856 OLEOMARGARINE. 



of Philadelphia (p. 221), manager of the 63 stores of the Acme Tea 

 Company, of that city. Mr. Cleaver said: 



We are in no way interested in the manufacture of butter; only in the sale of it. 

 If we could sell oleomargarine legally and there were a demand for it, we would 

 just as lief sell it as we would butter. 



With reference to whether or not there is a demand for it, I have only this to say: 

 We have a printed slip, with questions on the slip which must be answered every 

 week by every manager in each of our stores. One of those questions is this: "Has 

 there been anything asked for during the week that we do not keep? If so, what?" 

 We have yet, from all those 63 stores, to have an inquiry for oleomargarine or but- 

 terine. Consequently, we are convinced that the masses of the people in Philadel- 

 phia do not want oleomargarine or they would ask for it. 



And Mr. Cleaver further testified that they sold to the masses, their 

 stores being what are known as " cut-rate" or cheap stores. 



CONSTITUTIONALITY AND AIM OF THE 10-CENT TAX. 



There is of course a prejudice against the use of the internal-revenue 

 tax for protective purposes, particularly when it is argued that the 

 purpose is to entirely prohibit the manufacture and sale of the article 

 taxed. In this case we claim that the tax is being employed only for 

 the purpose of turning into the United States Treasury that portion of 

 the profits upon a counterfeit article which may furnish an incentive 

 for the vender thereof to practice fraud upon the public. 



We contend and believe that we have established the fact through 

 the testimony of food commissioners and others who are in best posi- 

 tion to judge that at least 75 per cent, if not more, of the oleomarga- 

 rine produced goes to the consumer as butter and at practically butter 

 prices. The evidence (p. 470) shows one case of where the manufac- 

 turer advised the dealer that a brand of oleomargarine quoted at 18 

 cents per pound should retail at 25 to 30 cents. General experience is 

 that when oleomargaine is sold as butter it is sold just a trifle under 

 butter prices as a bait to draw custom, and in twenty -five such cases 

 reported by the Massachusetts food commissioner in a statement filed 

 with this committee it was shown that the average price of such oleo- 

 margarine sold as butter during the year was 22 cents per pound. A 

 prospectus of the Standard Butterine Company, of Washington, filed 

 with this committee shows that the average finished product minus the 

 present 2-cent tax costs the producer 6.92 cents per pound. Add 10 

 cents to this as the tax under the Grout bill and the cost is brought 

 up to 16.92 cents per pound. At an average price of 22i cents the 

 retailer and manufacturer would have left between them a pro fit of 

 5.58 cents, and could still sell the product at the same price to the 

 consumer he is now paying for it. This is about the profit made by 

 the manufacturer and retailer of butter. 



Under these circumstances, can it be said the 10-cent tax is a tax 

 that will destroy ? If so, how 2 



Only in this way: These goods, now sold at 22J cents, are sold as 

 butter. This is forbidden by the State laws. The State laws of 32 

 leading States also forbid the sale of oleomargarine colored in sem- 

 blance of butter. The present profit of 13.58 cents per pound on 

 oleomargarine (costing, with the 2-cent tax, 8.92 cents per pound) 

 when sold as butter at 22^ cents is what causes its sale as such. The 

 additional 8 cents will stop that fraudulent sale, of course, by taking 

 away 8 cents of the profit in the transaction and bringing the business 

 down to a basis where the dealer will, because of the normal profit 



