Mr. WAGNER. I was not here when that statement was made.

Mr. LANNEN. I do not remember any such statement.

Mr. FORDNEY. What was the name of the tall, slender gentleman who was here, who represented so many firms?

Mr. WAGNER. Prof. Teller.

Mr. FORDNEY. If you will turn to his testimony, you will find that was the statement that that gentleman made that it was reduced 0.16 per cent, or thereabouts, in nutritive qualities.

Mr. WAGNER. All I can suggest is that we look up the record and get this straight.

Mr. RAINEY. I have just one or two questions which will not require any lengthy answers. Something was said about the country miller, and the effect this would have upon him, and that his business was killed by the regulatory features and the tax, was it not: a lot of mixers in the country who got the two flours and mixed them together.

Mr. WAGNER. Yes, sir; exactly.

Mr. RAINEY. And the country millers, both corn millers and wheat millers, were producing products which were assembled by mixing the two together?

Mr. WAGNER. Yes.

Mr. RAINEY. The wheat millers were getting the best of it because it was taking more of their product to make a salable mixture.

Mr. WAGNER. That is correct.

Mr. RAINEY. Is it not true that in the little country mills they grind corn just as much as they grind wheat, making it into corn. meal?

Mr. WAGNER. Yes.

Mr. RAINEY. And corn flour is simply corn meal ground finer? Mr. WAGNER. Yes.

Mr. RAINEY. If they want to pursue the process a little further they get corn flour?

Mr. WACNER. Exactly.

Mr. RAINEY. The evidence shows so far as I know, and I presume you know, too, that the commercial corn flour now is simply ground finer to make the flour.

Mr. WAGNER. Substantially so.

Mr. RAINEY. Now, as to the test that would have to be made by the country millers, and the expense to which they may be put if this bill is passed, I understood you to say that the country millers do make dough tests.

Mr. WAGNER. The wheat millers.

Mr. RAINEY. I mean the wheat millers.

Mr. WAGNER. Yes.

Mr. RAINEY. Dr. Wesener testified here. You understand his business?

Mr. WAGNER. Yes.

Mr. RAINEY. Do not the millers all over the country, the large millers up in Minneapolis and elsewhere, send in samples of their flour right along so that they may get an analysis to be put upon the sack telling the public how much gluten and how much of everything else there is in their product?

Mr. WAGNER. I have seen such labels.

Mr. RAINEY. That happens right along?

Mr. WAGNER. Yes.

Mr. RAINEY. If the country miller wants to mix flour. all he has to do is to put his flour in a package and send it to Dr. Wesener, or some other accomplished chemist, and have it analyzed and the result of the analysis put upon the packages of the product.

Mr. WAGNER. Yes.

Mr. RAINEY. And the cost. I understand, is very small for such service. The cost is only 4 or 5 cents, so far as the transportation is concerned?

Mr. WAGNER. Yes.

Mr. RAINEY. And the fees of Dr. Wesener, of course.

Mr. WAGNER. That being routine work, the fees are very small. Mr. RAINEY. They would not have to regularly employ a chemist? Mr. WAGNER. Oh, no. In this connection I want to refer to the skill of the men employed in the mills. We employ chemists to tell us how much moisture there is in the starch before it is put in the packages, because, if there is too much, it must not go in. I have tested the men in our factories, and it sounds unbelievable, but I will furnish you proof any time you wish to have it, but there are men there who will take unfinished starch in their hands and give you the amount of moisture within one-half of one per cent..

Mr. FORDNEY. You are speaking of the chemists?

Mr. WAGNER. No; I am speaking of the regular workmen that work for us at about 25 cents an hour. Such a man acquires his skill in his business.

Mr. FORDNEY. Just one question. I should like to have you or some other gentleman here put in concrete form this information. I want to know the amount of cornstarch that can be made from 100 pounds of corn in the grain or berry, and the various other products that can be made from that 100 pounds of grain.

Mr. WAGNER. Very well.

Mr. FORDNEY. The amount of cornstarch and corn flour and hominy grits, and all the different products.

Mr. WAGNER. Do you want those figures now?

Mr. FORDNEY. I should like to have them go in the record, so as to know just how much of the various products is made from corn in the manufacturing of corn flour.

