Milk is the largest single source of income to farmers, and prosperous farmers are good customers for the products of organized labor. In addition, we understand that about 40 percent of our beef and veal supply comes from dairy herds. There is no advantage to our members or to consumers in general in risking the scarcity and higher prices of those foods in order to get a few pennies of advantage in buying cheap oleomargarine. Our members also are consumers. While they economize in their living costs, they do not wish to sacrifice the welfare of their families who should get plenty of milk and butter, and other dairy products. In order to get plenty of these, farmers must be encouraged to keep their herds and maintain ample production. This means they need a good market for butter, which is made from their surplus milk and cream, and which is also used in pricing all other dairy products. We understand that about three-fourths of all farmers in this country milk dairy cows. We believe that union wage earners and farmers have something in common in maintaining a proper protection against unfair competition. I submit at this time two resolutions adopted by organizations of the international teamsters union, meeting in Chicago. The first resolution was adopted February 28, 1949, by the Mid-States and East Coast Dairy Conference, comprising officers of local unions in the Middle West and Eastern States whose members are directly engaged in procuring, manufacturing, and distributing butter and other dairy products. The second resolution was adopted on March 2, 1949, by the International Conference of Dairy Employees, which includes the unions already mentioned and, in addition, all others in the west and south. Both resolutions urge the passage of legislation to remove excise taxes on oleomargarine, and prohibit its manufacture or sale in commerce, with yellow color added to imitate butter. The amendment to H. R. 2023, introduced by 26 Senators on April 4, 1949, now before this committee, has our recommendation. It is not in conflict with resolutions adopted by the American Federation of Labor on this matter. Mr. Chairman, the resolution by the Mid-States and East Coast Dairy Conference, International Brotherhood of Teamsters, Chauffeurs, Warehousemen, and Helpers, A. F. of L., in regular session in the Hotel Morrison, Chicago, Ill., February 28, 1949, is as follows, and with your permission I will read it into the record. Whereas, in response to a widespread demand of the people, the Congress of the United States is considering measures to repeal the so-called oleomargarine tax; and Whereas such repeal will meet with the favor of American citizens in the lowincome brackets since it will bring this commodity down in price, thereby reducing the cost of living to persons who need it; and Whereas there is danger that oleomargarine, if there be no regulatory legislation, could easily be sold as a butter substitute of the same color as butter; and Whereas the dairy industry furnishes steady employment at good wages for many thousands of union employees throughout the Nation, engaged in the procuring, processing, and distribution of butter, as well as the building of motortrucks, equipment, and supplies used in the dairy industry; and Whereas there are more than 3,500 local creameries and 40,000 dairy plants located in thousands of small communities in every State, both in the North and South, whose employees' welfare is involved in protecting butter against unfair competition; and Whereas yellow oleomargarine resembles butter so closely that it cannot be distinguished from butter by consumers and therefore invites substitution and fraud, making it necessary that the consumers be protected by prohibiting oleomargarine to be colored yellow; and Whereas any such substitution or fraud would benefit approximately 28 large corporations in the United States who manufacture oleomargarine and would so benefit at the expense of consumers; the millions of dairy farmers who produce butter, and thousands of families of union employees in the dairy industry: Now therefore be it Resolved, That the Mid States and East Coast Dairy Conference comprising officers of local unions of International Brotherhood of Teamsters whose members are directly engaged in procuring, manufacturing, and distributing butter and other dairy products, in regular session assembled in Chicago on February 28, 1949, respectfully urges upon the Congress, in its consideration of the repeal of existing oleomargarine taxes, that it enact at the same time regulatory measures to prevent the sale of oleomargarine colored as butter, so that the public may distinguish between these two products; and be it further Resolved, That copies of this resolution be submitted to the President of the United States, the Secretary of Agriculture, the Representatives and Senators in Congress; and be it further Resolved, That this conference send representatives to appear before the House and Senate Agricultural Committees to emphasize the importance of protecting the dairy industry and its employees by proper legislation. (The resolution of March 2, 1949, follows:) RESOLUTION WITH RESPECT TO LEGISLATION PENDING IN CONGRESS TO REGULATE THE PRODUCTION AND SALE OF OLEOMARGARINE. ADOPTED BY THE INTERNATIONAL CONFERENCE OF DAIRY EMPLOYEES, A CHARtered Trade DIVISION OF THE INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS, AFFILIATED WITH THE AMERICAN FEDERATION OF LABOR, IN REGULAR SESSION ASSEMBLED, AT THE HOTEL MORRISON, CHICAGO, ILL., ON MARCH 2, 1949 Whereas, in response to a widespread demand of the people, the Congress of the United States is considering measures to repeal the so-called oleomargarine tax; and Whereas such repeal will meet with the favor of American citizens in the lowincome brackets since it will bring this commodity down in price, thereby reducing the cost of living to persons who need it; and Whereas