The “Bogus Butter” Tax

A Bad Principle.

FOR congress to determine what commodities shall and what shall not be manufactured with impunity or without forfeit, is a bad principle. The butter men are now trying to induce congress to say that oleomargarine shall not be made unless a certain tax or forfeit per pound shall be paid. The real danger in this proposed act is the precedent and the coming effect of the principle of governmental interference with the rights of a free commerce. The proposed tax is not for the purpose of raising a revenue; for internal revenue taxation, has been entirely abolished, except on whisky, for the very purpose of relieving the people of unnecessary taxation.

The purpose of this tax is to discourage and ruin, if possible, an industry which evidently has grown into some importance, or congress would not be asked to deal with it.

Now the question comes, is it wise to look to congress to put down an industry and legislate a product out of existence? Shall congress exercise a dictatorship over the manufactured products of this country, and alone determine what shall or shall not be manufactured for certain given purposes. An article of manufacture or a new discovery which congress might adjudge a nuisance and place an embargo upon, might ultimately prove to be a blessing to mankind.

When matches were first invented, their use was interdicted by law except under severe restrictions. To-day the people could not do without them. When it is made possible for our industries to become the prey of political favoritism, a very bad principle has been encouraged. To place a tax on oleomargarine, in order to crush it, would set a precedent that the farmers can not afford to have established.

Therefore the NORTHWESTERN still insists that the only true method of meeting this and all other difficulties with reference to impure articles of food and all adulterations and imitations, is to require all such articles to be plainly and specifically branded so as to indicate their exact character. Then the good sense and discrimination of the public will deal with them according to their merits, without congressional interference.

Bogus butter may be bad, but congressional censorship is worse.

The Daily Northwestern (Oshkosh, Wisconsin) May 17, 1886

An Aristocratic Diet.

Cincinnati Post: It is now intimated that whoever desires to eat oleomargarine instead of butter, shall be required to pay to the government two cents a pound for the privilege of doing so. What business has “whoever” to indulge in that anyway. He ought to be able to get along with everyday, common cow butter, and the bloated aristocrats can have all the oleomargarine they want.

The Daily Northwestern (Oshkosh, Wisconsin) Jun 25, 1886

THE president pays sixty cents a pound for all the butter that stands alone on the White House table. He evidently will not be wholly ignorant of the butter question when the oleomargarine bills comes before him.

The Daily Northwestern (Oshkosh, Wisconsin) Jul 23, 1886



What A Chicago Man Says about its Shipment to Wisconsin — The Process of Making and Materials in his Composition — Features of the Law to go into Effect.

CHICAGO, Ill., Oct. 18 — The manufacture of artificial butter has become one of the important industries of the country, and as butterine and oleomargarine can be made for eight cents per pound the effect of this competition is damaging to the interests of the farmer and dairymen in the extreme. I was told by a leading manufacturer that large quantities of the stuff are shipped into Wisconsin, Eau Claire, Chippewa Falls, and Milwaukee getting frequent shipments and occasionally some is shipped to Oshkosh. The retailer gets it at a cost of 10 to 12 cents and as butter made by a farmer brings 18 and 20 cents, the manufactured article is a great temptation to the grocer.

It is safe to say that all “butter” sold in Oshkosh which comes from Chicago is the spurious article and the consumer, if he don’t want to eat the bogus butter, should know just who makes the article which he buys.

In conversation with a prominent oleo man the other day, he said: It is a mistake to suppose that there is anything nasty or disgusting about oleomargarine when it is made by respectable manufacturers. The testimony before the United States senate last June by the big manufacturers shows this clearly. There have been in the past several manufacturers who bought rancid and stinking butter, and after deodorizing it and mixing it with genuine butter and washing the stuff with buttermilk, turned out an unhealthy and deleterious substance which was sold to the public. This fact becoming known, led to the popular detestation of oleomargarine.

