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(U. S. C., 1946 edition, title 19, sec. 321) which authorizes the Secretary of the Treasury to admit articles free of duty when the expense and inconvenience of collecting the duty would be disproportionate to the amount of such duty. However, this authority is not broad enough to apply to the ordinary commercial transaction, as it is limited to articles not in excess of $5 in value accompanying and for the personal and household use of persons arriving in the United States, or $1 in value in any other case. Sec. 13 of H. R. 5106 would broaden this authority to allow persons to bring with them articles up to $10 in value for their personal use and to allow free entry up to $3 in other cases. Thus, although the policy of avoiding the expense and inconvenience of collecting disproportionate amounts of duty would be continued and enlarged in H. R. 5106, it would still not be broad enough to take in commercial transactions. Therefore, our only relief would be by amendment of par. 391 of the Tariff Act of 1930.

CONCLUSION

We have been advised by the Bureau of Customs that our only avenue for relief is legislation. We believe that the proposed Customs Simplification Act of 1953 would be the proper vehicle for such relief.

The lead content of the pyrites which we import is not commercially recoverable and is not in fact recovered as its recovery would be economically prohibitive. It does not enter into competition with any lead produced or used in the United States.

The payment of the duty results in a penalty on the importer.
The collection of the duty results in a net loss to the Government.

Any duty on pyrites containing up to 11⁄2 percent lead can serve no useful purpose.

Paragraph 391 of the Tariff Act of 1930 should be amended and simplified by excepting therefrom any pyrites containing not more than 12 percent lead. This would conform to the policy expressed in paragraph 393 (which exempts pyrites containing less than 3 percent zinc), and section 321 of said act, and in paragraph (g) of section 8.48 of the Customs Regulations of 1943.

For the foregoing reasons, we urge that the amendment we have requested be adopted. Respectfully

GENERAL CHEMICAL DIVISION,
ALLIED CHEMICAL & DYE CORP.,
M. M. BIDDISON, President.

Hon. DANIEL A. REED,

CHAMBER OF COMMERCE OF THE UNITED STATES,

Washington 6, D. C., May 26, 1953.

Chairman, House Committee on Ways and Means,
House Office Building, Washington 25, D. C.

DEAR MR. REED: The Chamber of Commerce of the United States supports the principles of H. R. 5106 pending before your committee to provide for customs simplification. Even before Congress began considering this forward step in 1950, the membership of the national chamber stated that simplification and modernization of the customs administrative provisions of our tariff laws was of prime importance. Therefore, we have consistently urged your committee to start legislative action as you did.

Customs simplification is a universally accepted approach to facilitating world trade. The uncertainties and delays in the current outmoded procedures not only have been costly to the American importer but have been an important deterrent to those seeking to enter American markets.

For the above reasons, we strongly urge your committee to act favorably and promptly on this legislation.

Beyond the field of legislation, the national chamber believes that there should be continuous action on the part of the responsible agencies of Government to improve and simplify the administrative machinery and regulations. We also believe that there should be international action to modernize, simplify and standardize customs, consular, and other trade documentation and formalities. I would appreciate it if you would make this letter a part of the record of your hearings.

Cordially yours,

CLARENCE R. MILES.

RESOLUTION FAVORING THE PASSAGE OF CUSTOMS SIMPLIFICATION ACT (H. R. 5505) (1951) ADOPTED BY THE CHAMBER OF COMMERCE OF PITTSBURGH, MAY 12, 1953

The Chamber of Commerce of Pittsburgh with a membership of 3,600 businessmen in the Pittsburgh area, adopted the following resolution at its board of director's meeting on May 12, 1953:

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Resolved, That the Chamber of Commerce of Pittsburgh recommends the passage of Customs Simplification Act (H. R. 5505) (1951). Present customs regulations are causing great difficulties for our importers, and many unnecessary costly procedures. Consular invoices and consular visas should be abolished since they merely duplicate information contained in commercial invoices. A number of foreign countries have eliminated the consular invoices requirements in order to reduce the burden in doing international trade. The United States should follow this example to encourage rather than discourage international trading."

