the annual stockholders' report of Procter & Gamble was taken into the committee rooms and exhibited as a reason for the imposition of excise taxes. The sponsors of these taxes say they can bear it. Procter & Gamble is not injured by these taxes, it is the small members of the industry who are being injured or exterminated. I said in 1929 there were 282 soap manufacturers in business; in 1935, there were 238. There is a declining per capita production, sir, of soap in the United States. Mr. WELCH. Mr. Chairman, the witness in explaining his case has used the word "exterminate." May I interrupt to ask the witness if there is not a possibility of exterminating the whales? Mr. GORDON. Quite. Mr. WELCH. At the rate they are being killed. Mr. GORDON. Quite. I think it would be possible; yes. I, of course, am not an authority on the whale, you understand; I am testifying as an authority on oils and fats. Mr. WELCH. Personally, I am interested in the conservation of all natural resources-cotton, copra, soybeans, peanuts, and fat-producing animals that naturally reproduce to the extent that it is desirable to reproduce them. I am interested in seeing, if possible, that the whales are given a chance to reproduce in the same proportion that they are killed, and I sincerely hope, Mr. Chairman, before the hearings on this bill are finally concluded, that we will be given definite figures, or something near definite, in reference to what is the evident depletion of the whales. The CHAIRMAN. I think probably the best source to get some information on that will be to have somebody from the Bureau of Fisheries give it to us, if they have it. Mr. WELCH. I think we should have it. The CHAIRMAN. Mr. Fiedler, will you take notice of that? Mr. GORDON. I think that the position of the gentleman as expressed this morning is correct that if the whales are to be caught, American industry should catch its share. In other words, I would see no benefit to be gained from our refusing to catch whales, where some 260 expeditions are at work catching whales. Mr. WELCH. But that does not solve the problem-every nation for itself, like every man for himself, and the devil take the hindmost. Let us hope that the nations engaged in this will come to a proper reasoning and see to it that whales are given a chance to reproduce in proportion to the rate at which they are being killed. Mr. GORDON. I quite agree with that. Mr. WELCH. It is not a question of today; it is a question of protecting the generations to come, against the destruction of our natural resources. I am not only opposed to the destruction of the whale, but I am opposed to the destruction of fish fats. Mr. GORDON. The smaller soap companies too, perhaps? Mr. WELCH. I am opposed to the destruction of all specie that are being destroyed out of proportion to their ability to reproduce. We have had plenty of evidence as to that, and it should be stopped, if possible. Mr. GORDON. Would you consider, sir, that the extermination of the smaller soap companies was in line with the conservation of natural resources?. Mr. WELCH. They will exterminate themselves automatically if they are allowed to destroy the source of production. Mr. GORDON. That is not what has happened. Mr. WELCH. And if you kill off the whales beyond their ability to reproduce, you will have to resort to some other substitute. Mr. GORDON. May I state, in that connection, that the use of whale oil in soap is of a very minor nature. It is not an important ingredient; it is only one of several oils which are used after hydrogenation in the manufacture of soap to supplement a sadly deficient domestic supply of tallow. Its use in soaps will amount, say, to 28,000,000 pounds a year out of a total consumption of 1,300,000,000 pounds in the manufacture of soap of all kinds of oils and fats. So that it is not, of course, a matter of grave concern to soap makers. But all of these restrictions on our raw-material supply are cutting the vitals out of the industry, and the smaller members are going under. It is not hurting the larger ones, because, by the power of advertising, they can overcome the sales resistance of higher costs; but the smaller fellows, without money for heavy advertising appropriations, are going under and they are dying off at a rate which is of concern. Now this is a chart that I have here that I would like to have put in the record. The CHAIRMAN. It will be placed in the file, but it always requires getting special permission to print it in the record. Mr. GORDON. If you will refer to the copy of the chart which I have handed you, you will note the United States production of soap per capita is less