When the opinions of chemists are given we must remember that
chemists are not physiologists. Chemists can tell you what the con-
stituent parts of oleomargarine are; but not being physicians, they are
not competent to tell what the physiological action of oleomargarine
is. Now, then, we have in Philadelphia a chemist, Professor Heffman,
who is both a physician and a chemist, and he says that the question
of the healthfulness of oleomargarine is as yet undetermined. He is
both a chemist and a physician. The fact of the matter, then, is that
the best that can be said about the healthfulness of oleomargarine
to-day is that it is not yet determined positively. The facts are that
the opinions of chemists, as a rule, as presented by oleomargarine fac-
tories, are based upon samples of the very best oleomargarine they
produce, and it is not the ordinary oleomargarine that is sold in the
market. Therefore that accounts for the difference between certain
statements. When the oleomargarine men want to have a nice state-
ment they make up the very best sample of oleomargarine they have
got, put into it a certain percentage of butter in order to make it as
near like butter as possible, take it to a chemist, and ask him to analyze
it; and of course it is good. But go out in the open market and buy
the oleomargarine that is sold in the open market, and the results are
entirely different from the analysis of the chemist on a special sample
Now, Mr. Chairman, we oppose the sale of oleomargarine when
colored in imitation of yellow butter because the temptation is con-
stantly to sell that article as and for butter, and the temptation is too
great for ordinary human nature to resist, because of the money in it.
And the better the price that butter brings, the greater the temptation.
But now we say, "Add 10 cents a pound to the price of this product
in the shape of a tax, and there is not so much temptation to make
that money." Why should not 10 cents a pound be added to it? Why
do we pass our protective-tariff bills ? Why do we impose protective
tariffs upon products brought from foreign countries except to give
protection to our American industries ? Here is an industry which
competes with another industry that has been established for years.
Why ought not the farmers who have been in this .industry, these
farmers whose all depends upon the butter trade, to have that protec-
Now, what can our oleomargarine men complain of? They have
their choice. We say to them, "If you want to color oleomargarine
and compete with butter, then pay 10 cents a pound to the Govern-
ment for that privilege. If you think that money can be made by
selling colored oleomargarine, pay a revenue tax of 10 cents a pound
for it, and come in on equal terms, in a fair competition in the market,
and sell your product. But if you think that that is too big a tax,
you are not compelled to pay it. Then manufacture your uncolored
oleomargarine and pay a quarter of a cent a pound for it. ' You pays
your money,' as the Dutchman says, 'and you takes your choice;' that
If oleomargarine is a healthful product, if the people want it, the
matter of color has not anything to do with it. If people want
oleomargarine they will buy it as oleomargarine without the color.
They are not eating color. They want oleomargarine, we are told,
because it is such an absolutely healthful and nutritious article. It is
better than butter, as our friends maintain. They prefer it to butter,
as our friends maintain. Then, for heaven's sake, let the people have
it at this reduced price. Let them get this very superior article at a
price that is within their reach; and let these manufacturers spend
their millions to advertise the advantages of this delightful and supe-
rior and healthful article, and to induce people to buy it instead of
the vile butter!
That is what they ought to do. Why, we do not interfere with their
rights, Mr. Chairman. All we ask them to do is to manufacture good
goods to manufacture oleomargarine out of good materials. Do not
put any color in it. Sell it for oleomargarine. Teach the people that
oleomargarine is better than butter. Sell it as oleomargarine, and
not as butter. But if you do not want to do that, put your coloring
in, and pay the Government 10 cents a pound for it. Come in and
sell it as oleomargarine, colored, and come in free competition with
butter a free and fair fight for all.
Mr. TILLINGHAST. Will the gentleman permit a question?
Mr. KAUFFMAN. Certainly.
Mr. TILLINGHAST. Do you say that we could sell colored oleomar-
garine in the State of Pennsylvania by paying the 10 cents extra tax,
if we so desired ?
Mr. KAUFFMAN. Not under our present law; no, you could not.
Mr. DRENNAN. You would have as much profit as the butter man
Mr. TILLINGHAST. But we would have no right to sell colored oleo-
margarine in your State, in any event.
Mr. KAUFFMAN. No, sir; and we do not propose that you shall have
the right to sell it there, either, as colored oleomargarine. But that
is not the question. There are States where you can sell it.
