a rate? The importer has no interest in that any more than we have when he files a protest. It is an incidental interest. It is a suit against the Government. But you give him the right to go in there and conduct that proceeding.

Senator GEORGE. But you do not give him any right. You could not take his right away from him. You can not so frame this tariff act as to take away the property rights of an importer. Mr. LERCH. He has no property right.

He is given his property. Senator GEORGE. But if you increase his duty you are taking away his property right.

Mr. LERCH. But if you lower it you are taking away property of the domestic interests also.

Senator GEORGE. No, you are not. You are not doing any such thing.

Mr. LERCH. Then, of course, the title of this act is wrongly stated. Senator GEORGE. It doesn't make any difference about that. The Government here itself is imposing tariff duties. You have no more moral right to come in and take the Government's case than one individual income taxpayer has the right to come in and control the litigation and compel some other taxpayer to do something.

Mr. LERCH. We do not hope to take away the Government's case. Senator GEORGE. That is tantamount to what you are proposing, if you want to come in when the Government does not proceed as you think proper, and take charge of the litigation.

Mr. LERCH. No; our rights are separate and distinct from that of Government, just the same as in the present litigation the importer's rights in a suit in the Customs Court are separate and distinct from the Government's.

Senator GEORGE. Yes, I understand that, but that is because it is given to you as a mere matter by the statute.

Senator BINGHAM. Do you want anything more than is already given you at the bottom of page 468? I refer now to the number of times when it is applicable, the nature of what is given you in these words:

If the appraiser advances the entered value of merchandise upon the information furnished by the American manufacturer, producer, or wholesaler, and an appeal is taken by the consignee, such manufacturer, producer, or wholesaler shall have the right to appear and be heard as a party in interest, under such rules as the United States Customs Court may prescribe.

Mr. LERCH. That is literally what I have asked.

Senator BINGHAM. Do you want anything more than that? You want it in a greater number of cases?

Mr. LERCH. That is it.

Senator BINGHAM. The point being made against you, that you are trying to displace the Government, is not correct, because if that is true, then, the present law gives you the right to displace them. Mr. LERCH. Exactly. I am not asking for the broadening of this right now had in section 516-A.

Senator BINGHAM. Do you mean broadening the right or broadening the application?

Mr. LERCH. That is right. It is not broadening the wording at all.

Senator SACKETT. To what extent do you want it broadened?

Mr. LERCH. That is limited now, Senator Sackett, to suits for value, and suits as to rates and amounts as well as value. Customs litigation is divided into two different parts.

Senator BINGHAM. If you think they made a mistake as to value you can now come in as a party in interest?

Mr. LERCH. Exactly.

Senator BINGHAM. But if you think they made a mistake as to rate you can not now come in?

Mr. LERCH. That is right.

Senator BINGHAM. That is all you are asking?

Mr. LERCH. Yes, sir.

Senator REED. Don't you make a further request? This is limited to the manufacturer who furnishes the information upon which the Government acts. If I correctly understood you, you want any interested manufacturer to have the right to intervene in any suit and be a party in interest in regard to value, or rates or classifications?

Mr. LERCH. Exactly. As to this value in section 516, I considered, when I answered Senator Bingham's question, that where we had furnished information it identifies us with the procedure and shows our interest. Now, I ask that where our interest is shown to the satisfaction of the court, under such rules as the court shall prescribe, we be allowed to intervene under the same wording as is here in the statute.

Senator REED. In that case a hundred manufacturers might intervene in one suit?

Mr. LERCH. No; the court would not countenance anything of that sort, of course.

Senator REED. If you want to make this a right to intervene, then each one of the hundred would have that right. You would limit it, would you, to the discretion of the court itself?

Mr. LERCH. The court now has the power to make all necessary rules governing its procedure and practices, and I brought myself squarely under that, as Congress did in the law of 1922 and in the provision read by Senator Bingham.

