Mr. HOPPIN. May I make one more statement in regard to this matter?

Mr. SHREVE. Certainly.

Mr. HOPPIN. With the revenues as shown by a statement of the Treasury Department for 1923 amounting to $562,031,787.84, Congress has seen fit to increase the appropriation very largely for the Treasury Department, due to the increased pressure brought upon them by the tariff act of 1922. The same pressure has been brought to bear upon our department, due to the increased work in connection with the tariff act.

TRAVELING EXPENSES, FEES, MILEAGE, ETC., OF WITNESSES BEFORE BOARD OF GENERAL APPRAISERS.

Mr. SHREVE. I find a decrease in your item on page 101 for traveling expenses, fees, and mileage, allowance of witnesses before the Board of United States General Appraisers. The amount of your appropriation for 1924 was $1,000, while the amount of the estimate for 1925 is $300. That is very gratifying.

Mr. HOPPIN. That amount, to my mind, is absolutely inadequate, but I do not want to go into that because I understand it can not be increased. Therefore, I am willing to accept it.

Mr. OLIVER. What was the amount you used last year for that purpose?

Mr. HARRIS. $213.54.

Mr. HOPPIN. Most of that was used for one case.

Mr. OLIVER. Since you state you can summon witnesses, why should you be deprived of the services of those witnesses?

Mr. HOPPIN. Because we must pay their fees and travel expenses, and we have not the money with which to do it.

Mr. GRIFFIN. From your experience, to what extent do you find that the limitation on the allowance for witness fees and traveling expenses of witnesses interferes with or embarasses the work of your division? Have you anything in mind in the past which will emphasize that situation? Will you show the Committee the necessity which would indicate that your division ought to have the power to exercise discretion in that regard?

Mr. HOPPIN. In one case last year which was tried in Boston, we were anxious to get some witnesses from the West. Due to the fact that we did not have a sufficient appropriation for that purpose, we did not feel we could call them. We did call one witness under a special arrangement that we would pay his fare one way and he would wait for his witness fees and his right to the other five cents a mile for traveling expenses. We paid him on the basis of five cents a mile instead of ten cents a mile.

Mr. GRIFFIN. How did that case result?

Mr. HOPPIN. That particular case resulted unfavorably to the Government, although a new case may be brought up involving a similar question.

Mr. GRIFFIN. What was the amount involved?

Mr. HOPPIN. It is impossible at this time to tell; but it may amount to approximately $800,000, if finally decided against the Government.

Mr. GRIFFIN. And that amount the Government might have recovered if you had had the freedom to exercise your own judgment in calling necessary witnesses?

Mr. HOPPIN. It might have; yes, sir. Although the court held the emergency tariff act did not cover the merchandise in question. Mr. SHREVE. Have you anything further to submit?

Mr. HOPPIN. I would like to say this, that in a good deal of our litigation witnesses have been furnished to us free of charge, so far as the expense of traveling and fees are concerned.

Mr. GRIFFIN. By whom?

Mr. HOPPIN. By domestic manufacturers and producers interested in the question involved.

If the committee desires, I can file this complete memorandum for the record.

Mr. SHREVE. We will be glad to have that.

(The memorandum referred to is as follows:)

FUNCTIONS AND ACTIVITIES.

The function of the office of the Assistant Attorney General in charge of customs is to protect the interests of the Government in customs matters, and it is a conservative estimate to say that the amount involved in cases handled by this office and won by the Government easily runs into millions of dollars a year. It is difficult to make even an approximation of the amount of money saved to the Government by the prosecution of cases before the Board of General Appraisers and the Court of Customs Appeals. There have been instances where a shipment of 5 pounds of cotton yarn was entered for the purpose of ascertaining the correct market value thereof. While there would be less than $1 involved in the duty in such a case, the amount controlled by the result of the case would easily amount to hundreds of thousands of dollars, inasmuch as a 5-pound shipment would become a precedent governing all importations of similar merchandise. A few specific instances, however, of amounts actually saved to the Government are shown in the following tabulation:

From the illustrations given it will readily be seen that one such case ably handled by this office would save to the Government enough revenue to pay the expenses of the office for one year.

VOLUME OF WORK HANDLED.

There appears in the report of the Attorney General for each year a tabulation of the number of cases received and the number of cases disposed of by this office.

A ready tabulation of the cases handled by this office will be found in a comparison of the number for the fiscal year 1923, ending June 30, 1923, to that for the six months preceding January 1, 1924.

