It seems to us, therefore, in the face of these conditions, that there would be absolutely nothing compensatory in the placing of a duty, or the imposition of a processing tax on palm oil where it is used in the manufacture of tin plate, but instead would increase the cost of containers for fruits, vegetables, milk, meats, and many other food products, and which we would naturally wish to avoid.

In the event that the committee deems it wise to put a processing tax on palm oil, it is suggested that an exemption be granted to the tin-plate industry by inserting at the end of the paragraph imposing the tax the following clause:

"No tax shall be imposed under this section on the use of palm oil in the manufacture or production of tin plate."

BRIEF OF CHARLES W. HOLMAN, SECRETARY OF THE NATIONAL COOPERATIVE MILK PRODUCERS FEDERATION

I am secretary of the National Cooperative Milk Producers Federation, the largest and oldest national agricultural-commodity organization in the United States. The federation is an incorporated body, incorporated in 1917 in Illinois as a nontrading organization. The federation is composed of 51 member associations all of which are farmer owned and farmer-controlled cooperative marketing associations with a membership totaling approximately 360,000 dairy farmers residing in 41 of the 48 States. I am filing herewith a list of the member associations:

Berrien County Milk Producers Association, Benton Harbor, Mich.
California Milk Producers Association, Los Angeles, Calif.
Cedar Rapids Cooperative Dairy Co., Cedar Rapids, Iowa.
Challenge Cream & Butter Association, Los Angeles, Calif.
Champaign County Milk Producers, Champaign, Ill.
Colorado Dairymen's Cooperative, Inc., Denver, Colo.
Connecticut Milk Producers Association, Hartford, Conn.

Cooperative Milk Producers Association for San Francisco, Inc., San Francisco, Calif.

Cooperative Pure Milk Association of Cincinnati, Cincinnati, Ohio.
Coos Bay Mutual Creamery Co., Marshfield, Ill.

Dairy & Poultry Cooperatives, Inc., Chicago, Ill.

Dairymen's Cooperative Sales Association, Pittsburgh, Pa.

Dairymen's League Cooperative Association, Inc., New York, N.Y.

Des Moines Cooperative Dairy Marketing Association, Inc., Des Moines, Iowa.
Dubuque Cooperative Dairy Marketing Association, Inc., Dubuque, Iowa.
Evansville Milk Producers Association, Evansville, Ind.

Falls Cities Cooperative Milk Producers Association, Louisville, Ky.
Illinois-Iowa Milk Producers Association, Davenport, Iowa.

Illinois Milk Producers Association, Peoria, Ill.

Indiana Dairy Marketing Association, Muncie, Ind.

Interstate Associated Creamieries, Portland, Oreg.

Inter-State Milk Producers Association, Inc., Philadelphia, Pa.

Land O'Lakes Creameries, Inc., Minneapolis, Minn.

McLean County Milk Producers Association, Bloomington, Ill.
Maryland & Virginia Milk Producers Association, Washington, D.C.
Maryland State Dairymen's Association, Baltimore, Md.

Miami Valley Cooperative Milk Producers Association, Dayton, Ohio.
Michigan Milk Producers Association, Detroit, Mich.

Mid-West Producers Creameries, Inc., Indianapolis, Ind.

Milk Producers Association of San Diego County, San Diego, Calif.

Milk Producers Association of Summit County and Vicinity, Akron, Ohio. Milwaukee Cooperative Milk Producers, Milwaukee, Wis.

National Cheese Producers Federation, Plymouth, Wis.

Nebraska-Iowa Non-Stock Cooperative Milk Association, Omaha, Nebr.
New England Milk Producers Association, Boston, Mass.
Northwestern Cooperative Sales Company, Toledo, Ohio.
O.K. Cooperative Milk Association, Oklahoma City, Okla.

Pure Milk Association, Chicago, Ill.

Pure Milk Producers Association, Kansas City, Mo.

Richmond Cooperative Milk Producers Association, Richmond, Va.
St. Joseph (Mo.) Milk Producers Association, St. Joseph, Mo.

Sanitary Milk Producers, St. Louis, Mo.

Scioto Valley Cooperative Milk Producers Association, Columbus, Ohio.
Shelby County Milk Producers Association, Memphis, Tenn.

Stark County Milk Producers Association, Canton, Ohio.
Tillamook County Creamery Association, Tillamook, Oreg.
Tulsa Milk Producers Cooperative Association, Tulsa, Okla.
Twin City Milk Producers Association, St. Paul, Minn.
Twin Ports Cooperative Dairy Association, Superior, Wis.
United Dairymen's Association, Seattle, Wash.

