Mr. KEITH. We could use their services to greater profit from a revenue standpoint. Mr. HELVERING. Yes; in collecting the revenue. Mr. KEITH. In collecting the revenue. Mr. HELVERING. Now, I want to ask, in connection with a reading of this bill, on page 2, section 2, in lines 12, 13, and 14, what construction you would place on the language where it says: "Grinding or mixing together of wheat or wheat flour with any other grain or with the product of any other grain, whether the same contains a leavening agent or not." Mr. KEITH. Well, I would say that that meant if you had mixed wheat with any other grain it would be a mixed flour, regardless of whether there is some leavening material used or not. Mr. HELVERING. If I grind pure wheat flour with the outside part of the corn kernel, what we call the shell of the corn grain, would that be proper? Mr. KEITH. I am not a miller. I could not say whether you could do that under this law. It is another grain. If you call that a part of the corn grain I should say you could. Mr. HELVERING. Would you be called upon in your department to construe this law? Mr. KEITH. No, sir; if it does not provide a tax we would not be called upon to construe it. Mr. HELVERING. That would come under the pure-food department? Mr. KEITH. Yes, sir. Mr. HELVERING. And you do not care to give an opinion as to whether the outside husk of the grain of corn should be ground with the flour or not? Mr. KEITH. If we had nothing to do with it, it would not be in my province to say whether that could be done or not. Mr. RAINEY. If it could be ground under this law, it can be ground under the present law, can it not? Mr. KEITH. Yes, sir. Mr. HELVERING. But what, under regulation and inspection, must be done if it is ground to-day? Mr. KEITH. It must be marked as mixed flour. Mr. HELVERING. But there is no man could grind this as mixed flour unless he is under the eye of the inspector? Mr. KEITH. We do not have inspectors placed at the plants. Mr. HELVERING. You have an inspector inspect the books of these plants, do you not? Mr. KEITH. Yes; monthly; but he does not inspect the materials nor the process of manufacture. Mr. HELVERING. But the man who grinds the flour with these ingredients in it makes a sworn statement to the department each month, does he not? Mr. KEITH. Yes. Mr. FORDNEY. Mr. Keith, you stated this was a Spanish War revenue measure? Mr. KEITH. It was a part of it. Mr. FORDNEY. The investigation and preparation for the enactment of this law began many months before the declaration of war against Spain. Do you know that? Mr. KEITH. I only know it from hearsay. Mr. FORDNEY. The records here show that it began early in the year 1897, and the Secretary of Agriculture appointed special agents to gather information, and in the early part of the summer and fall of 1897 did gather information which is here of record on this very bill, on this very subject, but the bill itself was not enacted until after war had been declared against Spain. Do you believe, Mr. Keith, that that was purely a revenue measure, because of its passage? Mr. KEITH. I consider it a revenue measure, with only incidental features of protection. Mr. FORDNEY. Really, Mr. Keith, was not the sole purpose of that law to give Government supervision over the mixing of those materials which were put into mixed flour prior to the adoption of this law, and to stop placing in mixed flour things that were deleterious to health and to the value of the article? Mr. KEITH. That would be imputing to Congress, if I answered your question affirmatively, an evasion or subterfuge. Mr. FORDNEY. I would not ask you to do that. I am sincere in my question. Mr. KEITH. I assume that Congress intended it for what it was primarily, and incidentally, of course, any protection that might be afforded to the revenue features, in the same manner as the oleomargarine law. Mr. FORDNEY. It never has been a great revenue-producing measure, has it? Mr. KEITH. No, sir. Mr. FORDNEY. But it did put the mixed-flour men out of business? Mr. KEITH. So far as we know. I could not state that as a positive fact. Mr. FORDNEY. Let me ask you, and I am seeking information and am not trying to dispute you; I am only too glad to get any information I can from you: What would be the result if this law were repealed if a manufacturer of mixed flour were to ship barrels from one State to another in barrels labeled as per that label, and the grocer would put it up in smaller packages and resell it? Would he be permitted, under the law, to sell that without any label? Mr. KEITH. Under the present law that is in force? Mr. FORDNEY. No; if you repeal this law. Mr. KEITH. Yes, sir; just the same as he does under the old law. Mr. FORDNEY. Why? Mr. KEITH. Because if they take it out of the bulk package there is nothing in the law that now stands on the statute books which prescribes the manner of sales by a dealer except that it must be