Mr. YOUNG. Not necessarily; it might be handled under the drawback law. Mr. Chairman, I thank you and the gentlemen of the committee for your courteous attention.

Mr. FORDNEY. I have sat here now pretty nearly four days and there have been but two or three gentlemen heard who are not interested in the passage of this law-who are opposed to it, and we have heard all the gentlemen on the other side, practically, that are in favor of this proposed law. We are going to be here for a long time unless we can confine this argument to some gentlemen who are manufacturers of flour that are opposed to the mixing proposition. I am willing to stay here for any length of time to hear everybody. I want to do that if the other members of the committee are willing to sit, and I am willing to sit all this week and next or any length of time it takes to hear all of this evidence. This is a matter of very great importance to the people, because it affects everyone, because everybody uses the flour, and I would suggest that some of the gentlemen who are directly interested in the manufacturing of wheat flour be heard now.

Mr. RAINEY. Mr. Gross, do you want to be heard?

Mr. GROSS. It will only take me three or four minutes. I raise both wheat and corn, and I eat both wheat and corn, so I am nonpartisan.

Mr. RAINEY. We will hear you if you want to be heard now.

STATEMENT OF MR. HOWARD H. GROSS, PRESIDENT OF THE TARIFF COMMISSION LEAGUE, FIRST NATIONAL BANK BUILDING, CHICAGO, ILL.

Mr. RAINEY. Just give your full name and business address. Mr. GROSS. I was formerly president of the National Soil Fertility League and am now president of the Tariff Commission League.

I wish to say, gentlemen, that I have no interest in this matter on either side. I understand that there is now a tax of 4 cents per barrel on the mixed wheat, and the question is whether that should be repealed. Is that correct?

Mr. FORDNEY. On the flour.

Mr. GROSS. On the flour, yes.

Well, it does not occur to me that mixing a corn product with a wheat product, if both are good, is adulteration, if it is sold for what it is supposed to be. We have our wheat cakes and we have our corn cakes, and some prefer one and some prefer the other. It seems to me that if the purchaser knows what he is getting, and knows that what he is getting is wholesome, that there should be no objection to it, and no tax upon it; and the pure-food law ought to cover the question of whether the product is so inferior as not to be suitable for consumption.

The records will show that the acreage of wheat is somewhere between 47,000,000 and 50,000,000 acres per year, and has been fairly stable for 10 or 12 years. The acreage of corn has increased somewhat. The yield per acre is increasing more rapidly in corn than in wheat, taking a series of years together. I do not understand how the question of whether wheat or corn is the more profitable crop would cut very much figure in the discussion of a matter of this kind. Let the people have what they want. Let a man manufacture any

thing the people desire, so long as it is legitimate and is sold for what it really is. If a purchaser is aware of the fact that he is buying 80 per cent of wheat product and 20 per cent of corn, and he likes it that way, why, he should not be penalized for wanting it. It does not seem to me like a square deal to inflict a tax of that kind, for everything we eat is seasoned, and it is a combination of a number of things that we have. Shall we say that because beef is more nutritious, if it is, than pork, that the Government should discriminate against pork as a food product by taxing it? It does not occur to me so. It seems to me that you are cutting this down too fine, getting down to hairsplitting, and what I have heard here to-day and a week ago does not convince me that it is worth the amount of time put in upon it. It ought to be open. Let the people buy what they want to buy without being penalized, and let the pure-food act govern that.

In regard to the export abroad, if the people want a cheaper flour, let them have it. We may be very sure that the standards in Europe of testing out what you sell them are such that you can not very successfully sell them one thing for another, and those who have tried that have found to their cost, that it is not a very good proposition. Take Denmark. Everything is standardized. You go to Denmark and you will find that bacon is standardized. They standardize everything. They have got it down so they even standardize the men there. But in this country we have been loose in our methods of marketing, which the pure-food law has corrected to a great extent, but if corn and wheat is sold for what it is, I see no reason why there should be any discrimination whatever.

Mr. FORDNEY. What kind of standards do you have in Holland? A Government standard?

Mr. GROSS. In Denmark they standardize everything. They have their boards of trade there. You buy an article, and the producers are required to put it in a condition so that it goes out with the stamp of their commercial organization or board of trade, or whatever the name may be. It has that mark and everybody knows it, and that is the hall-mark of purity, and they know that article is up to the standard, and they do not permit them to sell it in any other way. So you could buy Denmark products with your eyes shut, and you know what you get.