Mr. WAGNER. And cornstarch, I take it?

Mr. FORDNEY. Yes.

Mr. WAGNER. I will be glad to do that.

Mr. LANNEN. I suggest that that be handed in after lunch.

Mr. FORDNEY. Any time.

Mr. LANNEN. I think Dr. Wagner made a mistake just now, and I want to straighten him out.

Mr. RAINEY. Very well.

Mr. LANNEN. Do I understand you to say that the wheat millers ever put on their sacks the percentage of gluten that is reported by Dr. Wesener?

Mr. WAGNER. If I created that impression, I certainly want to disavow it. I have never seen such a sack of flour. One of the millers took me over on Pennsylvania Avenue here to inspect a sack of flour, and it was not on there, I am sure.

Mr. HELVERING. Nor is it necessary for you to put on the starch sack the per cent in the starch?

Mr. WAGNER. The amount of gluten in the starch?

Mr. HELVERING. Yes.

Mr. WAGNER. No. However, I will say this, that we furnish enormous quantities of pamphlets to the housewives of the country giv ing all the information that might be desired with respect to our products.

(At 12.10 o'clock p. m. the committee took a recess until 2 o'clock p. m.)

AFTER RECESS.

(At the expiration of the recess the commission resumed its session.)

STATEMENT OF MR. E. M. KELLY, PRESIDENT LIBERTY MILLS, NASHVILLE, TENN.

Mr. RAINEY. Give us your address and tell us whom you represent. Mr. KELLY. I am president of the Liberty Mills, of Nashville, Tenn. I am president of the Southeastern Millers' Association. Mr. LIND. How long have you been a miller?

Mr. KELLY I am ashamed to say. It is forty-odd years. I do not know just how long.

The Southeastern Millers' Association is composed of millers located in Colorado, Missouri, Illinois, Indiana, Kentucky, Tennessee, Georgia, North Carolina, and Virginia.

I am also a director in the Millers' National Federation.

Mr. FORDNEY. In what firm?

Mr. KELLY. The Millers' National Federation. That is the same association that Col. Miner, who spoke the other day, is a director in.

This association has a business meeting twice a year. It is a joint meeting of directors and two delegates from each State association or local club. The last semiannual meeting was held in Chicago the first part of October.

The secretary of the federation, according to his custom, previous to this meeting sent out a circular giving a list of special subjects for discussion at that meeting. Included in this list was the Rainey bill. At the meeting in Chicago in October

Mr. RAINEY. When was that held?

Mr. KELLY. The first part of October, in Chicago. This bill was discussed at that meeting.

Mr. RAINEY. This bill was not drawn then.

Mr. KELLY. Well, I think it was-I do not mean to dispute your word, Mr. Congressman, but we discussed the repeal of this revenue law there.

Mr. RAINEY. It was another bill.

Mr. KELLY. Well, it was a similar bill.

Mr. DIXON. Introduced by the same gentleman.

Mr. KELLY. That is the one I am talking about. This proposed change in the law was discussed, and the Millers' National Federation went on record by a unanimous vote as being opposed to the repeal of the present revenue act. I want to state that this meeting also was one of the best attended, both by directors and delegates, of any

joint meeting that I can recall. I want to state, though, in justice to my friend, Col. Miner, whom I respect very highly, that he was not present at this meeting.

Our milling concerns are manufacturers of wheat flour. We have a corn mill, and are prepared to make corn flour. We are also manufacturers or blenders of wheat and corn flour. We work under the regulations and requirements of the internal-revenue act. We make daily and monthly reports. We affix stamps to every package. We do not find any inconvenience in meeting all the requirements, and do not object to these requirements at all.

Our mill was also engaged in blending flour in 1897 and 1898, during the Spanish-American War, when wheat was abnormally high, as it is during this present European war. We sold the blended flour then without stating on the label that it was mixed. We found the practice very unsatisfactory then, because there was no way of knowing how much of the cornstarch our competitors would put in their product. We were at that time very much interested and very much in favor of the passing of the present law, which resulted practically in the stoppage of the practice.

