institutions like hospitals, jails, and other public institutions are likewise prohibited from using oleomargarine in those 17 States.

While oleomargarine is made from vegetable oils instead of milk, it is just as nutritious as butter. Of course, the vital factor is that of price. Oleomargarine is sold at approximately 30 cents a pound and butter at 90 cents. The tax is thus wholly unnecessary, serving no purpose other than that of penalty and of deference to the Dairymen's League and its lobby.

It is time to call a halt to this licensing and tax and repeal the sanctions against a wholesome, inexpensive article of diet.

Statement of Hon. Robert Nodar, Jr., Sixth District, New York, in FurTHERANCE OF LEGISLATION TO REPEAL ALL FEDERAL TAXES ON MARGARINE

Mr. Chairman, legislation now before the committee to repeal Federal taxes on margarine has my wholehearted support. My support, I might add, does not stem from any desire to increase the use of margarine or to discourage the use of butter. Rather, it is based on the nonelasticity of the pocketbooks of those I represent. They are entitled to choose for themselves between margarine and butter. The fact that the retail price of butter is over twice that of margarine is a highly important factor in making this choice. If the decision is made by the consumer in favor of margarine he should not be penalized.

To virtually prohibit the sale of colored margarine, by means of the 10-cents-apound tax now in effect, is discrimination of the worst sort. The tax is an unfair burden imposed by a minority on a majority of Americans. To continue a tax on one product for the benefit of a competing product when we are all endeavoring to lower the cost of living is unconscionable. The American housewife, bedeviled as she is by high prices, can ill spare the time or patience required to color margarine in the kitchen in order to avoid this senseless tax.

It is respectfully urged that the committee take favorable action with respect to legislation to repeal all Federal taxes on margarine.

STATEMENT OF SENATOR BURNET R. MAYBANK, OF SOUTH CAROLINA

Mr. Chairman, I came here for the purpose of proposing an amendment to H. R. 4790. This amendment would repeal certain taxes on oleomargarine, amend the definition of manufacturer of oleomargarine and repeal the occupational tax on manufacturers, wholesalers, and retailers of oleomargarine.

Under the present laws uncolored margarine is taxed at the rate of one-fourth of a cent per pound while a 10-cents-per-pound tax is paid for colored margarine. The license fees are equally discriminatory. For example:

Add to these figures a $600 annual fee for coloring the product and you begin to see the unjustness of this discrimination both to the manufacturer and the housewife.

These complex and burdensome regulations make anyone coloring margarine yellow, and serving it to customers or paying guests, liable to a manufacturers' license fee of $600 a year and 10 cents a pound tax on each pound so colored.

These regulations are understandable when we remember the quality of this product when it was first placed on the market and its one claim to consideration was its economy. The present tax and license fees were set by the Congress of 1902-46 years ago. These were imposed after the crippling taxes and fees of the Oleomargarine Act of 1886. So it is that, after 60 years, the Federal Government still imposes the very same taxes on margarine--the only pure food in the land so restricted by national laws.

Mr. Chairman, it is unthinkable, in the light of page after page of testimony such as has been given on behalf of this product, that these ancient and outmoded laws should still rest among our ladened statutes. These laws still stand despite the fact that a small army of witnesses has, in recent years, appeared before committee meeting after committee meeting. They have represented

science, manufacturers, wholesalers, retailers, cotton, soybean, livestock, and peanut producers, labor, consumers, and hospitals and they have unequivocally urged the repeal of the discriminatory margarine taxes and license fees. Therefore, I am requesting the Senate Finance Committee to incorporate my bill in H. R. 4790.

American margarine is made today from domestic vegetable oils-oils derived from soybeans, cottonseed, peanuts, and corn. Margarine has become the second largest user of soybean oil and also uses about one-fourth of all the cottonseed oil refined in this country. Farmers of 44 States produce the products from which margarine oils are taken. Because of the substantially increased demand for margarine, manufacturers are encouraging production of more of these farm products which produce these fine domestic food oils.

The issue at hand has boiled down to two basic points: Color and definition of the word "manufacturer." The only basic difference between margarine and butter is that margarine is vegetable fat, butter an animal fat product. There is actually no perceptible nutritive difference. Each offers about 3,300 calories per pound. The amount of vitamin A in butter varies according to seasonal and other factors; while in margarine it is maximum and uniform the year round. Both products are equally digestible.

Report after report by medical associations and nutritional scientists declare margarine to be a nutritious, high-quality food.

