The department is in accord with your view that the widest use should be made of corn and corn products and that no discriminatory legislation should be enacted which would interfere with such use. Yet it can not assent to the proposition that the compound resulting from the mixture of wheat flour and corn starch, or wheat flour and starch derived from any source, is entitled to be called mixed flour.

Therefore this letter, written on Saturday last, says that by branding the flour "mixed flour" would weaken the existing law and be a dangerous precedent to establish.

Mr. RAINEY. As to starch.

Mr. FORDNEY. Corn starch, starch out of the potato, or starch out of anything that is put into flour. The department claims it would weaken it. That was written on Saturday last and signed by Secretary Houston.

Mr. RAINEY. Mixing starch and flour, instead of mixing two kinds of flour.

Mr. FORDNEY. I did not mean to be discourteous to you in reading your letter, but it was on that point.

Mr. RAINEY. I will have all of that correspondence incorporated in the record.

(Correspondence referred to will be found at page 557 and ff.)

This extract that the gentleman from Pennsylvania was kind enough to read from my Springfield, Ill., speech, so far as you know, correctly states the facts, does it?

Mr. KEITH. Yes, sir.

Mr. RAINEY. I wish you would read the rest of it and see whether that does not state the facts.

Mr. SLOAN. Is it the position of the Treasury Department, in the first place, that the repeal of this law would decrease the present expanding deficit of the Treasury?

Mr. KEITH. I am not here to make any statements as to any expanding deficit. In fact I know nothing of that phase of the Treasury affairs.

Mr. SLOAN. The next reason that I discover is that you suggest, although I do not understand just how it could be made to so appear, that the bill, if it becomes law, will strengthen the pure-food act. Mr. KEITH. I did not make such a statement, sir.

Mr. SLOAN. Perhaps I misstated it, but I understood you to say that the repeal of this law would further discourage violations of the law.

Mr. KEITH. I stated it would not weaken it.

Mr. SLOAN. As it stands now you think the revenue measure is a check on the improper adulteration of food business?

Mr. KEITH. No, sir; it is not a revenue measure.

Mr. SLOAN. What is that?

Mr. KEITH. It does not produce any revenue.

Mr. SLOAN. It produces some revenue, although, like a great many other revenue measures, not enough?

Mr. KEITH. It does not produce any great amount of revenue.

Mr. SLOAN. No; but this measure does, as it stands upon the statute books, have the effect of discouraging the business of impure foods?

Mr. KEITH. Of mixing flours?

Mr. SLOAN. Of mixing flours.

Mr. KEITH. It has had that effect to the extent that I have stated heretofore, in preventing the misbranding and causing, perhaps, some to go out of business because of the onerous burdens, as they contend, of the regulation, and the requirements of the regulation hampering them in their business, and perhaps a great many of them, by a slight change in the formula of their products, have escaped that classification.

Mr. SLOAN. The pure-food law of 1906 up to the present time has been effective; has it not?

Mr. KEITH. I could not say as to the pure-food law. It has undoubtedly aided us in the enforcement of this law, and would have had to be the law to rely upon, or would have been the law to rely upon in case of deleterious substances.

Mr. SLOAN. Then, as a pure-food policy, we have two checks for the present, and now you seek to repeal one of them?

Mr. KEITH. No; there are not two checks. We simply, by this law, require branding. The pure-food law required the same thing. They can prevent the use of deleterious substances and we can not. So it really is just a duplication of one check to the extent of misbranding that form of adulteration.

Mr. SLOAN. So far as misbranding is concerned, there are two checks?

Mr. KEITH. It is a duplication of the same check, you might say. Mr. SLOAN. I was interested in knowing how that would strengthen the policy of pure focd.

Mr. KEITH. This bill of Mr. Rainey's, as I read it and construe it, provides for the statement of the percentages, which the present law does not, and which I do not think the pure food law does, and to that extent it would prevent misbranding and adulteration more effectively than the present law.

Mr. RAINEY. That is all, Mr. Keith.

We will now hear Mr. T. E. Lannen.

STATEMENT OF MR. T. E. LANNEN, COUNSEL, REPRESENTING THE AMERICAN MANUFACTURERS' ASSOCIATION OF PRODUCTS FROM CORN, FIRST NATIONAL BANK BUILDING, CHICAGO, ILL. Mr. RAINEY. Mr. Lannen, state your address, so the reporter can get it.

Mr. LANNEN. I am appearing as counsel for the American Manufacturers' Association of Products from Corn.

