Senator FOSTER. That is the same old question.

Mr. TILLINGHAST. The same old question that has been discussed so
often.

Mr. SCHELL. Just one question. I presented here a list of 1,083 con-
sumers who buy direct from one of my factories. We also all of us



580 OLEOMARGARINE.

have an export trade. In 32 different States, including Ohio, where
two of my factories are located, there is a law absolutely prohibiting
the manufacture or sale of colored oleomargarine. I would like to
know how, under this bill, my people can manufacture, either on the
order of these consumers or for the export trade, colored oleomargarine
at all, since every time they do it they are pleading guilty to a viola-
tion of the State statute.

Mr. GROUT. That is a question that enters into the secrets of the
oleo business, and I do not think anybody could answer it. I must con-
fess I do not see myself how there is any plea of guilty to a charge in
such a case as stated by him.

The committee (at 11 o'clock and 45 minutes) adjourned, subject to
calL



HEARINGS



BEFORE THE



COMMITTEE ON AGRICULTURE,



HOUSE OF REPRESENTATIVES.



631



[NOTE. (*) pages at bottom refer to pages in original House hearings,
and are the pages meant when reference is made to House hearings in
Senate hearing and in review by Mr. Schell.]



OLEOMARGARINE.



HOUSE OF BEPRESENTATIVES,
COMMITTEE ON AGRICULTURE,
Washington, D. 0., March 7, 1900.

ARGUMENT OF W. D. HOARD.

Whom do we represent? The united dairy sentiment of the nation.
That means over 5,000,000 farmers, and an annual cash value in their
product of over $600,000,000. A vast army of consumers of dairy prod-
ucts, who are constantly duped and swindled by a counterfeit substitute
for butter. The consumer is defrauded of his money and the dairy
farmer of his rightful market, the first being compelled to pay a butter
price for that which is not butter.

The consumers and producers of butter ask Congress to enact into
law House bill 3717, which provides by the first section that all coun-
terfeit substitutes for butter, when taken into any State or Territory,
shall be subject to the laws of that State or Territory concerning such
counterfeit, the same as the Wilson law in regard to liquors, enacted,
I think, in 1891. It was deemed for the public welfare to enact that
law. We claim it is for the public welfare to place oleomargarine
under the operation of a similar law.

Already thirty-two States have laws on their statute books forbid-
ding the manufacture and sale of fat mixtures when colored and made
in the semblance of butter.

The Oleomargarine combine consists of less than twenty manufactur-
ers, who have entered into a conspiracy to break down these State laws,
and, by bribing merchants, by deception of all kinds, by subsidizing city
newspapers, by employing leading politicians, to so neutralize the effect
and administration ot those laws that they may force their counterfeit
upon the public. These manufacturers are assuming to override all law.
They stand behind all infractions of State and national laws, and fur-
nish money for the defense of their agents when arrested.

On one side stands one of the greatest of our agricultural interests,
together with the millions of consumers who are tired of being swindled.

On the other side stands the oleomargarine trust, engaged in manu-
facturing a counterfeit, depending on lawbreaking, falsehood, and
deception for its success, backed up with millions of capital.

The situation is significant, whether viewed from a political, eco-
nomic, or patriotic standpoint.

The second section of this bill provides, first, that on all oleomar-
garine which stands in its own color and not in the semblance of
butter, on this mixture the present Federal tax shall be reduced to a
fourth of one cent a pound. The dairy sentiment of the country would
be willing that the uncolored compound should be relieved of all taxa-

(*1) 583



584 OLEOMARGARINE.

tion. The tax as provided in the bill, however, is trifling and nominal.
This is done in the spirit of fairness. If there are any persons who
wish to eat this mixture in preference to butter, who ask it because
they are poor, they would then be enabled to buy it for what it is
worth. They could not be cheated into paying a butter price for some-
thing that in no honest sense is butter, or like butter.

The oleo combine and their apologists and defenders have a great
deal to say about oleomargarine being a cheap food for the " poor."
There is consummate hypocrisy in this plea. You will notice that the
poor people are not making this plea. It is made for the purpose of
overreaching the poor.