Valley of Virginia Cooperative Milk Producers Association, Harrisonburg, Va. The federation fully endorses section 602 of the Revenue bill of 1934 (H.R. 7835) as it passed the House of Representatives, and further endorses the amendment to this section which has been proposed on the floor of the Senate by Senator Connally, levying a similar excise tax of 5 cents per pound on palm oil, palm-kernel oil, sunflower oil imported fish oils and imported marine animal oils.

This position is predicated upon principles which the federation has advocated continuously since its inception :

1. The dairy farmers of the United States should not be forced to compete on the domestic market with an inferior substitute product made almost entirely of cheap foreign ingredients, and especially they should not be asked to reduce and limit production to domestic requirements unless they are assured of the domestic market.

2. Such a high degree of interchangeability exists as between different oils and fats in practically all uses that competition between them is almost entirely on the basis of price. Therefore the price level of all oils and fats is determined by the prices paid for those oils used in the cheapest way, which in most cases is in soap manufacture.

3. Dairy farmers are vitally interested in the profits and welfare of cotton farmers, hog and lard producers, beef-cattle farmers, and other producer groups because all of these producers are pottntial dairymen, and when dairy prices are high relative to prices for other agricultural products there is a considerable shift of other farmers into dairying and a consequent lowering of dairyproducts prices.

THE OILS AND FATS SITUATION IN THE UNITED STATES

A summary of the general situation of all oils and fats in the United States is presented in tabular form in table I attached hereto. We consume in the United States every year a little less than 8,000,000,000 pounds of oils and fats, including lard and butter. We produce in this country from domestic raw materials approximately 7,000,000,000 pounds of oils and fats per year. Of this amount, however, between three fourths and one billion pounds are exported. Since 1924 we have been on a deficit basis with respect to oils and fats; in other words, since that time domestic production has fallen below apparent consumption. This deficit has reached almost a billion pounds in the last few years. In fairness to domestic producers, however, it must be said that at the present time there are relatively heavy storage stocks of all domestic oils and fats in the warehouses and factories of the country. Total stocks of all oils and fats on December 31, 1933, totaled almost two and a half billion pounds.

During the last few years imports of oils and fats into this country have been between one and one half and two billion pounds per year. Practically all of the imported oils are used in industrial or factory consumption; that is, they are not consumed by the public in their original form. (See table II.) The imports of the oils on which we are supporting an excise tax are shown in table III attached hereto. Imports of coconut oil have increased from 94,000,000 pounds in 1913, to 732,000,000 pounds in 1933. Palm oil imports increased from 54,000,000 pounds in 1913, to 287,000,000 pounds in 1932. Sesame oil imports, which were negligible prior to 1933, totaled 21,000,000 pounds in 1933.

TABLE I.-Competitive oils and fats situation in the United States

MORE THAN TWO THIRDS OF THE IMPORTED OILS AND FATS BEAR NO FORM OF TAXATION

The large amounts of oils and fats and oil-bearing materials imported into this country every year constitute a rich source of revenue for the Government which up to the present time has not been utilized to any appreciable extent. Approximately 68.6 percent, or over two thirds of the oil imported in 1932, came in duty free. The total duties collected on the remaining 31.4 percent were $11,942,000, an average of less than 3 cents per pound. This excise tax, we feel, has a definite place in the revenue bill which is to be enacted by Congress at this time because it will provide revenue for the Government and at the same time will serve to help domestic producers who are now suffering through the competition of these foreign oils, which oils are placed in an advantageous economic position by virtue of their freedom from taxation and their unrestricted access to markets in the United States.

DIRECT COMPETITION EXISTS BETWEEN FOREIGN AND DOMESTIC OILS AND FATS IN EVERY IMPORTANT OIL- AND FAT-USING INDUSTRY

In the lard compounds and shortenings industry cottonseed oil and edible tallow compete with imported coconut, palm oil, sesame oil, and fish oils. All lard compounds incidentally compete directly with lard. Oleomargarines compete with butter. In the manufacture of oleomargarine, oleo oil, neutral lard, cottonseed oil, peanut oil, and corn oil compete with coconut oil, palmkernel oil, sesame oil, etc. In the soap industry tallow, greases, cottonseed oil, soy-bean oil, and domestically produced fish and marine animal oils compete with imported coconut oil, palm-kernel oil, palm oil, olive-oil foots, and imported fish and marine animal oils.