the State of Pennsylvania prefer to sell oleomargarine for butter?
Mr. DAVIS. I am not informed about that, sir.
Senator HANSBROUGH. Because of the greater profit.
Mr. DAVIS. I am not informed on that point. That is a matter that
can be settled. But what Senator Dolliver is talking about is not the
companies' stores. He is talking about the stores that are scattered
all throughout the western part of Pennsylvania, where a great deal of
its product is sold. You have hit it exactly, and the man who told you
that has hit it. The customers do not want this legislation made.
They go and ask for butter, and, as I say, they wink their eye and they
know they are going to get oleomargarine.
Mr. JELKE. If Senator Hansbrough will permit me, the company
stores in Pennsylvania would like to handle oleomargarine, but they
do not. They do not want to be annoyed with the regulations and the
lawsuits ; and I understand there is also a State tax upon retail deal-
ers of $100 in Pennsylvania, $500 for the wholesale dealer, and $1,000
for a manufacturer, in addition to all this regulation of the internal
revenue.
Mr. DAVIS. Now, I do say that it is an open insult to the adminis
tration of justice in the States for men to come here before the Senate
of the United States and ask the Senate to make the United States act
as policemen, because they can not get their own laws enforced by
their own home people; and, notoriously, the States are more jealous
of the enforcement of the United States laws than they are of laws of
their own. This very appeal turns on itself and makes a demonstra-
tion that we can not hope to enforce a law like this, and that the more
stringent your regulations are in point of money penalty the greater
temptation you are holding out to frauds and violations of the law. It
is not a matter of mere conjecture or opinion on my part.
Senator HANSBROUGH. Of course, the States can not tax an article
of commerce.
Mr. DAVIS. No. But, Senator, it is conceded by the men themselves
that the States liave enacted laws which are as yet untouched by any
constitutional decision as to prohibiting the manufacture and sale of
colored oleomargarine, and yet they say it is being manufactured and
sold colored. You can not stop it. That is the point. You can not
stop it. You can not stop it any more as has been shown by the
history of the world than you can stop anything that the public is
determined to have.
Senator DOLLIVER. Do you not think the United States could not
collect a tax of 10 cents a pound?
Mr. DAVIS. What have these gentlemen told you about that? Have
they not told you that the United States internal-revenue agents are
not doing their duty?
Senator DOLLIVER. Is there any complaint that the 2-cent tax is not
collected ?
408 OLEOMARGARINE.
Mr. DAVIS. Plenty of it, but without foundation.
Senator HANSBROUGrH. The advocates of oleomargarine here have
said that the internal-revenue officers, in the matter of inspection at
the several factories, are doing their duty. I myself very much ques-
tion whether they do their whole duty.
Mr. DAVIS. Senator Hansbrough, read what Mr. Hewes says about
the United States attorney in the city of Baltimore. If he does not
come right to the edge of accusing him of shutting his eyes I do not
know the English language.
Senator DOLLIVER. I have rather understood these gentlemen to
boast of their law-abiding disposition in respect to the present internal-
revenue laws.
Mr. DAVIS. I tell you, sir, as was said before the House Committee,
there are violations of this law. That is not to be denied. Nobody
denies it, and the violations of this law are induced by the consumers.
They are perpetrated by the little dealers, and they can not be perpe-
trated without some sort of laxness.
Senator DOLLIVER. I notice that there is a factory proposed to be
capitalized in the district here for $1,000,000.
Mr. DAVIS. Yes.
Senator DOLLIVER. You do not believe, since these factories are large
institutions, that they could escape the internal-revenue agents in the
mere matter of the collection of the tax ?
Mr. DAVIS. There is not a wholesaler in the country that escapes;
not one. That is not the point. You get your tax all right. The vio-
lations are made in the sales, as they say, under circumstances making
oleomargarine a competitor with butter. You get the tax all right.
The tax is paid at the factory. Nobody makes any complaint about
that. They are law abiding, and the Internal Revenue Commissioners
will tell you so. Their factories are open to inspection. They pay their
tax, but they are not going to pay any 10 cents a pound and keep alive.