The friends of this measure are the true friends of the poor, for they
ask that the force of law and the burden of onerous taxation be turned
against the counterfeit, while the article which is not colored to deceive
can have free course.

What does oleomargarine cost? Armour & Co., of Chicago, testified
before a Federal district court in New York that, with the 2-eent Federal
tax added, the cost was less than 7 cents a pound. If it was uncolored,
the poor could buy it for 10 cents, or at most 12 cents a pound. Yet
I saw the colored article selling in Ashland, Wis., to the poor, for 28
cents a pound.

This plea for the poor, by these exploiters of poverty, finds conspic-
uous parallel in the history of Judas Iscariot. When the women
annointed the feet of Christ with alabaster ointment, Judas had a
great deal to say why the ointment was not sold and the money given
to the poor. Yet I imagine it is not necessary to inform this commit-
tee that Judas was a traitor to both Christ and the poor.

To give added force to the first section of this bill it is also provided
in the second section that a tax of 10 cents a pound shall be imposed
on all oleomargarine in the color or semblance of butter. In plain
words, this is repressive taxation. In 1886 Congress, in response to
the demand of the people, placed a tax of 2 cents a pound on this
counterfeit, and exacted heavy license fees for its manufacture and
sale.

This was done in the interest of the public welfare. Congress has
the undoubted right to exercise this power. It has exercised it in the
tax on State bank circulation, on filled cheese, and adulterated flour.
This is a part only of the duty and policy of internal protection.

It has been found, through the inefficient administration of State
laws and the powerful influence of this oleomargarine combination, that
this protection is insufficient.

The manufacture of the counterfeit has grown from 34,000,000 pounds
in 188S to 83,000,000 in 1899, and, be it remembered, 90 per cent of it
consumed under the supposition that it is butter.

This product of 1899 would make 1,383,684 60-pound tubs. If placed
side by side they would reach 3,400 miles; if loaded into farm wagons,
a full load in each, they would reach 400 miles in length. The output
equaled the output of 415,650 cows, worth $12,469,500.

The hoped-for effect of the legislation asked of Congress is not to
destroy the oleomargarine industry, but to force it over onto its own
ground ; to compel it to be made in its own guise and color. Is there
anything unjust or unreasonable about this?

With a tax of 10 cents a pound on the counterfeit substitute, we
believe the temptation for unjust profits, deceptive sale, dishonorable
and dangerous conspiring against law, and fraudulent competition with
an honest industry will be greatly modified.

(*2)



OLEOMARGARINE. 585

A great many people ask why it is not as permissible to color oleo-
margarine as it is to color butter. I would answer because they are
not colored for the same purpose. Butter in winter is too light to suit
the taste of most consumers. The highest value is in fresh butter not
more than ten days old. The consumer asks that it bear the yellow
summer color of butter. That is a matter of taste, not deception, for
it is not colored to resemble something it is not. But oleomargarine is
colored to make it resemble butter, which it is not. It is colored, not
for the benefit or taste of its consumer, but to deceive the consumer.

Said President Cleveland, in his message approving the oleomarga-
rine legislation of 1886 :

Not the least important incident related to this legislation is the defense afforded
to the consumer against the fraudulent substitution and sale of an imitation for a
genuine article of food of a very general household use. * * * I venture to say
that hardly a pound ever entered a poor man's house under its real name and in its
true character.

The argument still holds good. Congress was then asked to place a
tax of 10 cents a pound on the counterfeit. Had it done so, the relief
would, in my opinion, have been ample and sufficient. But it has been
proved inadequate, and we ask for the passage of this measure in its
entirety.

We are met by certain abstractionists with the question, " Would you
tax one legitimate industry out of existence for the benefit of another?"
To this I would answer, No. But the oleomargarine business is not con-
ducted legitimately. It is based, from manufacture to sale, on wrong
and illegitimate methods.

We believe Congress has the right, for the sake of public welfare,
for the sake of suppressing fraud and deception in any industry, to tax
its illegitimate outcome burdensomely, and for this reason are the
farmers and consumers of the country making their wishes known to
this Congress on this bill.

