SECTION 28. Two dollars and twenty cents added to $475 equals $477.20, or the equivalent of 95.46 per cent. A "case" of woolen goods of this foreign value, $500, would contain, say, 10 pieces. Paper, twine, etc., would cost, say 2 cents for each piece, or 25 cents for the whole 10 pieces. The manufacturer will supply all such things without adding anything to the wholesale manufacturing price. Such items are included in his price, as much so as a butcher includes wrapping paper in the price of his meat. Certainly they are not fairly dutiable. But every now and then it is claimed, under the present customhouse régime, that they are. If duty were collected on the paper, etc., it would be at the rate of 55 per cent, or at the same rate as the duty on the woolen goods which they covered, and would amount to 134 cents on the 10 pieces. [NOTE.-The very same paper, if not covering woolen goods, would pay a duty of 30 per cent ad valorem, instead of 55 per cent.] Thirteen and three-fourths cents added to $477.20 equals $477.334, or the equivalent of 95.49 per cent. The Congress of the United States imposed a duty equivalent to 95 per cent ad valorem on woolen goods. It did not authorize a duty of 95.49 per cent. [NOTE.-The 0.49 of 1 per cent thus added has given rise to more complaints, heartburnings, and angry protests than almost any section in the bill, and has cost the Government and importers, in time and money, many times more than the whole duty would have amounted to, if collected.] Railroads have a right to charge on extra weight of baggage. What would the Ways and Means Committee think of a railroad insisting that hand-bags, clothes on the passenger's back, his boots, and the contents of his pockets should be included in the weight of his baggage? That would be no smaller, or meaner, than the action of the United States Government demanding that paper, twine, etc., which cost nothing, should be made to pay an extra duty as part of "wholesale market value." These petty, greedy additions to the tariff should be done away with and a clause inserted in the new act as follows: "The expenses necessarily incurred in the examination of woolen goods after they are delivered by the manufacturer in order to ascertain if the merchandise is according to sample and free from defects, also the cost of ordinary wooden packing cases and the necessary wrappings and twine required for their safe transportation shall not be dutiable." Appraisers can not detect undervaluations. They know nothing about woolen goods. In fact, they rely upon their examiners to judge of values. But what can examiners, living in New York, know about values in any foreign country? Such officials receive annual salaries of $2,500 or less. To pass intelligently upon foreign values, experts, easily commanding three or four times such salaries, would be required. First-class intelligence and education can not be obtained at fourth-rate wages. There is one way to detect undervaluations, and one only, viz, to take the invoices of reputable importers of unquestioned character and high credit, and make those invoices standards of value for the guidance of examiners and appraisers. Does Mr. Secretary MacVeagh or Mr. Assistant Secretary Curtis, both of whom have sneered at the suggestion that there could be an honest importer, suppose that the Claflin Co., Arnold, Constable & Co., John Wanamaker, B. Altman & Co., Marshall Field & Co., or any one of a host of others, would undervalue their goods? Honest importers are anxious only to stop undervaluations, and would gladly render to the Government any assistance in their power. In fact, they have been doing so for the last 40 years, as everybody connected with the customs service prior to the advent of Messrs. Curtis, Loeb, and Bird can easily testify. But those gentlemen, suspicious of everybody, have asked for no such assistance, and have made a general mess of their administration. There has been but one refuge for honest importers during the present maladminis tration of customs affairs, namely, the Board of General Appraisers. No unprejudiced person could have attended their hearings without being impressed by the evident desire of the general appraisers to be just to both the Government and importers, and to consider, thoroughly and patiently, all that could be said on either side. If importers had been placed at the mercy of the Treasury Department there would have been little hope of redress against any outrage. We believe it to be the almost universal opinion of importers that the present system as regards the independent position of the Board of General Appraisers should not be essentially changed in the new administrative act. The idea of there being no court quickly accessible to importers whose judges shall be free in making their decisions from the dictation of the Treasury Department which, in such a court, acts as both plaintiff and prosecutor, can hardly call for dis SECTION 28. cussion before fair-minded men. Yet that seems to be the demand of Mr. Secretary MacVeagh, and the unique committee of investigation which he has constituted and which is composed of the very men who, by their working of injustice, have aroused