So that if 100 did intervene, the court would, of course, order that they should be represented only by one attorney, as is the case now in ordinary courts where an interpleader may be had.

Senator SIMMONS. Mr. Lerch, I should like to ask you one or two questions.

This is a proceeding to enforce a law of the United States; is it not? Mr. LERCH. It is.

Senator SIMMONS. That proceeding must necessarily be instituted by the Government; must it not?

Mr. LERCH. NO; it is always instituted by some one else. It is a proceeding against the Government.

Senator SIMMONS. Oh, I understand that the Government is the complainant.

Mr. LERCH. The Government is the party defendant.

Senator REED. On the contrary, it is always the defendant.

Mr. LERCH. Always the defendant. It is never the appellant or plaintiff.

Senator SIMMONS. The Government is the defendant?

Mr. LERCH. Always.

Senator SIMMONS. You want to be made a codefendant?
Mr. LERCH. A plaintiff.

Senator SIMMONS. You want to be made a plaintiff?
Mr. LERCH. Or a codefendant, as the case may be.

Senator SIMMONS. Then you want to be allowed to come into court and to assert your rights against the rights of the United States, as represented by its attorneys?

Mr. LERCH. Separately and distinctly from the United States.

Senator SIMMONS. The proceeding, however, is to enforce a law of the United States?

Mr. LERCH. It is hardly that. It is to determine, of course, whether the

Senator SIMMONS. Well, you must determine what the law is before you can enforce it.

Mr. LERCH. It is to determine the correct administration of a law of the United States, I should say.

Senator SIMMONS. But here is what I wanted to get at: In this proceeding would your interest be divergent from the interest of the United States?

Mr. LERCH. No; it would run concurrently with that of the United States.

Senator SIMMONS. Then you would have two parties there representing the same interest?

Mr. LERCH. Exactly; as you do to-day, Senator.

Senator SIMMONS. Then you have two parties representing the same interest, one private and the other the Government. When the case is called, the Government and the private litigants have conflicting views with reference to it. The Government has one view with reference to it, and you have a different view with reference to it, putting you in direct conflict with the Government, which is represented by its attorney trying to enforce a Government law? Mr. LERCH. Will you permit me to answer that, Senator Simmons? Senator SIMMONS. Yes; I am asking you for the purpose of getting you to answer.

Mr. LERCH. All right. The American manufacturer

Senator SIMMONS. If you will pardon me, my inquiry is directed to this: Is it seemly to have a controversy in court between an American citizen and the Government when the Government is trying to enforce its law? The American citizen's view about it might be opposite to the view of the Government with regard to the enforcement of a governmental law.

Mr. LERCH. Exactly.

Senator SIMMONS. And I wanted to ask you if that would not bring about great confusion in litigation.

Mr. LERCH. Now may I answer?

Senator SIMMONS. Yes.

Mr. LERCH. Under the act of 1922 you have just that, where an American manufacturer files a protest after having gone through the gamut, and he claims that a higher rate of duty should have been assessed, which is manifestly to the Government's interest. That is why this law is being passed-to see that the Government revenues are protected. That is why we filed that protest and asked for more duty, and the Government appeared as the defendant. The suit is

56513-29-SPECIAL- -3

against the Government; but by the law of 1922 you permit the importer to come in in exactly the same status that I am now asking you to do.

Senator EDGE. That is what I was going to ask you. If the situation is reversed, and you make the complaint, and the Government is the defendant, do you mean to say that the importer then, with his attorney, is permitted to take part in the case?

Mr. LERCH. He not only takes part in the case, but he conducts the suit, and the Government backs out of the picture.

Senator EDGE. Why is not that exactly the same situation reversed? Mr. LERCH. It is.

Senator GEORGE. He is the necessary party defendant; is he not? Mr. LERCH. That is entirely a personal viewpoint, I take it, Senator?

Senator GEORGE. Who is the real defendant, if he is not the importer?

Senator REED. The Government.

Mr. LERCH. The Government is. I filed the suit against the Government.

