All briefs and other papers filed with the committee should have indorsed thereon the name and address of the persons submitting them and the numbers of the paragraphs of the present tariff law to which they relate. More than 1,100 persons sought a hearing as a result of this notice, and instead of the 35 days indicated in the notice the committee was compelled to sit 43 days and 5 nights in order that all might be heard, concluding its labors on February 27, 1929. Stenographic reports of the hearings were printed and distributed daily, which reports in addition to the oral statements contained briefs, resolutions, and other data pertinent to the subject under discussion. Copies of the daily prints were furnished to all witnesses who were requested to revise and correct their statements for this edition. The subject matter of the testimony presented, together with the papers and other data submitted, have been grouped together, as far as practical, and arranged in the numerical order of the paragraphs of the Tariff Act of 1922 to which they apply. The sequence of the statements and the order of appearance were thereby necessarily abandoned in the compilation of this edition. CLAYTON F. MOORE, Clerk. TARIFF READJUSTMENT-1929 HOUSE OF REPRESENTATIVES, Monday, February 25, 1929. ADMINISTRATIVE AND MISCELLANEOUS The committee met at 10 o'clock a. m., Hon. Willis C. Hawley (chairman) presiding. The CHAIRMAN. The committee will be in order. We begin this morning the hearings on the administrative provisions of the existing tariff law. The purpose of the committee will be better served, and I think that of those gentlemen who propose to submit suggestions, if you have prepared proposed amendments, to have copies of them ready to incorporate in your remarks. It is not necessary to read them, but have the provision incorporated in the remarks for the consideration of the committee. I suppose that most of the gentlemen will present briefs. We must conclude these hearings by Thursday night at the outside-Wednesday night, if possible, and the time of the committee will be best served if witnesses do not attempt to read briefs, but make an oral presentation in the time allotted, touching on the principal facts. The briefs will be carefully studied by he subcommittee that will be appointed on the matter of administrative provisions. I think that it will be necessary to begin under the 10-minute rule. If a witness does not complete his statement in that time, and the committee wishes to extend his time, the time may be extended by unanimous consent of the committee. GENERAL STATEMENTS STATEMENT OF HON. OGDEN L. MILLS, UNDERSECRETARY OF THE TREASURY, AND HON. E. W. CAMP, COMMISSIONER OF CUSTOMS, TREASURY DEPARTMENT Mr. MILLS. Taken as a whole, the administrative sections of the tariff act of 1922 have presented relatively few difficulties in interpretation and enforcement. It is inevitable, however, in the administration of a law of such broad application as the tariff act for a period of several years, that some difficulties should develop and in addition that some amendments suggest themselves due to changing conditions. As a result of experience with the tariff act of 1922, and its study of the administratíve provisions, the Treasury Department believes that a considerable number of amendments to the administrative provisions could well be made at this time. For the most part, the amendments which the department would recommend are of minor importance and involve little in the way of policy or change in procedure. To aid the committee in its consideration of amendments suggested, those considered to be of major importance have been segregated from those which may well be considered as noncontroversial, which means, at a subsequent date, with the permission of the committee, we will submit the so-called amendments of minor character in the form of amendments to the present tariff law. Value: As many of the tariff rates are based on value, the definition of value is of fundamental importance. Therefore, any amendments to section 402 become major considerations. Accuracy in the determination of value is essential to the protection of the revenue. It is also important that value be defined so that it may be readily ascertained. Otherwise, an unjustified burden would be placed on commerce and upon the administration of the law. The accurate determination of foreign value requires investigations abroad and such investigations can not in all instances be conducted without opposition and objection difficult to overcome. The abandonment of foreign value as a basis of assessment of ad valorem duties is now the subject of considerable discussion. This, however, is considered by the department as a broad question of policy for the Congress to determine. In the absence of information as to the desire or intention of the committee to adopt some other basis of value, the department is confining its suggested amendments to the improvement of the present basis rather than the substitution of some alternative. Section 500 of the tariff act imposes on the appraiser the duty of appraising the merchandise "in the unit of quantity in which the merchandise is usually bought and sold by ascertaining or estimating the value thereof by all reasonable ways and means in his power, any statement of cost or cost of production in any invoice, affidavit, declaration, or other document to the contrary notwithstanding." The mandate of Congress that the appraising officer shall affirmatively determine a value and not rely on unverified statements or statements not susceptible of verification is plain. Section 402 of the tariff act provides, in part, that "if neither foreign nor export value can be ascertained to the satisfaction of the appraising officer," duties shall be assessed on United States value. Under the present procedure with regard to reappraisement, although the appraiser might not ascertain foreign value to his satisfaction, the court, on appeal, might decide that a foreign value did exist with the result that the duties finally determined and paid would be based on a foreign value proved to the court by the submission of affidavits which Treasury agents were unable to verify, or by evidence undisclosed at the time the appraiser made his decision and which can not be subject to check. In other words, evidence might be submitted which would not be available at the time the Treasurer found he could not ascertain the foreign value and the court would then find there was a foreign value and upset the ap praisement made by the Treasury official, without the Treasury Department