Mr. RAINEY. What is your address?

Mr. LANNEN. My address is the First National Bank Building, Chicago. Ill.

Mr. RAINEY. Who are in your association?

Mr. LANNEN. That association is composed of the Corn Products Refining Co., of New York City, N. Y., with factories at Argo, Pekin, and Granite City, Ill., Davenport, Iowa, Oswego, N. Y., and Edgewater, N. J.; the Douglas Co., of Cedar Rapids, Iowa; the Clinton Sugar Refining Co., of Clinton, Iowa; J. C. Hubinger Bros. Co., of Keokuk, Iowa; the Huron Milling Co., of Harbor Beach, Mich.; the Union Starch & Refining Co., of Edinburg, Ind.; and the Piel Bros. Starch Co., of Indianapolis, Ind.

These people manufacture cornstarch, corn sirup, and other products from corn, one or several, and they grind upward of 56,000,000 bushels of corn a year, 15,000,000 bushels of that being ground in Iowa, and more than that in Illinois. At Chicago they grind 50,000 bushels of corn a day, and in one factory, at Edgewater, N. J., they grind 25,000 bushels of corn.

Now, as I have said, gentlemen, most of these manufacturers are manufacturers of cornstarch. We have here a lot of witnesses who want to testify before this committee. There is also another association represented here on this side of the cause of corn, and that is the association known as the National White Corn Millers Association. They have more members than we have, and they are more widely scattered throughout the corn belt. Their president, Col. Ascher Miner, of Wilkes-Barre, Pa., is here. Mr. Miner is not only a corn miller but he is also a wheat miller, and, I believe, he is also a member of the National Federation of Millers. Mr. Miner has to catch a train to get home, Mr. Chairman, and, if it be agreeable to you, I would like to relinquish my time to Mr. Miner and let him say what he has to say, and then I will continue afterwards. Mr. RAINEY. That will he satisfactory.

STATEMENT OF MR. ASHER MINER, REPRESENTING THE NATIONAL ASSOCIATION OF WHITE CORN MILLERS, WILKESBARRE, PA.

Mr. MINER. My name is Asher Miner, of the Miner-Hillard Milling Co., Wilkes-Barre, Pa. I am president of that company, and I also have the honor of being president of the National Association of White Corn Millers, with offices in Toledo, Ohio.

The National Association of White Corn Millers have a grinding capacity of about 50,000,000 bushels of corn a year, and I have come down here with the executive committee of this association consisting of Mr. J. H. Genung, general sales manager of the American Hominy Co., of Indianapolis; Mr. Charles W. Schmidt, president of the Schmidt-Walker Co., of Cincinnati; Mr. Charles Steinwache, of the United States Frumentum Co., of Detroit; and Mr. Ellsworth Huffman, manager of the Standard Cereal Co., of Chillicothe, Ohio, who manufacture both wheat and corn flour.

We are here in the interest of the Rainey bill to repeal the law taxing mixed flour, which we know to be detrimental to both the producers and the consumers of flour. As I know the committee's time is limited and very valuable, I will make my remarks very short and as concise as possible.

I would like first to say a few words as to the reason and cause of the tax on mixed flours, which seems to be somewhat in doubt in the minds of some of the committee. In the late nineties, about 1895 to 1897, some of the wheat-flour millers of this country found that it was possible to mix corn flour with wheat flour in certain percentages and produce a flour that was nutritious and wholesome and when baked made very good bread. This mixed flour was put on the market, but was not branded to show that it was a mixture, and was sold as wheat flour, and in this way deceived the consumers and gave increased profits to the miller who did the mixing, and resulted in unfair competition for the millers who manufactured

and sold pure wheat flour. This resulted in the wheat-flour millers of the country, of which the company I represent was one, forming what was known as the anti-adulteration league, the members of which pledged themselves not to manufacture or sell anything but pure wheat flour, and the packages of the members of the league bore the stamp of the league as a guaranty against mixture of any kind. The wheat millers also endeavored to secure legislation from Congress to require that when corn flour was mixed with wheat flour it should be so branded as to prevent deception and fraud. The bill for the purpose was, I believe, introduced in the session of 1898, but because of the press of business due to the Spanish-American War the bill failed to pass.

The millers' representatives did, however, succeed in having inserted in the war-revenue measure which passed that session of Congress certain paragraphs taxing mixed flour, which accomplished the same purpose, as it not only required that mixed flour should be so branded, but placed a tax on it as well.