We are opposed to the repeal of the present revenue act, because we believe it would lead to fraudulent and unlawful practices by unfair competitors. It is only the fear of violating the revenue law which now restrains them. We fear that if the present law was repealed, and we were working under the pure-food law only, a good many millers would take a chance and mix and sell the blended goods as wheat flour, counting on being fined if detected, and only a nominal amount, $50 or $100, or even $500. This penalty would not prevent some millers from violating the pure-food law, but they would fear to violate the revenue law, knowing such violation would be a penitentiary offense. The present revenue act applies everywhere in the United States. If the act was repealed, the proposed new law placing the regulations under the pure-food act would only regulate the sale of mixed flour in interstate trade. It would not prevent our concern from selling mixed flour anywhere in Tennessee without putting on the descriptive label. I do not agree with my friend, Mr. Genung, in his statement the other day, that the tax stamp on mixed flour puts an unwarranted odium on corn flour or cornstarch. If there is an odium on a mixture of 80 per cent and 20 per cent, then 80 per cent of the odium would be on the wheat flour and only 20 per cent of it could be charged to the corn flour. We to-day affix tax stamps on every bag of bran or shorts and other mill feeds that we sell in the southeastern territory; yet no odium is put on our mill feeds, and we have never yet heard an objection to the stamps on the part of the buyer. On the contrary, it is regarded as an assurance of quality. It is really a protection to the buyer of feeds.

There was exhibited yesterday a label of mixed flour, reading, "80 per cent wheat flour and 20 per cent cornstarch," and I think the question was asked by some Congressman if that label would not protect the ultimate consumer. In the Southeast. which is our market, it would not protect all of them. A large proportion of the population in that section are negroes, most of whom can not read. For that reason, in getting up designs for flour labels, we

invariably put a picture on the bag, a horse, or a bird, or a ship, or something that the negro can tell. He can not read. He could not read "mixed flour" if it was on there.

I have talked to a number of chemists, and all of them have stated that the only way cornstarch can be detected in wheat flour is by microscopical examination. The molecule of wheat starch is round and that of cornstarch is of irregular shape. They also stated that they could not tell-this was in answer to my question-whether there was 20 or 30 or 40 per cent of cornstarch in the mixture. Thus you see a label marked 80 per cent wheat flour and 20 per cent cornstarch would not prevent some fraudulent practices there. miller might put in 40 per cent and label it 20 per cent, and have the eminent chemists that run the Government's Bureau of Chemistry here examine it, and they do not know how to detect the quantities-Dr. Wesener might forget to tell them, you know-and they might be in trouble. That difference right there, 20 per cent excess of cornstarch which could be put in, would work like this. I believe that on the present market 40 pounds of cornstarch would cost 80 cents. Sold as wheat flour at 3 cents a pound would bring $1.40. There would be a profit to the blender of 60 cents a barrel. I do not say that it would reduce the cost of the food for use, because most millers-wheat millers, and I should expect corn millers are the same way—are not working for the public welfare altogether.

Mr. MOORE. At that point permit me to ask you if any of that profit would be passed on to the consumer in the loaf of bread, in your judgment?

Mr. KELLY. The loaf of bread would be 5 cents. There would be no change in that. The only thing that would change the size of the loaf would be when wheat declines from an abnormal price to a normal price.

Mr. MOORE. Would you regard the passage of the Rainey bill as a measure in the interest of the housekeeper?

Mr. KELLY. No.

Mr. MOORE. Do you think it would tend to reduce the cost of living to the ordinary housewife?

Mr. KELLY. I do not think so.

Mr. FORDNEY. Three years ago in my State wheat broke from $1 to 72 cents a bushel, but the purchaser of the bread in the bakeshop paid 5 cents a loaf just the same.

Mr. KELLY. And for the same size loaf, too, I expect.

Mr. MOORE. You say you comply with the present law in your business?

Mr. KELLY. Yes.

Mr. MOORE. You use corn flour?

Mr. KELLY. We mix corn flour and affix the stamps required by law.

Mr. MOORE. Do you find that the regulation can be lived up to? You do live up to the regulations?

Mr. KELLY. Oh, yes, sir. They are not hard to work under at all. Mr. MOORE. Where do you find the market for the products you make under those regulations, in the United States?

Mr. KELLY. Oh, yes; we have never exported a barrel of mixed flour.

Mr. MOORE. You think that the law should stay as it is?