Is oleomargarine a healthful food? There is no* way to determine
this question except by actual trial; not fora day, a week, or a mouth,
but for several successive months, and not with strong, robust men
with plenty of outdoor exercise.

Chemistry can not answer. For example, the chemist will tell you
that he finds the same elements in swamp peat that are found in the
grasses and hays that are fed to our cows, and in approximately the
same proportion. And the chemist is at a loss to determine from the
standpoint of his science why cattle should not feed on swamp peat.
Chemistry can not determine whether any particular substance is
poisonous or not. It must take a stomach to do that.

There is no credible evidence to show that oleomargarine is innocu-
ous; no evidence to show that when eaten continuously in place of
butter it is not harmful. But there are reports in great abundance to
the effect that oleomargarine is harmful.

Mr. Edmund Hill, a member of the Somerset County council, Eng-
land, reports that the great bulk of oleomargarine, or "margarine" as
it is called there, is eaten in public institutions, convents, schools, etc.
At the Wells Asylum, with which he is connected, the inmates receive
oleomargarine. In the asylums of Dorset, Wells, and Hants the
adjoining counties butter is furnished, and the death rate at Wells is
30 per cent higher. At the Tauntou Hospital there were 11 deaths in
thirteen months. Oleomargarine was substituted, and in nine months
the deaths rose to 22.

This accords with the experience in France, where its use in hospi-

(*3)



586 OLEOMARGARINE.

tals is forbidden. In the United States, in institutions for the blind
and for girls, it has been noticed that the use of oleomargarine lowered
the vitality of the inmates very perceptibly.

There is abundant reason for this. The normal heat of the human
stomach is 98. Butter melts at 92, 6 below the heat of the stomach,
passes into pancreatic emulsion, and digestion. Nature designed this
fat in its raw state for food.

Oleomargarine melts at the varying temperature of 102 to 108, a
temperature no healthful stomach ever attains. As a consequence,
this unnatural foreign fat must be expelled by sheer gastric action and
force.

Butter fat is found in the milk of all mammals. It is chemically and
physically unlike any other fat in existence. It was designed by nature
for the food and sustenance of infant offspring, having the most deli-
cate of all digestion. Because of this most evident purpose and provi-
sion of nature, butter forms a healthful and important article of food
in milk, cream, and in its separated state.

No matter what paid chemists may say, no counterfeit, even in its
purest state, is wholesome or healthful.

But there is another phase of this question. There is absolutely no
protection for the public against most dangerous introduction of posi-
tively unhealthful compounds into oleomargarine.

The Journal of the American Chemical Society and the department of
agriculture of New York abound in proof of the adulteration of oleo-
margarine with paraffin, a substance which the strongest acids even
are unable to affect. There is no reason on earth why the foulest of
germ-laden fats should not be used in the making of this compound,
when once they are deodorized by the aid of chemistry.

But with Dutter it is different. Any contamination or hurtful manip-
ulation is instantly shown in a loss of flavor. Butter always advertises
its condition.

It should be considered that the distinction proposed in taxation
against colored oleomargarine will bring no hardship to the consumer
who may want this article as a cheap, fat substitute for butter. The
coloring of it adds nothing to its digestibility or food value, if it have
a food value. The whole proposition is in a nutshell. Force out the
color or semblance to butter and you put a stop to its being imposed
on the consumer for butter. In addition you protect this great army
of producers, the dairymen of the United States, from competition with
a fraud and counterfeit.

It is high time that Congress entered upon this work of protection
of all honest and legitimate industries against the dishonest greed of
the counterfeiter and adulterator.

The Dominion of Canada has taken from us nearly all of our once
magnificient export trade in dairy products. Canada absolutely pro-
hibits the making of counterfeit butter or cheese.

Consequently the Dominion stands high among all foreign consumers
as to the purity and honesty of its foods.

Our National Government can proceed repressively only in the way
of taxation. We believe we are right, fair, and just, and in accordance
with a wise public policy, in asking of the members of this committee
an earnest support of House bill 3717.