Mr. FORDNEY. Do you claim that 100 pounds of cornstarch is just as valuable to put in bread as 100 pounds of wheat flour of good average grade?

Mr. GROSS. I do not know anything about that, sir; but I do know that cornstarch is palatable and nutritious and very valuable as a food, unless I am misinformed. Corn is good food for the human as well as for animals, and if you wish corn to eat in that form, or if you desire it mixed and want to buy it that way, I do not see any reason why it should be taxed.

Mr. FORDNEY. If by mixing cornstarch with wheat flour the nutritious qualities of the article are lowered, would you then say it was adulteration of the wheat flour?

Mr. GROSS. I would not say it was adulteration.

Mr. FORDNEY. Anything that lowers the standard adulterates it, does it not?

Mr. GROSS. I do not believe it does, necessarily.

Mr. FORDNEY. Suppose you take a quart of whisky and put a quart of water with it, would you say that that would be adulteration of the whisky?

Mr. GROSS. I should assume that it would weaken it to that extent. Mr. FORDNEY. Would it not be exactly the same with flour if the nutritious qualities were taken away?

Mr. GROSS. It is a question to what extent, if any, they are taken away. It is not the same as putting a quart of water to a quart of whisky. There you would be reducing the strength 50 per cent.

Mr. FORDNEY. I have never drank a quart of whisky in my life and I am only speaking from what I hear.

Mr. HELVERING. You are speaking about the fairness of the proposition. Do you think it is a fair proposition for a man in business to engage in it under a name by virtue of a law which legalized the name of mixed flour to come in now and ask to have that law repealed in every particular except saving to him the name?

Mr. GROSS. Well, I can not answer that question. I have not any opinion on it. I do not know just to what extent a trade name has been built up on mixed flour, whether it has any value, or if it has, whether it is not common to anybody who wants to take it. If that is the case, then it would not be a proprietary article like a trade-mark that would redound to the benefit of one person only, but it is open to anyone, and I would like to see a free, open market, unless a thing ought not to be sold, then to penalize it.

I did not expect to make any remarks here. I am not interested. Mr. RAINEY. We will recess now until 10 o'clock to-morrow morning.

(At 4.10 o'clock p. m. the committee took a recess to Friday, February 4, 1916, at 10 o'clock a. m.)

COMMITTEE ON WAYS AND MEANS,

HOUSE OF REPRESENTATIVES, Washington, D. C., February 4, 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, Crisp, Casey, Helvering, Fordney, Moore, Green, Sloan, Hill, and Longworth.

Mr. RAINEY. The committee will come to order.

Mr. GREEN. Mr. Chairman, I have a letter here that I would like to read into the record, if it is agreeable to the chairman and the committee.

Mr. RAINEY. I hear no objection.

(Mr. Green thereupon read the following letter:)

Mr. ROBERT G. GOULD,

THE BOARD OF AGRICULTURE, COLUMBUS,

DAIRY AND FOOD DIVISION,

T. L. CALVERT, CHIEF,
February 2, 1916.

New Willard Hotel, Washington, D. C.

DEAR SIR: Your favor of the 22d ultimo, addressed to Hon. R. W. Dunlap, has been referred to me for attention and answer.

25718-16-20

Will say that our State laws are so that they will take care of mixed flour very nicely. The manufacturer, of course, will be required to place on the package a statement giving the percentage of ingredients contained therein, and I see no reason why there should be a tax imposed upon this mixture by the Federal Government.

Of course, I am only speaking from Ohio's viewpoint, as there may be some other States that do not have a law covering this question, and, without looking the matter up, I think most of them do. I do not see why there would be any justified objection from consumers or anyone else as long as this is labeled.

Yours, very truly,

Mr. GREEN. I offer this letter.

Mr. OLDFIELD. What State is that?

T. L. CALVERT, Chief of Division.

Mr. GREEN. The Board of Agriculture of the State of Ohio. I offer this letter for the record, Mr. Chairman.

Mr. LIND. Mr. Chairman, we have had a miller here from Ohio all the week, but he was compelled to leave last night in response to a telegram, and he wrote out a very brief statement addressed to the chairman of the committee, with the request that it be read into the record as his statement of his views. May I read that into the record? It is very brief.

Mr. RAINEY. Yes.

(Mr. Lind thereupon read the following letter:)

Hon. CLAUDE KITCHIN,

Chairman Ways and Means Committee,

House of Representatives.

