Senator MONEY. If it will not interrupt you, I would like to have
you go back to the price of cotton seed for a moment, because the
prices you gave are contrary to my experience. Do you refer to the
price per ton of cotton seed, or the price per bushel?
Mr. PETERS. No; the price per ton of seed at Houston. Let me read
to you the prices of cotton seed at Houston, per ton of 2,000 pounds,
from 1898 to 1900. These figures are taken from Bradstreet's quota-
tions. On the 1st of January, 1888, the price was $9.50; in 1899 it was
$9; in 1900 it was $12.
Senator MONEY. Sixty bushels make a ton, you know.
Mr. PETERS. That is the way it is usually estimated.
Senator MONEY. Well, that is the basis on which every farmer and
every oil-dealer buys and sells.
Mr. PETERS. In our section they buy and sell entirely by the ton,
Senator MONEY. Well, 60 bushels of seed will make a ton. I have
lived on a cotton farm. In fact, I am a farmer myself. Now, that will
make 25 cents a bushel for cotton seed, there being 60 bushels in a ton.
Mr. PETERS. That is right.
Senator MONEY. The point is that in my State we are only getting
about $8 a ton now.
Mr. PETERS. I sold mine last year at $15.50.
Senator MONEY. Ffteen dollars and a half a ton ?
Mr. PETERS. Fifteen dollars and a half a ton.
Senator MONEY. That is 25 cents a bushel. That is higher than I
ever knew it to be sold before.
Senator FOSTER. You had better send yours over to Texas, Senator.
Senator MONEY. Yes; we might ship our cotton into Texas at a
profit, at that rate.
Mr. PETERS. No; you do not know the railroad people there. The
railroads charge us double price west of the river there for everything
we ship. It takes about $2.50 a bale to get a bale of cotton to the ports
west of us, while east of us it is only about a dollar.
Senator FOSTER. These are Galveston prices, are they?
Mr. PETERS. These are Houston prices.
Senator DOLLIVER. You are being robbed by somebody in some way,
The ACTING CHAIRMAN. The "octopus" has got hold of you. [Laugh-
ter.] But go on with your statement, Mr. Peters.
Mr. PETERS. This is the letter I received inclosing the figures to
which I referred a moment ago.
UNITED STATES DEPARTMENT OP AGRICULTURE,
DIVISION OP STATISTICS,
Washington, D. C., January 8, 1901.
Mr. E. S. PETERS,
Hotel Raleiyh, City.
DEAR SIR: In compliance with my promise of yesterday, I beg to 'inclose such
information as is available with regard to the production and price of cotton seed.
The information with regard to prices is rather meager, and I do not know whether
it will meet with your requirements or not, but it is the best that can be done on
such short notice. So far as production of cotton seed is concerned, it has been
figured out on the generally accepted basis of two-thirds seed and one-third lint;
in other words, it is assumed that 1,500 pounds of lint and seed will make 500 pounds
of lint and 1,000 pounds of seed. In the figures for 1900-1901 of production of cot-
ton, it is impossible to separate the production of Texas and the Territories, but this
is explained in a footnote.
Very truly, yours, JOHN HYDE.
Acreage, production, and value of lint cotton and estimated production of cotton seed in
named States and United States, 1898-99 to 1900-1901.
24, 967, 295
23, 403, 497
25, 034, 734
11, 189, 205
9, 142, 838
10, 100, 000
$305 467, 041
334, 847, 868
5. f>94, 602
4, 571, 419
5, 050, 000
6 991 904
3 363, 109
1 681 554
6, 642, 309
2, 438, 555
92, 187, 133
1, 219, 278
7 041 000
$3 108 942
1899 1900 . -
2, 512, 584
$5, 971, 019
4, 534, 174
1 Texas and Territories, 3,570,000 bales; this represents 1,785,000 tons of cotton seed.
Now, I have said what I wished to state in reference to how this bill
will affect us cotton planters.
I would like to say this in reference to the merits of this case : I see
no reason why the products of one agricultural section should be legis-
lated against for the benefit of another section. We all use butter
down our way; in fact, I presume they use it as much there as they do
anywhere else. I know I always have plenty on my table and never
have to buy any. But there is no right or justice in taking one prod-
uct for the benefit of another agricultural product.