While all the rest of the war-measure bill of 1898 has since been repealed, the tax on mixed flour still remains on the statute books. The Rainey bill, which the white-corn millers favor, repeals the objectionable tax feature of this revenue bill, but requires that mixed flour shall not only be so branded but that the brand shall also state the percentages of the mixture, thus preventing any possible deception of the consumers and permitting the manufacture and sale of a very valuable, nutritious, and economical food product which the tax practically prohibits, as is demonstrated by the fact that a statement of the Commissioner of Internal Revenue showed that the entire amount collected from the tax on mixed flour in 19 years was only $59,798.11, which was probably less than the cost of collection. The number of revenue stamps sold shows that in 1899 only about 150,000 barrels of mixed flour were manufactured, and that this amount declined steadily until the year 1905, when about 33,000 barrels were manufactured. Since that year there has been a slight increase, until last year, when, owing to the high price of wheat flour, the amount manufactured increased to about 120,000 barrels, which is very small indeed, when, as I have been informed, Government figures show that the annual consumption of wheat in the form of flour is 5.3 bushels per capita, which would mean over 100,000,000 barrels of flour.

Now, in 1915, owing to the European war, the price of wheat advanced rapidly, and flour followed until it was quoted in the New York market at from $7.50 to $8 per barrel, while corn flour did not advance beyond $5 per barrel.

At that time there was a great deal of unemployment and considerable distress, when every cent saved was of the greatest importance to the poor, and a good deal of attention was called to the high cost of living.

Mr. MOORE. When was that?

Mr. MINER. Last year; in 1915 and the fall of 1914.

The attention of corn millers was therefore called to the fact that if their product could be mixed with wheat flour by the miller a perfectly nutritious, wholesome bread could be obtained at a very material saving, as flour containing 20 per cent corn flour could have been sold at a reduction of at least 50 cents per barrel below the price of

wheat flour, which would have resulted in a saving to the people of the United States in those hard times of from four to five million dollars a month, if they all had used mixed flour.

A similar situation is now before us in 1916, spring wheat flour having advanced until it is quoted in the New York market at from $6.50 to $7 per barrel, while corn flour can be sold for $4 per barrel. Thus a mixture of 80 per cent wheat and 20 per cent corn flour, allowing 10 cents per barrel for the expenses of blending, could be and undoubtedly would be sold, if it were not for the tax, at a reduction below spring wheat flour of 40 cents per barrel, which would mean a possible saving to the people of the United States of $40,000,000 per year, which, though times are not as hard as they were a year ago, is important.

Mr. HILL. Why is it not done now, if there is only a tax of 4 cents a barrel?

Mr. MINER. We are manufacturers of both wheat and corn flour. It is the annoyance, trouble, and bother.

Mr. HILL. Forty-six cents a barrel would pay for the annoyance. Why do you not do it?

Mr. MINER. We would not get that 40 cents; the public would get that. There is competition in this flour just as there is in any other flour. The average profit on a barrel of flour, whether mixed, wheat, or corn, is not over 10 cents.

Mr. HILL. Is there no other reason except the annoyance?

Mr. MINER. That is the reason we are not in it.

Mr. HILL. That is a pretty good profit--46 cents a barrel.

Mr. MINER. I am not sure we would get that 40 cents. If we would, we would have been in that business.

Mr. RAINEY. That would be passed along to the consumer if you were in that business?

Mr. MINER. The consumer would get it.

Mr. FORDNEY. If you do not get the 46 cents, you get a greater market for your product?

Mr. MINER. We would get a greater market, and that is the reason I am in favor of it.

Mr. RAINEY. Mr. Hill never thinks about the consumer in discussing these questions.

Mr. HILL. I am one of them myself, sir.

Mr. MINER. It has recently been stated that there is a grave possibility that this country will become involved in the present world war; that the country should be prepared not only in a naval and military way, but industrially as well. How better can we conserve our resources than by adding 20 per cent to the amount of flour available for bread and at the same time reduce the cost 40 cents per barrel? The question may be asked, why if corn flour can be bought so cheaply and is so wholesome the baker and housewife do not buy it and mix it themselves. The answer is that they do not have the equipment to properly mix the flour so as to obtain the best results. The flour must be thoroughly blended by machinery, which can only be done properly in the mill.

We consider this tax, therefore, an unfair discrimination against corn; unwise, unnecessary, and injurious, and that it should be repealed.

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