An official definition and standard of identity was adopted by the United States Food and Drug Administration in 1941 under the Federal Food, Drug and Cosmetic Act of 1938. Under it, margarine has a minimum fat content of 80 percent; the actual average figure is slightly more. The standard requires fortified margarine to contain a minimum of 9,000 U. S. P. units of vitamin A per pound. But 99 percent of all margarine is now fortified with 15,000 units of vitamin, the content always being shown on the label. This margarine fortification is endorsed by the American Medical Association and leading nutritionists.

The nutritional value of the product dispensed with on the word of competent authorities, we come to color.

Artificial color adds nothing to the direct nutritional value of foods. It is not nutritive in itself. But, by satisfying natural color perceptions in relation to the palate, it promotes digestion and thus indirectly aids the process of nutritive assimilation.

A product's "right" to any color is established by consumer preference. There is no "patent" or "natural "or “common law trade-mark” to yellow for butter, for example.

The argument that all that is being done, in the coloring of butter, is restoring a "uniform" yellow to the product, falls to the ground. For one thing, butter is not colored uniformly, but to meet market demands. Thus, butter coloring is done to suit regional taste preferences—the New York market, I am told, generally prefers butter whiter than Wichita or Kansas City markets.

Butter is only one of the hundreds of food products using artificial coloring. Butter itself uses artificial coloring during most of the months of the year, because butter produced from cows on winter forage is pale yellow in color; frequently white.

Further, the ingredient of butter (cream) has no more, or even less, claim to yellow than the ingredients of margarine (vegetable oils). Cottonseed, soybean, peanut, and corn oil are yellow in color, varying, of course, in degree. Nevertheless, in their natural state, they frequently could convey to the finished product a yellow tint. Because of this, the oil ingredients of margarine must be bleached to avoid the Federal tax of 10 cents a pound on yellow margarine and the other penalties imposed on yellow margarine.

Mar

Artificial coloring is permitted by the United States Pure Food and Drug Administration when the colors used are certified United States Pure Food and Drug Administration colors. There are scores of these colors, each of which has been approved by the Administration. Under the Pure Food, Drug and Cosmetic Act of 1938, all food products using artificial coloring must label that fact. garine is made under a Pure Food and Drug Administration Standard of Identity and the yellow coloring, used in or packed with margarine, is so labeled. Butter, *cheese, and ice cream, however, enjoy special and unique exemption from labeling artificial coloring under the act. of 1923.

The effect of the Federal tax and other restrictions on yellow margarine has been to limit that food in production and distribution. In 1946, only 58,000,000 pounds of yellow margarine were produced compared with 514,000,000 pounds of uncolored margarine. A large share of the colored margarine produced was for Government purchase; the Government not paying the tax to itself.

Margarine is denied the use of yellow simply because the butter industry has misused its political power to drive a competitive product off the counter. This is discrimination and a violation of the American principle of fair, openly competitive business.

One of the most unjust points of the Federal law, at least from a monetary value, is the definition of the word manufacturer. Under the regulations, restaurants, hotels, clubs, charitable institutions, schools, hospitals, churches, and other institutions are all liable to the manufacturers' license fee of $600 per annum and 10 cents a pound tax for each pound colored. There is an exception, “where an institution under the complete control of the United States, or a State or political subdivision thereof, in the exercise of an essential governmental function, colors margarine for use of inmates or employees of the institution."

Mr. Chairman, it is my sincere belief that these regulations are pointedly designed to restrain the free marketing privileges of one group of manufacturers. Such an archaic statute in our modern Federal Code makes it almost as incongruous with free trade as the sight of a mounted cavalryman riding out against a Sherman tank.

In the name of free enterprise, in order that this long ignored discrimination may be corrected, I ask the Senate Finance Committee to incorporate my amendment into the Revenue Act of 1948.