I would suggest, in place of placing the tax proposed by th:s Grout
bill on oleomargarine, that if the butter men are honest in what they
say, and simply do not want butter imitated, that can very easily be
remedied, according to my idea. I would suggest that the products
of the process-butter factories be put up round or oval packages, so
that they can be designated as process butter, and that oleomargarine
be pat up in square or rectangular packages and marked as it is now.
If they will make it compulsory by a law with penalties attached to
put oleomargarine up in bricks, a blind man or a child can tell exactly
what he is getting, and there can be no imposition; and it would not
work a hardship upon the dairy people at all.
Senator MONEY. Then you want the renovated butter marked, too,
Mr. PETERS. Yes. Let the process-butter people put their product
up in oval or round packages. I think they are the men who need
looking after, if I can judge from some little testimony I have read and
I do not know, Senators, that there is anything further that I wish
to submit to you, unless it is a letter I received from Harvie Jordan,
president of the Georgia Cotton Growers' Protective Association,
directed to the committee. I will read it:
To the honorable Committee on Agriculture.
UNITED STATES SENATE,
WASHINGTON, D. C., January 5, 1901.
MR. CHAIRMAN AND GENTLEMEN: In behalf of the agricultural interests of my
State, which might be affected adversely or otherwise by the passage of the pend-
ing Grout bill, now in your hands for consideration, I beg to herewith submit my
earnest protest against its favorable consideration. The people of my State are
opposed to any legislation which fosters one industry at the expense of another.
Georgia is rapidly developing the dairy industry, and has also extended cotton-
seed oil milling interests. From a careful reading of the Grout bill, I feel assured its
passage would work serious detriment to the cotton-seed oil industry of the South.
The sale of our farm products should be based upon legitimate demand, and every
article given a fair showing in the markets.
The different States will and are enacting laws which will fully protect our but-
ter industry against the improper sale of oleomargarine, and will shut the sale of
that article out of the market as an active competitor, save upon its actual merits.
A bill was introduced at the last session of the legislature in this State, and
passed, which guaranteed absolute protection to the butter industry of Georgia, and
at the same time left the choice of purchase and consumption of butter and oleomar-
garine on a fair and equitable basis.
Sectional or class legislation is always objectionable, and should never be tolerated
in a country of such wide and varied interests as ours. I can see no good reason for
national legislation on the interests of the Grout bill. I am chairman of the general
agricultural committee of the house of representatives of Georgia, and can assure
you that we have secured the passage of a State law which gives satisfaction and
ample protection to the dairymen of Georgia, so far as the future sale of oleomar-
garine is concerned.
I am exceedingly anxious for the rapid development of the dairying industry in
Georgia, but I do not want it fostered and protected by the passage of unjust laws,
which will be detrimental to the future of other highly valuable and equally impor-
tant agricultural products.
1 trust that your committee will give to the provisions of the Grout bill most
careful and thorough consideration, and that your final judgment will be based upon
a fair and just solution of the questions involved in that bill, which I feel assured is
the earnest desire of every Senator who has the honor of representing the American
people in the highest branch of their National Legislature.
With highest respect, I beg to remain, gentlemen,
Yours, truly, HARVIE JORDAN.
Senator MONEY. Who is the writer of that letter ?
Mr. PETERS. Harvie Jordan. He is the president of the Georgia
Cotton Growers' Protective Association, and chairman of the Commit-
tee on Agriculture of the Georgia senate.
Gentlemen, I thank you very kindly for allowing me to be heard.
CONTINUATION OF STATEMENT OF CHARLES Y. KNIGHT.
Mr. KNIGHT. It was stated by Senator Allen that probably I would
want to answer something that the gentleman preceding me has said
In regard to cotton-seed oil.
From his figures I gather that the value of the cotton production of
this country is $475,000,000. From figures presented by other people
here, I take it that the value of the cotton-seed-oil industry is
$50,000,000, making a total of $525,000,000. Of those $525,000,000 in
value of the cotton and cotton-oil product, the oleomargarine people of
this country use less than one-half of $1,000,000 worth. The amount of
cotton- seed oil used in the manufacture of oleomargarine in this coun-
try, in proportion to the product of oleomargarine, basing it upon the
figures of the cotton-seed-oil people themselves, is about two-thirds of
1 per cent. So that we can not see, gentlemen, any great harm that
can accrue to the manufacturers of cotton-seed oil as a result of this
legislation, even if it would (as they claim) crush out the industry
entirely, which we deny.
