might give that would be pertinent to your deliberations. But there are one or two subjects that we are now prepared to turn over to you which we did not have ready for the Ways and Means Committee by which these surveys were printed-notably wool. We were late in completing our investigation of the wool situation, because it was almost impossible to get estimates of the cost of production and profits and prices during this past season. We now have a summary of our report prepared, which I think might be interesting to the members of this committee, and if you wish to have that I shall be very glad to put it up to the commission and send it down to you. The CHAIRMAN. You may send anything of that kind. I think it would be rather better for Mr. Page and his associates to be here Friday anyhow. Mr. PAGE. We will be here Friday at 11 o'clock. The CHAIRMAN. The committee stands adjourned until 2.30 this afternoon. (Thereupon, at 12 o'clock m., the committee took a recess until 2.30 o'clock p. m.) AFTER RECESS. The hearing was resumed, pursuant to the taking of recess, at 2.30 o'clock p. m. Senator McCUMBER (acting chairman). There are some 12 witnesses whose names are before me who desire to be heard on the matter of butter, cheese, dairy products, etc. I was in hopes we might boil it down to five, but I know how difficult that is when there are so many here who desire to be heard. I would simply ask that in giving your testimony you avoid duplication as much as possible. We have set a time limit to close this afternoon, and while I am well aware that the testimony of witnesses is drawn to an unusual length more on account of questions that are asked by members of the committee than from their own intent, I would ask be as brief as possible. you to I will call upon Mr. Lewis. STATEMENT OF MR. E. B. LEWIS, PRESIDENT J. H. HORTON ICE CREAM CO., NEW YORK, CHAIRMAN NATIONAL DAIRY PRODUCTS COMMITTEE. Mr. LEWIS. Mr. Chairman, we are here this afternoon as the National Dairy Products Committee, an organization representing all branches of the dairy industry from the Atlantic to the Pacific and from the Canadian border to the Rio Grande. Briefly, we are here to ask you to give us protection for the American dairy industry. We are not equipped with an attorney to conduct our deliberations, but we feel that as plain business men we can convince you in very short order that it would be for the best welfare of this country for you to give us the protection that we are going to ask for. Our secretary, Mr. J. J. Farrell, will introduce to you the representatives from the different branches of the industry, who will tell you about their particular branch of the industry and the protection that we are seeking. STATEMENT OF MR. J. J. FARRELL, SECRETARY NATIONAL DAIRY PRODUCTS COMMITTEE, WASHINGTON, D. C. Mr. FARRELL. Mr. Chairman, owing to the fact that this is an emergency affair we have with us 25 people from different parts of the country. I will therefore forego my remarks, as it would be in a measure duplication, but I do want to call the committee's attention to this fact, which some of the speakers may not touch upon : Owing to the 333 per cent freight increase and owing to the vast amount of foreign oils that are introduced into this country, imported practically free of charge, the dairy industry is receiving one of the most severe blows it has ever had, because of these cheap oils coming into the country and substituting the dairy products. That high freight rate on butter going to New York from North Dakota, South Dakota, and all the Western States makes it possible for Danish butter to be landed in New York at practically one-half the price that we can transport it for from North Dakota, South Dakota, and Minnesota. With these obstacles in the way of the farmer and with the crash in the farmers' prices it leaves them at the present time, with the only cash revenue coming in regularly, weekly, monthly, and yearly, coming from the cow. That is the only thing that enables the farmer to-day to hold his product a little bit longer until he may dispose of his cattle, swine, and grain for a little higher price. In this emergency measure it was intended to cover agricultural products, but they have left out really the most important product on the farm, the product that brings them a steady cash revenue, which would enable them to survive the crash in prices. With these few remarks, I am going to give way to the gentlemen who come from far and near to be heard. The first, Mr. Chairman, is a farmer from Minnesota, Mr. M. D. Munn, president of the Jersey Cattle Club of America, who will give the views of the producer. Senator MCCUMBER. We shall be glad to hear you, Mr. Munn. STATEMENT OF MR. M. D. MUNN, PRESIDENT NATIONAL DAIRY COUNCIL, CHICAGO, ILL. Mr. MUNN. Mr. Chairman and gentlemen, I rather congratulate myself on the fact that the presiding chairman of this meeting is a Senator from the section of the country that I am