universal obloquy. E. H. VAN INGEN & Co. Hon. O. W. Underwood, Chairman Committee on Ways and Means. SIR. We have carefully considered the brief prepared by Messrs. E. H. Van Ingen & Co. to which this is attached. Approving and indorsing every suggestion and recommendation offered therein, we earnestly ask for them the attention of your honorable committee. Yours, respectfully, W. O. WILLIS & Co., 156 Fifth Avenue, New York. MILBANK LEAMAN & Co., 320 Fifth Avenue, New York. BRIEF SUBMITTED BY IMPORTERS OF GLASSWARE AT NEW YORK. Hon. OSCAR W. UNDERWOOD, NEW YORK, January 30, 1913. Chairman Committee on Ways and Means, House of Representatives. SIR: We, the undersigned importers of glassware at the port of New York, respectfully suggest for your consideration the following changes in the administrative provisions of tariff act of August, 1909, for the reasons set forth. The changes suggested have been made with the idea of preserving as near as possible the phraseology of the present act. PENAL DUTIES AS PROVIDED IN SECTION 7, ADMINISTRATIVE ACT. Respectfully suggested that the portion of this section reading "An additional duty of 1 per cent of the total appraised value thereof for each 1 per cent that such appraised value exceeds the value declared in the entry," shall be changed to read: "An additional duty of 1 per cent of the entered value thereof for each 1 per cent that the appraised value exceeds one hundred and ten (110) per cent of the value declared in the entry." Qur reason for suggesting this change is that under the present act an importer is frequently penalized for slight changes in market value of which he has no knowledge at the time of making entry. There are frequently minor changes in market value which take place between time of purchase and delivery, and within a reasonable limit, such as 10 per cent, there seems to be no fair reason why an invoice which is true and correct should be penalized for advances in value within the limit here specified. Or a more just provision would be: "That in the event of an importer proving, to the satisfaction of the Board of General Appraisers, that the invoice offered for entry shows the price or prices actually paid for the goods and therefore there was no intention to defraud, the said board shall certify to the Secretary of the Treasury such facts, and the Secretary shall therefore authorize the remission of all duties in excess of those levied upon the appraised valuation." This would be advantageous to the honest importer but not to the dishonest importer, as the latter could not comply with the provisions here mentioned. DEFINITION OF MARKET VALUE SECTION 18, ADMINISTRATIVE ACT. Respectfully suggested that the clause, beginning with the words, "Including the value of all cartons, cases, etc.," and ending with "United States," be omitted. SECTION 28. This will make the dutiable value the market value of the merchandise at the factory and eliminate the duty on packages (when such are usual containers). There seems to be no good reason for a protective tariff on packing cases, for these cost abroad always as much and frequently considerably more than they cost in this country. And when the duty and transportation charges are taken into consideration the laid-down cost of such packages is many times the value of the domestic product, for example: Many foreign cases cost laid down at the port of New York about $4 each, whereas the same package could be purchased in this country for about $1. As shown in exhibits sent to you under date of January 7, 1913, these packing charges under the act of 1909 increase the actual duty paid on staple goods very materially, for example, on staple glassware the duty is increased from 60 per cent to about 80 per cent on account of these charges. See brief and exhibits as published in hearings before Ways and Means Committee, volume 4, pages 537-546. Also respectfully suggested that the following provision be added to the definition of market value in this section: "Provided, That whenever such merchandise is sold only for export, or sold only in limited quantities in the home market, the market value as herein defined shall be construed to mean, the price for export to any and all countries." This suggestion is made for the reason that there are many factories abroad who manufacture for and sell practically only export trade; as the demand for their wares in the home market is so small that they can only distribute a very small percentage of their output to home trade, and sales are only made to local dealers in limited quantities. Furthermore, many articles imported into the United States are so different in form, construction, and texture they can not be compared with those used in the foreign market. Under such circumstances the price made to purchasers in other countries should be considered the correct basis for duty. DETERMINATION OF MARKet value, SECTION 11, ADMINISTRATIVE ACT. We recommend that all calculations based upon selling prices in the United States as mentioned in this section be eliminated, at least in so far as they refer to purchased goods, for the reason that the operation of this section under the present act has