there is danger that oleomargarine, if there be no regulatory legislation, could easily be sold as a butter substitute of the same color as butter; and Whereas the dairy industry furnishes steady employment at good wages for many thousands of union employees throughout the Nation, engaged in the procuring, processing, and distribution of butter, as well as the building of motortrucks, equipment, and supplies used in the dairy industry; and Whereas there are more than 3,500 local creameries and 40,000 dairy plants located in thousands of small communities in every State, both in the North and South, whose employees' welfare is involved in protecting butter against unfair competition; and Whereas yellow oleomargarine resembles butter so closely that it cannot be distinguished from butter by consumers and therefore invites substitution and fraud, making it necessary that the consumers be protected by prohibiting oleomargarine to be colored yellow; and Whereas any such substitution or fraud would benefit approximately 28 large corporations in the United States who manufacture oleomargarine and would so benefit at the expense of consumers; the millions of dairy farmers who produce butter; and thousands of families of union employees in the dairy industry: Now therefore be it Resolved, That the International Conference of Diary Employees, comprising officers of local unions of International Brotherhood of Teamsters whose members are directly engaged in procuring, manufacturing, and distributing butter and other dairy products throughout the United States and Canada, in regular session assembled in Chicago on March 2, 1949, respectfully urges upon the Congress, in its consideration of the repeal of existing oleomargarine taxes, that it enact at the same time regulatory measures to prevent the sale of oleomargarine colored as butter, so that the public may distinguish between these two products; and be it further Resolved, That copies of this resolution be submitted to the President of the United States, the Secretary of Agriculture, the Representatives and Senators in Congress; and be it burther Resolved, That this conference send representatives to appear before the House and Senate Agricultural Committees to emphasize the importance of protecting the dairy industry and its employees by proper legislation. Senator LUCAS. Could I ask one question of the witness? Senator LUCAS. How many members of the teamsters union are employed either directly or indirectly in the handling of milk? Mr. HUBBARD. We have more than 100,000 members in the dairy branch of the International Brotherhood of Teamsters. Senator LUCAS. More than 100,000 members who are directly or indirectly handling milk? Mr. HUBBARD. Yes, sir; distributing it to homes and bringing it in from the farms and unloading it at warehouses and places. Senator HOEY. Thank you very much for your testimony. (The following was received for insertion in the record:) Hon. WALTER F. GEORGE, Chairman, Senate Finance Committee, Senate Office Building, Washington, D. C.: APRIL 13, 1949. Several producers and consumers of butter in Chicago have requested us to secure and submit information to your committee regarding sale of oleomargarine in Chicago. As your committee is aware, the sale of oleomargarine uncolored is permitted in Illinois. The Chicago Daily News of April 11, 1949, carried a two-column advertisement of the National Food Department Stores, a chain of grocery stores enjoying a substantial patronage from Chicago area consumers. The advertisement was headed: “Another important reduction in your cost of living * * * down go margarine prices at National-Lowest price in years!" A carton of Swanson's Swanco oleomargarine was displayed, with a price of 19 cents per pound. Other parts of the advertisement offered Allsweet and Parkay at 27 cents per pound, Keyko Reg. Margarine at 23 cents per pound, and the following brands at 29 cents per pound: Color bag margarines: Durkee's Color Ease: Good Luck Mix Kwik; Blue Bonnet Yellow Quick; and Del Rich .Ee-Zee Mix. In view of the active participation in the present hearings on oleomargarine on behalf of removal of all restrictions on the sale of oleomargarine, of the able Senator from Arkansas, Hon. William J. Fulbright, we submit the following facts regarding the manufacturers of oleomargarine obtained by us from reliable sources: A. Swanco oleomargarine is made and sold nationally by C. A. Swanson & Sons, Omaha, Nebr., who also have substantial interests in Arkansas, and one of whose owners, Mr. Gilbert Swanson, is a brother-in-law of Senator Fulbright. B. Unilever, Ltd., is a world-wide cartel, including Lever Bros., Inc., and manufactures approximately three-fourths of all oleomargarine consumed in Europe outside of Russia and approximately 40 percent of all the oleo consumed in the world. Lever Bros., Inc., has purchased the Jelke Oleomargarine Co. in Chicago, and spokesman for this company indicate it is expected to become one of the largest oleo manufacturers in the United States, should favorable legislation be enacted in Congress. Respectfully submitted. PAUL POTTER & ASSOCIATES, By PAUL POTTER. Senator HOEY. Congressman Andresen is here. We will hear you now. STATEMENT OF HON. AUGUST H. ANDRESEN, UNITED STATES REPRESENTATIVE FROM THE STATE OF MINNESOTA Representative ANDRESEN. I am August H. Andresen, member of Congress from the First District of Minnesota. Senator HOEY. Mr. Congressman, I am not inquiring for the purpose of trying to restrict you, but about how long will your statement be? Representative ANDRESEN. With the increased attendance of the committee I believe I can be very brief. Senator LUCAS. I regret that the other members are not present. Representative ANDRESEN. I do, too, not so much to hear me, but to hear the other witnesses. I am glad to have the chance to come over here, Mr. Chairman, and particularly to address you and the other