What piece of legislation best illustrates the tensions facing Congress when it attempts to regulate the diverse U.S. economy? One about butter: the Oleomargarine Act of 1886.
Frenchman Hippolyte Mère-Mouriés invented the butter substitute margarine in 1869, and the new spread quickly developed a loyal following in America. Meatpackers here took advantage of its manufacturing techniques—using animal fats that had previously been going to waste—to bring the profitable new product to market. In the face of rising butter prices and an unstable domestic economy, millions of Americans welcomed margarine into their homes.
Unsurprisingly, farmers and dairy manufacturers saw the new product as a direct threat to their livelihood. They commissioned studies and launched a massive public relations campaign against margarine, calling it “fraudulent,” “counterfeit,” and made by a “criminally filthy” process. According to future House Speaker David Henderson of Iowa, city scavengers often made oleo oil out of dying dogs.
Once confined to the marketplace, the battle over butter landed in Congress. During the first session of the 49th Congress (1885–1887), the House and Senate spent weeks debating the government’s proper role in butter. Among many questions, legislators considered whether Congress had the power to interfere in the marketplace, whether it was constitutional to tax margarine in order to protect butter, and whether margarine had deleterious effects on public health.
Regional interests, more than political parties, shaped congressional coalitions at the time, and most Northerners and Midwesterners supported a specific margarine tax. The effect would raise its price and protect the dairy industries in their states from the unwanted competition. “If I could have the kind of legislation that I want, it would not be a source of revenue,” Representative William Price of Wisconsin declared. “I would make the tax so high that the operation of the law would utterly destroy the manufacture of all counterfeit butter and cheese as I would destroy the manufacture of counterfeit coin or currency.”
Economic conservatives and many Southerners decried any government involvement in the economy and viewed the tax as unconstitutional. Against vivid arguments in favor of butter, the ideological opponents of the tax were reduced to comedic amendments in an effort to derail a tax on margarine. Representative John Adams of New York, for example, tried to amend the bill to tax chicken incubators “in order that the great American hen may be properly protected.”
The House passed the final language of the law on July 23, 1886, and President Grover Cleveland signed the bill despite his misgivings two weeks later. “It has been urged as an objection to this measure that while purporting to be legislation for revenue, its real purpose is to destroy, by the use of the taxing power, one industry of our people for the protection and benefit of another,” Cleveland said in his message to the House. “But . . . I am convinced that the taxes which it creates cannot possibly destroy the open and legitimate manufacture and sale of the thing upon which it is levied.”
Cleveland was right. The 1886 tax did not destroy margarine production, but its use did plummet. The tax, moreover, spawned margarine bootleggers, who circumvented the tax stamps required on all margarine packaging. According to U.S. Census Bureau statistics, consumers used more than 18 pounds of butter per capita in 1910 compared to less than three pounds of margarine. This trend continued until the Great Depression hastened calls for the tax’s repeal.
The repeal of the oleomargarine tax will be the subject of a future tasty tidbit.
Sources: “An act defining butter, also imposing a tax upon and regulating the manufacture, sale, importation, and exportation of oleomargarine,” ch. 840, 24 Stat. 209-213; Congressional Record, House, 49th Cong., 1st sess. (25 May 1886): 4905, 4927; Congressional Record, House, 49th Cong., 1st sess. (27 May 1886): 5011; House Committee on Ways and Means, “Message from the President of the United States Approving House bill No. 8328,” 49th Cong., 1st sess., 1886, Ex. Doc. 368, 1–4; Henry C. Bannard, “The Oleomargarine Law: A Study of Congressional Politics,” Political Science Quarterly 2 (1887): 545–557; Thomas A. Bailey, “Congressional Opposition to Pure Food Legislation, 1879-1906,” American Journal of Sociology 36 (1930): 52–64.