Our mills do an annual volume of business of about 10,000,000 barrels, or slightly in excess of that, of flour a year. Last year they produced about 150,000 barrels of mixed flour. This flour went almost entirely into the Southeast. I might say here that the demand for mixed flour depends entirely, in my opinion, on the relative value of corn and wheat. I have seen corn a number of years higher than the price of wheat, consequently corn flour was selling at a higher price than wheat flour, and it would be manifestly impossible to mix them under such conditions. But, on the contrary, when the price of wheat flour rises there is some temptation presented to mix the corn flour with wheat flour, and that mixture is made to some extent. You must understand that while we now have relatively high-priced wheat, as compared with corn, still the price of corn has increased relatively more than that of wheat during the last 15 years. That is just simply speaking from recollection. I have not the actual statistics before me, and I am eliminating these years of unusual happenings.

Our interest in this bill is largely centered in the fact that it works satisfactorily under present conditions, and we are afraid and feel sure that with any change of policy there may be evasion, and they will sell the mixed flour again without proper notice to the buyer, whether that lack of notice may come from dishonest motives upon the part of the miller or from inefficient State or Federal supervision.

While most of the States have laws that would, in a measure, control this traffic, it is a fact that in some of the States in the Southeastin one State, at least, that I recall they have only two or three inspectors to cover the whole State. The funds are not sufficient to carry on an active campaign of this kind, even though it should be desired, and I am quite sure in some of the States it would not be necessary to label the packages, as is now required.

This is all I have to say, gentlemen, except to tell you that out of all of these mills, and they are the largest, I might add, in the Southeast, which section is by far the largest consumer of mixed flour, there is not one in favor of this Rainey bill. I should say that the Southeast would consume, and does consume to-day, 90 per cent of the mixed flour sold in the United States. All the other tax which is collected is collected on pancake flours, but on strictly mixed flour the South is by far the largest consumer.

Mr. LIND. I would like to ask this gentleman one or two questions.

Are there many small mills in your district in your association? Mr. McLEMORE. No, Governor; there are no very small mills in our association.

Mr. LIND. Well, are there in the territory covered by your association?

Mr. McLEMORE. Yes; there are a great many small mills in Tennessee and Kentucky, and also in Virginia, North Carolina, and South Carolina.

Mr. LIND. What, in your judgment, would be the effect of opening up the general situation of mixing of wheat flour among the smaller mills?

Mr. McLEMORE. The smaller mill is not equipped to mix flour; it has no laboratorial facilities at all, and it could not well send off these samples every day for analysis. The cost of it to a small mill would be almost as large as the profit they would make in a year. You can not get this work done by chemists for nothing. It costs anywhere from $2 to $3 a sample. Each mill makes three different kinds of flour, brands of flour, and to keep in close touch with the quality of the flour would require several analyses daily.

Mr. LIND. Does it require technical knowledge to mix cornstarch and wheat flour successfully?

Mr. McLEMORE. To produce dependable results, I should say, yes. Mr. LIND. Are you a practical miller?

Mr. McLEMORE. No.

Mr. LIND. That is all I have to ask.

Mr. LANNEN. Did I understand the witness to say that he produced 150,000 barrels of mixed flour a year?

Mr. McLEMORE. No; I said that much was produced in this association.

Mr. LANNEN. In your association?

Mr. McLEMORE. I have not the figures. I said possibly a hundred and fifty thousand barrels a year.

Mr. RAINEY. What is the membership of this association? Who compose it?

Mr. McLEMORE. Mr. Kelly outlined its membership.

Mr. RAINEY. This is the same association?

Mr. McLEMORE. This is the same association.

Mr. LANNEN. I just want to call your attention to the revenue from mixed flour. It was $4,767.14. The 4 cent tax on 150,000 barrels would bring in $6,000 in taxes.

Mr. McLEMORE. He has the revenue here according to his own statement which is $5,255.94 in the year 1915.

Mr. LANNEN. You are forgetting the tax of $12 a year.

Mr. McLEMORE. This is special tax.

Mr. LANNEN. The stamp tax would amount to $4,767.14.