I say you are going to invite a violation of the law where it never has
been violated, and that is among the wholesalers, and you are going to
invite a further violation down among the retailers, because the profit
is so much greater when the tax is 10 cents and not paid. The profit is
very much greater, and the temptation is very much greater.
But, gentlemen, I take these gentlemen on the other side, if I may
use the term, on their own dunghill. What do they mean when they
tell you these State laws are not enforced, and what do they mean when
they say they want the United States to act as policemen? They must
give some explanation of it. If these laws are on the books, why don't
they repeal them, you say. What is the use of repealing them when
they are as dead as Julius Caesar, and that is their own cry. Are they
dead ? There is only one of two answers. One is that there is a deliber-
ate blinking at the violation of the law, and the other is that the public
sentiment is too strong. How is your State anticolor la\v enforced in
Iowa?
Senator DOLLIVER. I do not think there is much oleomargarine sold
out there, though probably
Mr. DAVIS. You have had a law on the books since 1873, and how
many prosecutions have you heard of, or how many convictions have
you heard of under it?
Senator DOLLIVER. I think our State dairy commission out there does
not believe there is much sold of any color. You see we are in the heart
of the butter belt.
Senator HEITFELD. I think there is a document giving the number
of pounds sold in Iowa.
OLEOMAKQAEINE. 409
Mr. DAVIS. Yes; there is a statement of Judge Springer here, I
believe, as to the quantity that is sold out there. There are three deal-
ers, and there are 79,000 pounds sold.
Mr. JELKE. If Senator Dolliver will permit me, I will say that before
the anticolor law was passed in Iowa there was quite a large business
done; but we can not sell uncolored oleomargarine in Iowa, and there
is a rigid enforcement of the law against colored oleomargarine there.
Mr. DOLLIVER. I never met anyone in Iowa who wanted to purchase
the article, because there would be very little difference in the price there.
Mr. JELKE. I will say we have some customers who buy it for their
own use in some of the towns in Iowa.
Mr. DAVIS. I will try to relieve the committee in a few minutes. I
want to know if the United States officials are going to do any better
for these people than the States' officials do, except in the one particular
in which the United States can help; that is, the collection of the tax.
If you say yes to that, and that that is the only way, you concede at once
that the object of this bill is to suppress the industry. There is no
other outcome to it. I put it to you thus : If the laws restricting the
fraudulent sale of oleomargarine can not be enforced by the States,
they can not be enforced by the United States ; and if for the reason
that they are not enforced and can not be enforced by the States this
legislation is desired, its object exclusively is to reach above the State
laws and above the laws which have merely to do with the fraudulent
violation of the act and stop the sale and manufacture of oleomargarine ;
and I protest that Congress has no right to do that in the face of the
decisions to which I have asked the attention of the committee.
As to your question a while ago about the color, which I have already
answered in part, I protest that no interest, no matter how long it has
lived, has a right to protection against a newer and a better industry.
It is the fate of all commerce and of all business that new things come
in and push out the old; and it would be a most interesting thing,
indeed, if Congress or a State legislature were to attempt to close down
a shoe factory where shoes are made by machinery in order to save the
village shoemaker. Why, I do not know of anything that has impressed
me more in my life than the experience that I have been through, and
that you have been through, and every man here of my years or older
has been through, and that is the painful experience of seeing the
gradual destruction of the country village. I have gone through Mary-
land, around this city, all my life. I can recall one village after another
through which as a boy I went and through which I have passed only
lately. There was the village blacksmith, the village tinker, and the
village carpenter, and the village tailor name them all. Who is left?
Only the village blacksmith, because as yet God in his providence has
not endowed the human mind with sufficient intelligence to shoe a horse
by machinery; but the carpenter is gone, because the manufacturers of
doors, sashes, and blinds have taken his place. The tailor is gone,
because the manufacturer of clothing and the sellers of them by whole-
sale have taken his place. The tinker is gone, for the same reason ; and
so through the list.
Now, what would have been thought of any man introducing in his
legislature a bill to suppress the manufacture of shoes at Lynn, Mass.,
because the village cobblers were going to be put out of business?