The CHAIRMAN. The Chair at this time would like to present for the record a statement submitted by Mr. John N. Hatfield, of the American Hospital Association. If there is no objection on the part of the committee, it will be made a part of the record at this time. (The statement of Mr. Hatfield is as follows:)

STATEMENT OF JOHN N. HATFIELD, CHAIRMAN, COUNCIL ON GOVERNMENT RELATIONS, AMERICAN HOSPITAL ASSOCIATION

Mr. Chairman and committee members: My name is John N. Hatfield. I am administrator of the Pennsylvania Hospital in Philadelphia, and chairman of the council on Government relations of the American Hospital Association. Today I wish to speak to you on behalf of my own hospital and also on behalf of the 4,000 hospitals of this Nation which are members of the American Hospital Association. The Pennsylvania Hospital, with which I have been identified for 25 years and of which I have been administrator for more than 17 years, was founded nearly 200 years ago to provide hospital service to the citizens of the British colonies. Benjamin Franklin was the founder of the hospital and a member of our first board of managers. He and his fellow citizens recognized the necessity of making hospital care available through an organization which would be primarily devoted to the service of the community. Subsequent boards of managers have followed this principle, and I am proud to say that the Pennsylvania Hospital has a long record of meritorious service to the community which it serves.

During the last fiscal year the Pennsylvania Hospital cared for 13,722 inpatients. The total number of adult in-patient days was 119,937. To these inpatients we served approximately 375,000 meals. In addition we served approximately 394,000 meals to employees and members of our staff on duty in the hospital providing care to sick people.

You will see that in our hospital we do a large business in food. It is not one of our major activities, but we definitely have a responsibility for feeding sick persons in our care and for feeding people who provide care to the sick. Normally we would have consumed 16,020 pounds of butter last year. Butter was served to our patients in quantities sufficient to meet minimum diet-therapy needs. Employees maintained at the hospital received butter once daily, while the others received no butter. The price of butter was much too high to permit serving it at all meals and in normal quantities. As a matter of fact we consumed 6,652 pounds of butter last year- -one-seventh of normal.

Although I have been speaking to you specifically on the basis of my own experience as administrator of the oldest hospital in the country, I wish you would bear in mind that I speak in a representative capacity for most of the hospitals. of the country. The American Hospital Association has nearly 4,000 institutional members including proprietary hospitals; nonprofit hospitals such as those of churches and religious orders and community nonprofit corporations; and governmental hospitals including hospitals of cities, counties, States, and the Federal Government. In our membership we have approximately 85 percent of the general hospital beds of the Nation and approximately 55 percent of the mental

and tubercular and other long-term hospital beds. Since this is a Federal tax its burden applies equally to every hospital in the Nation.

The nature of hospital service is such that the average hospital has a double dietary problem. It must provide food for sick people. It must also provide food for employees. In 1946 the annual survey of the American Medical Association showed that the average daily census for all hospitals was 1,239,454. Feeding these people presents a highly specialized problem for which most hospitals have trained and experienced dietitians. General and special hospitals caring for shortterm cases require an average of 11⁄2 employees per patient. However, in longterm hospitals only a third of this is required. On the average hospitals require 73 employees per 100 patients. Thus, in addition to the 1,239,454 patients, hospitals also had to feed approximately 830,000 employees, or more than 2,000,000 people every day.

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Of course not every hospital employee has all his meals at the hospital. does every patient consume 3 meals a day; some require more and the problem of special diets complicates the picture. But it has been estimated that in this Nation nearly 2,000,000,000 meals of all kinds were served in hospitals last year. This indicates a feeding problem of major proportions, and I think that our viewpoint with relation to food problems is significant. It means too that the normal butter or margarine consumption would have been approximately 37,500,000 pounds.

Now I should make it clear that we do not desire to serve oleomargarine to every patient in our hospital and to our employees nor to discontinue the purchase of butter entirely just because of the differential in price. People come to our hospital to receive good care which will restore them to health. A necessary part of that care is adequate and proper food. It is not the aim of our hospitals to provide luxury care in every case. We owe it to the welfare of our patients and to the community which we serve to be as sensible and economical in our purchases of supplies as we can be without injuring or jeopardizing the quality of care which we render.

As a matter of fact I would not be here today if there were any question as to the relative food values of oleomargarine and butter. For many years it has been popularly recognized that there is little difference in food value between these two agricultural products. And, now, we understand that there have been conclusive scientific findings on this question. We presume that your committee will have this information available in considering the question before you.

The principal purpose of our statement is to point out to you that the present tax laws establish an effective prohibition on the use of oleomargarine in many cases in the provision of hospital care. This prohibition adds to our difficulty and to our expense in providing hospital service. It curtails the amount of service we can give, and it adds to the expense of patients who require care in our hospitals. As such, this tax is a tax upon distress and in principle we believe it is wrong.