Mr. MILLER. I would like to call the attention of the committee to
the statement made by Mr. Culbertson, representing the Paris Cotton
Oil Company, of Paris, Tex. That statement was to the effect that
-the amount of oil made for the manufacture of oleomargarine was 25
per cent of the total amount of oil made.
Mr. KNIGHT. I do not know what Mr. Culbertson said; but I do
know that the Secretary of the Treasury has reported that in the
83,000,000 pounds of oleomargine made in this country last year there
were less than 9,000,000 pounds of cotton-seed oil. I can not give you
in pounds the amount of cotton- seed oil produced; I am only giving it
in dollars, as shown by this report, which does not give it in pounds.
So that that statement will hardly stand the test of reason, when it is
seen that the value of all of the cotton-seed oil is $50,000,000 yearly,
and there is only $500,000 worth used in the oleomargarine made in this
country, and 25 per cent of the $50,000,000 would be $12,500,000.
Mr. MILLER. You are not taking into consideration the amount
Mr. KNIGHT. Do we make into oleomargarine in this country the
cotton-seed oil that is exported ?
Mr. MILLER. What would be the effect upon the export trade if you
should place a ban on the oil used in this country ?
Mr. KNIGHT. I want to speak in connection with this matter of
"placing a ban" on the oil in this country. When this bill was up for
consideration in 1886, the cry was, "If you place a 2-ceiit stamp on
oleomargarine, you will place a ban on the article, so that nobody in the
United States will use it." But the minute the tax was placed on oleo-
margarine, its manufacturers began to call it an indorsement by the
Government of oleomargarine ; and the matter has been carried into
the courts, and it has been claimed that this taxation gave the Govern-
ment's stamp of approval to oleomargarine.
Now, if 2 cents a pound tax will give you the Government's stamp of
approval, a tax of 10 cents a pound will give you five times that much
Senator MONEY. Let me ask you a question : Do you want to repress
or destroy the manufacture of colored oleomargarine in this country ?
Is that your wish ?
Mr. KNIGHT. Why, I think it has been demonstrated here, Senator,
that white oleomargarine can be sold. I know very well that if its
manufacturers want to build up a trade in white oleomargarine, they
can do it.
Senator MONEY. I would like to have you answer my question.
Mr. KNIGHT. Yes, sir. .
Senator MONEY. I think we should have a candid talk about this
Mr. KNIGHT. Yes.
Senator MONEY. Do you wish to diminish the oleomargarine produc-
tion, or not? Do you want to injure it, or do you want to suppress it,
or do you want to get it out of the way as a competitor?
Mr. KNIGHT. We do not want to compete with oleomargarine, col-
ored so closely to resemble butter that the people can not have a choice
between it and genuine butter.
Senator MONEY. Then is your idea that by taxing it 10 cents a
pound you will get rid of a competitor? Is that it?
Mr. KNIGHT. I think we will get rid of the incentive of people to use
that product to defraud the public.
Senator MONEY. Now, without using any roundabout expressions at
all, you want to get rid of a competitor, do you; and you want to get
rid of it by a tax of 10 cents a pound.?
Mr. KNIGHT. We want to get rid of a fraud, Senator.
Senator MONEY. I am not talking about fraud. We disagree on that
subject, you know; for I think there is as much fraud in your business
as there is in ours.
Mr. KNIGHT. There is fraud in every business.
Senator MONEY. Nevertheless we have had testimony here to show
that you take rancid and sour butter, and paddle it up, and put chem-
icals in it, and sell it for butter.
Mr. KNIGHT. And we have also had testimony, Senator, to the effect
that these oleomargarine people want to color their butter in imitation
of that "rancid stuff."
Senator MONEY. All right. That is another matter. Now, you want
to get rid of this industry whether it is a fraud or not; and that is the
object of this measure, is it not to get rid of oleomargarine ?
Mr. KNIGHT. I do not see how I can explain to you my views
Senator MONEY. You can explain. them by answering the question.
Senator FOSTER. Do you want to get rid of it if it is not a fraud?
Mr. KNIGHT. We want to get rid of the fraudulent competition.
Senator FOSTER. The illegitimate competition?
