Mr. McCORD. I see; the regulation is based upon the statute. Mr. ZIMMERMAN. If we repeal the law, as this bill proposes to repeal it, then that will repeal the regulation, and then they can make the margarine. Mr. McCORD. If you could repeal that regulation they would not have to do that. Mr. POAGE. I want to repeal the regulation. Mr. KLEBERG. Let the Chair enter this statement in connection with that. The law distinctly carries an inhibition against the sale of colored margarine. Mr. HOPKINS. Without the additional tax. Mr. KLEBERG. So that it is perfectly manifest that without the regulation the situation would be still worse than it is today, because with the regulation the manufacturer of margarine can bleach the oil and sell it without the tax, but without the regulation, which permits the manufacturer to bleach it and things of that sort, it would be more drastic than it is, as to the color limitation. The problem is in the law. It is not a question of which came first, the chicken or the egg. It is perfectly patent. Mr. McCORD. The regulations state that they may bleach the oil before they manufacture it into oleomargarine. If the regulation were not in existence, there would not be any basis for coloring. Mr. HOPKINS. Let me try to clarify that. May I read this regulation? It may be helpful. Mr. McCORD. Yes. Mr. HOPKINS. This is from regulation No. 9 of the United States Treasury Department. I am reading from page 4, article 11: ART. 11. COMMODITY TAX.-The tax on oleomargarine accrues upon sale or removal from the place of manufacture. The tax shall be paid by the manufacturer by affixing stamps to the packages before they are removed from the bonded premises. A fraction of a pound is taxable as a pound. Oleomargarine may be withdrawn tax free (1) for use of the United States (see Regulations 34) or (2) for export (see article 82 and Regulations 73). Now, this is the section: Section 8 (b), Act of August 2, 1886, as amended by section 3, Act of May 9, 1902 (32 Stat. 194), and section 2, Act of March 4, 1931 (46 Stat. 1549). For the purposes of subsection (a) and of section 3, oleomargarine shall be held to be yellow in color when it has a tint or shade containing more than one and six-tenths degrees of yellow, or of yellow and red collectively, but with an excess of yellow over red, measured in the term of Lovibond tintometer scale or its equivalent. Now, it says that it shall be Mr. ZIMMERMAN. Regardless of how it got there. Mr. HOPKINS. If the margarine is colored, or has that color, it is regarded as colored margarine and whether it is put there or is natural, does not matter. Mr. McCORD. What color would margarine be if you did not bleach the oils? Mr. HOPKINS. Pardon me. Mr. McCORD. What color would margarine be if you did not bleach the oils? Mr. HOPKINS. You could make it of a golden color, somewhat comparable with the color of margarine now Mr. ANDRESEN (interposing). Somewhat the color of butter? Mr. HOPKINS. It would depend upon the oils. Certain vegetable oils have a drift of color, but it would have a very definite light golden color, which would make it appetizing to the consumer. Mr. ZIMMERMAN. Following my question a little further; but, if you were permitted to use, as I say, the natural products then you would get the color you wanted and would not have to first bleach the oils and then go through all this other process. Mr. HOPKINS. If the law did not require that we use oil of a certain color, low color, then we could use it and make the yellow-colored margarine. Mr. ZIMMERMAN. Would you oppose the putting of a tax on the use of coloring in butter? Mr. HOPKINS. No; I would not think that butter should be taxed, simply because coloring is put into it to make it appeal to the housewife, the consumer, and it should be colored. Mr. ZIMMERMAN. In other words, you are not in favor of penalizing the dairy people for doing what they say should not be done to margarine? Mr. HOPKINS. Mr. Zimmerman, I am in favor of making butter just as attractive as it possibly can be made for the consumer, without reference to margarine at all. I think margarine should be given the same privilege. Mr. ZIMMERMAN. That is right. But, you do realize that the principal objection and the stock argument against it is this coloring; is it? Mr. HOPKINS. Yes, sir. Now, I think-may I say, or may I read something here that seems to be of concern to some of these gentlemen, because I think they are sincerely anxious to avoid the possibility of fraud, and they do not realize maybe