One of the most preposterous arguments advanced in support of the
oleomargarine business is that which is unwittingly put in the mouths
of the beef and hog raisers by the oleo combine. The Nebraska Farmer



OLEOM AEG A BINE. 587

ot February 15 exposes the fallacy of this argument in an able edi-
torial, from which we quote the following extract:

The National Live Stock Association, at its recent meeting at Fort Worth, Tex.,
passed a lengthy and stringent resolution condemning proposed oleomargarine leg-
islation. This resolution, as it appears in the circular letter sent out over the name
of President Springer, is a remarkable document remarkable alike for its arraign-
ment of one class of agriculturists by another and in its disregard for facts in its
general narration.

Some of the false " statements of fact" in the general narration are as follows:

"The 'butter fat ; of an average beef animal, for the purpose of making oleomar-
garine, is worth from $3 to $4 per head more than it was before the advent of oleo-
margarine, when the same had to be used for tallow; which increased value of the
beef steer has been added to the market value of the animal, and consequently to the
profit of the producer. To legislate this article of commerce out of existence, as
the passage of this law would surely do, would compel slaughterers to use this fat
for tallow, and depreciate the market value of the beef cattle of this country $3 to
$4 per head, which would entail a loss on the producers of this country of millions
of dollars.

" The use of this fat for the purpose set forth is an encouragement to the producer
to improve his herd and raise a class of grade or thoroughbred cattle capable of mak-
ing and carrying this fat, rather than the common or scrub animal, which is so hard
and unprofitable to fatten ; and the cattle raiser or producer has come to know the
value of this product, and that the amount of the increase in the market value of his
matured animal depends somewhat on the value of the 'butter fat' carried by the
animal."

To show the absurdity of the above statements it is only necessary to call atten-
tion to the fact that every steer or cow butchered by manufacturers oi oleomargarine,
if good enough to sell for " dressed beef/' is sold with the kidney tallow in the
quarters. This being true, nothing but the "gut fat "remains in the packinghouse.

Therefore every oleo manufacturer that ever lived and all his agents are chronic
liars, if gut fat of beeves and "butter lat" of oleomargarine are one and the same
thing. More than this, the gut fat of beeves averaged an many pounds per animal
in 1890 to 1896 as it does in 1900, and there were " workingmen and their dependen-
cies" (we quote from the resolutions) then as now, and oleo sold as a counterfeit
and substitute for butter then as now, without appearing to add materially to the
" market value of the animal, and consequently to the profit of the producer." (Cattle-
men will please take note that swine men claim that they are the people whosuffer-
from legislation which hampers the sale of bogus butter. Now, what is your " but-
t er fat " for oleomargarine? Is it gut fat of cattle or hogs' fat!)

The next fact of importance in connection with the resolutions is the ignorance
of cattle breeding shown in the text, therefore the fair presumption that not live-
stock breeders, but a packing-house attorney, wrote the resolution. We call atten-
tion to the statement, " The use of this fat for the purpose set forth (making a
counterfeit of butter) is an encouragement to the producer to improve his herd and
raise a class of grade or thoroughbred cattle capable of making and carrying this
fat, rather than the common or scrub animal," etc.

Every breeder of cattle understands that the value of improved breeds depends
on the capacity of the improved animal to give a larger proportion of cuts of good
meat to the rough fat (gut fat or "batter fat," just as you choose), and that the
chief objection to the scrub steer or dairy-bred steer is the excess of fat, as com-
pared with meat cuts, due largely to a failure of the scrub animal to carry the sur-
plus fat among tbe meat tissue. Hence the falsehood of the assertion that increase
of rough fat in beeves encourages improved breeding.

This resolution seems to have been introduced to the stockmen's convention by
one C. W. Baker, of Illinois, and it seems to be one of those cases where the stock
men have been trapped into pulling the packing-house chestnuts out of the fire.

STATEMENT OF CHARLES Y. KNIGHT.

My business is that of editor of the Chicago Dairy Produce, a pub-
lication devoted to the dairy and butter business. I have for the
past three years been secretary of the National Dairy Union, an organ-
ization of farmers who keep cows, and others engaged in pursuits
allied therewith. This organization at present comprises about 30,000
members who are farmers, and they are scattered all over the United
States. The organization has for its aim the protection of producers



588 OLEOMARGARINE.

and consumers of dairy products against fraud, and its officers serve
absolutely without further compensation than their actual and neces-
sary expenses incurred in the discharge of their duty. No officer has
ever received one cent salary, but upon the other hand they have spent
hundreds of dollars in expenses while working in the interest of the
cause, for which no account has ever been rendered the organization.