Mr. KNIGHT. The illegitimate competition.
Senator MONEY. And in order to do that, you want to tax the whole
production 10 per cent?
Mr. KNIGHT. No, indeed, we do not.
Senator MONEY. Is not that the proposition?
Mr. KNIGHT. No, sir; the Grout bill only taxes that which is colored.
The Acting CHAIRMAN. Will there be any tax on the pure uncolored
oleomargarine under this bill, as you understand it?
Mr. KNIGHT. There will be a quarter of a cent tax, Senator, for this
reason. The idea of putting a quarter of a cent tax on the uncolored
article is to place it within Government restrictions, so that when a
man puts up a factory he will be located by this tax and the Govern-
ment can keep its eye on him.
The Acting CHAIRMAN. I mean apart from that. That is a mere
bagatelle. Do you want any substantial tax upon the uncolored
Mr. KNIGHT. Oh, no; no, indeed.
Senator MONEY. Now, I want to ask you this question: Are you
willing to insert in this bill a provision that no dairyman shall color his
Mr. KNIGHT. No, indeed ; we are not.
Senator MONEY. No ; but you are willing that the manufacturer of
process butter shall be restricted there, are you ?
Mr. KNIGHT. No ; now, 1 will explain that. That has been brought
up here several times.
Senator MONEY. Excuse me; I would prefer to have you answer my
Mr. KNIGHT. I can not answer it, sir, yes or no; because I have got
to explain to you that renovated butter is made out of butter which is
already colored, either by nature or by the farmer artificially. The
manufacturer of renovated butter, in choosing his stock, has no choice
at all in this particular matter. He could not be compelled to make
his butter uncolored. He gets yellow butter that is as yellow as any
butter that you have ever seen which has absolutely no artificial col-
oring matter in it. That is one grade that he gets. Now, you can not
make him make that butter white. On the other hand, it is within the
province and jurisdiction of the oleomargarine manufacturer to make
his product of one color the year round.
Senator MONEY. You do not object to the oleomargarine manufac-
turer coloring his product red, then, when he sends it down to the
West Indies ?
Mr. KNIGHT. No; he can color it red, just like currant jelly, and it
can be put on bread just as people use currant jelly on their bread.
We will not object to that at all.
Senator MONEY. You only object to it when it is colored in competi-
tion with your product.
Mr. KNIGHT. That is it exactly.
Senator MONEY. In other words, you want something done by the
United States Government which will put money in your pockets at
the expense of some other person ?
Mr. KNIGHT. No j we do not. But we want our pockets locked up
against the plunder of other people.
Senator MONEY. Nobody is taking anything out of your pockets.
Mr. KNIGHT. Oh, no !
Senator MONEY. Now, here is another thing: Suppose I were to
introduce a bill, let us say, placing a tax upon butter of 20 cents a
Mr. KNIGHT. Yes.
Senator MONEY. And suppose that bill forbade the coloring of it.
Mr. KNIGHT. Yes.
Senator MONEY. And suppose I taxed oleomargarine 10 cents a
pound, as you propose to do in this bill.
Mr. KNIGHT. Yes.
Senator MONEY. In other words, suppose I proposed to crush you
both out of business in order that the people might be compelled to
use a product of cotton-seed oil. What would you think of that?
Mr. KNIGHT. I think it would not pass. (Laughter.)
Senator MONEY. I am not talking about whether it would pass or
not. I do not want your opinion about that. I have my own opinion
on that question. But what about the morality of it, and the consti-
tutionality of it, and the justice of ilj?
Mr. KNIGHT. But, Senator, you can not claim that either of those
products are imitating your product.
Senator MONEY. That makes no difference.
Mr. KNIGHT. That is our whole claim here. The best part of our
whole claim is that this other product is a fraudulent imitation of ours,
and that oleomargarine is being used to displace our product illegiti-
mately and fraudulently.
Senator MONEY. Does not the first provision of the act sufficiently
provide against that? Now, as I understand it excuse me for arguing
Mr. KNIGHT. That is all right ; I am very glad to have you.
Senator MONEY. I am trying to get at the facts of this matter. I
have only been here during a part of the hearings, because I have had
to be in other places. But in the first place, it seems to be conceded
that the manufacturer himself does not deceive anybody.
Mr. KNIGHT. Oh, no !