that the pure-food laws protect completely the matter of any violation, and you are going to have again to use or put that same information that you have on the carton even if this law were repealed. I think this might be helpful if I read this. Mr. ZIMMERMAN. All right. Mr. HOPKINS. This is from the United States Code Annotated, titles 20-21, 1942; on page 77, paragraph 331, Prohibited Acts [reading]: The following Acts and the causing thereof are hereby prohibited: (a) The introduction or delivery for introduction into interstate commerce of any food, drug, device and oleomargarine is a food drug, device, or cosmetic that is adulterated or misbranded. (b) The adulteration or misbranding of any food, drug, device, or cosmetic in interstate commerce. (c) The receipt in interstate commerce of any food, drug, device, or cosmetic that is adulterated or misbranded, and the delivery or proffered delivery thereof for pay or otherwise And so forth. That shows the prohibition. I would like to read the penalty for that. The penalty is found over in paragraph 333, page 78. [Reading:] (a) Any person who violates any of the provisions of section 331 shall be guilty of a misdemeanor and shall on conviction thereof be subject to imprisonment for not more than 1 year, or a fine of not more than $1,000, or both such imprisonment and fine; but if the violation is committed after a conviction of such person under this section has become final such person shall be subject to imprisonment for not more than 3 years, or a fine of not more than $10,000, or both such imprisonment and fine. And then-this is a matter in the same document-this is a matter of misbranding. It covers misbranding. [Reading:] ART. 343. MISBRANDED FOOD. A food shall be deemed to be misbranded when (a) If its labeling is false or misleading in any particular. You have got a label there that goes on every package of margarine. (b) If it is offered for sale under the name of another food. This still would exist in the pure-food laws in existence after the repeal of these regulations. Mr. ZIMMERMAN. That is right. Mr. HOPKINS. If margarine is sold as butter, it is in violation of the Pure Food and Drugs Act. Imitation of another food. (c) If it is an imitation of another food, unless its label bears, in type of uniform size and prominence, the word "imitation" and, immediately thereafter, the name of the food imitated. And I would like to call your attention again to the statement that I read this morning from one of the courts of appeal in which the circuit court of appeals showed that margarine was not an imitation of butter and should not be labeled as imitation butter. Mr. KLEBERG. Might I interrupt just for a moment, to ask you if you object to the committee sometime, when you can stop for a moment, to permit Mr. Boice, president of the American National Livestock Association, to make about a 10-minute statement, because he is due to catch a train this evening and has to go cut to Arizona? Mr. HOPKINS. At your convenience, Mr. Chairman. Mr. KLEBERG. Without objection, then, we will have Mr. Boice come up now. Mr. ZIMMERMAN. I can finish a few questions with him when he comes back? Mr. KLEBERG. Yes. Mr. HOPE. And I want a chance sometime. Mr. KLEBERG. You will have a chance immediately following Mr. Zimmerman. Mr. HOPE. I did not have a chance to ask him any questions. Mr. KLEBEPG. Well, that is up to the committee. We can decide that right now before Mr. Boice starts. If you would like to hold a session tomorrow morning, we can decide that right now. Mr. ZIMMERMAN. I think that we ought to accommodate these gentlemen who are here. Mr. POAGE. I move that we have a session tomorrow morning. Mr. KLEBERG. Without objection, we will meet tomorrow morning at 10 o'clock. STATEMENT OF FRANK BOICE, SONOITA, ARIZ., PRESIDENT OF THE AMERICAN NATIONAL LIVESTOCK ASSOCIATION Mr. KLEBERG. Mr. Boice, will you please give the reporter your name? Also your business and your address. Mr. BOICE Mr. Chairman, my name is Frank Boice; my address is Sonoita, Ariz. I am president of the American National Livestock Association. This is a voluntary organization representing the cattle producers of the West. Our membership is made up of a great many individuals and the 18 Western States. In addition to that we have many local cattle organizations. Perhaps I am sure, there are over 100 of the local associations, in addition to the State associations, that are members of the national. I am here to state the position of the industry on margarine. It