having any opportunity to make proper verification. The weakness of the present system, it therefore appears, is not in section 402 which directs appraisement on United States value where foreign value can not be satisfactorily ascertained, but in the reappraisement proceedings which may result in appraisement on a value which can not be properly verified by Treasury officials. It is believed that the method or basis determined upon by the appraising officer as proper should, subject to review by the Secretary of the Treasury, be applicable throughout all the proceedings. Thus the court would be limited to the question whether the value on the basis used by the appraiser had been properly determined, and, if not, to a redetermination of the value on that basis only. The department believes that the existing law is susceptible of being so construed and that the result to be accomplished by the proposed amendment was intended in the 1922 act. As a further safeguard it is suggested that the appraiser's valuation be made prima facie correct on reappraisement. The present definition of United States value is not entirely satisfactory, as such value can not be found if "such or similar imported merchandise " is not "freely offered for sale in the principal markets of the United States." The word "similar" has been very strictly construed. It is thought that the definition should be amended to allow the value to be arrived at from the value of a comparable article, whether domestic or imported, so offered for sale in the United States, with proper adjustment for differences in quality and in other respects. The department believes that this accords with the intention of the present definition, and would make possible the determination of United States value in many cases in which it can not now be determined. The provisions of section 510, placing an embargo upon the goods of exporters who refuse to allow access to their books for the purpose of determining value, have been productive of much ill feeling, which has sometimes approached international importance. It is the opinion of the Treasury that, with the amendments above suggested, section 510 may be repealed. In other words, where we can not obtain foreign value, if we are given an amendment to the law which will permit the ascertainment of United States value in nearly all of these cases, it will be unnecessary to resort to the extraordinary procedure of refusing importation in the case foreign exporters do not give us access to their books. Bonds: There are many provisions throughout the act requiring or authorizing the taking of bonds in certain cases to secure the payment of duties, or compliance with administrative requirements. These provisions vary greatly. The act requires bonds in some cases in which experience has shown them to be unnecessary, and omits the requirement in others where it has been found that a bond is necessary for the protection of the revenue. The department recommends, in order to provide more elasticity in this respect, that in lieu of these specific requirements, the Secretary of the Treasury be given general authority to require by regulation such bonds or other security as he may deem necessary to protect the revenues and assure compliance with the provisions of the law. The act already gives the Secretary (or, in some cases, the commissioner or the collector) power to fix the amount, to approve the sureties, and, sometimes, to prescribe the conditions of the bonds required. The administrative officers thus have full power over bonds, except in determining in what cases they shall be required. Marking: The several tariff acts prior to 1922 have required that all imported articles should be marked to indicate the country of origin, when such marking could be done without injury. No penalty was prescribed other than that the articles imported not marked should not be delivered until marked in conformity with the law. Under these provisions the customs officers and the Treasury Department determined the question of what articles were subject to marking under the act. The act of 1922, however, introduced two new elements: A penalty of additional duty of 10 per cent was imposed upon all articles not marked at the time of importation unless they were exported, and the domestic manufacturers were given the right to protest against the rate of duty assessed by the collector. In certain instances the department held the unit of sale to be the article rather than the individual piece in such unit, as, for example, a bundle of shingles was held to be the article of commerce rather than the individual shingle, or the book of cigarette papers rather than the individual leaf. The Customs Court, however, has interpreted the act very strictly, indicating that the individual paper of the cigarette book or the individual shingle should be marked instead of the book or the bundle. A strict interpretation of the language of the marking provision has led to absurdities, not only in requiring the marking of articles where marking seems illogical, but in relieving certain articles from the marking requirements where marking appears entirely reasonable. It is believed that if the policy which requires the marking of country of origin is to be carried out adequately, greater flexibility must be given to the statutory rule and power placed in the Secretary of the Treasury to meet changing conditions and circumstances. The amendment recommended to section 304 will in no wise affect the marking of articles where Congress has seen fit to prescribe a special form of marking. Amendments to entry: Though the appraised value be lower than the entered value, duty can not, under the law, be assessed on an amount less than the entered value (except in certain very limited classes of cases). On the other hand, if the appraised value be higher than the entered value, the importer is subject to substantial additional duties. It is, therefore, greatly to the importer's interest to enter at a value which will correspond as closely as possible to the appraised value. The existing law allows an entry to be amended at any time before the invoice or the merchandise comes under the observation of the appraiser. This has been construed by the court to mean the appraiser himself and not an assistant appraiser or examiner, although the latter officers value the merchandise, subject to the appraiser's approval. To carry out the evident intent of Congress, it is recommended that no amendment of an entry be allowed after the merchandise or invoice has come under the observation of an examiner, assistant |