distinguished gentlemen, because the State of North Carolina is one of the coming dairy States of the Union. I have talked with a good many dairy farmers from your State, and I know what they are doing, and it is adding very much to the economy of your State, as it does to any other State where they go into dairy farming, and it is hard work. Mr. colleague, Mr. Poage, has addressed your committee, and says that he has refrained from discussing the economic factors involved in this legislation. I am very much against Mr. Poage's bill which is up for consideration by your committee. I cannot say I am very strong for the dairy bill that is before the committee. It is a compromise measure. If I had my way, I would outlaw the coloring of oleomargarine yellow to imitate butter. But as legislation goes, and the bill which was reported by the committee of Agriculture of the House prohibited the sale of yellow oleomargarine in interstate commerce. That bill was defeated, and you have before you the Poage bill. The tax is not an issue. That was claimed to be an issue last year. I always maintained it was never an issue, that the color yellow was the issue, and that is the issue today. The fight is an economic fight. It is an economic fight to see who is going to get the spread market of the country which the dairy farmers of the United States have had as far back as we can remember and which the oleomargarine industry is trying to take away from the dairy farmers in order to make more money. The cotton farmers and the soybean farmers are expecting to profit by it, through increased sales of yellow oleomargarine. If it were not for the fact that oleomargarine at the present time is made principally out of cottonseed oil, with a little soybean oil, this issue would not be before Congress. If oleomargarine were made out of the best vegetable oil for oleomargarine, coconut oil, we would not have this fight between the two branches of agriculture in the United States. There is nothing in this legislation to prohibit the oleomargarine manufacturers from using coconut oil if coconut oil becomes cheaper than cottonseed or soybean oil, and they will, because I have never found any industry in the United States that did not charge all the traffic would bear for their product under our competitive system. I am going to discuss the economic aspect of the Paoge bill and what it means to 21⁄2 million dairy farmers in the United States, including those in your State, Mr. Chairman. The dairy farmer has had the historic market for butter in this country. Twenty-seven percent of the milk that leaves the farm must go into butter because it cannot be sold in any other form. If oleomargarine succeeds in capturing the spread market in the United States, butter consumption will go down and our farmers will be forced to liquidate at least 25 percent of the milk cows in this country, at a time when the Secretary of Agcitulrue is asking for production of 150,000,000,000 pounds of milk, whereas this year we probably will produce only 116,000,000,000 pounds of milk. We will not only decrease the milk-cow population of this country if the oleomargarine industry succeeds in capturing the spread market-which is their intention-but we will also bring about a situation that eventually will mean higher milk prices to the people and higher beef and veal prices also to the people, because 40 percent of the meat that is produced in the United States comes from our dairy farms. The average consumption of butter has been around 16 pounds per capita. In 1939 oleomargarine consumption was around 221⁄2 pounds. Butter was around 16 pounds per capita. As oleomargarine consumption increased from 21⁄2 pounds up to 6 pounds, a little over 6 pounds, what it was last year, butter consumption decreased from 16 down to about 101⁄2 pounds. Senator LUCAS. Why do you think the consumption of margarine has increased and that of butter has decreased? Representative ANDRESEN. The increase of oleomargarine consumption began with a regulation issued by Mr. Paul McNutt when he was Federal Security Administrator, which permitted the injection of vitamins into oleo, that is shark-liver oil, which gives them the vitamin content, and the addition of diacetyl, which is the butter flavor. So the oleo industry, claims that they have a product that has the texture of butter, that looks like butter, and that is just as nutritious as butter. I don't agree with that last cne. All they lack now is the color yellow and the unrestricted right to sell yellow-colored oleomargarine in the country. It is pretty hard to conceive that people would suddenly turn from butter to oleomargarine, but the price element does have a factor in it, and the dairy farmers of the United States just couldn't compete with the tremendous amount of money that the oleo industry has spent to sell its product to the people and to bring about this drive upon Congress to repeal the tax. When I have to take my choice, of course it is with the dairy farmers of the United States because I recognize that these 21⁄2 million dairy farmers are a very important segment of our agricultural economy and of the economy of the country. They mean more to the country than 24 oleomargarine manufacturers. My colleague, Mr. Poage, also indicated that he was just talking on the merits, that we should have the free-enterprise system, that we should permit the sale of any good food product without taxing it and without restriction. I agree with him on that, but the product of oleomargarine today is a synthetic product, legalized by regulation of the Federal Government, and the group that is manufacturing that product is now trying to legalize its unrestricted sale and to capture the butter market. There is no question that this is an economic fight, and the cotton farmers hope to profit by it because the National Cotton Association and the Association of Southern Oils are also backers of |