FEBRUARY 3, 1916.

DEAR SIR: I am a miller of pure, soft winter wheat flour; located in Osborn, Ohio; have been in the business for 30 years. I was appointed by the president of the Ohio Millers State Association to represent it at the hearing of the Rainey bill. I have been in attendance at your meetings for four days, and was unable to make my statement of objections to the above bill. I find it imperative that I return to my home this evening. I, therefore, desire, with your permission, to file my protest against the repeal of the existing mixed-flour law, for the reason the law is a safeguard around a barrel of pure flour, therefore protecting the innocent consumer against designing dealers.

I do not think a mixture of 20 per cent cornstarch and 80 per cent of wheat flour should be put on the market and offered for sale as mixed flour.

We would not under any circumstances adulterate our flour with starch, as It would make an inferior loaf of bread. It seems to me that the reputation established by the millers of this country for making the best flour in the world should be maintained, and that can not be done if the existing mixed-flour law is repealed. We know something about the adulteration of pure-wheat flour with cornstarch during the years of 1896 and 1897. We, like other millers in our State, had a hard time to hold our trade on account of the pernicious practice of adulterating on the part of some millers. We, therefore, are opposed to the Rainey bill.

Very truly, yours,

M. L. FINNELL.

Mr. LIND. I would like you now to hear Mr. Faircloth.

STATEMENT OF MR. E. C. FAIR CLOTH, SECRETARY-TREASURER OF THE AMERICAN BREAD CO., NASHVILLE, TENN.

Mr. LIND. Mr. Faircloth, will you please state who you are, what your business is, how long you have been engaged in it, and also your connection with milling and your experience as a miller?

Mr. FAIRCLOTH. I am secretary-treasurer of the American Bread Co., a baker, and also of the Cherokee Mills, blenders of soft wheat flour.

My first experience in the milling business was in 1886, as a salesman of flour throughout the Southeast, the Carolinas, Georgia, Florida, Alabama, Mississippi, and our own State of Tennessee. A few years after that I came back and stayed in the office at the mill with Mr. Kelly, who testified here a few days ago, who was bockkeeper at that time and is president now of the Liberty Mill.

Shortly after that we built a very large mill at Estill Springs, Tenn., known as the Noel Mill Co., having a 4.000-barrel capacity per day of soft wheat flour. I stayed down there and managed and operated that for three years, when I came from there to Nashville, in 1895, and in connection with M. S. Pilcher, who is still in Nashville, we begun the blending of flour. We leased a warehouse that was attached to a mill that had been in operation there and began to blend soft wheat flour for the southeastern trade, putting it in such shape and form and sacks as the trade might require, and buying it either in bulk, furnishing the bags ourselves, or 140-pound jute bags furnished by the millers that we purchased the flour from. We had been in that business about a year when we became cognizant of the fact that others were mixing corn flour with wheat flour, we found it out because of the fact that our prices became relatively high, our trade went back, and our quotations were out of line; and we investigated and found what was going on, and so we purchased corn flour ourselves in Indianapolis and Peoria, I believe, and some other places up through that section of the country, and we began to mix this corn flour with wheat flour.

Mr. LIND. Was it corn flour or cornstarch?

Mr. FAIRCLOTH. Corn flour.

Well, the demand for corn flour became so great, gradually, by the millers and blenders of flour it was with some difficulty that we secured it.

Mr. FORDNEY. What year was that? Mr. FAIRCLOTH. That was in 1897. And finally we were informed-I do not recollect by whom-that other articles were being used, and shortly after that we were quoted a price on what they termed at the time a glucose starch. That was cheaper than the. corn flour, so just like all the others we began putting some glucose starch in the flour.

Mr. CASEY. Did you label that a mixture of corn and wheat flour? Mr. FAIRCLOTH. No, sir; it was not necessary then. This law had not been passed at that time, and nobody did that. There was no branding on it.

Every little while somebody quoted flour lower and lower and lower, and the millers in Louisville became very strong competitors of ours. We continued to mix this starch and corn flour with the wheat flour, and finally the price of the materials that we doped into the flour became so high that there was comparatively no profit, with the competition and prices that the others were quoting, and it dragged along that way for several months, and soon there was no more profit in it then than there had been when we were putting out genuine wheat flour.

Mr. MOORE. Why did the price go up?

Mr. FAIRCLOTH. Because these materials that went into the flour. became almost as high in price as the flour.

Mr. MOORE. Where did you buy them?