But possibly one of the clearest illustrations of the volume of work handled will be found in a tabulation of the work disposed of for the six months ending January 1, 1924. During those six months there were 1,823 cases involving the classification of merchandise actually heard and submitted; 1,572 cases involving the value of merchandise; 164 cases involving petitions for the remission of additional duties; and 138 cases involving claims for rebate of duty, due to damage or loss while in Government custody. These figures show that in all 3,533 cases were actually heard and submitted during the six months preceding January 1, 1924.

While many of the cases tried are sui generis, the figures which go to make up the total of 3,533 represent actual test cases which will probably be decisive of a great many more.

One of the cases represented by this figure was the Sandoz Chemical case, which not only involved $80,000 but formed a precedent for the construction of paragraphs 27 and 28 of the tariff act of 1922, which may control the assessment of duty thereunder as long as those paragraphs are a part of the law. This case involved the question of the intent of Congress in changing their policy-i. e., that of a nembargo against the importation of all coal-tar products-to a high protection on competitive commodities.

From figures recently compiled it is estimated that over 90 per cent of the dyestuffs now used in this country are of American origin. If the decision in the Sandoz Chemical Co. case and its kindred coal-tar cases had been adverse to the Government the protection intended by Congress in paragraphs 27 and 28 of the act of 1922 would have been ineffectual, and I am told that many of the then existing companies would have discontinued the manufacture of coal-tar dyes. The Madeira embroidery cases above cited involved a difference of 15 per cent in the amount of duty collected over a period starting in 1921 and coming down to date. The estimate of $300,000 heretofore given is very conservative, when it will be seen that the average business in this commodity is upward of $2,000,000 a year.

CHANGE IN PRACTICE.

With the passage of the tariff ac of 1922 new rights were given to the importer with respect to the recovery of duties paid. Under all previous tariff acts additional duties could not be remitted except by reason of a clerical error. Under the new tariff act the importer may petition the Board of General Appraisers for the remission of additional duties, and where it is shown that upon entry he did not intend to defraud the Government, misrepresent the facts to the appraiser, or to deceive the appraiser, the additional duties levied under section 489 of the tariff act of 1922 will be remitted. The class of claims which might be made against the Government for duty was also broadened to cover duties paid upon merchandise damaged or destroyed while in the custody of the Government and also all decisions of the collector with regard to imported merchandise claimed by the importer to be erroneous or illegal. The last set of claims is sufficient to cover any decision of whatever character the collector of customs may make either with respect to the exclusion of merchandise because of the infringement of a patent right or trade-mark or because it is not marked with the country of origin; claims for drawback which have been disallowed; and many other decisions as to which the importer theretofore had no right of action. All of these new remedies which were extended to the importer were intended to cover circumstances which worked great hardship upon importers under previous acts.

That these provisions, however, have greatly increased the work of the office of the Assistant Attorney General in charge of customs is manifested by the fact that during the six months preceding January 1, 1924, there were actually tried

and submitted 302 cases of this character. The procedure before the Board General Appraisers was also changed in so far as cases involving value are cor cerned in that the hearing de novo on appeal has been abolished and a complet record must be made before the trial judge, a review being had upon the recom thus made. This involves a more complete preparation and exhaustive trial i the first instance than was heretofore necessary.

OPPOSITION TO EMPLOYMENT OF LOCAL ATTORNEYS IN CONDUCT OF CUSTOMS CASES.

Suggestion was made by some of the committee that local counsel might han dle the cases to greater advantage than under the present practice where attorneys are sent out from the home office in New York to cover the calendars in the outof-town cities. I am thoroughly opposed to any change in the present system In the first place, local counsel could only be retained at higher salaries than the Government is now paying to the attorneys in the office. In the second place, a more important reason to my mind is that it is most essential in customs practice to be in active touch with litigation that is constantly going on. Frequent conferences are held in our office at which matters involving doubt are thoroughly discussed and the proper attitude for the Government to take determined upon. Also, attorneys who go to try out-of-town cases have the advantage of consultation with their fellow attorneys who are experts in all the various lines of customs litigation. This is of immense advantage to the Government attorney, which would, of course, be unavailable were local counsel employed. In addition, the attorneys are imbued with the spirit of the office where all are working for a common cause and where anxiety to assist each other is the rule rather than the exception. It is this fine spirit of cooperation and mutual aid which has gone so far to make the work of this office a success, and there would be none of this in the case of local counsel.

