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same time, it would not diminish the governmental revenue or the tariff protection accorded domestic producers.
While these proposals have been designed in the mutual interest of the United States Government and of the American businessman, their announcement would also convey welcome assurance to foreign countries that the United States does not wish to hamper the admission of their products into the United States by procedural roadblocks that can be avoided. I hope that your committee will recommend the prompt passage of this bill.
Mr. JENKINS. The next witness is the Honorable Fred L. Crawford. Do you have a prepared statement?
STATEMENT OF HON. FRED L. CRAWFORD, WASHINGTON, D. C.
Mr. CRAWFORD. Mr. Chairman, I do not. I was talking with Miss Taylor yesterday afternoon, and I told her, on account of the change in the hearing, I did not have a statement prepared, and she said to present an oral statement.
Mr. JENKINS. We will be glad to hear from you. For the interest of some of the members who might not know Mr. Crawford, he was for many years a very prominent Member of Congress, and specialized on transportation and traffic, and was considered an expert on the subject. Mr. Crawford, you may proceed.
Mr. CRAWFORD. Mr. Chairman, first let me express my appreciation for permitting me to appear before the committee, and secondly may I say I am 100 percent in favor of this bill.
The only change I would make in the proposition is that I would go a little further than the author of the bill has proposed here. I was very pleased to have the Assistant Secretary of the Treasury make the statement which he does on page 1, paragraph 4, of his formal statement, where he outlined some of the purposes of the bill and having compared all this bill and all the data I could get on it carefully, with the present law and procedures going back to 1913 and 1922 and 1930 acts, and also having in mind the problems which have attempted to be answered by the customs by the exporters of the United States, and the report of the Judicial Conference of the United States, I think the bill is very much in the right direction.
I shall be just as brief as possible and take only a few minutes. In my personal opinion, the people of the United States, the Members of the House and Senate, and the Eisenhower administration, have not clearly made up their minds or brought about their philosophy or drawn their conclusions as to what they propose to do with this problem of the settlement of international trade balances. This bill and what has been presented by the Assistant Secretary simply shows some of the things that those who are attempting to import into this country or export from other countries into this country are suffering.
This bill in my opinion will help alleviate some of those pains. It is my guess and my firm belief that if we are to continue our present role in international affairs, and specifically as referred to the Korean situation as late as last evening by Senator Taft of Ohio, that either this Congress, or perhaps the next or the next Congress will be absolutely forced to make very drastic changes in the Tariff Act itself, and not just the administrative end of it as this bill substantially
I have had some experience in attempting to import goods, goods that were badly needed in this country because of the nonproduction
of this country. Then I have also in recent months attempted to import some goods for which there could be found substitutes in this country, but for which there is a great demand in this country.
Speaking very bluntly, the gentleman who wrote to our friend over here expressed some of the things which importers would be up against, and I have simply said to my customers and to the people who wanted to ship to me that I would not go through the customs red tape for all the money that might be involved in the way of profits from the transaction, and I passed it aside.
That might be good for our people or it might be bad for our people. It is certainly not good for the fellow who wants to ship goods to this country.
Mr. Simpson's interrogation, in my opinion, shows specifically how obsolete the present tariff laws are as related to present shipping conditions. Let us take England's situation, for instance, in recent years. I have gone to stores in London and priced goods for consumption in London and priced those same goods for export to the United States, and I say emphatically that this Government of ours-and by that I mean the Congress and the people-have supported England in recent years in a program wherein England has shipped to this country goods at prices tremendously lower than would be permitted to be consumed by the British people. We did it to fortify and uphold the British economic structure. We may be doing that with respect to other countries. We do it as a national policy, which in my opinion runs absolutely contrary and directly across the face of the proposition of so-called antidumping as it was comprehended at the time that language was put in the law.
It is my belief that this administration and that this Congress will support countries in shipping goods to this country at prices greatly lower than the prices they charge to their people and have not thought of it being antidumping. I am making these remarks as one who has an 18-year record in the Congress for voting and upholding and protecting the hands of American industry every way I knew how without making apologies to anybody about it. But American industry now is not restricted to the continental United States and its Territories. American industry is as broad as the world, whether behind the Iron Curtain or in front. We ship everywhere, directly or indirectly, and that is American industry.
