impair, or purport to impair, the effectiveness of § 403 (c). The order establishes a definition of a food product, and is not a license, to those who produce it, to violate any state or federal labelling requirements. Sec. 402 (b) (4) of the Act [21 U. S. C. A. § 342 (b) 4] provides that a food shall be deemed to be adulterated "if any substance has been added thereto or mixed or packed therewith so as to increase its bulk or weight, or reduce its quality or strength, or make it appear better or of greater value than it is." In order to determine whether anything has been added to a food which makes it appear "better or of greater value than it is," it is necessary to know first of all what the food is. The purpose of the respondent's order was to ascertain the ingredients of oleomargarine and to define and identify it. Under the definition which he adopted, oleomargarine is a food which contains the ingredients and optional ingredients specified in the definition and standard of identity. It is not conceivable to us that we could rule that the use of one or more of the optional ingredients would make oleomargarine an adulterated food, and at the same time be of the opinion that the standard of identity established by the order was supported by valid findings of fact and sustained by substantial evidence. We think there is no conflict between the order of the respondent and § 402 (b) (4) of the Act. What the petitioners are really objecting to is the inclusion by the respondent, in the standard of identity established, of optional ingredients which they contend should have been excluded by him. They should have made their fight for these exclusions before the respondent, and not before this Court. Upon the evidence adduced at the hearing, we are convinced that the respondent had the power to make the order which is challenged. Whether the order is right or wrong is no concern of this Court, for it cannot substitute its judgment for that of the respondent. See and compare, Gray v. Powell, 314 U. S. 402, 412; Pittsburgh Plate Glass Co. v. National Labor Relations Board, 8 Cir., 113 F. 2d 698, 701 ffirmed 313 U. S. 146; Railroad Commission of Texas v. Rowan & Nichols Oil Co., 310 U. S. 573, 580-581: National Labor Relations Board v. Waterman Steamship Co., 309 U. S. 206, 226; National Labor Relations Board v. Nevada Consolidated Copper Corp., 316 U. S. 105; Eagle-Picher Mining & Smelting Co. v. National Labor Relations Board, 8 Cir., 119 F. 2d 903, 907; National Labor Relations Board v. Bradford Dyeing Ass'n., 310 U. S. 318, 342. The motion of the respondent to dismiss the orginal and intervening petitions is denied. The order under review is affirmed. Е. Е. Косн, Clerk, U. S. Circuit Court of Appeals, Eighth Circuit. Mr. ZIMMERMAN. We are pressed for time, Mrs. Johnson. Mrs. JOHNSON. I want to say with regard to this lobby by the butter interests, I know that in one State representatives of the dairy industry went to a State convention several weeks in advance of the general convention, and the lady who offered the resolution to table the matter was the State president of that State, which was Virginia. The women who were for margarine did not believe that organization was necessary. They thought the truth would be enough. They were a group of innocent clubwomen who felt that this nutritional substance should be within the reach of all, and that anything that was harmful should be removed; anything that would help must be done, and they felt, with the number of men that were turned down because of lack of nutrition, that fact would help the other side and injure our side, because we would have had more men in our fighting forces provided they had had the proper nutrition. Incidentally, the Agricultural Department is now displaying in some of the banks in town a large chart giving the seven basic foods, linking butter and margarine together as a basic food. I think that is about all. Mr. ZIMMERMAN. Thank you for your appearance. Mrs. JOHNSON. Just a minute. There is one thing I forgot. The Women's Economic Council was organized immediately following the morning meeting of the tabling of that resolution at Fort Worth, Tex. I don't know how many States are in it now. It was organized with 8 States and they reached out throughout the United States. And so you have another organization against the butter interests. Those women have their relatives in different States, even in the dairy States, and incidentally, the Milwaukee Women's Club passed a resolution favoring margarine. I have a clipping here. Oleomargarine cannot hurt butter sales, and it does help humanity. Mr. ZIMMERMAN. We thank you for your appearance. Mr. ANDRESEN. When Mr. Fulmer called these hearings, he notified Mr. Holman as one of the representatives of the dairy group that he should prepare for the hearing. Mr. Fulmer agreed that the hearing for the dairy group and others in opposition to the bill should begin on November 15. I thought it might be possible, if the committee desires, to have Mr. Holman take 2 or 3 minutes to give a brief outline today as to what the dairy groups intend to show at the hearings beginning November 15. That is, if the committee so desires. Mr. Holman is here and he can briefly state his views orally on what the dairy groups will present. Mr. POAGE. Let