Hon. CLIFFORD R. HOPE, AMERICAN VETERANS' COMMITTEE (AVC), Chairman, House Agriculture Committee, Washington 25, D. C. DEAR CONGRESSMAN HOPE: The following written statement has been prepared for inclusion with testimony of current hearings on bills designed to repeal or modify Federal margarine tax and license requirements. STATEMENT OF THE AMERICAN VETERANS COMMITTEE (AVC) As the largest exclusive World War II veterans organization (whose membership includes both farmers and urban dwellers) the American Veterans' Committee, (AVC) at its annual convention in Milwaukee, Wis., urged that AVC "serve as a medium for the development of better understanding and cooperation between the two groups.' In furtherance of this policy as well as other convention planks dealing with taxation, the AVC favors the repeal of all taxes and license fees on the distribution and sale of colored and uncolored oleomargarines and margarines. Every thrifty American housewife resents the waste caused by coloring margarine in the home. Every efficient American housewife resents the wasted effort in coloring margarine by hand. The resentment of the housewife is generally directed toward the American farmer, thereby forming another barrier to cooperation and understanding between farmers and city dwellers. There is no doubt that the housewife would prefer to buy precolored margarine. Yet in most cases, because of prohibitive license fees, she is unable to buy precolored margarine even at a premium price. Less than 1 out of every 200 American food retailers have a license to sell colored margarines. The AVC regards this as a completely unjustified restriction on the housewife's freedom of choice. While the AVC is on record as seeking the reduction and gradual elimination of all excise taxes because they are regressive and uneconomic, we are particularly opposed to the margarine tax because it discriminates against, and penalizes one group of farmers and gives an unfair advantage to another farm group. It is a glaring example of taxation being used to favor the economic interests of one group of Americans to the detriment of all other groups. Even as a revenue producer, the margarine tax fails. Although the Treasury Department cannot supply exact figures, it has been reliably estimated that margarine tax and license provisions cost nearly as much to administer as is taken in in revenue. Finally, and most important of all, the margarine tax violates every concept of justice and fair competition. It is an entirely unnecessary interference with free competition, and makes a travesty of the almost universal professions of belief in democratic capitalism. The American Veterans' Committee (AVC) strongly urges the Congress to repeal all taxes and license requirements on this basic food commodity. Sincerely, JOSEPH A. CLORETY, Jr., STATEMENT OF HARVEY W. BROWN, INTERNATIONAL PRESIDENT, INTERNATIONAL ASSOCIATION OF MACHINISTS As head of an organization representing over 600,000 members, and if the families of these members be included, some 2,000,000 people, I would like to add my voice to the popular demand now sweeping the country that all penalizing taxes on margarine be repealed, but particularly the 10-cent tax on colored margarine. The 10-cent tax is so discriminatory and so specious a tax that it has no place on the Federal statute books, altogether apart from the burden it imposes on that section of the population, which unable to buy butter at three times the price of margarine, must, by force of circumstances, buy margarine. As a tax on a food still within the reach of the low- and moderate-income groups, it is as oppressive a tax, sales or otherwise, as can be imagined. The notion that margarine is inferior to butter, from a nutritive point of view, and that, therefore, the public must be protected against it, has long ago been proven false. J. W. M. Bunker, as long ago as 1927, in a study on the health values of fats, put the matter in the American Journal of Public Health as follows: "Beef fat excreted in the milk of a cow is no different in its origin from beef fat which is retained within the animal, although the chemistry of butterfat and oil differ somewhat. Each is a suitable food. The vegetable oils, also, such as olive oil, palm oil, coconut oil, peanut oil, cottonseed oil, and others are all suitable foodstuffs. The digestibility of the various animal and vegetable fats is high." Discussing facts and fancies about food fats in the same journal in 1941, A. J. Carlson of the University of Chicago said: "All the scientific data on the digestibility, flavor, and color of the dietary fats show clearly that there is no significant difference in digestibility between animal and vegetable fats and that the acceptability of those fats in regard to color and flavor is a matter of past conditioning