Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1913-08-05
DODGING OLEO TAN.

A charge that the great oleomargar-
inc companies, most of them subsidi-
aries of the beef trust, escaped Grim
inal prosecution and evaded payment
of 100000 internal revenue taxes
due in 1912, by offering a compromise
of 100000, which was accepted by
the Taft administration as one OF its
last executive acts, has been made on
the floor of the house by Representa-
tive W. +. Cox of Indiana, and is caus-
ing a sensation in Washington.
The cleo law, which was passed for
the protection of the American farm
er, provided only nominal internal
revenue tax of one-fourth cent pound
on white (uncolored) oleo. but a tax
Of ten cents per pound when the pro-
duct IS artificialiy colored so that it
can pass for butter in appearance.
After the law was passed the manu-
facturers searched the world for a
natural product which could properly
go into the manufacture of oleo and
which would give it the yellow color
u was argued that if Some wholesome
oil. having q yellow color, could be
found. the oleO in which such oil was
an ingredient, could not be termed arti-
ficially Colored within the meaning of
the law, and would legally escape the
ten-cent tax.
Yellow oils from sesame, mustard
seed. peanuts, soy beans and other
vegetables we're experimental with,
but either the cost Of producing these
oils was too great to be commercially
practicable. or else the flavor OF the
oleo was altered.
Finally a Louisville firm discovered
a process Of blowing sulphur fumes
through boiling cotton seed oil and
afterwards refining the sulphur from
the oil. This left a yellow oil in
which even chemical tests would
sometimes fail TO detect sulphur.
Oleo made from this oil was sub
mitted 70 the treasury department for
an opinion on the validity of its use
as a natural colored oil. The govern
ment analysis failed TO detect artificial
/ coloring, but the manufacturers were
warned that if subsequent tests de
tecting coloiing, the oleo would be
subject to the 10-cent tax.
The manufacturers, nevertheless
during 1911 and 1912 put out this oleo
paying only one-fourth cents pei
pound tax on it. Later the bureau OF
/ animal industry analysed samples o.
| this oleo and found them to contain
sulphur as a coloTing matter. On this
evidence the treasury department de
manded to see the books of the oleC
companies, and found that on the sui
phur Oleo already sold there was due
the government S1,246,62S.62 in taxes
at 10 cents a pound.
The manufacturers offered to settle
for S101,1O0. At this point the house
committee on expenditures in the
treasury department of which Mr.
Cox was chairman, made an investi
cation. Its report recommended tina
the compromise be rejected. This re
port was made Feb. %. 1913, and copies
sent to Secretary OF the Treasur,
MacVeagh.
According to Mr.. Cox. the attorney
for the cleo manufacturers. when the,
heard the house report. got busy put
ting pressure on MacVeagh TO accep
the compromise.
AT 1855 o'clock on the morninI
] Of the 9Th OF last March one of tn
last acts performed by Secretary Mac
Veagh was 10 accept the compromise,
said Mr. Cox. "He rendered that dc
cision, exempting them from payin.
S1,000,00O, in the face of the law an
in the face of the solemn facts in III
! "a 60 "