thus it would not be necessary to change the eating habits of th American people and America still could provide the Allied Nations with the same quantity of fats they are now receiving through lend lease deliveries of butter. 10. It is our contention that the Fulmer bill constitutes a direc threat to the dairy industry of Minnesota and to the Nation. The un fair competition which would result should the Fulmer bill become law cannot be overlooked nor underestimated. Butter is essentially a concentrate of the fat of milk. The making of butter exceeds by a wide margin, under normal conditions, the production of all other branches engaged in the manufacture of dairy products. 11. Butter is the basic product of the dairy industry. It is the product which must absorb all surpluses in times of large production. and its price largely determines the price which the farmer receives for milk utilized in every other dairy product. Thus, the economic welfare of 5,000,000 farmers is directly dependent upon a satisfactory market for butter. 12. Manufacturers of oleomargarine have become bolder and bolder in their efforts fraudulently to sell their product to the American public in imitation of butter. These are but a few points that the Minnesota Dairy Industry Com mittee would like to place before the House Agricultural Committee of the United States Congress in opposition to the Fulmer bill. We trust. however, they will be given due consideration. STATEMENT OF RUSSELL FIFER, SECRETARY, OHIO DAIRY INDUSTRY WARTIME COMMITTEE, COLUMBUS, OHIO I, Russell Fifer, Secretary to and representing the Ohio Dairy Industry Wartime Committee, representing dairy farmers, breed associations, milk sanitarians, and dairy processors of this State, address. Room 905, 5 East Long Street, Columbus, Ohio, emphatically op pose the passage of H. R. 2400 (Fulmer). The principal objections to H. R. 2400 are: (1) That the bill was introduced and promoted under the pretense of patriotism as an attempt to relieve the critical shortage of butter, a vital war food. The increase in points on oleomargarine by the Office of Price Administration, which reflected a growing shortage of this product, was accompanied with a statement to the effect that the supplies of all fats and oils are diminishing and that increased sales of oleomargarine would be made at the expense of other fats, some of which are even lower priced. Considering these facts, passage of H. R. 2400 would not increase production of oleomargarine. Furthermore, all testimony presented by the proponents of H. R. 2400 failed to indicate that the removal of the present Federal regulations or restrictions would reduce the selling price. (2) That the Federal regulations and control of the Department of Internal Revenue are necessary as an adequate protection to the consumer of oleomargarine. The amount of the tax on colored and uncolored oleo is insignificant to the manufacturer, the wholesaler or retailer, and the consumer. However, the control by the Department of Internal Revenue on the production, sale, and disposition of oleomargarine is necessary to prevent fraudulent practices. (3) That all controversies between various trade groups should be ostponed for the present time when all food production must be enouraged and increased as a wartime necessity. A trade struggle beween agricultural and industrial food forces during this critical eriod would create disunity and further discouragement to the proluction and manufacture of vital dairy foods. The War Food Adminstration realize the extreme importance of dairy products and are promoting all efforts to increase production during the remaining weeks of 1943, and 1944. (4) The 1942 cash income from milk is reported at $113,077,000, and exceeds one-fourth of the total farm income in Ohio. Approximately 50 counties of our State derive their major farm income from dairying, about 30 counties rank second, and none of the remaining counties place dairy farm income lower than fourth place. The total 1942 milk production in Ohio was estimated at 5,037,000,000 pounds of 4.2 percent milk. About one-third of that milk goes into butter, producing 72,620,000 pounds last year, which ranks Ohio eighth in the United States. The farmer receives at least 65 percent of the consumer's butter dollar, but only 15 percent of the consumer's oleo dollar. We therefore urge that H. R. 2400 be rejected and not recommended for passage. STATEMENT OF HASSIL E. SCHENCK, PRESIDENT, INDIANA FARM BUREAU, INC., INDIANAPOLIS, IND. For your consideration and on behalf of the thousands of Indiana. Farm Bureau members who are engaged in dairy farming, and the many more thousands of Indiana Farm Bureau members who are classed as general or diversified farmers who along with their many other farm activities are milking cows and marketing their product through manufactured milk channels, I wish to submit the following facts: It seems that the oleomargarine interests are trying to take advantage of the very serious butter situation now prevailing not only by promoting the sales of their products but are also attempting to have your committee