OPPONENTS Barlow, Floyd S., Ohio Guernsey Breeders' Association, Wooster, Boatwright, Mrs. R. G., Virginia Federation of Women's Clubs, Brenckman, Fred, Washington representative of the National Grange. Brigham, Hon. Elbert S., Montpelier, Vt., former United States Cheney, Mrs. Edith C., member, New York State Assembly, Corning, 426 Elvehjem, C. A., University of Wisconsin, Madison, Wis.... Fifer, Russell, Ohio Dairy Industry Wartime Committee, Columbus, 412 Ferguson, Mrs. Meade, Virginia Federation of Women's Clubs, Rich- 425 Holman, Charles W., National Cooperative Milk Producers' Federa- 321 Iverson, Dr. C. A., Iowa State College, Ames, Iowa.. - Minnesota Dairy Industry Committee, St. Paul, Minn. Meyer, Scott, chairman, United Dairy Committee, Hannibal, Mo- Moscrip, W. S., president, Holstein-Friesian Association, Lake Elmo, Nisbet, J. C., American Jersey Cattle Club, New York City. Prior, Dr. Robert, Washington State Dairy Products Commission, Musser, Karl B., American Guernsey Cattle Club, Peterboro, N. H.. Perdue, William O., Pure Milk Products Cooperative, Fond du Lac, Wis. 409 429 406 369 416 425 Schenck, Hassil E., Indiana Farm Bureau, Indianapolis, Ind- Shaffer, Mrs. L. B., Minnesota Federation of Women's Clubs. Sharp, Herb E., Washington, D. C. Sugden, Mrs. George, president, Minnesota State Federation of 395 Zimmerman, G. J., Nebraska Cooperative Creameries, Omaha, Nebṛ-- 408 HOUSE OF REPRESENTATIVES, The committee met at 10 a. m., Hon. H. P. Fulmer (chairman) presiding. The CHAIRMAN. The committee will come to order. The committee has met this morning to take up H. R. 2400. [H. R. 2400, 78th Cong., 1st sess.] A BILL To eliminate the provisions of the Internal Revenue Code relating to taxes on domestic margarine and relating to license taxes upon manufacturers, wholesalers, and retailers of margarine Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That sections 2300, 2301, 2302, 2303, 2304, 2305, 2307, 2309 (c), 2311, 2312, 3200, 3201, and 3202 of the Internal Revenue Code are repealed. SEC. 2. Section 2306 of the Internal Revenue Code (U. S. C., 1940 edition, title 26, sec. 2306), is amended to read as follows: "SEC. 2306. TAX ON IMPORTED MARGARINE. "All oleomargarine imported from foreign countries shall, in addition to any import duty imposed on the same, pay an internal revenue tax of 15 cents per pound, such tax to be represented by coupon stamps. The stamps shall be affixed and cancelled by the owner or importer of the oleomargarine while it is in the custody of the proper customhouse officers; and the oleomargarine shall not pass out of the custody of said officers until the stamps have been so affixed and cancelled, but shall be put up in wooden packages, each containing not less than ten pounds before the stamps are affixed. Whenever it is necessary to take any oleomargarine so imported to any place other than the public stores of the United States for the purpose of affixing and cancelling such stamps, the collector of customs of the port where such oleomargarine is entered shall designate a bonded warehouse to which it shall be taken, under the control of such customs officer as such collector may direct." SEC. 3. Section 2308 of the Internal Revenue Code (U. S. C., 1940 edition, title 26, sec. 2308), is amended to read as follows: "SEC. 2308. PENALTIES. "(a) REMOVAL OR DEFACEMENT OF STAMPS, MARKS, OR BRANDS.-Any person who shall willfully remove or deface the stamps, marks, or brands on a package containing oleomargarine taxed as provided in this subchapter shall be guilty of a misdemeanor, and shall be punished by a fine of not less than $100 nor more than $2,000, and by imprisonment for not less than thirty days nor more than six months. "(b) PURCHASING FROM IMPORTER OR OWNER OF IMPORTED OLEOMARGARINE WHO HAS NOT PAID SPECIAL TAX.-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 penalty of $100. "(c) EMPTY PACKAGES. "(1) FAILURE TO DESTROY STAMPS.-Any person who willfully neglects or refuses to destroy utterly the stamps on any empty package which contained 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 |