American industry contributes taxes to meet our responsibilities as determined by the Congress and the administration and the State Department. So we need to get down and do some very fundamental thinking on these questions involved in the tariff law as such, and in the administration of that tariff law.
The section on value is an improvement, I mean the new language, in the handling of the most difficult procedure, and the handling of this question of value will never be satisfactorily done by any group of administrators under the law as now written. I do not criticize administrators or the customs officials. Congress gave them a law which is almost impossible of administration, unsatisfactory to the exporters from the other countries or the importer from this country, and they will have to suffer along with it as best they can until Congress changes it.
Section 15 of the bill is not too clear to me, and I listened closely to the Secretary for further elucidation and I still am not clear. May I refer to that very briefly. It has to do with the declaration of goods.
It is the language having to do with goods arriving, that they must be declared in 48 hours or by regulation in 5 days. Suppose there is a strike in the Port of Hawaii, Alaska, or Puerto Rico, which may run for 2 or 3 weeks. How is that situation to be handled under the
language of this bill?
I submit that question to the committee so that they may further inquire, because we have territories where these strikes do occur from time to time, and where ships can not be unloaded, and it might have to do with that language. I am not sure the language here is sufficiently broad to let the Secretary do the thing that is necessary. I think that should be looked into.
I hold in my hand here the annual report of the Director of the Administrative Offices of the United States Courts, 1952 Annual Report. On page 45 we find this comment:
"The pending cases of the United States Customs Court went up substantially in 1952. Classification cases increased from 75,109 at the end of 1951 to 82,992 at the end of 1952, and appeals from 48,989 to 63.010."
On page 188 of the same report in tabulated form, table G-1, report of the United States Customs Court for the fiscal year ending June 30, 1951, and June 30, 1952, gives this information. Cases pending at the beginning of the year, 76,755. Cases received during the year, 10,722. Cases decided during the year, 12,368. Cases pending at the close of the year, 75,109. That is for 1951. Now, for 1952, the figures run cases pending, 75,109. Cases received 14,205. Cases decided, 6,322. Cases pending at the close of the year, 82,992.
That record speaks for itself.
The Secretary in his comments a while ago made the statement-I did not get it too clear something about one-third, as I understood it, of the 120,000 invoices received during the last 90 days are held up. How can anybody do business under such conditions. This congress should do something about it, and I congratulate the author of this bill for trying to do something about it by getting this bill before the Congress.
Here is the customs information for exporters of the United States, a tremendously valuable assistance to anybody who wants to import or anybody in another country who wants to export into this country. The Treasury has done its best to make it possible for a man to do business. But still the exporters and importers are up against it. If the Congress and the administration and the public generally want to facilitate the movement of goods across international boundary lines, and also somewhat assist in the settlement of trade balances, I suggest they support this bill.
Thank you very much, sir.
Mr. JENKINS. Thank you very much, Mr. Crawford.
Mr. CRAWFORD. Thank you.
Mr. JENKINS. The next witness to be called is Mr. Roland Jones. I know him very well, and he is a man of wide experience and great ability in this line.
STATEMENT OF ROWLAND JONES, JR., PRESIDENT, AMERICAN RETAIL FEDERATION, WASHINGTON, D. C.
Mr. JONES. Thank you, sir.
Mr. Chairman, in view of the lateness of the hour, I have two choices. I can either read this fairly short statement in its entirety or give it to you in summary, whichever would be most convenient to the committee.
Mr. JENKINS. You use your own judgment, Mr. Jones.
Mr. JONES. I would like to offer this entire statement for the record, and to simply give you at this time a summary of the position of the retail industry of this country on this bill. The retail industry opposes the pending bill solely because of the section which would increase the import duty exemption from $1 to $3 and for the following
First, the increase in the exemption would result in tremendous growth of foreign mail-order business, offering substantial savings to customers on a myriad of important products that would be duty free, excise tax free, and sales tax free.
Two, the certain loss of substantial revenue of the Federal Government, the States and the municipalities has resulted in the avoidance of the excise and sales taxes and the reduction in corporate and personal taxable income.