That will not do. A very apt expression on that subject is to be found
in the language of Mr. Justice Peckhain, in the case of The United
State's v. The Freight Association, reported in 166 U. S. I read from
page 323. This is one of the trust cases. The argument was pressed
410 OLEOMARGARINE.
on the court that every trust in the country is an octopus, reaching out
its tentacles and strangling industries, and all that sort of business;
and after stating the business very plainly and bluntly, the court says
this :
In any great and extended change in the manner or method of doing business it
seems to be an inevitable necessity that distress and perhaps ruin shall be its accom-
paniment in regard to some of those who were engaged in the old methods. A change
from stagecoaches and canal boats to railroads threw at once a large number of men
out of employment; changes from hand labor to that of machinery, and from opera-
ting machinery by hand to the application of steam for such purposes, leave behind
them for the time a number of men who must seek other avenues of livelihood.
These are misfortunes which seem to be the necessary accompaniment of all great
industrial changes. It takes time to effect a readjustment of industrial life, so that
those who are thrown out of their old employment by reason of such changes as we
have spoken of may find opportunities for labor in other departments than those to
which they have been accustomed.
The same thing exactly is true of industries. When an industry
comes in it takes the place of another. When the cotton seersucker
was invented, the silk seersucker had to step aside. When the Paisley
shawl came into the market the camel's-hair shawl had to take a
back seat. It is the same old story. It has been so ever since the
beginning of industries. It is simply a repetition of the old cry that
this wholesome and nutritious product, which is the poor man's butter,
is to be kept out of the market and its manufacture to be suppressed
because a part of that same market has been preempted by the butter
men. I protest that that is not within the legislative power. Certainly
it is not within the legislative wisdom, and I think it is not within its
power at all.
So far as my particular clients are concerned these people here in
the District of Columbia if you are going to put out your hands in
exercise of the revenue power, say so; but you do not say so; tliis bill
does not say so, and it does not pretend to say so, and it does not mean
so, because, as I have already said, if you say that I will show you in a
minute that you have more money than you can spend. You do not
need this money. You are now engaged in the very act and effort of
reducing the Government revenues. That is not what you want. If
you say you are going to stop this particular industry here, which
will be the one most nearly affected, because you are exercising the
police power, I ask you, Why? Is this thing detrimental to the public
safety ! That is one of the things that the police power has to do with.
Is it detrimental to the public health ? The Supreme Court tells you
that it is not; the chemists the world over tell you that it is not. Is it
detrimental to the public morals? How? The manufacturer here has
to pay the tax like everybody else. And if you tell me, as these gentle-
men say, that it is detrimental to the public morals in that it puts a
temptation before a man to sell something for what it is not, I say to
you in perfect earnestness that your increasing the taxis increasing
that temptation instead of diminishing it, and instead of helping the
public morals you are simply doing the opposite.
Now, gentlemen, I am thankful to you for the very patient attention
you have given to me. I have taken a longer time, perhaps, than you
thought was necessary, but I could not be too earnest in my endeavor
to get before you my attitude toward this matter. I could not be to
earnest in my endeavor to convince you, as I believe in my heart, that
this is a very vicious piece of class legislation that is being attempted
here. I do not believe it to be constitutional, for the reasons that I
have stated. If it were constitutional [ would believe it to be a very
unwise act, and certainly a very unjust one; and with. respect to the
OLEOMARGARINE. 411
industry at large, and certainly with respect to this industry which I
represent here, it means absolute destruction; and that means not
merely the forfeiture, the practical confiscation, of large sums of money,
but also the deprivation of employment and means of support of thou-
sands of people; and at the bottom of it all it means the denial to the
poorer and the more moderate classes of an article of food that they
want; that they have a right, before God and the laws of this land, to
have, and from which they can not be kept except by what I am con-
strained to characterize as an abuse of legislative power.
1 thank you very kindly.
Senator DOLLIVER. The committee is very much obliged to you for
your statements, and to all others who have addressed the committee
to-day, and if nothing further is to be suggested the committee will now
adjourn.
Mr. DAVIS. Senator, some mention was made about Mr. Tompkius.
Mr. Jelke will state that.