from the original package. He can make it up, if it is in 196-pound packages, into smaller packages, and the law does not say that he shall put his name and address on it. Mr. FORDNEY. He can be governed, then, only by the State law? Mr. FORDNEY. And could sell mixed flour without labeling it? Mr. FORDNEY. I want to call your attention to what was said at that time, which led me to ask you the question I did. There is a very large volume of correspondence published here in the report that was made at the time this mixed-flour law was up, in 1897 and 1898. If I do not turn to it readily, the substance of it was that in the making of flourine in some extreme cases as much as 50 per cent of the contents of the package was barytes, stone, and soft clay ground and mixed with flour, and in the making of mixed flour 50 per cent of the flourine, mixed as I have described, was mixed with the flour, making 25 per cent of the mixed flour consist of barytes, a material without any nutritious substance whatever, which, of course, added weight to the bread. The bulk would not be as great with that material in it as without. Although the Agriculture Department says, by this specialist, that that was not injurious to health, if this law were repealed could not this practice, under the present pure-food law, be reestablished; could they not reestablish that same system? Mr. KEITH. It can be under this present law, if they want to pay a tax on it. Mr. FORDNEY. Yes; but they must give notice to the public. Mr. KEITH. Not in so far as this bill goes, which covers interstate shipments. It would have just the same effect as the old law. Mr. MOORE. Do you think that can be done now? Mr. KEITH. What is that, sir? Mr. MOORE. Do you think that mixing can be done now, under the present law? Mr. KEITH. If I am right in my interpretation of the law, it is not prohibited: That for the purposes of this act the words "mixed flour" shall be taken and construed to mean the food product resulting from the grinding or mixing together of wheat or wheat flour as the principal constituent in quantity, with any other grain, or the product of any other grain or other material. The "other material" would certainly permit the mixing of almost anything if they saw fit to and wanted to pay the tax and branded it as mixed flour, and if the pure-food law did not stop it. There is nothing in the present law to prohibit the use of deleterious substances. Mr. MOORE. It is your belief that adulteration of flour with deleterious substances could take place now? Mr. KEITH. Yes, sir; so far as this law is concerned. Mr. MOORE. You are in the Treasury Department? Mr. KEITH. Yes, sir. Mr. MOORE. And the Secretary of the Treasury is Mr. McAdoo? Mr. KEITH. Yes, sir. Mr. MOORE. Let me call your attention, then, to a letter written by Mr. McAdoo, Secretary of the Treasury, to Senator Stone, of Missouri, last year, in which he gives the figures, substantially, that you gave a little while ago, about the revenue-producing qualities of this bill, and then says: From this, of course, it will be seen that this has not in fact been a revenue measure, but it has undoubtedly effectively prevented the adulteration or misbranding of flour. Mr. KEITH. Misbranding. Mr. MOORE. "Adulteration or misbranding." That includes the word "adulteration." That is what I am directing your attention to: But it has undoubtedly effectively prevented the adulteration or misbranding of flour, and was the only law relating to flour serving this purpose prior to the passage of the act of June 30, 1906, known as the pure-food law. Now, it does not appear to be the thought of the Secretary of the Treasury that the law is ineffective as preventing adulteration. That is what led me to ask the question I did a while ago. Mr. KEITH. I know better what was intended, probably, by that letter, because it so happens that I prepared it myself. Mr. MOORE. I am very glad to hear that. I did not want to ask you that, but I suspected you had. Mr. KEITH. I had in mind just what I stated, that it prevented the misbranding, and in that respect, and adulteration, prior to the passage of the pure-food law. There was not any pure-food law until 1906, and that language was used in that way. That was my idea when I stated or dictated that letter, that prior to 1906 it had prevented the adulteration by requiring it to be branded as mixed flour, Mr. MOORE. I will turn you over to Mr. Fordney. Mr. FORDNEY. Mr. Keith, I want to read you now from a letter written back in 1898. If I understand you, you believe the real purpose, or the principal or chief purpose of that law, was the tax feature. Mr. KEITH. I assume that was the idea of Congress. Incidentally, as I said, it may have been regulatory. Mr. FORDNEY. Here is a letter from the York Manufacturing Co., Greensboro, N. C., dated May 7, 1898: GENTLEMEN: We invite your attention to our mineraline, which is, without a doubt, the