not been satisfactory to either the Government or the importer and the question here involved can be treated more definitely under section 18 as amended. Importers as a class are honorable and reputable merchants, and, with very few exceptions, invoices offered for entry by importers are absolutely true and correct and show the prices actually paid for the goods. In any event there are no advantages offered by section 11 over the plan suggested in section 18 for the accurate determination of facts in the question at issue, and on account of the variety of conditions attending sales of imported goods in this country it is practically impossible to determine a wholesale price that would form a correct basis for calculations, in accordance with section 11, for any commodity. Or, if the above suggestion is not consistent with the opinion of your committee, we respectfully suggest that the last clause of this section reading, "Or a reasonable allowance for general expenses and profits (not to exceed 8 per cent) on purchased goods," be changed to read "Or a reasonable allowance for general expenses and profits (not exceeding 8 per cent) on purchased goods.' There has always been more or less uncertainty as to the construction to be placed on this clause, that is, whether the 8 per cent was to cover general expenses and profits, or whether 8 per cent was to be allowed for profits only. his section states very clearly that on consigned goods a profit, or commission of 6 per cent, is allowed, and certainly a purchaser should be allowed a profit of 8 per cent, as in any business depending on purchase and sale of merchandise the expenses alone will be considerably in excess of 8 per cent, thus leaving no profit at all for consideration on purchased goods. The change here suggested merely makes the meaning or intent of the law more certain. ADDITIONS TO MARKET VALUE MADE "UNDER PROTEST" PENDING REAPPRAISEMENT. Respectfully suggested that there be inserted in section 23 of the administrative act, after the words "or payments made upon appeal," the following: "Or when additions to make market value are made by the importer (under protest) at the time of entry and a lower market value is finally determined by the General Appraisers, or any one of them." SECTION 28. Such additions as those here referred to are invariably made by the importer solely for the purpose of avoiding penal duties, and (being made under protest) not because he admits the correctness of the addition. There seems to be no good reason, therefore, why any additional duties thus paid should not be refunded on liquidation, provided they are proved to be in excess of the correct amount as determined by law. Under the present act there is no provision for the return of duties paid by the importer on such additions, so that the collector is frequently compelled to assume the position of retaining duties which are admittedly incorrect. Such acts would hardly be considered legal if practiced by banks or other depositaries, and the need for proper legislation to rectify this inconsistency is most urgent. ABANDONMENT OF DAMAGED GOODS, SECTION 22, ADMINISTRATIVE ACT. Respectfully suggested that the clause reading, "Provided, That the portion so abandoned shall amount to ten per centum or more of the total value or quantity of the invoice," be changed to read: “Provided, That the portion so abandoned shall amount to ten per centum or more of the total value or quantity of any case or package specified on the invoice." It frequently happens that certain cases of an importation have a very large percentage of breakage, or damage, although this may not quite equal 10 per cent of the total invoice, and it does not seem fair that in cases of excessive breakage the Government should demand duties on goods which in the case of fragile material such as glass can have no commercial value. The provisions in this section certainly seem sufficient to prevent an abuse of the privilege by unscrupulous parties. Owing to the fact that duties must be paid before merchandise is unloaded, it is not always practicable for importers to comply with the provisions of this section of present act. A provision should be enacted by which a Government inspector may make an examination on the dock of the damaged merchandise and the amount of damage recorded at the customhouse, so that a rebate for the duty paid on the portion damaged, provided same equals or exceeds the percentage above mentioned, may be made upon final liquidation of entry. PARAGRAPH 98, SCHEDule b. Respectfully suggested that in the list of processes referring to ornamentation of glass the word "colored" be omitted, or a provision added to this paragraph to the effect, that for the purposes of this act glass colored in the pot (during the process of melting) is not to be considered as glass, colored. Our reason for this suggestion is that the various processes mentioned in the present act are intended to refer to operations involving additional labor after the article is made in glass, whereas the coloring of glass in the pot, by the mere addition of certain chemicals to the batch, takes place before the substance can be called glass at all, and