The method of producing oleo-oil is as follows: The selected fat is taken from the cattle in the process of slaughtering, and after thorough washing is placed in a bath of clean cold water and surrounded with ice, where it is allowed to remain until all animal heat has been removed. It is then cut into small pieces by machinery and melted at an average temperature of 150 degrees until the fat in liquid form has separated the fibrine or tissue and settled until it is perfectly clear. Then it is drawn into graining vats and allowed to stand all day, when it is ready for the process. The pressing extracts the stearine, leaving the remaining product known as oleo-oil. It is this article which when churned with cream or milk, or both, and with sometimes a small portion of creamery butter, the whole being properly salted, gives the new food product, oleomargarine. Each animal yields an average of about 40 pounds of oleo-oil.

The difference between oleomargarine and butterine is this: In making butterine neutral lard is used. Neutral lard is made from selected leaf lard prepared and rendered in a similar manner to oleo-oil, except that no stearine is extracted. This neutral lard is a beautifully white and odorless product, and is cured in salt brine from 48 to 70 hours, at an ice water temperature. It is then taken out and, with the desired proportions of oleo-oil and the finest creamery butter, is churned with cream and milk, producing an article which, when properly salted and packed, is ready for market. It is colored by the same process and material used by all butter dealers.

Butterine is generally made of two qualities, differing only in the proportions of the ingredients used. In cold weather a little salad oil is used in both. A hog yields an average of eight pounds of raw leaf lard, which is equivalent to five or six pounds of neutral. This neutral is worth tow to three cents per pound over ordinary steam-rendered lard.

Oleomargarine is mainly made of oleo-oil exclusively, but sometimes 5 per cent of the finest butter is added, which is churned with the cream and milk to improve the flavor. Creamery butterine is usually composed of 25 per cent creamery butter, 40 per cent neutral lard, 20 per cent oleo oil, and the balance milk, cream and salt. Dairy butterine differs from creamery only in the proportions. It is a cheaper product, and its proportions are: Butter, about ten per cent; neutral lard, about 45 per cent; and oleo-oil about 25 per cent; the balance being made up of cream, milk and salt. It is not known that mutton tallow ever enters into the manufacture of oleomargarine.

The fines for not paying the tax are as follows: Manufacturer, $1,000 to $5,000; wholesale dealer, $500 to $2,000; retail dealer, $50 to $500.

Manufacturers must file with the collector of internal revenue the location of his factory, shall put up signs and the number on the same, and conduct his business under the surveillance of internal revenue officers, who shall see the accounts of his materials and products, and must give a bond of $5,000. Manufacturers must pack oleomargarine in new wooden packages containing not less than ten pounds, marked, stamped and branded. Original packages only must be sold by manufacturers and wholesalers.

Retailers may sell from original packages where they sell less than 10 pounds, but they must pack in other wooden or paper packages, which must also be marked and branded. Violations of this clause and fraudulent evasions of the tax will be fined not more than $2,000, and imprisoned not more than two years.

Failure of manufacturers to attach the label will be fined $50 for each package. The manufacturer shall pay a tax of two cents per pound.

The Daily Northwestern (Oshkosh, Wisconsin) Oct 18, 1886


Still Further Regarding the Substitute for Butter.

The fact that Pitcher & James have taken out an oleomargarine license has caused some to think that there must be some money in the trade. Pitcher & James have a wholesale license. Collector Wells of Fond du Lac has granted a retail license to a dealer in Marinette and one to a dealer in Antigo. It is believed the retail dealers who handle it will require considerable moral courage to sell the stamped packages, as many of the farmers on whose trade they depend are opposed to those who handle it.

Every manufacturer is compelled to pack it in wooden packages not before used, and in quantities not less than ten pounds, which must be marked, stamped and branded.

The license is $600. Manufacturing and wholesale dealers must sell it in the original stamped packages. It must be packed in wooden or paper packages, marked and branded, as for instances: “John Blank. Oshkosh, Wis., 1 pound oleomargarine.” The letters must not be less than one quarter of an inch square, written or painted. From the foregoing it will be seen that the cow is fully protected.

Oleomargarine in all its native purity is hedged about by restrictions which enable the buyer to learn what he is purchasing.

The word “license” is used herein for the term “special tax.”

The Daily Northwestern (Oshkosh, Wisconsin) Nov 6, 1886


Matters  regarding the inspection of oleomargarine and butter by the revenue officers of Milwaukee seem to be in a pretty mess. It is claimed by the commission men that large quantities of country butter shipped in from the dairy districts of Wisconsin is pounced upon by the inspectors and pronounced oleomargarine and subject to tax.

