AGRICULTURE: Butter Fingers

After years of debate, Congress last week repealed the 64-year-old federal tax on oleomargarine, effective July 1. But oleo will still not be easily mistaken for butter; oleo sold at retail must be conspicuously identified on the wrapping, while yellow margarine served in restaurants must be either triangular in shape or clearly identified. Quipped one Congressman: “Maybe we should require Florida orange growers to sell all their artificially colored oranges in a square shape.” In addition, 16 states will continue to prohibit the manufacture and sale of yellow margarine, and six states will still levy special taxes on it.

Buttermakers thought that Congress had picked the worst possible time to repeal oleo taxes, for butter prices have been slipping and surpluses mounting. Last week the U.S. Department of Agriculture bought up 239,000 lbs. of butter to support the wholesale price at 60¢ a lb., thereby adding to its huge 86 million-lb. stock of surplus butter.

The oleo repeal bill also produced a surprise. To make sure that margarine labeling and packaging is obeyed, Congress gave the Federal Trade Commission the power to fine a violator $5,000 for every day he disobeys an FTC order. Under the old law, which the FTC regarded as far too mild, one penalty was levied for each violation no matter how long it continued. Although the change was originally looked on as a weapon only against margarine makers, as finally passed the penalty could be used against all businessmen under FTC jurisdiction.