privilege of parading under false colors and made it stand on its own merits or die in the market places. Today, margarine is proud of its name, the manufacturers show absolutely no reluctance in advertising the ingredients and the public wants it. They want it yellow. They can have it yellow, fact is, it is naturally yellow, but Congress says, "no," if you want it yellow, you must pay a fine. Congress said this tax was not a revenue-raising law but to protect the public. What protection does it or can it now afford? Gentlemen, let me reiterate our stand. We have faith in both butter and margarine. Dairy products are used in the manufacture of margarine and the oil producers find a ready market for their cottonseed, soybean, peanut, and other meals on the dairy farms of the Nation. Let me also reiterate that the tax on margarine has served its purpose, it has no further use and has no further right in our system of free enterprise. On behalf of those I am privileged to represent and on behalf of the margarine consumers, I ask that you lend your every effort to see that this discriminatory trade barrier is removed from the tax laws of our Nation. ASSOCIATION, SOUTHERN COMMISSIONERS OF AGRICULTURE, By J. ROY JONES, Vice President. STATE OF SOUTH CAROLINA, By J. ROY JONES, Commissioner of Agriculture. STATEMENT FILED ON BEHALF OF THE NATIONAL EDUCATION ASSOCIATION BY H. FRANCES BOYER, LEGISLATIVE-FEDERAL RELATIONS DIVISION I represent the National Education Association, which has a present membership of over 300,000 teachers and administrators. Its business is transacted through a representative assembly, boards, committees, and commissions. Since the beginning of World War II living costs in the United States have steadily increased while the income of teachers has lagged far behind. This is to say, living costs have mounted more rapidly than teacher income. In many States today the buying power of teachers is below the 1935-39 level. It is an understatement rather than an overstatement to say that half of the teachers in our public schools today are forced to subsist on a near-poverty level. The imposition of any tax upon any object that increases the cost of living is a direct attack not only upon the well-being of teachers but upon the basic educational safety of the Nation. The present tax program imposed upon oleomargarine is vicious and therefore unsound. It is offensive to the principle of justice and the spirit of fair play which lies at the very base of the American way of life. The tax on oleomargarine should accordingly be adjusted downward, if not entirely removed. This is in line with a basically sound economy. It treats the the consumer fairly. It places production on a sound basis. For these reasons the National Education Association supports the proposal to eliminate the inexcusable and unjustified levies now imposed upon oleomargarine. The CHAIRMAN. Are there any others whose names have not been mentioned who desire to file a statement at this time on behalf of the legislation? Mr. PATTON. I am Clifford Patton of the National Association of Consumers and I desire to file a statement. The CHAIRMAN. If there is no objection to the requests that have been made that the organizations and individuals who have been named and others be permitted to file statements at this time, the Chair will state those statements will be made a part of the record at this point. (The statement referred to above is as follows:) STATEMENT IN BEHALF OF THE NATIONAL ASSOCIATION OF CONSUMERS MR. CHAIRMAN, MEMBERS of the Committee: My name is Clifford Patton, and I am appearing here on behalf of the National Association of Consumers. The NAC is a politically nonpartisan, nonprofit, noncommercial organization devoted to the advancement and protection of the economic welfare of Americans as consumers. Its board of directors, members, chapters, and affiliated groups represent a fair cross section of consumer interests of the Nation. Its monthly publication, Consumers on the March, goes to readers in 950 communities and in every State in the Union. The National Association of Consumers strongly urges the repeal of Federal taxes and license fees on the manufacture and sale of margarine. It is an impelling necessity that this action be taken by the Congress. Repeal of these laws would benefit millions of families in the low-income bracket. All consumers should be able to secure the best possible diet at the lowest cost. The average family, living under the impact of the high cost of foods, spends 40 percent of its income for food-the largest single item in the average family's budget. Millions of families desperately need protection against high prices. We see no reason why further unnecessary hardships should be imposed upon the consumer by a continuation of outmoded and antiquated tax and license fees upon margarine. Of all the taxes levied against a commodity, that on margarine has been one of the most unfair and discriminatory. The forces making for these taxes and license fees have perpetuated a tax burden on the American consumer which was not of his making. The tax law no longer serves its original purpose. The trite contention that margarine would be misrepresented as butter has been refuted by experience. Margarine is sold and labeled for what it is. When it is colored, the colored matter is no more artificial than that used in butter and it is more honest, for colored butter is not so labeled. According to the Bureau of Labor Statistics' recent report on the city workers' family budget, the cost of goods and services for a family of 4 ranges from $2,734 in New Orleans to $3,111 in Washington, D. C.