Now, let me call your attention to the question of desire to obey the
law. According to the statement made by somebody here this morn-
ing, 107,000,000 of pounds of oleomargarine are manufactured annu-
ally in the United States. Where is it sold? Why, it is on the stands
everywhere. It is sold where? Largely in the States prohibiting or
restricting the sale of oleomargarine. How is that ? Simply because
the men who sell this stuff are law-defying and not law-obeying men;
that is all. These manuf acturors, these dealers, know that it has been
against the law to sell oleomargarine in the State of Pennsylvania in
years gone by, because of the prohibitory law. They know that it is
against the law to sell oleomargarine now in the State of Pennsylvania,
and yet they defy the law. Would law-abiding men do that ?
Mr. SPRINGER. Will the gentleman allow me a question right there ?
Mr. KAUFFMAN. Certainly.
Mr. SPRINGER. I think he ought to take into consideration the fact
that in the State of Pennsylvania, up to the passage of the present law
in May, 1899, the lawyers and the courts disputed the question as to
whether this legislation was constitutional or not, and the sellers of
oleomargarine were advised on the one hand that it was not a valid
law; and those who took that position were finally sustained by the
Supreme Court of the United States, in the Shallenberger case, which
decision declared that that law was invalid. Then the legislature passed
another law. So that those people who you say were violators of the
law up to the act of May, 1899, were not violating any law at all, as
the Supreme Court has since held.
Mr. KAUFFMAN. Well, sir, I must correct you. You are simply
misinformed about the decision. Let me say that in the State of Penn-
sylvania, under the law of May 21, 1885, the situation was this and
I had the honor to carry the fight all the way up to the higher courts :
The supreme court of Pennsylvania and the Supreme Court of the
United States held that the law was perfectly constitutional in so far
as it related to the retail dealers of the State of Pennsylvania, but that it
was only unconstitutional in so far as it related to the original packages
manufactured in another State and coming into the State of Penns} T l-
vania. It only affected the wholesalers not the retailers. I argued
the question before our State courts; and pur supreme court affirmed
the constitutionality of the act also in relation to the wholesale dealers.
But there never has been a time, since the passage of that law of 1885,
when, so far as the retail dealers were concerned, it was legal for oleo-
margarine to be sold.
Mr. GROUT. It was the interstate commerce point that the case was
Mr. KATJFFMAN. That is all.
Mr. SPRINGER. Every pound of oleomargarine that was sold from
1885 to 1899 in the original package was legally sold.
Mr. KAUFFMAN. It was legally sold, yes, except that our State
supreme court had decided otherwise. I argued the question before
the supreme court, and they decided my way; but that decision was
reversed in the United States Supreme Court. Still, the retail sale
was always and has always been regarded as illegal; and even the
Supreme Court of the United States, in that decision in the case of
the Commonwealth v. Shallenberger, affirmed the fact' that the law was
constitutional as far as the retail dealers were concerned.
Mr. KNIGHT. Will you pardon an interruption ?
Mr. KAUFFMAN. Certainly.
Mr. KNIGHT. Did you ever know of any kind of an oleomargarine
law being passed the constitutionality of which was not questioned
by the oleomargarine dealers?
Mr. KAUFFMAN. Not one.
Mr. SPRINGER. They have a right to question it, too.
Mr. KNIGHT. Well, have they the right to go on and do business
while questioning it?
Mr. SPRINGER. They have a right to go into the courts and ask for
the decisions of the courts, and abide by them.
Mr. KAUFFMAN. Yes; but they have not any right, as it seems to
me, when a law is enacted, to keep on defying the law until the law is
passed upon. A man has not any right to carry on a manifestly illegal
business when it is prohibited by law. It is his business to stop car-
rying on that business until the courts decide the disputed question.
Now, then, Mr. Chairman, this act, the Grout bill, particularly
remedies this original-package feature. Mark you, the Wadsworth
bill distinctly makes the 1-pound and the 2-pound packages original
packages. If that provision w ere to pass and that is the viciousness of
the Wadsworth bill it would absolutely and positively prevent any
State from passing any law in relation to oleomargarine, because the
packages are cut down to 1 and 2 pound packages, and under the inter-
state law nothing whatsoever could be done in the States to restrict
their sale. Where would we be then ? What is the effect of oleomar-
garine upon these butter dealers and these farmers? Let me tell you.