the defense bring in anything they want to. Mr. ZIMMERMAN. Are there any other representatives here who wish to speak in support of this bill, whose name has not been called? STATEMENT OF F. E. GIMBEL, PROSPECTOR, LEADVILLE, COLO. Mr. GIMBEL. I would like to be heard in support of the bill, but I don't like to talk to a group of hungry men when I'm doing it. Mr. ZIMMERMAN. We will let you have a minute and a half. You are against the bill? Mr. GIMBEL. No; I am for removing the tax. Mr. ZIMMERMAN. All right; we will hear you. Mr. GIMBEL. My name is F. E. Gimbel, Leadville, Colo., prospector; incidentally, a goat raiser. The matter of butter, of course, is pertinent to me. For the moment, of course, I have my own butter out of my two milk goats, so it doesn't bother me just now, but it has in my career, considerably. I have used both oleo and butter, but it seems to me as these restrictions that are being put on it, in the first place, of course, are put on at the insistence of pressure groups. It is the duty, of course, of this committee to act in one of three ways—or you have all three duties, rather: You are to be the judge, first, as to the revenue the Government gets out of it. That is part of your interest. The next is to defend the butter interests of the United States, and the next is to defend the public. This seems to be one of those nuisance taxes that does not bring much revenue. I heard it stated yesterday that the cost to the individual retailers and the handlers was 10 times as great as what they had to pay out in revenue, and I am sure the cost to the Government in collecting the revenue would be in the same proportion, so that the tax of $1,000,000 or $2,000,000 that was mentioned here yesterday is an infinitesmal thing as compared to the cost of getting it. Inasmuch as it has been stated here that it is a food, and I think myself separate from the butter. If I had the privilege and could buy the butter, I would pay 10 cents a pound more for it. Maybe it is just imagination that I think it is better than oleo. At the same time, if I could not get butter, I take it as the next best. In regard to the duties of this committee, you seem to be in a position where you must take sides. Your interest, of course, is to get the taxes for the Government. Next, you are to defend the producers of the article, and next you are to defend the consumers of the article, and like the million and one taxes we have now, I think it is a useless tax and the cost to the Government of collecting it is a whole lot more than the revenue that comes from the taxes. Mr. ZIMMERMAN. We certainly thank you for your appearance. Now, shall the committee hear Mr. Holman for 5 minutes? Mr. POAGE. What would be gained by hearing Mr. Holman now? Let the defense put on what they please when they get ready to put on their case. Mr. ANDRESEN. It is the wish of the committee. I thought he might make a 5-minute statement outlining the position of the dairy groups, so that some of these men who have not made up their minds, like the gentleman from Texas, might have a little advance information. Mr. POAGE. I will be here when he takes the stand on the 15th. STATEMENT OF MRS. ANNIE GAREN, HOUSEWIFE Mrs. GAREN. Mr. Chairman, I am merely a bystander, a mother of three sons who are serving their country. I have been most of my life at the head of a household of 10 members. I have served as purchasing agent for that family, and so on. The objection I have to this tax is not to paying the tax, so much, as to the work that is required to collect the tax. Oleomargarine should not be taxed. It should not have to pay a Federal tax. Anyone trying to sell oleomargarine has to have clerical help and accountants and what not to figure up how much he should pay, and I am sincerely opposed to a tax on oleomargarine. Mr. ZIMMERMAN. We thank you for your appearance and your statement. Now, so far as I know, that concludes the hearings for the proponents of this bill. We are going to meet, I believe, as we announced the other day, on Thursday morning to consider further the citrus question. Mr. PHILLIPS. Was the sugar beet question finished? Anyway, it is sugar beets and citrus. Mr. ZIMMERMAN. And at this point, Mrs. Wheeler, the chair wishes you to get in touch with the gentlemen representing the O. P. A. who were here on Monday, and ask them to be here tomorrow morning to show cause, if any there be, why they will not produce the plan which this committee asked them to submit to it, and which they have submitted to Mr. Vinson for his approval. Mr. ANDRESEN. And I understand also that it has been agreed that we meet here Friday morning at 10 o'clock, on H. R. 2400, to consider the departmental recommendations made on this bill and such other matters as may come before the committee. Mr. ZIMMERMAN. Well, that may be understood, but there was objection. Mr. McCORD. The gentleman is correct. We did agree on that. However, I will now make a motion to that effect, that the committee meet at 10 o'clock, Friday, for that purpose. Mr. ZIMMERMAN. Without objection, it is agreed that the committee so meet, and the secretary will take notice of it. The committee stands adjourned until tomorrow morning at 10 o'clock. (Whereupon, at 12:35 p. m., the committee adjourned to meet at 10 a. m., Thursday, November 