-the lowest and highest cost cities among the 34 cities surveyed. The average family needs 79 pounds of butter or margarine annually, according to nutritional standards-but the consumption of both butter and margarine by an average family of 4 was about 64 pounds in 1947, as against 80 pounds in prewar years. The reason for this underconsumption is the exorbitant high price of butter and restrictive taxes and discriminatory legislation on margarine. Only one industry in America-the butter industry-has even been successful in securing Federal legislation for even a partial monopoly of a market for its product. In spite of this crippling legislation, the production of margarine and its popularity have increased greatly during the war and since. A valuable byproduct of consumer rationing during the war was that it induced millions of consumers to try margarine for the first time, because of the large savings in red points made possible thereby. Since the end of the OPA, dollar savings have taken the place of red point savings. Butter at 79 cents to $1—even $1.20 a pound is not for the masses of housewives in America today. It is significant that margarine retails for about 40 cents a pound-yet the price would be greatly reduced, were it not for the taxes and license fees on the manufacture and sale of margarine. To say that the average butter consumption is at the rate of 11 pounds per capita per year is to cover up the fact that the figure is much higher for the well to do and is much lower for those whom the high cost of living really pinches. Because of the progress which margarine has made, the opponents of margarine now state that they have no objection to the sale of margarine white. For example, the National Cooperative Milk Producers' Federation, in its News for Dairy Co-ops, under the date January 17, 1948, states, "Dairy farmers are not opposed to the sale and use of oleomargarine. They do object to permitting yellow oleomargarine without legal protection in behalf of both consumers and the dairy industry." The opponents have repeatedly said that "yellow" is "butter's trade-mark," and that the coloring of margarine by the manufacturer is a "fraud." To ask the average consumer to take this argument at its face value is to insult his intelligence. The National Cooperative Milk Producers' Federation has a booklet How's That Again? in which a housewife is portrayed enjoying coloring margarine in the kitchen. To us, this is nonsense. Furthermore, in approving of the housewife having fun in this way, the booklet actually approves of the addition of "Butter's trade-mark" in the home, while it disapproves of its addition by the manufacturer. We know that the busy housewife does not cherish the extra chore of coloring margarine. Moreover, this home process results in wasting 2 to 22 percent of each pound colored. Thus an estimated 15,000,000 to 18,000,000 pounds of margarine were wasted in 1947. If there ever was a time when American consumers should conserve food, now is the time. We The National Cooperative Milk Producers' Federation has another booklet, Colored Oleo Sold As Butter, in which it plays up the danger of margarine being. sold in butter wrappers by crooked middlemen and argues that this danger would be much greater if margarine were colored yellow by the manufacturers. We concede that there is nothing to fear from the manufacturer on this score. know very well that nearly all margarine is distributed by the manufacturers through their own branch houses, or is shipped direct to chain-store warehouses. As a general rule, margarine is not simply turned loose by the manufacturer to be marketed by anyone who wants to get his hands on it. It violates every article of common sense to imagine that packages of margarine in great numbers would be unwrapped and wrapped again and labeled "butter." In an attempt to strangle the margarine industry, the opponents of margarine frequently cite six old cases of the fraudulent sale of margarine sold as butter. But according to notices of judgments under the Federal Food, Drug, and Cosmetic Act, in the period between 1933 and June 1947, when butter's volume was 4 to 5 times that of margarine, butter was seized for various reasons 2,292 times as compared with 21 times for margarine-a ratio of 100 to 1. But at no time was margarine seized for contamination, filth, addition of foreign matter, decomposition, or for similar reasons. Margarine's only seizure under the Food and Drug Administration-21 in number-were for slightly less than 80 percent fat content. Margarine is probably the most closely regulated product on the grocery market, and will remain so, if the