is a position which has been the same for a great many years. We are interested in margarine, because in the manufacture of margarine one of our byproducts is used. Fat is the second most important byproduct of the beef animal industry. We have always opposed the tax on margarine which made it difficult to sell in the domestic market in competition with other domestic products. It is my understanding that this bill repeals the tax on colored margarine; also the tax on uncolored margarine, and we can go along with it, except that we do not think that the tax should be repealed on margarine made out of foreign products. We realize that after this war there is going to be a surplus of fats and oils and we think that the tax is necessary for the protection of the industry against foreign products. I believe, Mr. Chairman, that is the statement of the position of this industry. Mr. KLEBERG. Any questions? Mr. HOPE. I would like to ask a question. Mr. KLEBERG. Mr. Hope. Mr. HOPE. Mr. Boice, I have here in my hand a statement which was supplied by the proponents of this legislation entitled "Oleomargarine; Materials Used in Manufacture in the United States, 1935 to 1942," and the notation follows that that is compiled from the internal revenue records and internal revenue bulletins. I just call your attention to the fact that this statement shows that out of 436,000,000 pounds of ingredients used in the manufacture of oleomargarine in 1942, that only 37,000,000 pounds comprise animal products. So that there were about 400,000,000 pounds of vegetable products and 37,000,000 pounds of animal products which were used in the year 1942. And 8,000,000 pounds of that 37,000,000 pounds comprised lard. So that there were less than 30,000,000 pounds of animal products, outside of lard, which were used in the manufacture of oleomargarine in 1942. Mr. KLEBERG. Any further questions? Mr. ANDRESEN. Mr. Chairman. Mr. KLEBERG. Mr. Andresen. Mr. ANDRESEN. Mr. Boice, are you of the opinion that all types of oleomargarine use some animal fats? Mr. BOICE. I cannot answer that. I know that it is used in the manufacture of margarine. I cannot answer whether all types use it or not? Mr. ANDRESEN. My understanding of the Pure Food and Drugs Act, when it comes to labeling what is in a product, provides there must be printed on the label what the contents may be. I was looking at the carton, the label of which I have before me, and it says that this oleomargarine contains vegetable, vitamin A added. It says nothing about any animal fat being in it. But, according to the table that Mr. Hope just quoted from, it is quite apparent that not a great deal of animal fat goes into oleo at the present time. That is all. Mr. MURRAY. Mr. Chairman. Mr. KLEBERG. Mr. Murray. Mr. MURRAY. Mr. Boice, I would like to call your attention to a further table I have here from the Department of Agriculture that shows that the State of Arizona in 1942 only produced $40,000,000 worth of livestock products, and Iowa produced over $1,000,000,000; Illinois, something over $600,000,000; Minnesota produced over $600,000,000; Wisconsin over $500,000,000, and so forth down; Missouri practically $500,000,000. In other words, that your association in fact does not represent any large part of the livestock industry of this country. Is that right? Mr. BOICE. I am representing the American National Association, of which the Arizona association is only one member, and a very small member. ago was here Mr. MURRAY. And this same association a few months in Washington opposing the Bankhead bill, which brought corn to parity. Mr. BOICE. What Bankhead bill? Mr. MURRAY. The Bankhead bill which made corn parity price; we had it below parity. Mr. BOICE. Our organization opposed that. Mr. MURRAY. Yes. Mr. BOICE. No. Mr. MURRAY. I beg the gentleman's pardon, because I called him up myself and asked him his position, at his hotel. In other words, I was trying to get some relationship between livestock and feed at that time and your opinion at that time was that we should not have the Bankhead bill raised the price of corn 8 cents to the cattle feeders of the country. Mr. BOICE. You certainly did not talk with me. Mr. MURRAY. I talked with a gentleman of your name at your hotel. Mr. BOICE. You did not talk with me. Mr. MURRAY. In other words, then you believe in the 16-cent ceiling on cattle? Mr. BOICE. I do not believe in any ceiling on cattle. Mr. ZIMMERMAN. Mr. Chairman, I suggest that we confine ourselves to the subject. Mr. MURRAY. I did not yield. |