Senator MONEY. He sells his product as oleomargarine ; he never
pretends to sell it as butter. Is that so 1
Mr. KNIGHT. I will tell you. I have two cases right here to which I
can refer you, which bear on that subject. I will tell you the trouble
about that, Senator. Whenever that is done, it is done in such a way
that we can not get evidence against those manufacturers to connect
them with the fraud. But if you will permit me to do so, I will give
you a little incident here which I think will convince you that possibly
the manufacturers are pretty well in sympathy with those who do pass
off oleomargarine as butter. That is as close as we can get to it.
Senator MONEY. That does not meet the point at all.
Mr. KNIGHT. It meets it as nearly as we can meet it.
Senator MONEY. Then you fail to meet that point. The next is
Mr. KNIGHT. Well, what point is it you want me to meet, Senator?
Senator MONEY. I want to know where there is any fraud.
Mr. KNIGHT. Yes; and I will show you right here. I did not want
to be forced to do this, but I am
Senator MONEY. Oh, yes ; let us hear the whole truth. Do not hold
Mr. KNIGHT. I simply did not want to be personal in this matter,
and for that reason I have left out a great many things that might
have been said.
Senator MONEY. You can suppress names if you do not want to be
Mr. KNIGHT. I hold in my hand here an answer to a complaint which
was made by the collector of internal revenue for the first district of
Illinois against the largest manufacturers of oleomargarine in the State,
in which they were accused, in twenty counts, of fraudulent entry
that is to say, of having sent to the collector's office wrong or fictitious
names of people who bought oleomargarine. What was that com-
plaint for? It was for what is known as " covering up " dealers.
For instance, suppose I am a manufacturer and you are a licensed
dealer. By law I am compelled to report every pound of oleomargarine
I sell to you and your post-office address. The object of that require-
ment is to enable the Government to go to you and see that you have
the necessary license to sell it, and have paid your tax to sell it.
Here comes a man who wants to sell oleomargarine for butter, we will
say, or who does not want the Government to trace him out and put a
tax on him, so that he will be identified, and so that any person can go
to the office and find out that he is a dealer and watch him.
Senator FOSTER. It is a species of green goods, is it?
Mr. KNIGHT. Yes, that is it. Now, instead of his billing the goods
to the man he wants to cover up he bills them to you. You are none
the wiser, because those reports are confidential. And this particular
matter was brought out in this way, as I understand it : In the city
of Aurora, 111., there was a company formed, known as the Aurora
Produce Company. That Aurora Produce Company, as nearly as the
internal-revenue collector has been able to find out, sent out broadcast
through the country $140,000 worth of oleomargarine, with the stamps
scratched off, as and for butter. That oleomargarine was sold as butter
in New York State. The company sold it by the carload. They sold it
to one man in Buffalo, N. Y. The food commissioner became aware of
it, and it cost that man $1,800 in fines for buying something innocently,
which he supposed to be butter, because it was colored and he could
not tell the difference, as it came there in tubs. Another man, up in
Milwaukee, had to go up and pay a $480 internal-revenue license as a
wholesaler, because he got hold of some of that oleomargarine, thinking
it was butter, and bought it innocently, and sold it as butter. But the
internal-revenue collector went after him, with the result I have stated.
I do not know how many more men were traced in that way.
When the man who was the head of this concern was arrested, it was
not through the activity of the internal-revenue office, but through the
department of agriculture of New York, which sent detectives to Chi-
cago, tracked him down, got evidence against him, and turned him over
to the internal-revenue collector. When he was arrested two of his
people fled the country and got into Canada, and one of them, before
he went, burned his books, and permitted nobody to see anything
about his transactions. The people were absolutely irresponsible, and
yet they had done a business of $140,000 within a few months.
When this man was arraigned before Commissioner Mason (who, by
the way, is Senator Mason's son) the leading oleomargarine manufac-
turers of the city of Chicago came and put up bail for him, and kept
him from going to jail. I can not say that they furnished counsel for
that man, for you can not find out from their check books who they pay
money to for such purposes. But the point I was coming to was that
this thing started an investigation (commenced, as I understand it, by
the Internal Eevenue Department) for the purpose of finding out where
these goods were being shipped by the manufacturers, so that they
could u get on to them/ 7 and that investigation led to the locating of
some twenty places where oleomargarine had been shipped by the