Third, the safeguards of administration discretion contained in the bill will not prevent the evils they are intended to prevent.
Four, three basic limitations to the exemption contained in the 1952 bill which failed of passage do not appear in the pending bill, namely, the exemption for alcoholic beverages and tobacco, the denial of the c. o. d. privilege, and the elimination of the qualification that such shipments are limited to articles for personal and household use and not for resale.
Why these limitations to this exemption have not been carried through in the present bill, I do not know.
Five, the loss of customs revenue would be presently in excess of the present revenue for the reason that current bulk shipments of small items which produce substantial amounts of revenue would be diverted to mail-order type single duty free imports.
Six, the increase in duty-free exception requires the question of tariff revision which should be reviewed carefully in terms of tariff policy in general, and not injected into an otherwise meritorious customs simplification bill.
Mr. Chairman, the retail industry generally is interested in customs simplification. The industry generally believes that we must have more foreign trade for reasons that are obvious. The retail industry also is interested in the importation of a tremendous volume of gift merchandise of a handicraft nature, which in reality do not compete with most of our mass-production industries in this country. We think that the $3 tax-free exemption, tax free all down the line, the bill is meritorious, but we do feel the advertising by direct mail, by radio, and newspaper and magazine in this country, the opportunity afforded to foreign shippers of a number of products which fall into the $3 exemption which I call your attention to is equivalent to $10 to $12 equivalent domestic value in this country for comparable items.
It is the hope of the American Retail Federation and its 58 constituent groups that if this bill is to be given consideration that the section involving the $3 duty-free exemption should be eliminated.
Mr. KEAN. Mr. Jones, what would be your comment to the statement made by the Treasury Department that this $1 limitation had been there for a long time, at a time when the general inflation was not there that is there now, and this $3 limitation is just about the same as the $1 limitation was some 20 years ago?
Mr. JONES. In the first place, we do not believe that the price level has tripled.
Mr. KEAN. It has doubled, has it not?
Mr. JONES. It probably has close to doubled, but certainly not tripled. The point is that today we have these very heavy Federal excise taxes of 20-percent rates at the retail level. We have a myriad of manufacture excise taxes, running from 10 to 20 percent, which cover many categories of goods which would fall within this $3 exemption.
In addition, our States and our municipalities are greatly dependent upon sales tax revenue for the operation of State and municipal government. These kinds of shipments would come in completely free from the taxes imposed at the State and city level.
Mr. KEAN. Of course, these taxes are included in the price at which goods are sold in the market, so the fact that if the level of the price of goods is doubled, definitely the manufacturers' tax is included in that, and therefore paid by the consumer.
Mr. JONES. That is right, but the point is that on these imported shipments, the tax does not accrue and is not paid either in the case of manufacture level taxes or the retail level Federal tax; it is completely exempt. That is the great danger. There is a great preoccupation of the American people today in the direction of tax avoidance. It is a common American practice today of studies and ways that they can legitimately reduce their taxes.
Mr. KEAN. That is always true when taxes are too high.
Mr. JONES. That is right. One of the reasons for that is the very high level of taxation. Here is a gimmick, to use a slang word, that opens a tax saving as high as 25 percent of the value on an American item which would sell in this country, either imported directly by retailers or importers, equivalent to $10 or $12 retail price. There are very substantial problems involved in this picture.
Mr. KEAN. Would your group be opposed to this section if the limit was $2 rather than $3?
Mr. JONES. We think the present $1 section should remain. Let me give you one example of what happens now under the $1 exemption. Here is a full page ad which appeared in last Sunday's Detroit Free Press advertising beautiful unusual gifts direct by mail from foreign lands every month for only $2 each postpaid, duty free. This ad cost $2,304 for a single insertion in the Sunday Detroit Free Press. It is evidence of the fact that there is a tremendous volume of merchandise moving into this country under the present dollar limit.
What would happen if it was raised to three we can only surmise, but we are sure it would be substantial.
Mr. KEAN. Thank you, Mr. Jones.
Mr. JONES. Thank you, sir.
Mr. JENKINS. Mr. Jones, your statement may appear in the record at this point without objection.