Senator SHORTRIDGE. Nominally on the record it is so, Senator. Senator GEORGE. No; the Government is not the real party. Mr. LERCH. That is a difference of opinion.

Senator HARRISON. Who has to pay the increased tariff if the Government wins its suit?

Senator COUZENS. The importer, of course.

Senator GEORGE. He is the necessary party defendant.

Senator HARRISON. And he is the man affected.

Senator GEORGE. Of course he is.

Mr. LERCH. But who loses if the Government does not win the suit?

Senator COUZENS. Certainly not the manufacturer.

Mr. LERCH. The manufacturer pays for it and pays for it.

Senator COUZENS. No; he does not.

Mr. LERCH. He pays for it by increased competition, Senator Couzens.

Senator COUZENS. You might equally say that when a taxpayer sues the Government for a refund, every other citizen might interpose so as to protect his interest in not having to pay additional taxes. It is exactly the same situation.

Mr. LERCH. Of course if this were a revenue-producing statute only

Senator COUZENS. Well, that is what it is.

Senator HARRISON. Is not that what it is?

Senator REED. Mr. Chairman, we are being wholly unfair with this witness. We fire questions at him and demand answers, and then do not permit him to answer any question fully. Senator Simmons asked him a question and made a point of getting a definite, responsive answer; and he has had six interruptions in his effort to give it.

The CHAIRMAN. Now you may answer the question of Senator Simmons.

Senator SHORTRIDGE. Explain it in plain words.

Senator SIMMONS. I do not want to argue with you. I should like to have an answer.

Mr. LERCH. I do not want to argue, either.

Senator SIMMONS. My question is directed to the complications that may arise.

Mr. LERCH. I should like to get on record clearly my answer to your question, and that is this:

Where the domestic manufacturer, under the right given under the law of 1922, filed a suit against the Government claiming a higher rate of duty, the importer did exercise his right to intervene. The Government backed out of that suit, or, rather, nominally appeared in that suit. The Government did not think that the case ought to be appealed when the manufacturer won his suit. The importer did think it should be appealed. There, a private interst-an importerexercised his right to take the litigation out of the hands of the Government and appeal it to the highest court.

That is one instance, answering your question, Senator Simmons. The CHAIRMAN. What do you want?

Mr. LERCH. I want just the same right-no greater and no less. Senator SIMMONS. In other words, you might be in court insisting that a higher rate should be levied. The Government might be in court in the same proceeding insisting that a lower rate should be levied.

Mr. LERCH. Exactly.

Senator SIMMONS. That would necessarily bring about some conflict and confusion in that controversy, it seems to me.

Mr. LERCH. Well, of course it would not be a lower rate, Senator Simmons. We file a claim that a higher rate should obtain. We are actually protesting against the action of a collector.

Senator SIMMONS. Yes; but when you get into that suit, the Government, through its attorneys, may take the position that you are asking for too much.

Mr. LERCH. That is what they would. They are the defendant in the suit. That is their position in that suit.

Senator SHORTRIDGE. What you want, then, is the right to appeal it to the Court of Customs Appeals? That is all?

Mr. LERCH. We want the same right that the importer has in that kind of a litigation.

Senator SHORTRIDGE. There is nothing unseemly about that, Senator.

Senator SIMMONS. And when you go into the Customs Court, then you will have three parties to the proceeding the Government, the importer, and the manufacturer.

Mr. LERCH. You will be in exactly the same position as you are now in common-law practice where there is an interpleader. That is all there is to it.

The CHAIRMAN. There is one explanation I should like to have you make for my own information.

It seems to me the only difference between the two cases is this: The importer owns the property himself. That is his property. He is assessed on that, and the assessment is paid by him. Therefore, he is directly interested in that property; whereas in your case you want the manufacturer to intervene and have him given the same right as the importer. Now, can you differentiate between the two? If so, I should like an explanation right now, because that is the only difference that I can see.