Mr. McLEMORE. Let us assume that is true. I said between 100,000 and 150,000 barrels. I have not accurate information. I am saying between 100,000 and 150,000 barrels. Now, judging from the amount that was collected in previous years, I should say that my estimate was a little bit high, but not much, though. The members of our association made practically 97 per cent, I assume, of the mixed flour that was sold. They are scattered all over the country, you know, the mills in this association, and they all sell in that territory.

Mr. LANNEN. Mr. McLemore, are you a miller or an attorney? Mr. McLEMORE. I am not an attorney. I might qualify that by saying that I am a graduate of the University of Virginia-the legal department and practiced for four years, and I was with Mr. Padgett, the chairman of the Naval Affairs Committee of the House, but for a number of years I have been in the milling and grain

business.

Mr. RAINEY. We will adjourn until 10 o'clock to-morrow morning. (At 4.10 o'clock p. m. the committee adjourned until 10 o'clock a. m., Thursday, February 3, 1916.)

COMMITTEE ON WAYS AND MEANS,

HOUSE OF REPRESENTATIVES, Washington, D. C., February 3, 1916.

The committee met at 10 o'clock a. m., Hon. Henry T. Rainey (acting chairman) presiding.

Present: The chairman and Messrs. Dixon, Dickinson, Conry, Oldfield, McGillicuddy, Allen, Casey, Helvering, Fordney, Moore, Green, Sloan, Hill, and Longworth.

Mr. LIND. I will call Mr. Roos to the stand.

STATEMENT OF MR. CHARLES L. ROOS, WELLINGTON, KANS.

Mr. LIND. State who you are and whom you represent.

Mr. Roos. Charles L. Roos, of Wellington, Kans. I am connected with the Hunter Milling Co. and am here to represent the Southwestern Millers' League, who have a membership in the State of Kansas, Oklahoma, Texas, Missouri, and Colorado.

Mr. LIND. Kindly state to the committee your experience as a practical miller and manager of mills and as a flour merchant. Mr. Roos. In connection with mixed flour?

Mr. LIND. No; I mean your whole milling experience.
Mr. Roos. What is it you want; my life history?

Mr. LIND. Your miller's life history.

Mr. Roos. Well, I was engaged in, or started in the milling business as the manager of a small mill at New Ulm, Minn., in 1889, and I was in business there about 11 years; then went to Kansas in 1901 and organized the Kansas Milling & Export Co., a sales organization, the object of which was to exploit Kansas flour in the larger markets of the United States and in Europe. We had a group of mills, about 30 mills, that formed the company-took stock in it-and I managed that for about 9 or 10 years. Since that time I have been the sales manager of the Hunter Milling Co., at Wellington, Kans. My work has not been practical milling; it has been the selling of the products-the merchandising of the products.

Mr. LIND. You are, however, a practical miller?

Mr. Roos. No; only in that sense that I did in my boyhood days dress stones and work in the mill and tried to become a practical miller, and later on it was necessary for me to inform myself of the methods of manufacturing flour.

Mr. LIND. You operated, then, under the old conditions, before the passage of the present revenue act. Kindly explain to the committee fully what your experience and observations were.

Mr. Roos. Well, at that time-between the years of 1890 and 1900-I was engaged in milling in the Northwest, and the markets for those mills then were principally domestic. We sold flour as far south as Georgia and Alabama and some of the other States and worked up a business there, and also in the Central and Eastern States; and somewhere around the year 1897-that was the worst year that I remember-we met a very keen price competition, which we could not locate at first, but it developed that the lower-priced sellers were mixtures of corn flour, as they called it then, with wheat flour. The result of that competition was that we were driven out of the trade in the southern territory entirely; we could not sell

there, and, of course, our markets were restricted; and there was some danger of that working northward, and to some extent it did, and I was one of the millers who agitated for legislation to prevent the adulteration of wheat flour. I have always been in favor of the present measure, not that it was ideal so much as that it accomplished the result we strove for.