Mr. JELKE. A gentlemen from Texas, Mr. Peters, came 1,500 miles to
address the committee, and he thought he would be heard this after-
noon; but on account of Mr. Davis and myself occupying the time he
has gone, and he would like to be heard for a short time in the morn-
ing. Mr. Tompkins would also like to be heard.
Senator DOLLIVER. Let them report here in the morning and we will
determine that question.
Senator HANSBROUGH. Is it understood that the advocates of the
Grout bill are to occupy to-morrow?
Senator DOLLIVER. I think that is the understanding.
Senator HANSBROUGH. And that the meetings will end then?
Mr. KNIGHT. That was the understanding with Senator Proctor.
Senator DOLLIVTER. Will you require all of to-morrow ?
Mr. KNIGHT. Yes, sir; we certainly shall, and that will be very short.
Mr. CTTLBERSON. Mr. Tompkius wants to conclude what he started
to say to the committee.
Senator DOLLIVER. That question may be determined to-morrow;
but in the meantime it may be said that written arguments can be filed
with the stenographer and printed.
Senator HANSBROUGH. I understand that the Secretary of Agricul-
ture is tobebefore the committee to-morrow morning for a short time, and
I make the suggestion that if this gentleman from Texas has any addi-
tional information to lay before the committee he might put it in writ-
ing, because, as you understand, there are only from two to three
members of the committee present at aey one time, and it will be nec-
essary before we can consider this bill to have all the committee have
these proceedings on their desks and examine them.
Mr. SCHELL. The gentleman from Texas has not been before the
committee at all. It was Mr. Tompkins who started his remarks and
who did not finish.
Senator DOLLIVER. I think it would be well to advise Mr. Tompkins
that he can have leave to file a supplemental argument, as if it were
delivered before the committee.
Senator HEITFELD. Are those the men who came here from Texas,
whom Senator Culberson spoke to the Chair about?
Mr. CULBERSON. Yes, sir; Mr. Peters is, 1 am quite sure.
Senator HEITFELD. They have come all the way from Texas on the
assurance that they will be heard.
Senator HANSBROUGH. They have all been heard except one, as I
understand.
412 OLEOMARGARINE.
Mr. CULBERSON. Mr. Peters has not been heard at all.
Mr. KNIGHT. There were two gentlemen here who stayed almost a
week, but did not have an opportunity to be heard, and they have left
their statements, which they ask to be filed.
Senator DOLLIVER. They may be tiled with the stenographer and
printed with the proceedings.
The statements referred to are as follows :
WASHINGTON, D. C., January 5, 1901.
GENTLEMEN : I hereby respectfully request to be permitted to tile
with your honorable body, to be printed in the records, the indorse
ment of the Watertown Produce Exchange, of the State of New York,
of the so called "Grout bill." That board, composed of a large num-
ber of representative citizens of the State of New York, through me, as
their delegate, request your honorable committee to report the said
bill favorably, to the end that the fraudulent practices now in vogue
in the sale and use of oleomargarine by the retailers and its use in
hotels and restaurants fraudulently represented as butter may be
stopped.
This board would not favor the bill if its only object were to drive
competitors out of the market. It believes firmly in giving free scope
to honest competition, but it believes that no fraud should be the
vehicle or avenue of commerce whatsoever, and it therefore believes
that this is a question worthy the notice of the Congress of the United
States, and asks that your honorable body provide against such fraud
by the enactment of this measure into a law.
Respectfully, W. A. ROGERS.
The COMMITTEE ON AGRICULTURE AND FORESTRY
OF THE UNITED STATES SENATE,
Washington, D. C.
CHAIRMAN COMMITTEE ON AGRICULTURE AND FORESTRY,
UNITED STATES SENATE,
Washington, D. C.
Mr. CHAIRMAN: On account of the pressure for time in your com-
mittee by those conducting the oleomargarine side of the questions
involved in the Grout bill, I have been unable to be heard, although I
have been present here for nearly a week. The press of business at
home demands that I return. I therefore beg leave to lay this written
communication before you, to the end that a few facts may be placed
upon record relative to the attitude of the National Grange and of the
State Grange of the State of New York in the matter of the so called
" Grout bill."
1 1 has been stated by those opposed to this bill that the farmers of
this country are not interested in the measure and do not want it.