familiar with. Doubtless you realize fully the importance of this industry to the Northwestern country in particular and to the United States as well. I sat in the room yesterday and listened to the discussion on these vegetable oils with considerable interest, and after hearing what was said I thought it might be wise to gather some facts in relation to that to present here this morning. So I am going to devote myself largely to that branch of this discussion, which, to my mind, is more important to this dairy industry to-day than anything else. This industry, as you know, produced in 1919 products which sold in the open market for about $3,000,000,000; and, as Mr. Farrell has just said, it is the only product which brings in a daily, weekly, and monthly revenue on the farm. The statement was made yesterday by the oil men that the tariff of 20 cents a gallon on these vegetable oils was prohibitive, and in response to the question what it meant on an ad valorem basis, it was stated that it would range from 40 to 50 per cent, as I remember the statement. Coconut oil is the one vegetable oil that is being most used in the manufacture of the so-called substitutes for butter. It was said in the hearing yesterday that to prohibit the importation of that oil into this country would mean the taking away of an infant industry which had been established as a result of the war. Investigation will show you that the coconut-oil industry is controlled in England. That country has divided itself up into 40 sections, and the Government has taken supervision over the handling of this coconut oil, and what we are getting here is the amount that the English Government allows to come into this country. Instead of our controlling it, we have no control over it whatever and can never have. The oil that was imported here during the first 11 months of 1920 amounted to 203,321,412 pounds. That was made very largely into the so-called food substitutes; that is, substitutes for articles which enter into our dietary, and very much of it into oil margarine. The Government has furnished me with figures showing the amount of oil margarines manufactured during the first 11 months of 1920. We find that there were manufactured 177,972,000 pounds of oil margarines. Those are the pure oil margarines. In addition to that there were manufactured 192,000,000 and odd pounds of mixed oil margarines. In those mixed oil margarines there is about 80 per cent of the vegetable oil and the balance of it is made up of a mixture, so that when you take that out we have a total of 307,000,000 pounds, in round numbers, of vegetable oil margarines manufactured in the first 11 months of 1920. Now, that is a menace to this industry that can hardly be expressed in words. When I heard the statement made, as I did yesterday, that 20 cents a gallon was a prohibitive tariff I could not quite understand it. The Government has furnished me some figures that show this. Assuming that this oil weighs 8 pounds to the gallon, and it will be approximately that, we find that 20 cents a gallon would make a little less than 2 cents per pound. The average selling price for coconut oil in the New York wholesale market during the first 11 months of 1920 was 19.3 cents a pound, a little less than 20 cents. So, you see, reduced to an ad valorem basis, instead of being 40 or 50 per cent, as stated here, it is less than 13 per cent-about 12 per cent. We are not here to advocate a tariff which shall be placed on these oils. Twenty cents a gallon is hardly enough to add respectability to the product in the market. It could be made double that and not be prohibitive and not afford protection to this industry. We feel, as dairymen, that we are entitled to some protection along this line, because if we do not get it it can only result in two things, a decreased efficiency in our citizenship and a decreased revenue to the farmer from the dairy industry. Because there is not a particle of food or nutriment in these oils. There is energy-producing power, but when it comes to producing growth and intellectual and physical vitality they are practically nil. And just as far as they substitute butter and futter fat in the human dietary they reduce to that extent the posibility of efficient manhood and womanhood, to say nothing about the effect they have upon the prosperity of our industry and agriculture. I am not going to touch upon the other subjects; they will be covered by other speakers, and we do not care to keep you here. But we oo feel that when you come to consider the question of a tariff on these oils, instead of taking the amount that has been specified here in the House bill it should be, if anything, increased. Senator NUGENT. To what extent? Mr. MUNN. I am not prepared to say. I gave the ad valorem basis as nearly as we can figure it out. It can be double that and not be prohibitive. Senator NUGENT. What rate would be necessary, in your judgment, in order to protect the dairy industry