4, 1943.) Hon. H. P. FULMER, Chairman, Committee on Agriculture, WAR FOOD ADMINISTRATION, Washington, September 25, 1943. House of Representatives. DEAR HAMP: In response to your request of June 21 to my predecessor for a report on your bill, H. R. 2400, he asked certain men in the Department who had made a study of taxes on oleomargarine to prepare a factual analysis on the subject. This has just come to my attention in connection with your request to me of September 13 and a copy of this statement of the economic effects of the bill is enclosed for the consideration of your committee. The prevailing taxes upon oleomargarine are a part of the permanent law enacted by Congress and the matter of repealing or reducing these taxes, or of possibly suspending them for the duration is a question which, in my judgment, should be determined by the Congress. The Bureau of the Budget advises that it has no objection to the submission of this report. Sincerely, MARVIN JONES, Administrator. ECONOMIC EFFECTS OF H. R. 2400 H. R. 2400 is 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." It would repeal all Federal taxes based on the domestic manufacture and sale of oleomargarine, including the manufacturers' excise taxes of one-fourth cent per pound on uncolored and 10 cents per pound on colored oleomargarine sold for domestic consumption and the special annual taxes of $600 on manufacturers of oleomargarine, $480 and $200 on wholesalers of colored and uncolored oleomargarine, respectively, and $42 and $6 on retailers of colored and uncolored oleomargarine, respectively. The provisions of the present law relating to the excise of 15 cents per pound on imported oleomargarine and its enforcement' would be changed only to delete references to the provisions to be repealed. The manufacturers' excise tax of one-fourth cent per pound on uncolored oleomargarine represents about 1 percent of the present United States average retail price of oleomargarine. From July 1939 to June 1942 the annual license on manufacturers and distributors of oleomargarine amounted to about 0.4 cent per pound of oleomargarine withdrawn for consumption in the United States, less than 2 percent of the present retail price. The excise of 10 cents per pound on colored oleomargarine, on the other hand, is equivalent to more than 40 percent of the current retail price of oleomargarine and to more than 50 percent of the retail price in pre-war years. Annual consumption of colored oleomargarine in the United States in 1940-42 averaged a fraction of one-hundredth of a pound per capita, compared with 2.7 pounds of uncolored oleomargarine. Repeal of the taxes on domestic margarine and on manufacturers and dealers would tend to lower prices of uncolored margarine slightly (probably less than 1 cent per pound) and probably would make it possible to sell colored margarine at about the same prices as uncolored. The existence of competition between uncolored oleomargarine and butter is indicated by the fact that year-to-year changes in the consumption of butter are usually accompanied by changes in the opposite direction in the consumption of uncolored oleomargarine. No data exist for determining the degree of competition that might exist between butter and colored oleomargarine. The quantity of butter available for civilians in the period July 1943 to June 1944 is estimated at about 12.7 pounds per capita, about 3.5 pounds under the 1940-42 average. To make up part of this decrease it is planned to provide about 3.8 pounds of oleomargarine per capita for civilian consumption in the same period, about 1.2 pounds more than the average 1940-42 consumption. In a survey of food consumption in nonfarm households in one week in the spring of 1942, larger purchases of oleomargarine were reported by families at low-income levels than by those at the higher levels. Families with incomes from $500 to $1,000 reported twice as much oleomargarine purchased as families with incomes from $2,000 to $3,000.1 In 1940 and 1941 nearly 90 percent of the facts used in oleomargarine were of domestic origin, consisting chiefly of cottonseed oil, soybean oil, and oleo oil. With use of coconut and other imported oils in oleomargarine prohibited during most of 1942, the percentage of domestic fats and oils increased to 98 in that year. The following tables show for recent years the relative importance of the principal fats and oils used in the manufacture of oleomargarine and the importance of oleomargarine as an outlet for these fats and oils. Oleomargarine: Percentage contributed by principal items to the weight of facts and oils used in manufacture, United States, 1938-42 Bureau of Agricultural Economics. Computed from reports of the Bureau of Internal Revenue. Production of specified fats and oils in the United States, and quantity used in the manufacture of oleomargarine as a percentage of production, 1940–42 Bureau of Agricultural Economics. Computed from reports of the Bureau of the Census and the Bureau of Internal Revenue. 1 The survey was made by the Bureau of Human Nutrition and Home Economics and the Bureau of Labor Statistics jointly. Families with incomes from zero to $499 annually purchased less oleomargarine than families with incomes from $500 to $1,499 but more than those with incomes of $1,500 or more. |