and the Congress act favorably on the Fulmer resolution, H. R. 2400. You, of course, are aware of the fact that the first Federal oleomargarine law was enacted in 1886. This first law did not distinguish between colored and uncolored margarine but taxed all of the product alike at 2 cents per pound. In 1902 the act was amended by making the tax 10 cents per pound on colored oleomargarine and one-fourth of 1 cent per pound on all margarine not colored. Since 1902 the Federal oleomargarine law has remained unchanged except for a few clarifying amendments. The existing Federal taxes on oleomargarine are as follows: Manufacturers of any oleomargarine___. Per year $600 480 200 48 6 The dairy farmers of my State, and I think they are representative of the feeling of the dairy farmers of the Nation, feel that the enactment of the above law with its various amendments has established a definite policy of the Federal Government on the product, oleomargarine. The purpose of this law was to prevent the manufacturers of margarine from selling their product as and if it were butter and we farmers feel that this policy should not be disturbed. The facts are that the American dairy farmer is producing far more dairy products today than he has ever produced before; that the armed forces and lend-lease have been supplied with their full requirements of dairy products; after this has been done the dairy farmer is still producing slightly more dairy products for civilian consumption than he was producing in any of the pre-war years, and the only reason why we are experiencing a shortage of these valuable food products is the increased buying power of millions of American consumers. We do not feel that it is right to allow substitutes of an inferior quality to be palmed off on these consumers now that they do have the means to purchase dairy products. The margarine industry is asking that the Congress pass legislation eliminating all of the Federal taxes now imposed upon their product. In asking for the elimination of the one-fourth-cent per pound on all margarine and all of the licensing taxes from the manufacturer to the retail dealer, they are asking that a considerable source of Federal taxes be done away with. They are asking this at a time when the Federal Government finds itself hard-pressed to raise sufficient income to carry on the war. Practically all other industries and all individuals are cheerfully submitting to many substantial increases in Federal taxes, and we question the motives of those now seeking to evade taxes that have been in existence for many years. In my opinion, the one tax which the oleomargarine industry is most anxious to do away with is the 10-cent-per-pound tax on colored margarine, and again I question their motive. My understanding is that when coloring is added to oleomargarine there is no food or nutritional value added in the process. Obviously their desire to color their product is to give to it eye appeal, thus deceiving the consumer and enabling them to sell margarine as and if it were butter. To this the dairy farmers object. We do not object to the sale of any food product being sold for what it is, but in the case of margarine it is very evident that the sole desire of that industry in asking for the elimination of the 10-cent-per-pound Federal tax on colored oleomargarine is to enable them to more easily market their product to the American consumer under the guise of butter. Much has been said by the margarine industry about their use of American-grown vegetable fats and oils, such as soybeans, cottonseed, and peanuts, and at the present time they are particularly stressing the amount of soybean oil being used in the manufacture of oleomargarine. Since Indiana is one of the four leading States producing commercial soybeans, I take this opportunity of pointing out to you the fallacy of the margarine industry's claims regarding their use of soy beans and what it means to the farmers of Indiana, Ohio, Illinois, and Iowa, the States in which the major portion of the Nation's commercial soybean crop is grown. According to the latest statistical information available, only 5.3 percent of the total cash income from soybeans is paid by the manufacturers of margarine. Certainly that cannot mean much in the cash income to the farmers of the above-named States. Under present conditions, in my opinion, soybean growers would not suffer any in cash income if none of their products were being used by margarine manufacturers. There are plenty of other outlets for our products. Furthermore, I wish to point out that prior to the outbreak of the war margarine was made largely from imported fats and oils, such as coconut and many other oils. These products afford a much cheaper source of raw fat for the oleomargarine manufacturer than can possibly be supplied by any of our domestic fats, and may I add that we have no assurance that as soon as the war is over the margarine manufacturers will not go back to those cheaper imported fats and oils and forget all about our domestic products. Our dairy farmers think they will. I believe that the oleomargarine industry