As I said a little while ago, in February of 1899 the butter trade at
Philadelphia was absolutely paralyzed. The dealers here will testify
to that fact. We began to enforce the law which we had. Now, what
was the result? We have advanced the price of butter in the city of
Philadelphia, in the wholesale market, on an average of 5 cents a
pound over what it was two years ago, before we began to enforce
this law, simply because we have driven out the illegal sale of oleo-
margarine. More than that, the price of cows in the State of Penn-
sylvania, because of the driving out of this illegal competition of
oleomargarine, has advanced from 25 to 40 per cent. If oleo had
been permitted to remain in the market, being sold illegally as and for
butter, the price of farms would have kept on going downward, the
price of cows would have kept on going downward, and the price of
butter would have been going downward. Now, I am going to say,
further than this, that in the years gone by, from 1895 up to 1899,
numbers of creamery men were driven out of business because of the
competition of oleomargarine driven clean out of business; and it is
only in the past two years that the tide has changed.
Mr. SPRINGER. Do you think that 4 per cent of the whole product
will materially interfere with a business that amounts to two billions
of pounds annually ?
Mr. KAUFMAN. Oh, I will answer that question. I was shifted off
from what I wanted to say. Where is oleomargarine sold? There
are 107,000,000 pounds manufactured? Where is it sold? In the
States where the restrictive legislation has come in. In the State of
Pennsylvania not less than from twelve to twenty millions of pounds
are sold, in defiance of both United States and State law ; and they are
sold as butter that is where this stuff is sold. Why do not these
gentlemen sell it otherwise ? They come into a dairy State in defiance
of law, and sell it there. How do I know ?
The ACTING CHAIRMAN. You say 12,000,000 pounds of butter are
manufactured in your State. Is that it?
Mr. KAUFFMAN. No; I say sold in our State.
The ACTING CHAIRMAN. Do you mean butter, or oleomargarine?
Mr. KAUFFMAN. Oleomargarine. I say there are about 12,000,000
pounds of oleomargarine sold in our State. How do I know that?
Mr. DRENNAN. Why is so much sold there, and so little sold in
Mr. KAUFFMAN. Mr. Flanders has gone, but I will tell you why.
Because the laws in our State have not been enforced as they ought to
Mr. GROUT. And yet you are making an appropriation of $60,000 a
year to enforce the law?
Mr. KNIGHT. Two hundred and forty thousand dollars a year, Mr.
Mr. GROUT. Not for this law alone.
Mr. KAUFFMAN. No.
Mr. GROUT. There are $60,000 a year, as I understand, appropriated
and assigned to the enforcement of the oleomargarine laws in New
York; and that has been the case for half a dozen years or more.
Mr. KAUFFMAN. Yes, sir; but in our State there was an appropria-
tion of $12,500 a year, which makes all the difference in the world,
of course. Then there were some disputes as to the construction of
the law, etc. But the laws, for some reason or other, were not
enforced; and because of that the oleomargarine manufacturers simply
flooded the States with their agents, who have proceeded to induce
small dealers to embark in this business. I have been told, over and
over again, by retail dealers who have come to me begging for mercy,
' ' We have been led into this thing. The wholesalers have come to
us and said, 'You can go into this business; the law is no good; you
can go into it with perfect safety and we will take care of you, and
pay all your legal costs, and your fine. Go into the business."' And
because of the profits, and these people not knowing any better, they
are led into it by the wholesalers. They furnish them the stamps and
tell them all the schemes. Why, I have in my office an application
given to me by a retail dealer, who brought it to me, and said that a
wholesaler had given it to him, and said, "Now, go to work and make
out your application for the revenue license in the name of some
creamery company." Oh, there are lots of "creamery companies"
not handling a pound of pure butter in Philadelphia. There are not
so many of them as there used to be, because some of them have been
put in jail and fined, and we have driven some of them out. But these
wholesalers come and induce these poor fellows to go into the business,
because they think that the law will not be enforced and they will be
protected against prosecutions.
Mr. JELKE. Will you permit a question ?
Mr. KAUFFMAN. Certainly a dozen of them.
Mr. JELKE. What stamp is this that the manufacturers use?
Mr. KAUFFMAN. The manufacturers would come and give them a
revenue stamp, and show them how to use it, and tell them how they
might use it.
Mr. JELKE. What was on the stamp, please?
Mr. KAUFFMAN. "Oleomargarine"; and then they go to work, as
was the case with one fellow we convicted before the United States
court only last term, and tell them how to violate the law.
Mr. JELKE. Was the stamp made in accordance with the law the
proper size, and so forth ?