The National Grange represents over three hundred ihousand agri
culturists of the United States, and the State Grange of the State of
New York represents over sixty thousand, and yet both of these bodies,
after due consideration of all the questions involved, passed resolutions
indorsing the said bill and requesting the Congress of the United
States to enact it into a law.
I am master of the State Grange of the State of New York and a
member of the executive and legislative committees of the National
Grange, and come here in such official capacity as the representative of
OLEOMARGARINE. 413
both these bodies to urge your committee in their interest to report
favorably the said bill to the Senate of the United States for its con-
sideration, without amendment in any respect whatever.
The Granges of the United States, aside from any financial consider-
ations in their own interest, believe this bill should be enacted into a
law, because they believe :
First. That oleomargarine is relatively, if not entirely, an unhealthy
product; and
Second. That it is a fact so notorious as to need little argument that,
while producers of oleomargarine in the first instance sell it for such,
hardly a pound of it reaches the consumer under its true name and in
its true guise. It is almost invariably sold as and for butter, and in
the hotels, restaurants, and boarding houses where it is used it is always
served as butter.
If this condition of things is allowed to continue the consuming public
will be forced to use the commodity, whether they desire to do so or
not. Plainly, this state of things ought not to be. In the isterests ot
mutual integrity in commerce and justice between man and man these
goods ought to be placed upon the market in such guise as that the
consumer may be notified in their appearance of their true nature.
Respectfully submitted.
E. B. NORRIS,
Master of the State Grange of the State of New York.
Mr. ADAMS. I ask permission to file the statement of Governor Hoard
at this time.
Senator DOLLIVER. That may be done.
The statement above referred to is as follows :
STATEMENT OF W. D. HOARD.
This law is demanded in the interest of a broad public policy, for
the protection of legitimate industry against illegitimate counterfeiting
and fraud. Compare the policy pursued by the United States with that
of Canada. The Dominion government guards the purity and honesty
of her dairy products to the extent of absolute prohibition of any adul-
teration or counterfeiting of the same. As a result her export of
cheese to England alone has grown in twenty years from $3,000,000 to
$20,000,000, while ours has declined nearly the same amount, because
we did not place the strong hand of the law on the adulterated product,
tilled cheese, until w r e had lost the confidence of the foreign consumer.
Denmark sells $30,000,000 of butter abroad annually. Do you think
that Government would allow her commerce in butter to be endangered
by the shipment to foreign consumers of a counterfeit butter? Not so.
The Danish Government rigorously prohibits the exportation of oleo-
margarine. Here are two conspicuous examples of two nations who
have guarded well the reputation of their dairy products and exports,
and well have they thrived by it.
This law is needed in the interest of the promotion of honesty and
fair dealing in our own home markets. This is a policy of taxing
heavily a traffic which flourishes by deception. Two benefits will
accrue to American society by the passage of this law. Cheating, both
of the producer and consumer ot butter, will be lessened, and the burden
of taxation correspondingly shifted from the shoulders of honest and
legitimate industry. It is time the Federal Government instituted a
vigorous policy in this direction. It has no right to stand before the
414 OLEOMARGARINE.
conscience of the people and excuse itself for not distinguishing between
legitimate and illegitimate industry and enterprise in the burden of
taxation which is laid. The Government has the power in this way to
discourage wrongdoing and encourage honest industry, and the people
will hold it responsible for the exercise of that power when the oppor-
tunity comes, as in the present case. I ask, can the Senate of the
United State, can any Senator, afford to deny to the great dairy interests
of this country this prayer for relief from competition with an acknowl-
edged counterfeit and fraud?
The committee (at 5 o'clock p. m.) adjourned until Thursday, January
10, 1901, at 10.30 a. m.
COMMITTEE ON AGRICULTURE AND FORESTRY,
UNITED STATES SENATE,
Washington, D. <7., January 10, 1901.
The committee met at 10.30 a. m.
Present: Senators Proctor (chairman), Allen, Dolliver, and Money;
also, Hon. William M. Springer, Charles Y. Knight, Mr. H. E. Adams,
Mr. Schell, Mr. Tilliughast, Mr. Culbersou, Mr. Miller, and others.