STATEMENT SUBMITTED BY WILLIAM S. SWINGLE, PRESIDENT OF THE NATIONAL FOREIGN TRADE COUNCIL, RELATING TO H. R. 5106

The National Foreign Trade Council, Inc., wishes to place itself on record in support of the general principles embodied in H. R. 5106 and in urging the enactment of a customs simplification measure in conformity with these principles.

The council, which was founded in 1914, comprises in its membership manuturers, merchants, exporters, and importers, rail, sea, and air-transportation interests, bankers, insurance underwriters, and others interested in the promotion and expansion of the Nation's foreign commerce.

In the interest of a large and expanding volume of American foreign trade, the council for more than 25 years has been urging the revision and simplification of the unduly burdensome and highly restrictive customs administrative law and procedures of the United States. Strong recommendations to this end have been included in the final declarations of many national foreign trade conventions sponsored by the council. Typical of such recommendations of earlier national foreign trade conventions was that of the 16th convention, which was held in Baltimore, Md., April 17-19, 1929. In its final declaration, that convention stated:

"We again express the hope that Congress will take early action upon the long pending measure for revision and simplification of the customs administrative law, and we point out that the great bulk of the friction and difficulties which arise out of the international movement of merchandise spring from the cumbersome customs administrative regulations."

The most recent expression by a national foreign trade convention on the subject of customs simplification was that of the 39th convention. This convention, held in New York City November 17-19, 1952, and attended by more than 2,000 representatives of American foreign trade and investment interests from all sections of the country, in its Final Declaration stated:

"The convention expresses its keen disappointment that the 82d Congress failed to complete action on the customs simplification bill. It urges that the Treasury Department again bring forward a bill designed to modernize the administrative and procedural laws, with the object of giving improved service to the importer, at the least cost to the taxpayer, and with the greatest benefit to the consumer." As regards H. R. 5106, the emphasis which it places upon improvement in customs valuation procedures is especially commendable. The archaic, highly complex, and extremely restrictive valuation provisions of the customs administrative law of this country is responsible for the exasperating uncertainties, extraordinary difficulties and prolonged delays involved in clearing many articles of foreign merchandise through the customs portals of the United States. These provisions have also been prolific of prolonged and costly litigation which, in conjunction with the other obstacles to customs clearance, has greatly added to the inconvenience and cost to American consumers of imported products.

Under existing legislation, the value of imported merchandise for the purpose of assessing ad valorem duty is determined according to the provisions of section 402 of the Tariff Act of 1930. Section 15 of H. R. 5106 provides for a substantial revision of section 402 so as to effect the following:

(1) Elimination of "foreign value" as a basis for assessment of duties. (2) Designation of "export value" as the primary basis of valuation. (3) If the "export value" cannot be ascertained satisfactorily, then the use of "United States value."

(4) If neither the "export value" nor the "United States value" can be ascertained satisfactorily, then the use of comparative value."

(5) If neither the "export value," "United States value," nor the "comparative value" can be ascertained satisfactorily, then the use of "constructed value."

(6) In the case of certain articles with respect to which there is in effect a rate of duty based upon the American selling price of a domestic article, then the use of the American selling price of such domestic article, as at present. Generally, the definitions "export value" and "United States value" are the same as those in the present law. "Constructed value" is similar to the provisions for "cost of production" in the present law. "Comparative value" is roughly the equivalent of the "export value" in the country of origin of comparable merchandise exported to the United States, with appropriate adjustments for differences in size, material, construction, etc.

Section 15 of H. R. 5106 also defines such terms as "freely sold" or "offered for sale" as used in the proposed measure.

As has been indicated, there is no doubt that many of the delays in the final determination of the duty to be paid on the importation of certain articles have been due to the complex provisions for the determination of value under section 402. These delays have been due, in part at least, to the need for determining the “foreign value" of the article in each case which, in turn, often requires a foreign investigation. Further, it has been contended that the use of the "foreign value" criterion has caused many inequities, in that it requires the assessment of duty on the price for which articles are offered for sale in the home market of the country of origin even though such prices may be higher because of the smaller quantities dealt with in such country as compared with the quantities exported to the United States.

Since many United States duties are imposed on an ad valorem basis, the need for an equitable as well as expedient method of determining value for duty purposes cannot be overemphasized.