does not involve any additional labor. Furthermore, such coloring, with very few exceptions, is done for utilitarian purposes rather than for ornamentation. Also respectfully suggested that the clause in this paragraph reading "and all articles of every description, including bottles and bottle glassware composed wholly or in chief value of glass" be omitted, for the reason that the present act construes plain undecorated articles as being in the same class as articles which have some ornamentation, which is not consistent and extremely detrimental to the importation of staple articles, for which such protection is not necessary, and from which considerable additional revenue might be derived if tariff specifications were more favorable. Respectfully submitted. H. G. McFaddin & Co., 38 Warren Street; M. Kerchbeyer & Co., 374 Sec- SECTION 28. BRIEF SUBMITTED BY ROBERT J. HEARNE, OF THE DURBROW & HEARNE MANUFACTURING CO., NEW YORK, N. Y. Hon. OSCAR W. UNDERWOOD, NEW YORK, January 7, 1913. House of Representatives, Washington, D. C. GENTLEMEN: The changes proposed herewith are submitted as a whole. It is difficult to separate the various paragraphs or subsections of section 28 because they are so interwoven into one another that it would seem necessary to consider the whole in order to make a proper revision. The revision asked for is almost entirely concerned with the removal of disabilities under which the importer suffers now. The laws are very harsh and arbitrary, and there is nothing that is asked for that is not in accordance with ordinary justice as administered in the courts. The attempt has been made to conserve the interests of the Government in all respects and at the same time prevent complications. The present law is very involved, and its meaning on many important points is only gotten at by implication. In the proposed changes submitted herewith a printed copy of the tariff law, as published by the Government, has been used. New matter is in italics and old matter is inclosed in brackets. SECTION 25. SEC. 25. That where imported materials on which duties have been paid are used in the manufacture of articles manufactured or produced in the United States, there shall be allowed on the exportation of such articles a drawback equal in amount to the regular duties, but not any additional duties imposed for fraudulent undervaluation, paid on the materials used, less one per centum of such duties: Provided, That when the articles exported are made in part from domestic materials the imported materials, or the parts of the articles made from such materials, shall so appear in the completed articles that the quantity or measure thereof may be ascertained: And provided further, That the drawback on any article allowed under existing law shall be continued at the rate herein provided. That the imported materials used in the manufacture or production of articles entitled to drawback of customs duties when exported shall, in all cases where drawback of duties paid on such materials is claimed, be identified, the quantity of such materials used and the amount of duties paid thereon shall be ascertained, the facts of the manufacture or production of such articles in the United States and their exportation therefrom shall be determined, and the drawback due thereon shall be paid to the manufacturer, producer, or exporter, to the agent of either or to the person to whom such manufacturer, producer, exporter, or agent shall in writing order such drawback paid, under such regulations as the Secretary of the Treasury shall prescribe. That on the exportation of medicinal or toilet preparations (including perfumery) hereafter manufactured or produced in the United States in part from domestic alcohol on which an internal-revenue tax has been paid, there shall be allowed a drawback equal in amount to the tax found to have been paid on the alcohol so used: Provided, That no other than domestic tax-paid alcohol shall have been used in the manufacture or production of such preparations. Such drawback shall be determined and paid under such rules and regulations and upon the filing of such notices, bonds, bills of lading, and other evidence of payment of tax and exportation, as the Secretary of the Treasury shall prescribe. That on the exportation of any imported goods on which any duties have been paid, there shall be refunded to the exporter, or to any person to whom such exporter shall in writing order such refund to be paid, the regular duties paid thereon, but not any additional duties imposed for fraudulent undervaluation, less five per centum of such duties: Provided, however, That such exportation must take place within one year from the date of importation, and that the exportation be made by the original importer, but proof of the identity of such goods shall be made under regulations to be prescribed by the Secretary of the Treasury. That the provisions of this section shall apply to materials used in the construction and equipment of vessels built for foreign account and ownership, or for the Government of any foreign country, notwithstanding that such vessels may not within the strict meaning of the term be articles exported. |