than it was as far back as 1923. Now, you see something which these gentlemen who secure these taxes do not appreciate-and it is easy to secure them; all you have to do is to come down here and set up an agricultural background and claim you are representing the farmer and, you can get these taxes. (The chart referred to is as follows:) was not a case of a 5-percent importation, or a 10-percent importation; it was a 100 percent stoppage of the activities of these people. Two of them have been sold under the hammer and others will go unless that situation is rectified. The CHAIRMAN. Are there any further questions? Mr. GORDON. Mr. Chairman, would you please ask Judge Snow to place in the record the number and location of the menhaden fish oil plants which he has said The CHAIRMAN. I think that is in his statement, but we will be very glad to have that information. Mr. GORDON. I have it here: In New York there is 1 menhaden factory; in New Jersey there are 2 factories, in Delaware there are 2, in Virginia there are 10, in North Carolina there are 8, in Georgia there is 1, and in Florida there are 5 plants. Mr. SNOW. And in California there are 60. Mr. GORDON. Wait a minute The CHAIRMAN. Just a minute. I am running this thing. Mr. GORDON. The Judge spoke a little out of turn. I was speaking of the menhaden factories. If a separate figure of the valuation of those could be obtained, it would be found that at the outside, we will say, it would be $2,000,000. The total production of menhaden fish oil by those plants is less than one-half of 1 percent of the United States domestic oil and fat consumption. The CHAIRMAN. So you would put them out of business in order to pay dividends to some foreign stockholders? Mr. GORDON. No; I would not. But I say this, sir, that we should not wreck essential portions of the American fats and oils industry to satisfy the caprices and the whims of a few gentlemen engaged in that industry who do not make a very careful economic study of the effect of excise and tariff taxes on the general fats and oils situation, or who pay little attention to the general commodity price trend of the country. The CHAIRMAN. Judge Snow, now I will ask you to submit in the record the information that has been requested. There is no use to take the time now, but you can put it in the record. Mr. SNOW. Mr. Chairman, that information will include all of the industries that we represent. The CHAIRMAN. Yes. Mr. SNOW. Not only the menhaden and pilchard. The CHAIRMAN. Yes; and separate them if you can. Mr. GORDON. May I ask this, that they be put on some fair basis of valuation-let them say where they get their figures, which are put in the valuation? I know one of the gentlemen came to me through an agent and wanted to sell his plant to someone in the industry, and he placed a valuation on it, I think, of a couple million dollars; yet I do not believe he could sell the whole thing for $200,000. If that is the basis of the valuations they are going to give you, it will not be worth much. The CHAIRMAN. Mr. Gordon, I am very sure what he submits will not be to your satisfaction. Mr. SNow. Mr. Chairman, we do not propose to let Mr. Gordon value our plants. The CHAIRMAN. Certainly not. (The following information was submitted by Mr. Gordon subsequent to the close of the hearings:) goods. Glycerin is necessary in the production of the lacquer which you put on the inside of the tin can to keep the tin from poisoning people, because the acid in the food would take up the tin. I do not want to take the time of the committee in recounting all the innumerable absolutely essential uses of glycerin. Now, then, gentlemen, this is the situation: You can go on putting these taxes on the soap people; you can go on putting them out of business, because it is easy to get these taxes; but the day of reckoning will come when this country is at war and our military men will be looking for a glycerin supply. They won't find it, because there will be nobody left to make it except a few big soap makers who are, of course, going to stay in the business. The little fellows are going to be missing. I regret to tell you that, but that is the case. The CHAIRMAN. All right; does that conclude your statement? Mr. GORDON. Unless you have some questions you want to ask. The CHAIRMAN. Mr. Gordon, you represent the Bureau of Raw Materials, you say, of the American Vegetable Oils and Fats Industry? Mr. GORDON. Yes, sir. The CHAIRMAN. Has that bureau any written charter or any written memorandum showing the purposes of the organization? Mr. GORDON. There is nothing printed, but there is a great deal written which I would be glad to place