legislation before this committee passes. It is controlled by the Pure Food and Drug Administration. It is manufactured in accordance with the standards of the Federal Trade Commission. Labeling requirements are set out in the greatest detail. State agents are on the look-out for any possible misrepresentation. There is not the slightest danger that consumers will be the victims of fraudulent packaging of margarine as butter if adequate repeal legislation is enacted. The consumer looks in vain for a simple, direct answer from the opponents of margarine to a question asked thousands of times: if margarine should be taxed because it is butter yellow, why should not Koroseal be taxed because it imitates leather almost perfectly in appearance, or why should not metal furniture, finished to resemble wood furniture, be taxed to protect the "natural" product?—or why should not vegetable shortening be taxed because it resembles lard?—and so on, ad infinitum. The plain fact is that the opponents of margarine want to discourage the consumption of margarine by compelling the housewife, to take it in a form that is much less attractive to her than the manufacturer could make it without additional cost. Gentlemen, repeal of the Federal taxes on margarine will benefit the consumer in three specific ways: first, in terms of price; second, in terms of convenience; and third, in terms of additional consumption of a basic food. The Federal antimargarine law is the cornerstone of a structure of legislation which adds cents per pound to the price which the consumer pays. This law has forced the low-income group to pay higher prices for one of the essential foods, when it is to the best interest of this country to keep unnecessary prices down. Failure to protect the consumer's economic welfare at this time would add fuel to the pent-up resentment of the consumer toward high prices, and the difficulties of obtaining basic foods. With milk at such fantastic prices, many consumers have cut down their consumption of this essential food. Many mothers have to manage for their families with less of the protective foods, and they have felt outraged and helpless as they have seen their living standards going steadily downward because of high prices. **With more margarine on the market and available at more neighborhood stores, consumers could afford more of this and other nutritious foods. At the retail level, only one half of the grocery stores handle uncolored margarine. The small neighborhood grocer is unable to pay the fees or is unable to cope with the restrictive legislation. Even a volume which totaled 725 million pounds in 1947 could not tip the scales of a $6 license fee for one grocer out of two. As for colored margarine, for which the retail license fee is $48, and the consumer price is upped by 10 cents a pound, only a handful of grocers are licensed to handle the product, even in States where no local prohibitions are in effect. Thus, at every step, the development of the industry to optimum efficiency is hindered and free competition is discouraged. The consumer pays the bill. If State and Federal taxes and license fees on margarine were repealed, the consumer would save an estimated 19 million dollars a year. Butter consumption per capita has decreased from 18 pounds prewar to 11 pounds in 1947. No one will argue that the price is beyond reach of most consumers, especially families below the middle-income groups. Up until these hearings, the Federal Government has held out no hope that this situation will materially improve, and the president of one of the Nation's largest dairy companies, on January 28, 1948, advised his stockholders that if butter production is to rise under present conditions, the price "would have to rise considerably above the present level." This is the prospect which the opponents of margarine hold out while trying to perpetuate their semimonopoly. The Assistant Secretary of Agriculture, testifying before the Senate Committee on Banking and Currency on January 29, 1948, referred at length to the prospective shortage of meat and to the fact that a rationing program restricted to meat alone would raise supply and price problems in other fields. He then said: "Topmost on the list of competitive and related foods are the food fats and oils * * * their interrelationship with other foods and especially with meat is surprisingly close. Cause and effect would thus reach butter, oleomargarine, and shortenings of vegetable origin. They also could become problems to be quickly encountered as the result of limited rationing." Regardless of the question of rationing, certainly most consumers will agree that shortages which prevail at the present time should not be deliberately perpetuated. The Federal antimargarine law does precisely that. In view of present shortages, the remarkable fact is that per capita consumption of margarine has increased only from 3 pounds to 5 pounds annually, while butter has declined from 18 pounds to 11 pounds per capita. A substantial gap remains between the consumption of both spreads before the war (reaching a between-war peak of 20.5 pounds in 1926) and now. Margarine could