greatest existing discovery. There is no flour-mill man who can afford not to use it for several reasons: Your flour will be much whiter and nicer; it does not injure the flour in any way; is not at all injurious to the health, and by using mineraline you realize a margin of from $400 to $1,600 on each carload you use. Do you believe that quotation had anything to do with the real cause for the passage of this act? Mr. KEITH. I had no knowledge as to such practices. Mr. FORDNEY. Here is one manufacturer who makes that statement to another. Mr. KEITH. I will say this, Mr. Fordney: I have never found any such material used since I have been with the Internal-Revenue Bureau. That is the reason I make that statement. So far as I know, that is only hearsay, because I have never yet heard of any manufacturer using, or found on the premises of any manufacturer, any such material as that. Mr. FORDNEY. He further states: We can furnish you mineraline f. o. b. cars your station, for high-grade flour, at $20 per ton; for medium-grade flour, at $16 per ton; for bread meal, at $12 per ton; and for feed meal, at $8 per ton. Mr. Keith, there is an abundance of evidence here, if I am correct, and I think I am, sir, that shows that by repealing this mixed-flour law, so that the manufacturer of mixed flour gets away from any Government inspection, when the price of wheat is higher and the price of corn and potatoes is lower, they will take advantage of the lower priced article to put a larger quantity in mixed flour, hoping, of course, and expecting to undersell the manufacturer of honest wheat flour, or to enable him to make a larger profit out of the flour. Is not that the real substance of the meat in the coconut? Is not 25718-162 that why the manufacturers of corn flour now want to get away from Government inspection? Mr. KEITH. Mr. Fordney, so far as I am concerned, I do not know that any particular person or class of people are primarily interested in getting away from regulation of this character. They would get it under the pure-food law. When you say the "corn-flour manufacturers" I could not state as to what their idea is. I would be expressing an opinion about what somebody else intends or thinks, and I am not prepared to do that. Mr. FORDNEY. Mr. Keith, I am not a miller. I was at one time, and know something about the business. I lost all the money I had in it, but I learned something, and although I do not represent any milling company personally or otherwise, I only have an interest in a general way, and if this is a bad law I do not want it, and if it is a good law I want it passed and enforced. If this law is repealed, do you believe, under the pure-food law, as long as there are materials put in mixed flours that are not injurious to health, that the purefood law is going to help out on cheaper flour or less valuable flour? Mr. KEITH. It will protect them just as effectively, in preventing misbranding, as this law, and in one sense more so, because it will prevent, under the pure-food law, the use of deleterious materials, such as you have spoken of, which this law does not prohibit. Mr. FORDNEY. But, Mr. Keith, barytes is not a deleterious material. Mr. KEITH. Of course, if you did use a deleterious material it would be prohibited by the pure-food law. I am assuming-I do not know anything about barytes that if it were deleterious the pure-food law would prevent its use, whereas this present law does not. Mr. FORDNEY. In other words, Mr. Keith, there is a statement here (this is so voluminous I can not turn to the figures, and I do not presume it is necessary, and while I may not be absolutely correct in this statement, I am somewhere nearly correct), the statement by the chemist is to the effect that there is so little in barytes that a laboring man would have to consume 750 pounds a day in order to get the necessary nutriment out of it to sustain life. That is what a chemist says. Mr. KEITH. I plead ignorance of the properties and qualities of barytes. I know nothing about it. Mr. FORDNEY. Therefore, if this chemist is correct (it may be that I have the amount too large, but it is quite large at least, more than any person or family or several families could consume in a day), and if that be true, then the repeal of this law, which would permit the use of barytes under the pure-food law, because it is not deleterious to health, and that is all the pure-food law prohibits—then it would be bad, would it not? Mr. KEITH. But it can be used now, sir, so far as this law is concerned. Mr. FORDNEY. But you have to brand it. Is there not something about that inspection that the manufacturer does not like? Mr. KEITH. I do not know except that the burden of the regulations, the fixing of stamps, etc., rendering of reports, is onerous. I do not know that the inspection itself is a particular burden, because I never made any inspection, and never had any complaints on that score. |