Mr. KAUFFMAN. Oh, yes, sometimes sometimes.
Mr. SPRINGER. It is not the tax stamp ?
Mr. KAUFFMAN. Oh, no not what is called the tax stamp. It is
the stamp that the present United States law requires to be put right
on the wrapper. Now, to show you one of the schemes they have got
to deceive people, to show you just how deceptive they are, there was
one dealer in Philadelphia who thought he was very sharp. He went
to work, and he put the stamp right across that corner [indicating].
Then he folded it down in that way [indicating].
Mr. GROUT. Oh, he folded it very many more times than that he
folded it in three or four times.
Mr. KAUFFMAN. Yes; he did. Our people would go in and ask for
butter, and they would get ' ' butter; " and when they would go out and
look it over they could not find anything about oleomargarine upon it
until they turned down the corner and looked underneath there, and then
they found the word "oleomargarine" hidden away there. And we
convicted that fellow because, although he supposed his little scheme
complied with the law, the courts differed with him.
Mr. SCHELL. Would that customer go back to that store, do you
Mr. KAUFFMAN. It does not make any difference whether he would
do that or not; he was deceived, and he was defrauded willfully
deceived and defrauded because the very fact that the dealer had the
acuteness to do that showed that he intended to do it.
Now let me show you another trick. Oleomargarine is wrapped in
parchment paper or thin paper. There is another dealer in the city of
Philadelphia (he is doing it now, and we are going to convict him
before the United States court) who goes to work and stamps on this
thin paper "Oleomargarine." He puts that stamp right next to the
oleomargarine, in that way [indicating]. The moisture in the oleo-
margarine absorbs the stamp, and by the time the purchaser has it in
his possession for a few minutes you can not see it unless you hold it
up to the light, and then you can see very faintly "Oleomargarine."
It is so faint as not to be discernible.
Why, it is deception on the face of it. And that is only one of a
multitude of schemes by which these oleomargarine dealers try to com-
ply with the law, technically, and yet deceive the people. It is fraud
from the beginning to the end.
Now, then, we urge, Mr. Chairman, that this Grout bill shall be
passed, for two reasons:
First, that it will prevent fraud that is all. If the oleomargarine
dealers are honest in their desire to push a legitimate product, we say
that they can sell oleomargarine on its merits, pure and simple, and
advertise it and create a demand for it. If they want the advantage
of having oleomargarine colored in imitation of yellow butter, if they
think that will make the sale better, then they ought, because their
product costs so much less than ours, just as foreign goods are put on
a par with ours, to pay to the Government of the United States such a
tax as to make it an equal and fair competition.
Mr. SPRINGER. Pardon me. If you can sell oleomargarine on its
merits without color just as well, why not sell butter on its merits
without color ?
Mr. KAUFFMAN. Well, there are a great many men who do.
Mr. SPRINGER. It does not come out with a much better color than
oleomargarine, as I understand.
Mr. KAUFFMAN. No; and there are some men who sell purely white
butter. I think some gentleman on the committee this morning called
attention to the fact that some of the first-class hotels are serving
white, unsalted butter. That is simply a question of taste. But the
whole question that is at stake in this matter is not a question of taste;
it is a question of legitimate trade and fraud.
Secondly, there is the question of allowing to the States that juris-
diction, as a police measure, over the sale of oleomargarine which of
right belongs to them. As it is now, understand, the present act of
August 2, 1886, having recognized oleomargarine as a legitimate
article of commerce, the States are prevented, by the interstate-com-
merce law, from passing any legislation which would interfere with
the original packages coming in.
All we ask is that this act shall be passed so as to prevent fraud,
and to put the oleomargarine dealers on a parity, in competition,
with the dairymen of this country. If they will come in on equal
terms, if they will pay to the Government this revenue tax of 10
cents a pound, then the dairymen of the country have got a fair chance
Now, gentlemen, I am ready to answer questions. I will stop talk-
Mr. HABECKER. I would like to ask you whether there is any moral
law in this matter, aside from any legal law.
Mr. KAUFFMAN. Moral law? Yes; there is a moral law that
" Thou shalt not rob thy neighbor." If a man sells oleomargarine for
butter, he is robbing his neighbor. That is immoral.
Mr. SCHELL. Right on that line, then, let me ask you the question
which I raised originally, and which some of your people did not an-
swer. (Mr. Sharpless, however, wants to place himself on record on
that subject presently.) Is your attitude one of extermination
Mr. KAUFFMAN. No, sir.