The reasonableness and efficiency of innovations such as are reflected in the valuation provisions of section 15 of H. R. 5106 will be finally determined only after such provisions have undergone the practical test of application over a period of time. As has been noted, the valuation provisions of the present law have often resulted in delay, uncertainty, prolonged litigation, and the final assessment of duty long after entry of the goods into commerce. Such conditions are thoroughly undesirable. The valuation provisions of the instant bill are the result of extensive and expert consideration of means to eliminate these conditions, and it is reasonable to believe that they will achieve this purpose.

Although the valuation provisions of H. R. 5106 are of major significance, there are other sections of the proposed measure which are of outstanding importance. Among these are the provisions relating to the amendment of customs entries. Section 19 of H. R. 5106 eliminates the privilege an importer has under the present law to amend his original customs entry to increase or decrease the entered value. The proposed measure would make the "final appraised value" the value for assessment of ad valorem duty, rather than "the entered value or the final appraised value, whichever is higher," as under the present law. The proposed measure would thus eliminate the provision of the present law for imposition of additional duties, and even for the seizure or forfeiture of the affected merchandise, if the entered value is below the final appraised value. The proposed measure would, of course, retain the provisions of the present law for application of severe penalties in case of false or fraudulent entries.

Also important are the provisions of H. R. 5106 for the extension of time limits for the performance of various acts by importers and exporters. These include(1) The extension from 48 hours to 5 calendar days of the "general order" period in which formal customs entries must be filed after the arrival of imports.

(2) The extension from 30 days to 90 days of the period in which merchandise not conforming to sample or specifications may be returned to customs custody for exportation. This time extension provision would permit the Secretary of the Treasury to grant more than 90 days in special cases where the defects can be determined only by tests or use.

(3) The extension from 1 year to 3 years of the period during which substitution for drawback may be made, and the extension from 3 years to 5 years of the time limit for exportation of merchandise involving drawback allowances.

(4) The extension from 10 days to 30 days of the time allowed in which to segregate goods so packed or mingled that the quantity of goods subject to

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different rates of duty in the package cannot be ascertained. The proposed measure provides that an even longer period may be authorized in special cases. The need for adequate time in which to make such segregation is important to the importer, since commingled goods are dutiable at the highest rate applicable to any part of the goods in a package.

(5) The extension from 6 months to 1 year of the period in which temporary imports are admitted duty free under section 308 of the present law. This is the section under which foreign products may be imported under bond for certain purposes including repair or alteration, after which they must be exported. Under the proposed measure the 1-year period may be further extended for periods not exceeding a total of 3 years.

In view of the pressing need for simplified and streamlined customs administrative procedures in this country and of the above-indicated desirability of the general principles embodied in H. R. 5106, the National Foreign Trade Council respectfully urges the prompt enactment of a customs simplification measure based on these principles.

We request that this statement be made a part of the official record of the hearings of your committee.

STATEMENT SUBMITTED BY FRANK L. KING, EXECUTIVE SECRETARY OF THE FOUNTAIN PEN AND MECHANICAL PENCIL MANUFACTURERS' ASSOCIATION, INC.

It is imperative for the protection of a vast number of United States manufacturers and merchandisers that the Ways and Means Committee of the United States House of Representatives give serious consideration to the effects which would ultimately follow approval by the Congress of section No. 321 of H. R. 5106, popularly known as the "customs simplification bill." This section, in part, authorizes an increase in the limitation on duty-free mail imports from $1 to $3 per package. This increase has been favored by the United States Treasury as a money-saving device because, according to the Treasury, it costs approximately $1.59 on an average for the Bureau of Customs to clear individual incoming shipments.

The Fountain Pen and Mechanical Pencil Manufacturers' Association, Inc., is opposed to the passage of this provision of the bill authorizing this increase from $1 to $3 on the value of duty-free incoming mail shipments. Approval of this section not only would affect the fountain pen and mechanical pencil business in this country but other lines of business which also have foreign competitors shipping products into this country which would be covered by this increase on the limitation of duty-free mail. This increase is also opposed on the ground that approval thereof would be, in effect, a change in tariffs rather than a simplification of customs procedure.