is making a very poor case for itself in its attempt to have the Congress remove the taxes which have been imposed on their product and have been well established for many years. Their claim of being a benefactor to the American farmer by using his domestically grown fats and oils, and their pleadings in behalf of those unfortunate Americans who are in the lower income groups, that the dairy farmers are denying them the poor man's spread, is based on deception. Their motives seem to be purely mercenary and not deserving of consideration by your committee. STATEMENT OF MILO K. SWANTON, EXECUTIVE SECRETARY, WISCONSIN COUNCIL OF AGRICULTURE, MADISON, WIS. Federal taxes on oleomargarine do not restrict consumer availability of food products. The one-fourth-cent per pound on uncolored oleomargarine is negligible. Consumers today can easily afford to pay approximately 32 to 37 cents per pound, 10 cents tax included, for the yellow product if they prefer to buy it already colored like butter. Since the Federal tax on colored oleomargarine is not prohibitive and since the uncolored product is equally nutritious and available and is nearly tax free, neither of these Federal taxes, therefore, prevents availability of this food to the consumer. The trade barrier argument carries no weight in the case of the one-fourth-cent tax. Since both taxes are applicable throughout the United States, they do not fall in the class of interstate trade barriers. When thinking of the 10-cent tax as an alleged barrier, let us also think of it as a means of counteracting an unfair trade practice. Unfair trade practice is as dangerous economically and as unfair socially as are trade barriers. Butter with its natural yellow color and its characteristic flavor, has come down through the ages a universally recognized food and flavoring in the diet of civilized man. Coloring oleomargarine like butter is an unfair trade practice in that it capitalizes on the ac cepted evidence by which the average consumer determines the character of the product she is buying. In the use of butter yellow, the oleomargarine interests are masquerading in the color and flavor of butter, the source of which is vastly different than the source of oleomargarine. These Federal taxes are justifiable and necessary to cover the cost of supervising an industry which makes a product unfairly in the image of another long-accepted standard, thereby causing confusion and uncertainty in the channels of trade and consumption. Consumers have a right to buy either oleomargarine or butter. The Federal oleomargarine taxes do not deprive them of that right. In the eyes of the consumer, in the home or the restaurant, consumers have a right to be free from confusion or deception in the use of butter and to know with certainty that they are getting butter with its natural vitamin A content, superb natural flavor and growth factor. Even though distinctly marked on the package, oleomargarine, when colored like butter, does not carry its identity through when removed from the package; hence, oleomargarine using the same color as butter leads inevitably to confusion and deception. The 10-cent tax on colored oleomargarine is justifiable from the standpoint of revenue to regulate against confusion and to prevent, if possible, this unfair trade practice in consumer deception. STATEMENT OF WILLIAM O. PERDUE, GENERAL MANAGER, PURE MILK PRODUCTS COOPERATIVE, FOND DU LAC, WIS. Pure Milk Products Cooperative is the largest strictly bargaining producers cooperative in the United States. It has a membership of approximately 12,000 farmers engaged in the production of milk. In the year 1942, their combined production was 1,105,340,375 pounds, with a market value of $30,363,700.79. The dairy farmers who are members of this cooperative have a total investment of $150,711,000 for milk alone and require land amounting to 1,163,514 acres devoted to dairying. At the annual convention on October 26, 1943, the membership adopted various resolutions, one of which was the registering of unalterable opposition to H. R. 2400 designed to drastically change regu lations of the manufacture and sale of oleomargarine. Shortly fol lowing this annual meeting, as general manager of Pure Milk Products, I dispatched a telegram to Chairman Fulmer of the House Committee on Agriculture requesting, in effect, that the bill H. R. 2400 be not reported by the House Committee on Agriculture. In reply, I received a copy of a letter which Mr. Fulmer previously had sent to Mr. Rich L. Duncan, secretary-manager of the Falls Cities Cooperative Producers Association in Louisville, Ky. I wish to quote this letter as follows: Replying to your telegram just received, I will state that you are mistaken about starting a Civil War which was fought years ago between the North and the South. It appears that in this instance every section of the country is advocating in an equal degree the repeal of discriminatory taxes on a purely domestic product. Why should we put a tax on oleomargarine manufactured 100 percent out of domestic fats and oils, the purest products in the country, at the expense of |