of the individual and of no other significance in nutrition." More recently Carlson, in a study of some 250 children, 2 to 17 years of age, extending over a 2-year period, during which about half of the children studied were served margarine and about half butter, came to the conclusion that there was no perceptible difference in the blood characteristics of the children, nor in their growth and weight. Summing up the results of the study Carlson says: "Whether the greater part of the fat of the diet is derived from vegetable or animal sources has no effect on growth and health as shown by changes in height and weight and health records of children observed over a 2-year period. "During a 2-year period the health of 267 children was uniformly good so far as serious illness is concerned, regardless of whether margarine or butter was the source of the greater part of the fat in the diet. "If there is a growth factor present in butter which is not present in margarine, there is no evidence in the present study that such a factor plays any important part in the growth of children as determined by increases in height and weight. "Margarine is a source of table fat in growing children, as determined by a 2-year study. Children readily accept margarine as a table spread when it is colored and served in pats (The Journal of the American Medical Association, Feb. 7, 1948, Vol. 136, pp. 388-391)." The tax on margarine is not only a tax on that part of the population least able to bear it, but is a stumbling block to dietitians, including the U. S. Department of Agriculture in their effort to improve the nation's diet. It is not the butterfat in milk that is its most important constituent, particularly since the butterfat can be replaced by margarine if reinforced with vitamin A, but the minerals in the milk, particularly calcium. The Assistant Secretary of Agriculture told your committee on October 6, 1947, that his department would like to see the percapita consumption of milk, or its equiavlent in milk products, increased to 1,014 pounds per year. The department's moderate cost diet now allows only 653 pounds, the department's low cost diet allows 546 pounds, while the city worker's family budget, set up by the U. S. Department of Labor, allows only 423 pounds. This, in all cases, is besides butter. The point is, if people were not discouraged from using margarine there would be more whole milk to go around. With a fuller realization of the value of fluid milk, a shift from butter to margarine is slowly developing anyhow. Fifty years ago, at about the turn of the century, the consumption of butter ran around 201⁄2 pounds per person, now it is around 111⁄2 pounds. In 1901 the consumption of margarine amounted to about 11⁄2 pounds per person, now it is around 41⁄2 pounds. The tax is not only retarding the shift, but is imposing an unnecessary expense on the public in making it, not only to the extent of the tax, but, indirectly, through increased prices of milk and its products. The price of milk in large consuming centers is tied to the price of butter, or is otherwise fixed allegedly by monopoly practices in accordance with what the market will bear. With the price of butter at a point only the high-income group can reach, the price of milk and other milk products tends to be correspondingly high, monopoly practices or no monopoly practices. The tax thus feeds the high cost of living at a particularly vulnerable spot. To realize just what pegged prices for milk and milk products mean in the cost of living of the average city family, including workingmen's families, it is only necessary to bear in mind that, in 1946, the average city family of two persons had an income of about $2,000 a year, and the average city family of four persons had an income of about $3,000 a year. In March 1946 the cost of food alone in the city worker's family budget of the U. S. Department of Labor ran from $792 a year for a family of four in Cincinnati to $854 in Seattle. By June 1947 the Cincinnati cost jumped to $1,000, and the Seattle cost to $1,094. In September 1947 the low-cost diet of the U. S. Department of Agriculture cost $725 for a family of four and the moderate-cost diet $1,011. The point is that, at current prices, milk and milk products absorb too large a share of the total amount available to lowincome families for food. The United States Department of Agriculture allows the equivalent of 1,016 quarts a year for milk and its products for a family of four in its low-cost diet, and the equivalent of 1,196 quarts in its moderate-cost diet. This is besides the amount allowed for butter, which could be taken out in the form of margarine. At 20 cents a quart, this means a milk bill of $203 a year for the low-cost families, and $239 for the moderate-cost families. This further means