One of the functions of customs tariffs is to protect the United States economy by prohibiting the importation of products which would undersell United States products. The application of duty not only increases the landed cost of the imported merchandise to a competitive price on the American market but also provides revenue for the United States Treasury. If the present limitation were raised beyond $1, a new loss of revenue might well ensue, for, besides the loss of duties, there would be a loss of excise taxes where applicable, as well as loss of business to American importers, manufacturers, and merchants which would result in potential lessening of their income taxes. In addition to such losses in revenues, unemployment in the industries affected might well take place.

The United States should not permit an increase in the duty-free importation of foreign-made merchandise which not only undersells American-made merchandise but is not subject to certain Federal taxes. There are numerous mail-order houses in the United States, both large and small, which deal in items generally under $3 in value. They would be directly affected by foreign competition as foreign-made goods can be produced in the same standards of quality at lower production costs.

At the present time there is in existence a foreign mail-order business primarily originating in Great Britain advertising foreign-made products. These advertisements not only show the cost price of the merchandise but the amount of duty which would have to be paid. In most instances, this cost-plus-duty price is below a fair price for the same articles manufactured in the United States. By raising the limitation on duty-free mail the disadvantage to American manufacturers and mail-order houses would be even greater.

The raising of the limitation on duty-free mail to $3 is an invitation to foreign sellers and United States importers to import into the United States quantities of identical or similar articles in a series of mail shipments. The value of the merchandise shown in the documentation of the shipments will be fictitious and only part of the actual value. This is a practice being used throughout the world today to circumvent a variety of regulations governing the importation and exportation of merchandise.

An increase in the valuation of duty-free mail not only would increase the present disadvantage to some American manufacturers and mail-order firms but also would be an invitation to other foreign firms to enter into the business of selling by mail to United States consumers. Japan in particular would be ready to step into this business in the United States with regard to fountain pens and mechanical pencils. At the present time that country has not been too successful in selling Japanese pens and pencils in the United States in competition with United States manufacturers on a quality basis. The Japanese pen manufacturers, on reviewing their 1950 and 1951 figures on their domestic and foreign business, have requested the Japanese Ministry of Industry and Commerce to grant them the right to use gold in the manufacture of pen points so that they might better compete against the foreign pen manufacturers. Japanese productions costs are far below those in the United States. The wholesale price on a Japanese fountain pen with a gold nib can be estimated at approximately $10 a dozen. Even with our present import duties on fountain pens, such prices would be below the prices that a United States manufacturer of fountain pens would be forced to ask. Permitting Japanese fountain pens to be imported duty-free in small lots would make this unfair advantage even greater.

For these reasons, the 73 manufacturers of the Fountain Pen and Mechanical Pencil Manufacturers' Association, Inc., urge the members of the House Ways and Means Committee not to increase the value of duty-free incoming mail shipments above the present $1 limit.

AMERICAN FARM BUREAU FEDERATION,
Washington 1, D. C., May 28, 1953.

Re H. R. 5106, Customs Simplification Act of 1953.

Hon. DANIEL A. REED,

Chairman, Ways and Means Committee,

United States House of Representatives, Washington 25, D. C.

DEAR CHAIRMAN REED: The American Farm Bureau Federation recommends enactment of legislation which will simplify and expedite customs procedures, particularly such provisions which will result in more uniform and rapid classification of products and commodities for customs purposes. We believe the enactment of H. R. 5106 will accomplish many of these objectives.

The voting delegates representing 1,500,000 American Farm Bureau Federation members in 47 States have considered the need for customs simplification on several occasions. Their policies for 1953 state:

"We recommend early enactment of legislation to simplify customs procedures to facilitate imports. Customs procedures should neither add to nor detract from restrictions contained in the current schedule of duties."

The major objective of H. R. 5106 is the modernization and simplification of customs procedures. The subject is a highly technical one on which we are in no position to conclude that each and every provision of the bill is desirable; however, we do want to support the major objectives of this bill and recommend its approval with whatever revisions your committee deems desirable to accomplish the maximum customs simplification consistent with the principle stated in our policy quoted above. We urge early enactment of the bill.

We respectfully request that this letter be made a part of the record in lieu of personal testimony before your committee.

Sincerely yours.

JOHN C. LYNN,
Legislative Director.

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