Before the passage of this act we were compelled to safeguard ourselves, and we organized or established what was known as the antiadulteration league. Membership in that was obtained by a guaranty of manufacturing none but pure wheat flour, and we were compelled to execute a bond to protect the league in case we should not do as we agreed, and the privilege we received, or the insignia they gave us as a member of the league, was the right to use the name member of the Anti-Adulteration League," with a seal "AAL," which we published in our advertisements and put on our bags. That in itself had a good effect. Those flour buyers who wanted pure flour knew that they could buy from any member of the Anti-Adulteration League and be guaranteed as to the purity of the flour. It had a particularly good effect in the European markets. And in the meantime this amendment to the revenue law, or this part of the revenue law regulating the mixing or adulterating of flour, whichever you please to call it, went into effect, and since that time our league has died. Mr. HILL. May I ask you a question right there?

Mr. Roos. Certainly.

Mr. HILL. From your experience as a flour merchant you know there was no pure-food law at the time you made these agreements? Mr. Roos. There was not.

Mr. HILL. This law which it is desired to partly repeal and partly change was practically a substitute for your agreements among yourselves?

Mr. Roos. Entirely so.

Mr. HILL. In other words, it stops the adulteration.

Now, supposing this law had not been passed, would not the purefood law as it came later have done the trick for you, so far as exports are concerned, and so far as interstate trade is concerned?

Mr. Roos. It might have done so, but I think we would have busted before that came into effect.

Mr. HILL. Very likely

Mr. Roos. It was an entirely business matter

Mr. HILL. But would not the pure-food law have done the business? Mr. Roos. It would, perhaps; I presume it would have done the business, but

Mr. HILL. Let me supplement that by one other question. Can not the pure-food law now, if all other legislation were repealed, answer your purpose to-day?

Mr. Roos. I should say no.

Mr. HILL. Well, why not?

Mr. Roos. For the simple reason that the pure-food law as such would apply only to interstate commerce.

Mr. HILL. I am talking about foreign trade and interstate trade. Mr. Roos. Well, it would apply to interstate trade; but we also have to contend with the question in reference to intrastate trade. Mr. HILL. Why should not your own State take care of that?

Mr. Roos, As far as that question is concerned, I think the State of Kansas does take care of intrastate trade.

Mr. HILL. They are taking care of all of the rest of the United States; why do they not take care of themselves?

Mr. FORDNEY. Oh, I beg your pardon; they are not taking care of all of the rest of the United States.

Mr. HILL. They are trying to.

Mr. FORDNEY. There is a big difference in what they are trying to do and what they are doing; they are two different things.

Mr. HILL. Why does not Kansas attend to that intrastate trade in her own way?

Mr. Roos. We will assume that Kansas does, that all States do. But all States have not pure-food laws, and a law working under the internal-revenue system is much more effective than a State law can possibly be.

Mr. HILL. Does the law of the State of Kansas provide that there shall not be adulteration of her main crop unless it is branded on the package?

Mr. Roos. I can not answer that definitely; I am not familiar with the details of the State law.

Mr. HILL. You live in Kansas, do you not?

Mr. Roos. Yes.

Mr. HILL. And you are coming here to Washington to try to get legislation to protect you within your own borders, within the borders of the State of Kansas, in which you live. Why do you not go to Topeka for such legislation?

Mr. Roos. I am not asking this for Kansas alone.

Mr. HILL. I thought that you conceded that the pure-food law would take care of interstate and foreign trade?

Mr. Roos. No; not in all cases, I will give you an illustration. Mr. HILL. Certainly.

Mr. Roos. I sell probably 5,000 barrels of flour a month in Oklahoma. The Oklahoma miller can do anything he pleases with that, but I can not; because I am governed by the United States law in my shipments into Oklahoma or any other States or Pennsylvania or the District of Columbia here.

Mr. GREEN. Do you know that Oklahoma has no pure-food law? Mr. Roos. They have not as far as flour is concerned. They have a law applying to hog feed and cow feed, but when it comes to human feed, that is not protected.

Mr. GREEN. Your statement with reference to Oklahoma would also apply to Kansas, would it not?

Mr. HELVERING. The witness says he is not informed as to the law applying to Kansas. I would say, as a matter of information, that Kansas has a very good pure-food law.

Mr. HILL. I thought it was strange if Kansas did not have such a law.

Mr. Roos. I am not posted as to the various State laws. I have operated my mills under the national law and shipped out a pure flour, and have not bothered with State laws.

Mr. FORDNEY. Is there a pure-food law in any State in the Union, or is there any provision in the pure food and drugs act that permits the mixture of foods that are not injurious to health?