Mr. SCHELL (continuing). Of colored oleomargarine, or is it
merely to prevent its being sold as butter ?
Mr. KAUFFMAN. I thought I had made myself clear about that.
Mr. SCHELL. No* you did not touch on that point.
(Mr. Tillinghast rose.)
Mr. KAUFFMAN. Now, let me answer one at a time, for I can not
answer more than one at a time. I will answer every question 1 am
asked, gentlemen. Oleomargarine does not cost the manufacturer to
exceed 8 cents a pound to produce.
Mr. MILLEK. How do you know that, Mr. Kauffman ?
Mr. KAUFFMAN. Oh, it has come to me over and over again, from
Mr. TILLINGHAST. Do you mean stamped and all, or without the
Mr. KAUFFMAN. Yes ; stamped and all.
Mr. TILLINGHAST. No; you are wrong.
Mr. KAUFFMAN. Well, tell us how much it does cost then, gentlemen.
Mr. BRENNAN. That is the point.
Mr. KAUFFMAN. How much does it cost?
Mr. BRENNAN. I will answer that question for you, Mr. Kauff man.
Mr. KAUFFMAN. Oh, do not answer that, Mr. Brennan; let them
Mr. BRENNAN. A year ago the average make was sold in Philadel-
phia to the wholesale dealers at 11 cents. Fancy goods sold for a little
more, of course.
Mr. MILLER. I will say to you, Mr. Kauffman, that we are making
some goods that cost 14 cents.
Mr. KAUFFMAN. Yes; but the great proportion of your goods cost
Mr. MILLER. Well, I do not care to say.
Mr. KNIGHT. Those are the goods that have butter in them ?
Mr. MILLER. We can not give away the secrets of our trade.
Mr. KAUFFMAN. Oh, of course not. Now, Mr. Chairman, I said it
cost them 8 cents a pound, and they denied it; and when I asked them
what it did cost, they would not answer. Mr. Drennan has said (and
this I know to be so) that the goods are sold to the wholesalers in Phil-
adelphia at prices ranging from 11 to 12 and 14 cents a pound, accord-
ing to quality. There are grades of oleomargarine, you understand.
Mr. JELKE. Mr. Kauffman, the better grades of oleomargarine that
sell for 14 cents a pound, or higher, contain butter, do they not?
Mr. KAUFFMAN. I understand so.
Mr. GROUT. So much butter that you can hardly tell them from pure
Mr. JELKE. This grade of oleomargarine, which contains such a
large percentage of butter, contains colored butter. It is colored but-
ter which is put into the oleomargarine, is it not?
Mr. KAUFFMAN. That I do not know.
Mr. JELKE. Well, will this law permit us to make the best grades
of oleomargarine, and use colored butter?
Mr. KAUFFMAN. Unquestionably, if you pay the 10 cents a pound.
That is what I say.
Mr. TILLINGHAST. But you would not permit the sale of colored
oleomargarine in Pennsylvania?
Mr. KAUFFMAN. Oh, we are not talking about the Pennsylvania
law, but about the United States law.
Mr. TILLINGHAST. But I say that the law of the State of Pennsyl-
vania to-day does not permit the sale of colored oleomargarine. Does
Mr. KAUFFMAN. No, sir.
Mr. TILLINGHAST. And that is so with 32 States, as I understand.
Mr. KAUFFMAN. Yes, sir. I do not know-
Mr. TILLINGHAST. So that no matter if we pay 10 cents a pound
tax, we have no more right to sell colored oleomargarine in Pennsyl-
vania than we had before.
Mr. KAUFFMAN. No ; but we are not talking about the Pennsylvania
law, but the United States law.
Mr. KNIGHT. Do you not believe that if this Grout bill were to
become a law, and colored oleomargarine should be taxed 10 cents a
pound, there would be no difficulty in repealing* our present law in
regard to oleomargarine in the State of Pennsylvania ?
Mr. KAUFFMAN. I can only speak as an individual. I think if this
Grout bill is passed, the legislation of the States will conform to the
United States law. That is only a matter of personal opinion, however.
Mr. TILLINGHAST. I do not know that I understood you in reference
to the original-package question. Do 1 understand you to say that if
the Wadsworth bill were adopted, and if there were no sales of oleo-
margarine except in the original package, the police laws of the State