Under the present law, if a hospital wishes to purchase colored oleomargarine, it must pay a tax of 10 cents per pound. It is not only the amount of tax which imposes a burden in this case. The tax has made it more difficult for hospitals to purchase colored oleomargarine. We have been told that a large percentage of the oleomargarine on the market today has had the natural color of its ingredients removed because of this tax law, and it is not always easy to buy the colored product.

However, if the hospital wishes to color the bleached oleomargarine, it must pay a manufacturer's license fee of $600 per year. Senator Fulbright last December pointed out that all of the Federal taxes and license fees on oleomargarine amounted to less than $5,000,000 in 1946. It is plain that these taxes are not intended to produce revenue but to use esthetic senses of consumers as a means of forcing the use of one food instead of another. The result is to deny the hospital the right to choose which food it will serve to its patients and employees. This, again, is a burden upon the provision of care to sick people, a tax upon distress, and we believe that in principle it is wrong.

Hospitals today are faced with a dilemma arising from inflationary conditions. Increases in wages to hospital personnel and increases in the cost of equipment and supplies and services have added tremendously to our burden. Besides, hospital care is more elaborate and more costly than ever before. We must either curtail the amount of service which we provide or raise our rates again and again. Reduction in the essential quality of hospital care is unthinkable. Raising hospital rates will certainly make it more difficult for persons who need hospitalization to receive the care which they should have. Consequently we must eliminate all unnecessary costs in providing to the citizens of our communities the finest

quality of hospital service at our command. As I said before, we cannot afford to provide luxury service. We must be economical in our buying and we must secure at the lowest possible prices those things which are necessary to provide good care.

The tax discrimination between butter and oleomargarine on a purely economic basis is a violation of this principle. It has forced us to buy a luxury food where in many cases a utility food would be preferable. It has denied us the right to choose between these foods on the basis of nutritional value. Under the present situation sick people are forced to pay an unjust tribute to a long-fostered prejudice which has no factual or scientific support.

In

The council on Government relations of the American Hospital Association has voted that the association should support any effort to remove this unjust tax. While we think that it is wrong in principle and that it is an unjust burden upon all consumers, we would like to urge that your committee give particular attention to the possibility of exempting hospitals from these tax provisions. every hospital, food is prepared and served to patients and employees under the direction of highly trained people who are able to make a sound judgment in their choice of food on the basis of known food value. They should be free to make this choice on the basis of what is best for the patient. It is most unfair to be forced to make that choice on the basis of economic values alone, or because of financial advantage to any self-interested groups. Whatever the decision of Congress may be with regard to its treatment of the American consumers as a whole, we sincerely hope that Congress may see fit to correct this legislation as it applies to the use of oleomargarine in hospitals.

Mr. POAGE. Mr. Chairman, we also have a statement here from Mrs. Sylvia B. Gottlieb, representing the Communications Workers of America, who expected to testify this morning. I ask that that statement be filed also.

I also ask leave to file statements from the consumers groups, the American Home Economics Association, the National Education Association, the New York City branch of the American Association of University Women, the Southern Commissioners of Agriculture, and J. Roy Jones, Commissioner of Agriculture for the State of South Carolina.

The CHAIRMAN. Are there any objections? If not, the statements referred to by Mr. Poage will be made a part of the record at this point.

(The above statements are as follows:)

Hon CLIFFORD HOPE,

AMERICAN HOME ECONOMICS ASSOCIATION,
Washington 1 D. C., March 10, 1948.

Chairman of Committee on Agriculture, House Office Building,

Washington, D. C.

DEAR MR. HOPE: The American Home Economics Association is pleased to present to you and your committee its attitude pertaining to the removal of all Federal taxes on margarine, both colored and uncolored.

As you know, the American Home Economics Association is a professional organization with affiliated groups in 48 States, the District of Columbia, and Puerto Rico. Its 18,000 members include home economists who are employed by business firms and industries; dietitians who work in hospitals, social welfare, and public organizations; extension workers; teachers; and school lunchroom directors. It also includes homemakers who have been trained in home economics. Members of the American Home Economics Association work to raise living standards of American families by assisting them to utilize their resources to the best advantage. Discriminatory taxes, such as those imposed on margarine by the Federal Government, lower living standards by making it difficult for families to derive the best values from their resources. We are interested in having these taxes removed.

Discriminatory taxes on margarine are paid when families buy federally taxed margarine. This increased price per pound means less cash for purchasing other foods, such as milk. Taxing margarine, a food no less nutritious than butter but selling for much less, is particularly unfortunate in a time of high prices such as