Show Butter Industry Reopens Year 30 Old Battle to Protect Itself From Cheaply Manufactured Substitutes Farm Leaders Seek Rescinding Rescinding Rescind Rescind- ing Order on Use of Coloration By FRANK L WELLER WELLE Associated d Press Farm Editor WASHINGTON Jan 9 The F year thirty battle of ot the butter industry in in- to protect rot ct Use itself from the competition of more cheaply manufactured manu mann substitutes has broken into the open again In the office of David Burnet commissioner of Internal revenue re farm leaders will wUl pre present nt arguments tomorrow that the tho bureaus bureau's ruling which permits use of at palm oil in oleomargarine be rescinded The oil imparts the na natural tural color of butter but under the tho bureaus bureau's definition of artificial coloration escapes the federal tax on colored ine me HURTS PROTECTION The effect it Is claimed has been virtually to nullify all protective legislation legIslation leg leg- for tor the butt butter r producer Unless Unless Un Un- less tho ruling Is changed representatives of the Industry say any this ef ef- ef feet will necessitate enactment of a anew anew anew new law to replace the oleomargarine act of 01 1902 Since the ruling was made they contend the price of butt butter butter but- but t ter r has been depressed seven ven cents a a. pound They say the loss has been passed o on in reduced cream checks for every dairy farmer taking toll ll from the nations nation's biggest farm tarm bust bust- ness Made with palm oil oU oleomargarine S can be taxed under the bureaus bureau's rulIng ruling rul nil ing only one-fourth one cent a pound instead Instead instead in In- in- in S stead of or the 10 cents a 3 pound tn tax provided pro for artificially colored butter butter but but- ter substitutes Efforts to keep the price of oleomargarine oleomargarine oleo oleo- margarine more nearly in line Una with S the price of ot butter were Initiated inthe in inthe the law of 1886 which required a a. tax of ot 2 cents a a. pound It permitted S oleomargarine to bo ho colored yellow In 1902 because of the rising price of ot butter dairy interests interest insisted S that the cent 2 ta tax was not sufficient to deter unscrupulous persons who vho were selling oleomargarine in the guise of butter for m much mitch ch less than the bona fide tide product Congress amended the law increasing tho the tax on artificially colored oleomargarine to 10 cents a pound and placing a tax of one-fourth one cent a a. pound on un- un colored NEW PROCESS But Just when all aU artificially colored colored col col- col- col ored butter substitutes were paying a cent 10 tax a a. new process for ref refining InIng In- In ing palm paint oil was developed in En En- gland The butter substitute Industry industry indus Indus- try was provided with a natural In Ingredient in- in which did the tho work of ot the artificial color Defeating entirely the tho purpose of ot the oleomargarine law it was claimed The act sa says s 's that when oleomargarine oleomargarine garine is free from front artificial coloration coloration colora cobra tion Uon which causes it to look like butter of ot any shade o of yellow the tax shall be one-fourth one of 1 cent a pound Charged with collecting the tax the bureau of Internal revenue ruled that oleomargarine is not free from artificial coloration except where such yellow ellow color results from naturally naturally natu natu- rally colored oils or other materials which are arc used in substantial quan titles in relation to tho the other ingre ingre- NATURAL COLOR These must serve some material function or functions In addition to imparting color to the finished prod prod- That is what palm oil all docs does It now Is 15 so refined that from 10 to 30 per cent of a pound of oleomargarine can be made of ot the tho oil oU and it has a natural yellow color Thus with all the old competition reinstated butter producers started the investigation of the law which led to the hearing before Commissioner Commissioner Commis Commis- stoner Burnet Shipments of oleomargarine and butter substitutes in this country In 1929 represented an increase of 56 per cent in quantity compared with the year car before with a value of ot more than If It this had been pure butter on which the average price was about 40 cents a pound Hw it H w would have represented a revenue of approximately for the tIie American farmer and farm leaders insist meant elimination of the butter butter butter but but- ter surplus that has depressed prices As they see the situation only the production of oleomargarine has beaten prices down Storage stocks of at butter are less than a year ago Consumption has increased and the output is barely normal I |