in the United States? Mr. MUNN. Well, the differences in the markets are something like this. Coconut-oil margarine is selling for around 35 to 37 cents to-day, whereas butter is 54 cents. Of course, there is a difference in the food value that I have spoken of. I am not prepared to say what tariff would amount to a protection, it is difficult to figure it out, but it is quite certain that 20 cents a gallon will not do it. Senator NUGENT. I apprehend that the committee is extremely desirous of knowing your opinion in the matter. Mr. MUNN. I should say it should be at least double, in my own opinion. That will not be prohibitive, but certainly it will not be much more than protective. Senator LA FOLLETTE. Will you kindly repeat that? Mr. MUNN. I believe it should be double, and that will not be prohibitive. If it is double it would be equivalent to 5 cents a pound ad valorem. Senator NUGENT. You are speaking now of the doubling of the rates as set out in this House bill? Mr. MUNN. Yes, sir. In this estimate we have included the vast amount that comes in here in the form of coconut meat and copra and the oil pressed out in this country. That amounts to very many millions of dollars, in additon to the oils that come in as such. I notice this bill makes no reference to that at all; it just specifies the oil. There is about 40 per cent as much comes in in the form of coconut meat and copra as comes in in the oil. Of course, that is not all used in oils; it is used in other forms. How much is used in oil I am not prepared to say; there is no way of finding out. But this bill makes no reference to copra or coconut meat at all, and I apprehend that if the tariff on the oil were sufficient to make it less remunerative than to bring the meat in they would bring the meat in and compress that to get the oil. But we do know that this is a terrific menace to the dairy industry, and there is no way of meeting it. They spend vast sums in publicity all the time. I noticed in the State of Ohio the other day the statement that a thousand billboards were advertising a product known a Nucoa, a so-called coconut-oil butter. In the Chicago papers alone, I was informed the other day I have seen the page ads that they are carrying from day to day-they have spent $75,000 in a very short time. Senator LA FOLLETTE. Do you know the ingredients of the coconutoil butter that is put upon the market and the proportions? Mr. MUNN. It is pure oil, as I understand it, or very largely coconut oil. It has a milk flavor, because they churn it in milk, as they say, to give it a milk flavor. But the main substance is coconut oil. Mr. FARRELL. There is 2 per cent casein, 3 per cent salt, about 12 per cent moisture, and 83 per cent fat. Mr. MUNN. If there are no further questions, I thank the committee for its attention. I want to say that these figures are all taken from the Government; they are not guesswork on our part. They were supplied this morning by the Department of Agriculture and from the records of the Foreign Commerce Bureau. Senator MCCUMBER. We are very much obliged to you, Mr. Munn. I will call now on Mr. W. H. Bronson. STATEMENT OF MR. W. H. BRONSON, BOSTON, MASS., REPRESENTING NEW ENGLAND MILK PRODUCERS' ASSOCIATION. Mr. BRONSON. Mr. Chairman, our association in Boston is very much interested in butter prices. The price we receive from milk depends a great deal upon butter quotations, and if we had a serious decline in the price of butter it would mean that the New England farmers would suffer a very heavy loss in the producing of milk for the city of Boston and for New England territory, in that the majority of the farmers bought their grain last fall, or contracted for it; when the price was high, and, even though grain prices dropped, they are still feeding that high-priced grain. Also, the silage and other feeds going into the production of milk were produced last summer with very high-priced labor, and again with the drop in the price of butter and the price of milk there must be a decided loss. We have prepared some figures showing the relative cost of production of milk in the New England States compared with Quebec, of which I will file a copy with the committee. (The data submitted by the witness are here printed in full, as follows:) ESTIMATES OF THE COMPARATIVE COST OF MILK PRODUCTION IN NEW ENGLAND STATES AND PROVINCE OF QUEBEC, CANADA, [Wesley H. Bronson, statistician, New England Milk Producers' Association, Boston, Mass.] The estimated cost of producing 100 pounds of milk in the year 1919 in the New England States and Province of Quebec is as follows: New England States_ Province of Quebec. Difference in favor of Quebec---. $3.79 3. 26 .53 Based on these costs of 100 pounds of milk, the cost of producing 1 pound of butter in these two areas is as follows: Again based on these costs, the cost of 1 pound of cheese is as follows: New England States_ Province of Quebec--- $0.379 .326 Difference in favor of Quebec.. . 053 |