fill up this gap economically and with equal nutritional advantage, if antimargarine laws did not hold down margarine consumption. Thus, it is obvious that for these foods, total consumption today is much lower than it was before the war, and is much less well distributed among consumer groups. Most consumers below the middle-income bracket have forgotten the taste of butter. What consumers need and want is a palatable, nutritious, and attractive table spread at a reasonable price. The repeal of the antimargarine laws would contribute to the fulfillment of this need. The National Association of Consumers, therefore, urges this committee to wipe the slate clean of the long-standing discriminatory legislation perpetuated by the opponents of margarine. Mr. MURRAY. I ask unanimous consent, Mr. Chairman, at this juncture in the record if any experiment has been put on in the United States showing that a vegetable oil is equal to animal fat, that it be put in at this point. The CHAIRMAN. If anyone has the answer to that question, we will be glad to put it in the record. The committee will adjourn until 10 o'clock tomorrow morning. (The following statements were subsequently submitted for the record:) THE RHODE ISLAND FEDERATION OF BUSINESS AND PROFESSIONAL WOMEN'S CLUBS, Providence 5, R. I., March 18, 1948. Representative CLIFFORD R. HOPE, Chairman, House Committee on Agriculture, New House Office Building, Washington 25, D. C. MY DEAR MR. HOPE: At a State board meeting held on March 10 of the Rhode Island Federation of Business and Professional Women's Clubs, it was voted that I write direct to you, suggesting that this letter be made a part of the record of the hearings to repeal or modify the Federal antimargarine law. We feel that the housewife should not be compelled to continue paying a tax of 10 cents per pound to purchase yellow margarine, but rather that it should be colored at the factory at no extra cost to the consumer. Sincerely yours, JANE MANN, Chairman Legislation. HONOLULU, March 10, 1948. JOSEPH FARRINGTON, Washington, D. C.: Our organization strongly urge you work untiringly for repeal of tax on colored margarine. Hon. JOSEPH R. FARRINGTON, House of Representatives, Washington, D. C.: WE THE WOMEN OF HAWAII, HONOLULU, March 10, 1948. We strongly feel that yellow margarine should not be taxed otherwise than is the white. A correction of the present injustice would materially assist in reducing the high cost of living. The Honorable WILLIAM C. COLE, THEO H. DAVIES & Co., LTD., ST. JOSEPH, Mo., March 11, 1948. House of Representatives, Washington, D. C.: DEAR SIR: As one of the many, many users of margarine, I want you to know we are watching with great interest to see how Congress acts on this problem. We feel that the taxes on margarine are unfair discrimination and it makes us furious that we have to mix in the color. I sincerely trust that you will vote to remedy this situation. Mrs. Z. D. Waller. BATON ROUGE 5, LA., March 11, 1948. JIMMY MORRISON, Representative, Sixth Congressional District, House of Representatives, Washington, D. C. DEAR. MR. MORRISON: I'm writing in reference to a bill now pending in Congress relative to taxes placed against margarine. Taxes that I deem discriminatory and unnecessary and have long considered un-American. I am of the opinion that the time has now come to do away with these unfair taxes against margarine. My understanding is that the following conditions exist in regard to margarine: (1) A customer pays the regular economy (?) price plus a 10-cent Federal tax. (2) My grocer is charged an annual tax of $48 for handling margerine. (3) That, in some instances, other special fees are levied against margerine. (4) That a New Orleans firm reports that it costs that firm $100 per month to fill out the forms required by the Government (required of anyone who sells margarine wholesale). (Absurd.) (5) That a special tax is assessed if the margerine is sold already colored (which is entirely absurd). Butter prices are sky high and the average housewife cannot afford to use it— that leaves us only margarine for our bread, and to be used in cooking. It is completely absurd that margarine should be taxed unduly; thereby raising the price of that commodity so that the lower-income-brackets people cannot afford even margarine. And to stick a further tax on margarine because it has been colored by the manufacturer is completely "coo coo"-butter is not taxed for coloring; and I understand that identically the same food coloring is used in commercial butter that is used in margerine. Many thousands of people here in Louisiana feel precisely as I do about the situation-feel that the time has now come to do away with these foolish discriminatory taxes against margarine. These thousands of Louisianians may not take the time, or effort, to write to you about this unfair condition but they are definitely against margarine being taxed unduly. All of us are looking to you to get in there and "pitch" for us; and help overcome this ridiculous condition. I'd appreciate a copy of the "margarine bill" if you can secure one for me. Thanking you, I am, Mrs. CHESTER W. JAMES. |