in the record. The CHAIRMAN. I did not know whether it had a charter, or just what the purpose of the bureau was. Mr. GORDON. No, sir. It essentially concerns itself with raw material supplies of the vegetable oils and fats industries. The CHAIRMAN. Will you file with the record a list of the organizations making up that bureau? Mr. GORDON. Yes. Might I ask, Mr. Chairman, that the same procedure be followed with other witnesses who have testified and will testify? The CHAIRMAN. If I think it important, it will, but I want that information from you. Mr. GORDON. Yes. The CHAIRMAN. You have been engaged for several years in appearing before the Ways and Means Committee and other organizations, have you not? Mr. GORDON. I appeared before the Ways and Means Committee on January 21. That was my first appearance before that committee, I think, since 1933. The CHAIRMAN. Before that time, you appeared opposing tariffs and taxes on foreign importations of fats and oils? Mr. GORDON. I appeared in 1930; I appeared in 1922. As far as I know, those have been my only appearances before the Ways and Means Committee. The CHAIRMAN. And your last appearance was for the purpose of reducing the tax on foreign oils? Mr. GORDON. No, sir; I appeared on oil seeds. And that, I may state, was an attempt to rectify what everyone admitted was an absolute miscarriage of justice, in that Congress had placed a higher tax on the raw materials, namely, oil seeds, than had been placed on the oils, and the domestic manufacturers, therefore, could not turn a wheel and we were obliged to watch the importations of the finished products, namely, oil, and cake and meal into the United States. It was not a case of a 5-percent importation, or a 10-percent importation; it was a 100 percent stoppage of the activities of these people. Two of them have been sold under the hammer and others will go unless that situation is rectified. The CHAIRMAN. Are there any further questions? Mr. GORDON. Mr. Chairman, would you please ask Judge Snow to place in the record the number and location of the menhaden fish oil plants which he has said The CHAIRMAN. I think that is in his statement, but we will be very glad to have that information. Mr. GORDON. I have it here: In New York there is 1 menhaden factory; in New Jersey there are 2 factories, in Delaware there are 2, in Virginia there are 10, in North Carolina there are 8, in Georgia there is 1, and in Florida there are 5 plants. Mr. SNOW. And in California there are 60. Mr. GORDON. Wait a minute The CHAIRMAN. Just a minute. I am running this thing. Mr. GORDON. The Judge spoke a little out of turn. I was speaking of the menhaden factories. If a separate figure of the valuation of those could be obtained, it would be found that at the outside, we will say, it would be $2,000,000. The total production of menhaden fish oil by those plants is less than one-half of 1 percent of the United States domestic oil and fat consumption. The CHAIRMAN. So you would put them out of business in order to pay dividends to some foreign stockholders? Mr. GORDON. No; I would not. But I say this, sir, that we should not wreck essential portions of the American fats and oils industry to satisfy the caprices and the whims of a few gentlemen engaged in that industry who do not make a very careful economic study of the effect of excise and tariff taxes on the general fats and oils situation, or who pay little attention to the general commodity price trend of the country. The CHAIRMAN. Judge Snow, now I will ask you to submit in the record the information that has been requested. There is no use to take the time now, but you can put it in the record. Mr. SNOW. Mr. Chairman, that information will include all of the industries that we represent. The CHAIRMAN. Yes. Mr. SNOW. Not only the menhaden and pilchard. The CHAIRMAN. Yes; and separate them if you can. Mr. GORDON. May I ask this, that they be put on some fair basis of valuation-let them say where they get their figures, which are put in the valuation? I know one of the gentlemen came to me through an agent and wanted to sell his plant to someone in the industry, and he placed a valuation on it, I think, of a couple million dollars; yet I do not believe he could sell the whole thing for $200,000. If that is the basis of the valuations they are going to give you, it will not be worth much. The CHAIRMAN. Mr. Gordon, I am very sure what he submits will not be to your satisfaction. Mr. SNow. Mr. Chairman, we do not propose to let Mr. Gordon value our plants. The CHAIRMAN. Certainly not. (The following information was submitted by Mr. Gordon subsequent to the close of the hearings:) |