CHAPTER II ACTIVITIES The essential function of the U. S. Tariff Commission is to aid Congress in all matters relating to tariff legislation by supplying accurate and reliable information. As Dr. Taussig, the first Chairman, has expressed it 1 As re Our essential task, then, is to act as the servants and assistants of Congress. We are to gather and prepare information, to sift the essential from the nonessential. We shall bend our utmost endeavors to be exhaustive in inquiry, and at the same time brief and discriminating in statement. gards advice, we must be sparing, since advice must often rest on the basis of established fundamental principles; and fundamental principles must be settled not by the Commission, but by Congress and by the public. We have no mission of a highflying sort. Although this statement as well as the letter of the law creating the commission, and the Congressional debates which preceded passage of the act, indicate that it was the intent of Congress that the Tariff Commission should be purely an investigating body without power of recommendation, it was natural that with its accumulation of much invaluable data. and with its careful studies of all tariff questions the tendency should grow for congressional committees to request suggestions and recommendations on matters in which the commission has expert knowledge. The Ways and Means Committee has frequently requested reports for use in consideration of the various revenue bills. A second function, that of making recommendations to Congress," is, therefore de 1 Address before Home Market Club, Boston, May 18, 1917. 2 Although in the act of September 8, 1916, the use of words "recommendation," "advise," or any equivalent term is avoided, the veloping which is as yet decidedly of subordinate significance in comparison with the function of investigation and research, though becoming of increasing importance. A third function of the commission is to provide such information for the President as he may require in administration of special clauses of the tariff act. Thus, the act of September 8, 1916 imposed certain duties upon semi-manufactured and fully manufactured coal-tar products to meet the situation caused by the war-time shortage of dyestuffs, with the proviso that if at the end of five years less than 60 per cent of the domestic consumption was produced in the United States, the duties thus imposed would terminate automatically. The President thereupon designated the Tariff Commission as the agent for collection of the required statistical information regarding these commodities in order to ascertain when, if at all, the specified percentage of the domestic consumption was being produced. The commission pursues many lines of investigation which may be divided fundamentally into two classes: those which are conducted with the definite end in view of aiding Congress or the President in particular problems and those which are in the nature of general research. The commission obtains certain basic information through coöperation with the other government services, as prescribed by Section 707 of the act of September 8, 1916, through the taking of testimony at hearings and the requisition of documents as provided for in Section 706 of that act, and through primary investigations by members of its staff. From this basic information, properly arranged and indexed commission found no embarrassment in recommending a basic foreign tariff relation policy in a report issued in February, 1919: "that it should be the policy of our government to offer equality of tariff treatment to all who grant like treatment to the United States and its products, and to penalize with a higher tariff those countries which refuse us equality of treatment." An interesting feature to be noted in the more recent development of the commission's functions is its tendency to become the agency for initial hearing (prior to submission to committees of Congress) of claims of various industries for special or changed treatment in tariff legislation. and supplemented by work in the field, many studies or reports are prepared. It is these reports rather than "activities" in the usual meaning which may be conveniently and logically classified as in the following pages. Investigations to Aid in Revision of Customs Administrative Law. Although revision and codification of the laws governing the collection of duties on imports had been frequently urged, nothing was done prior to 1916 to adapt the mechanism of customs revenue collection and control to the requirements of modern trade and industry except for the codification of 1874 and a limited revision in 1890. The Tariff Commission began work thereon directly after its organization, in conformity with Section 702 of the act of September 8, 1916, which provides that “it shall be the duty of said Commission to investigate the administration of the customs laws of this country now in force or which may be hereafter enacted . . . and in general to investigate the operation of customs laws." The commission in 1918 issued a report on its proposed revision which was framed in coöperation with customs and judicial officers, and representatives of importing, exporting, and manufacturing interests. Interim Legislation. Shortly after its organization, the Commission, in response to a request from the Ways and Means Committee for suggestions of revenue legislation, studied the problem of protecting the Treasury against the financial loss occasioned because of the unusual rush of importations of various commodities in anticipation of advancing duties in periods when Congress has customs legislation under consideration. Investigation was made of the practices of foreign countries in this matter and the recommendation advanced that "prior to tariff and internal revenue increases, statutory provision be made whereby duties and taxes shall attach to merchandise previous to the date of the final passage of tariff and internal revenue laws." No actual collection of taxes is suggested, but importers and others liable to tax could be required to give bond to the Secretary of the Treasury, "collection to be made eventually at the increased rates as settled on enactment." Free or Foreign Trade Zones. The investigation of the administration of the customs laws has led to a study of the so-called "free zone" as alternative or supplementary instrumentality to the bonded warehouse and drawback system in handling reëxport in foreign trade. The commission was specifically requested to investigate this problem both by the Ways and Means Committee on August 16, 1917, and the Senate Committee on Commerce on May 3, 1918. A report was submitted on November 20, 1918, entitled "Free Zones in Ports of the U. S." which was based on hearings held in San Francisco, New York, and Philadelphia, information obtained by investigations in New Orleans and Galveston, questionnaires sent out to several hundred merchants and shippers, a study of the history and workings of free ports and zones in Europe and of laws and regulations controlling them, and information as to recent foreign developments secured through the Department of State. The inquiry has been continued so that not only has a study been made of the "practice and results in foreign countries and the adaptability of the device to the needs of American commerce, but extending as well to the legal questions raised by the proposed legislation." As the results of its investigations on this subject the commission has recommended the passage of permissive legislation for the creation of foreign trade zones. Investigations to Aid Congress in Revision of Existing Tariff Laws. Constantly changing conditions in the economic world make it necessary for the commission to study the industries affected in order to establish the basis for intelligent revision of the tariff. The numerous studies in the "Tariff Information Surveys" described below were undertaken to supply Congress with such information as it might require in the revision of the tariff. The result of such study is that the commission is enabled to present a more or less complete current record of the rapidly changing phenomena of the industrial life of the country in so far as it is affected with an interest from the point of view of tariff legislation. To illustrate this phase of the commission's work it is only necessary to note in its more recent annual reports those sections which summarize the studies of the year. The following, selected from the 1919 report, is typical: Prior to the war, the domestic crude barytes industry was localized in Missouri . . . War conditions caused a four-fold increase . . . accomplished largely by development of deposits in Georgia, Tennessee, and Kentucky, and by a doubling of production in Missouri . . . Efforts were made to cultivate several indispensable drugs which appeared suitable to American climatic conditions. Marked success was reported with two important medicinals, belladonna and digitalis, and also with cannabis indica, the drug obtained from Indian hemp. . . . In recent years the United States has developed a considerable export trade in gas mantles, etc., . . . a significant development during 1919 in the coal tar industry is the increase of 17.2 per cent in the productive capacity of by-product coke ovens in the United States, with the result that the production of coke in by-product ovens exceeded that of the wasteful beehive ovens. ... In cases where an industry itself suggests a change in a particular tariff rate or classification, the commission serves as a preliminary reviewing body for Congress. It examines the claims submitted, sifts the available evidence, and reports to Congress, thus materially curtailing the labor of the Congressional committees. An instance of such a service was afforded in the latter part of 1917 when the attention of the commission was directed by factors in the brush industry to the fact that competition was impossible with |