitute, and being assured that its nutritive value is approximately equal to butter, we would like to use it as a substitute for the butter which we cannot secure in adequate quantities.

Mr. ZIMMERMAN. Do you want to use the colored margarine?
Dr. MARTIN. We would like to do that; yes, sir.

Mr. ZIMMERMAN. But if you use that, you have to pay a large tax?
Dr. MARTIN. We have to pay a $600 tax, plus 10 cents a pound.
Mr. ZIMMERMAN. In order to serve that to your sick people there?
Dr. MARTIN. That is right.

Mr. ZIMMERMAN. And your sick people do not want to use the white margarine on their toast, and their trays, and so forth?

Dr. MARTIN. That is correct.

Mr. ZIMMERMAN. They want the colored product?

Dr. MARTIN. That is right.

Mr. ZIMMERMAN. And in order to give them that colored product you would have to pay a tax of $600. That is what you are asking to be removed?

Dr. MARTIN. That is right; yes, sir.

Mr. POAGE. You have to pay that tax of $600 even though you buy white margarine and color it, don't you?

Dr. MARTIN. If we color it; yes, sir.

Mr. POAGE. The housewife can buy uncolored margarine-or more correctly, I should say white margarine, because it is bleached-the housewife can buy white margarine and take it home and color it

without paying any kind of a special tax other than the quarter of a cent a pound, but when you color it in your own kitchen for your patients and employees in the hospital you have to pay 10 cents for every pound you color. You are not simply talking about buying colored margarine. I want to get that point clear. Some of these folks may have the idea you want to buy colored margarine. You can't even buy white margarine and color it without paying a $600 a year manufacturer's tax and then paying 10 cents for every pound you use; is that right?

Dr. MARTIN. That is correct; yes, sir.

Mr. POAGE. Now, then, isn't there a further discrimination-but, first, let me find out, is a large portion of your patients comprised of charity patients?

Dr. MARTIN. A considerable portion are free patients; yes, sir. Mr. POAGE. You give them the same food, of course, that you give the paying patients?

Dr. MARTIN. Oh, yes; the same food.

Mr. POAGE. Now, if those patients were in a sanitorium, hospital, or other institution run by the Federal Government, or by a State or political subdivision thereof, in the exercise of essential Government functions, they might color oleomargarine without paying any tax. Is that right?

Dr. MARTIN. They may color oleomargarine without paying any tax whatsoever.

Mr. POAGE. So that if it is a State hospital or a Federal hospital there is no tax. They can buy white margarine and color it without paying any tax?

Dr. MARTIN. That is true.

Mr. POAGE. But when you, sir, render the same kind of charity, and do a charitable act by picking up somebody who is hurt and give him hospitalization, the law says that you must not give them the same kind of food that the State of Maryland, for instance, can give, but you must give them cow's butter, not because it is any better, because the studies of scientists disprove that, but because somebody wants to get a tax out of it and somebody wants to keep somebody from selling it. You have thus got to be burdened and are able to take care of that many less charity cases, because if you have to pay $600 for the margarine tax, you are not going to be able to spend that $600 on charity

Mr. PHILLIPS. Are you turning patients away from your hospital because you can't secure butter?

Dr. MARTIN. No, sir; we are not; not for that reason.

Mr. PHILLIPS. That's all.

Mr. POAGE. Well, if you had that $600 you could take care of some of your patients longer than you have taken care of them; could you not?

Dr. MARTIN. We don't pay the tax, and therefore we don't use the oleomargarine in that way.

Mr. PHILLIPS. I am really sympathetic with what the gentleman says, but you still have the $600 which Mr. Poage contends you have not available for the treatment of patients.