In closing it should be borne in mind that the work of this office is of vast importance to the business interests of this country, both to those engaged in domestic trade and those engaged in foreign trade. It is, therefore, with a great feeling of satisfaction that while the burden has been heavy much progress has been made in the interpretation of the present tariff act and of the many and difficult questions involved.

DUTIES AND CLASSIFICATION OF WORK OF OFFICE IN CHARGE OF CUSTOMS CASES.

Mr. HOPPIN. The office of the Assistant Attorney General in charge of customs, located in New York, has, by virtue of subsection 30 of section 28 of the tariff act of August 5, 1909 (36 Stat. 11, 108) — charge of the interests of the Government in all matters of reappraisement and classification of imported goods and of all litigation incident thereto, and shall represent the Government in all the courts and before all tribunals wherein the interests of the Government require such representation.

Under this statute, therefore, this office has charge of all litigation before the customs tribunal of original jurisdiction, the Board of United States General Appraisers, and all appeals therefrom, as provided in subsection 29 of section 30 of the tariff act of August 5, 1909 (36 Stat. 11, 105), to the United States Court of Customs Appeals, and in certain instances, as provided for by section 195 of the Judicial Code, of appeals to the United States Supreme Court. The legal work performed by this office may be conveniently divided into four distinct classes.

Class 1. Suits involving the classification, rate, and amount of duty to be assessed upon imported merchandise under the tariff act. of 1922 (42 Stat. 848); the emergency tariff act of May 27, 1921 (42 Stat. 9); the war revenue acts of October 3, 1917, and February 24, 1919 (40 Stat. 308 and 40 Stat. 1105, respectively); the act of

September 8, 1916, Titles V and VI (39 Stat. 793); and the tariff act of October 3, 1913 (38 Stat. 114).

Class 2. Suits involving the value of imported merchandise, paragraph M, section III, tariff act of October 3, 1913, and section 501 of Title IV of the tariff act of September 21, 1922.

Class 3. Suits involving claims for the remission of additional duties, section 489 of Title IV of the tariff act of September 21, 1922.

Class 4. Suits involving claims for abatement or allowance of duties for any injury, deterioration, loss, or damage sustained by any merchandise while remaining in a bonded warehouse, section 563, Title IV, tariff act of September 21, 1922.

CLASS 1-CLASSIFICATION PROTESTS.

Under Class 1 it may be pointed out that by section 514 of Title IV of the act of September 21, 1922, relating to "protest," this office has charge of litigation before the Board of United States General Appraisers instituted by proceedings denominated as "protests against decisions of the collector of customs, including:

(a) The legality of all orders and findings entering into the same as to the rate and amount of duties chargeable, and as to all exactions of whatever character (within the jurisdiction of the Secretary of the Treasury).

(b) His decisions excluding any merchandise from entry or delivery, under any provision of the customs revenue laws.

(c) His liquidation of any entry.

(d) His refusal to pay any claims for drawback.

(e) His refusal to liquidate any entry for a clerical error discovered within one year after the date of entry, or within 60 days after liquidation when liquidation is made more than 10 months after the date of entry.

(f) By section 514, supra, provision is also made for the amendment of protests pursuant to rules of the Board of General Appraisers. This provision is taken advantage of freely, approximately 600 motions having been filed since the enactment of this provision.

(g) By section 514 (b) of the tariff act of 1922, provision is made whereby an American manufacturer, producer, or wholesaler may file a protest against the decision of the collector as to the classification and rate of duty imposed upon imposed merchandise.

(h) By section 517 of the act of 1922, provision is made for the determination of frivolous protests (or appeals) by the Board of General Appraisers.

It should be noted that subdivisions (b), (d), (e), (ƒ), (g), and (h) represent new legislation, which has added materially to the jurisdiction of the Board of General Appraisers and increased the work of this office very substantially.

During the fiscal year 1922, 12,336 protests were filed, while during the fiscal year 1923, 26,303 protests were filed, and during the first six months of the fiscal year 1924, 20,778 protests were filed. In December, 1923, 3,775 protests were filed and in January, 1924, 4,812 protests were filed. These figures illustrate the rapid progressive increase in the number of protests under section 514, supra, and reflect the prodigious amount of labor developing upon this office by virtue of section 514 alone.

Further with respect to Class 1, it may be pointed out that the Board of United States General Appraisers is divided by statute into three subboards of three members each, and these boards have concurrent jurisdiction over the case embraced in the above four classes. Under the statute at least three members of the Board of General Appraisers shall be on duty at New York daily. Moreover,