I have had charge of the work of organization and the collection of
facts regarding the oleomargarine traffic of this country, and it is the
enormous illegal and fraudulent growth of the business during the past
two years, in face of the best restrictive laws the States have been able
to devise, that has brought us to Congress as a last resort to ask for
relief.

THE ORIGINAL OLEOMARGARINE LAW.

For the information of the committee, all of the members of which
may not be familiar with the history of national legislation along
this line, I will state that fourteen years ago, finding the powers of the
State helpless to cope against the peculiar character of this fraud, the
dairymen of this country arose en masse and came to Congress for
relief, feeling that nothing but Congressional action would save their
business from absolute ruin. They convinced Congress that national
legislation was necessary, and the result was that numerous measures
were introduced for their relief. The matter of legislating against a
counterfeit article, however, was found to be a complex proposition for
Congress because of the constitutional restrictions which prevent the
Congress of the United States exercising police powers except for the
protection of its revenue receipts, interstate commerce, and other mat-
ters absolutely within the limits of the Constitution, and after months
of tedious investigation and effort, what is known as the Hatch bill
was finally originated by the Committee on Agriculture, and brought
into the House.

PROVISIONS OF THE HATCH BILL.

At that time it was thought, as many have become to believe since,
that the manufacture and sale of oleomargarine could not be permitted
and at the same time protect the public against fraud. Acting upon
this theory the government of Canada did and has ever since abso-
lutely prohibited the traffic in any character or condition and oleomar-
garine is not permitted to be sold in that country in any way, shape, or
manner. France, where oleomargarine originated as a necessity during
the Franco Prussian war, found it impossible to protect its people
against fraud, and even its present law forbidding the sale of that
article in any store or shop where butter is sold is not considered ade-
quate a law which would not stand under our Constitution a week
because of the great scope of liberty afforded under our form of gov-
ernment. Germany has also adopted the same plan, which has not
proven satisfactory, and various other measures are being suggested
in that country. In fact, Denmark, Australia, Eussia, Italy, Spain,
and every other European, antipodean, and Asiatic country has found
the same trouble in endeavoring to control this deceitful substitute for
butter.

It will therefore be seen that the Agricultural Committee had before
it a perplexing problem, and one which it seemed to finally despair of
solving and at the same time permit the article to survive in commerce,
the result of which was the recommendation of a measure which would

(*6)



OLEOMARGARINE. 589

have been pretty close to entire prohibition of the entire traffic had it
been passed as recommended. I simply cite these facts and conditions
to give the committee something of an idea of the great provocations
which existed at that time, as reflected by these recommendations, it
having been found almost impossible then to secure butter whose
purity could be guaranteed, unless it came direct from the farm to the
consumer.

RECOMMENDED A TEN-CENT TAX.

The recommendations of that committee were many, and the outcome
of their investigations a complete scheme for the taxation and regula-
tion of oleomargarine through the Internal- Re venue Department, which
taxation would put the article within the constitutional control of the
Government and thereby permit the branding requirements which were
desired at that time to be enforced by the National Government. A
tax of 10 cents per pound was recommended, regardless of color, by that
committee.

EXPECTED LAW TO BE ENFORCED.

The Agricultural Committee, however, did not then know as much as
the public knows to-day about the Internal Be venue Department. It
was the impression of Congress that when the revenue law required
every retailer to brand his package sold the consumer, that this, as well
as all other provisions of the measure would be enforced. It was because
of the impression that this branding clause alone would give the public
protection that the 10 cent tax was finally cut down to 5 cents in the
House and 2 cents in the Senate, the argument being that the 2-cent
tax would give about revenue enough to permit the revenue depart-
ment to pay the expenses of enforcing the branding clause.

WHAT HAS BEEN THE RESULT?

We have now had about fourteen years of that 2-cent tax. And what
has been the result "? Has the fraudulent sale of oleomargarine ceased ?