This is certainly a good joke on the sturdy butter farmers of the interior who have been so infuriated over the damage to the pure butter trade by the introduction of oleomargarine in this country.

The Milwaukee inspectors claim that six-tenths of the rural butter shipped in there contain bull fat. Collector Wall gives it as his official opinion that, according to the legal tests provided for identifying oleomargarine, the larger part of the country butter received in Milwaukee is, legally, oleomargarine and liable to seizure unless the oleomargarine tax is paid upon it.

This will naturally create surprise among the honest cow-milkers who have sought protection from such alleged vile stuff as oleomargarine.

One of two or three things must be inferred: either the butter inspectors of the revenue department don’t know sweet Jersey when they taste and smell it, or the sly farmers have found out how to doctor their butter on their own account, or else butter makers of Wisconsin are making some awfully poor stuff that can’t be told from oleomargarine by the ordinary tests.

The Daily Northwestern (Oshkosh, Wisconsin) Nov 30, 1886

In this 1912 article,  it discusses the dangers and futility in hunting down the “Margarine Moonshiners.”  Maybe they should have written about the absurdity of the protectionist  law, and how this “special tax” created the margarine black market to begin with. : -)


According to the statement of Mr. Royal E. Cabell, Commissioner of Internal Revenue, before the House of Representative Committee on Agriculture, in April, 1910, the enforcement of the oleomargarine law is the worst one with which the Internam Revenue office has to deal; and that if the Bureau used the whole appropriation it could not catch all the violators; because the law as interpreted by the courts provides that in order to convict a man it must be proven that he manufactures and sells the spurious article without the special tax, receipted for in the form of stamps, which are to be affixed to the tubs, boxes or firkins in which the oleomargarine is sold. When these receptacles become empty, the law requires the stamps to be destroyed. The courts have decided that so long as any of these receptacles contain a salable quantity of oleomargarine they are not empty — and here is where the cheat has an opportunity to outwit Uncle Sam, which he does by buying a number of cases of uncoloured oleomargarine, taxed at the rate of a quarter of a cent a pound, colour it and pour it into the receptacle bearing the ten cent stamp; by which system he robs the Government of $5.85 on every sixty pounds of oleomargarine sold, and he also robs the consumer more often than not by selling the stuff for genuine butter.

These illicit colourers of oleomargarine are termed “moonshiners” by the revenue officers, and their capture is often attended with as much danger as that so long associated in the public mind with the capture of the daring mountaineers who manufacture and sell whiskey.

An internal revenue agent, having good reason to believe that a man in his district was engaged in this scheme to defraud the Government, secured the necessary search warrant from a United States commissioner, before whom he made known his purpose, and re-enforced by other officers, rushed into the place where the oleomargarine trade was carried on and found four men there, their arms bared, and smeared with the colouring matter which they were using to convert the white oleomargarine into yellow; the churn busy, and about three thousand pounds of oleomargarine waiting to be coloured and placed in the tubs bearing the ten-cent tax and containing a few pounds of the yellow product on which the proper tax had been paid.

The culprits were indicted, the strong evidence was presented, but, in spite of that, the judge said that, while there was a presumption that the men were not colouring three thousand pounds of oleomargarine for their family use, still the revenue officers could not prove that they had made sales, and were, therefore, wrong in making the arrest.

When one hears such stories as this, and also that men have been shot down or badly beaten for intruding upon the premises of supposed illicit manufacturers of oleomargarine, he does not wonder that the officers consider oleomargarine stalking the most difficult and unsatisfactory of all the hunting expeditions of the Internal Revenue Service.

Title: The Bookman: A Literary Journal, Volume 34
Publisher: Dodd, Mead and Co., 1912
Original from the University of Michigan
Pages 59-60 (Google book LINK)

Last, but not least, we have the great margarine and butterine swindle, where you can read about the history of the products, the damage to the dairy interests, the congressional actions and the demoralizing effects on trade, plus much, much more!

Title: Oleomargarine and Butterine: A Plain Presentation of the Most Gigantic Swindle of Modern Times
Publisher: T.L. McAlpine, 1886
(Google book LINK)

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