that if the low-cost families really used the amount of milk the Department of Agriculture considers necessary, they would be spending 28 percent of their total food budget for milk and milk products, and the moderate-cost families, 24 percent. This is altogether too much for essentially one item in a food budget. If the margarine tax no longer boosts the price of this item, because of the height already attained, it certainly helps to keep the price from falling. Average weekly factory earnings in 1947 amounted to about $49 a week. This meant about $2,500 a year. The city worker's family budget of the United States Department of Labor, for all purposes including food, ran well over $3,000 a year for a family of four in June 1947. The difference between the income and the cost of the budget only shows how unfair the tax really is. It falls on those least able to pay it. The Department of Labor budget, in fact, allows only margarine in its diet, while the low cost diet of the Department of Agriculture calls mainly for margarine, even if it allows a small amount of butter. The CHAIRMAN. Mr. Pace has raised the question of how much time we may have in which to accept filed statements. I think they should be filed as soon as possible and as far as the Chair is concerned, he assumes that they will be filed before the close of the hearings. The question was raised a while ago as to what the future policy of the committee would be with reference to the hearings, and it was suggested the committee go into executive session. Since that time there have been some informal discussions of the matter, and I think the committee has agreed unanimously that the hearings be continued for an additional day so as to give both sides 3 days. On Thursday, Friday, and Saturday the committee will hear the opponents of the legislation. Mr. WORLEY. Mr. Chairman, how many witnesses are to be heard yet? The CHAIRMAN. The Chair does not know. The Chair has a list of four witnesses in opposition to the legislation who were to have been heard today, had we reached them. I do not know how many more there will be. Mr. HOLMAN. Mr. Chairman, we will use 160 minutes of direct presentation. Mr. ANDRESEN. I might then state that the record shows here that the proponents of the legislation have had 7 hours and 45 minutes. Mr. HOLMAN. I trust we can get through with that much. The CHAIRMAN. Thank you very much. Of course, that still leaves the matter of time uncertain because we do not know how many witnesses will be called. (Whereupon, at 12:05 o'clock p. m., the committee was adjourned until 10 o'clock a. m., March 11.) OLEOMARGARINE TAX REPEAL THURSDAY, MARCH 11, 1948 HOUSE OF REPRESENTATIVES The CHAIRMAN. The committee will come to order. Mr. ANDRESEN. Mr. Chairman, I would like to make a unanimousconsent request. Several Members of Congress have expressed themselves to me that they would like to appear before our committee in opposition to the bills that we are considering. I would like to ask, Mr. Chairman, that they be permitted to do so after we hear the witnesses who are here and who are not Members of Congress, and they can appear at that time. If they do not appear, they may have permission to file statements. Mr. COOLEY. Would you amend that so as to include Members of Congress who would like to speak on behalf of the legislation? Mr. ANDRESEN. We have heard those at length. If the gentleman will look at the record, he will find we have heard them at length. Mr. COOLEY. Suppose there are some others who would like to be heard? Mr. ANDRESEN. They were given permission to file statements and testify before we heard the other witnesses. Certainly, I do not want to preclude any Member from submitting a statement, but I think the understanding with Mr. Poage and Mr. Pace was that statements could be filed for those who were for the bills and who did not personally appear. Mr. PACE. It was my understanding, Mr. Chairman, that those who were called were authors of the legislation and that there are numerous Members of Congress who otherwise would desire the privilege of appearing in person. Mr. ANDRESEN. I thought on the time that we are allotted now, we are supposed to have Mr. PACE. We do not propose to take up your time. The CHAIRMAN. I assume the request of the gentleman from Minnesota means that the members will have time after the opponents have completed their testimony within the agreed time limit. Is there any objection? The Chair hears none. Before we call the first witness, the Chair has a statement here by Mr. C. P. Key, master of the South Carolina State Grange, which he intended to file yesterday, but it was inadvertently overlooked. If there is no objection, the Chair would like to file that now as of yesterday and as a part of the presentation of the proponents of the legislation. 219 |