(The document above referred to is as follows:) [Tariff Adjustment, 1929, hearings, Committee on Ways and Means, vol. 16, pp. 9966-9968] MEMPHIS, TENN., July 2, 1927. Hon. HUBERT F. FISHER, House of Representatives, Washington, D. C. DEAR SIR: On account of not understanding the proper procedure, the followingTM matter was first called to the attention of Senator McKellar * * * A few months ago our firm was sent some golf-club heads from Australia for use as patterns or models. We were forced to pay duty, although the heads we made from these patterns were for export to Australia. In other words, the United States tariff laws * * * operated in this instance to handicap a domestic manufacturer trying to develop trade with foreign countries. * * Upon taking up the matter with the Bureau of Foreign and Domestic Commerce, I understand that the lack of such authority in our present tariff law has proven a handicap to American manufacturers in a number of lines, who, like ourselves, are interested in building up their production of goods in this country for export by duplicating models and patterns upon which those of other countries find a ready demand to exist in given foreign countries. * * * I beleve you would be doing a service to American exporting manu* * * introduce facturers, generally, if you would * * a bill modifying section 308 * so as to include among the articles now admissible without duty, articles imported by manufacturers of similar products intended solely for comparison and reproduction, and not for sale. Manufacturers would, I am sure, be willing in such cases to give bond that such imported articles will not be resold, thus eliminating any possible objection from domestic producers or that there was any weakening of the tariff provisions accorded them under the regular duties. * * * * * * * * I feel that our tariff laws should be designed to protect domestic trade, but without interfering with the development of our foreign com merce. * * * W. R. SCOTT, GOLF SHAFT & BLOCK Co. Hon. WILLIS C. HAWLEY, Chairman, Ways and Means Committee, House of Representatives, Washington, D. C. DEAR MR. HAWLEY: The Golf Shaft & Block Co., manufacturers and exporters, in Memphis, Tenn., find it necessary in their export trade, to bring into this country samples of foreign manufacture which are intended solely to be used for comparison and reproduction and are not for sale The secretary of this concern expresses clearly the reasons why they would like to have exemptions from tariff on these samples in the following paragraph of a letter to Hon. William R. Green, dated January 19, 1928: "Our people have been exporting the materials from which golf clubs are made for many years, but these materials were in a stage of manufacture known as 'in the rough'—that is, it consisted of rough-sawn dimension stock. For some time we have endeavored to develop an export trade for our material in a more advanced stage of manufacture. After receiving a great deal of encouragement from one branch of our Government that is organized to develop and enlarge our foreign trade, it was quite a shock to learn that our tariff laws did not exempt from duty samples of foreign manufacture, when intended to be used solely for comparison and reproduction, and not for sale, especially when the articles produced in an American plant were to be exported, thereby adding to our foreign trade." The question was presented to the House legislative counsel as to an amendment to the tariff laws and it was thought best to add to paragraph 4 "also samples intended to be used solely for comparison and reproduction and not for sale." It would seem that it would be only fair to a manufacturing concern, which is a large exporter of such things, to permit him to import samples dutyfree for the purpose of comparison and reproduction. I hope the committee will write this amendment into section 308 and add it to paragraph 4. Very truly yours, HUBERT F. FISHER, Member of Congress. [Tariff Adjustment, 1929, hearings, Committee on Ways and Means, vol. XVI, p. 9784] DEPARTMENT OF COMMERCE, Hon. W. C. HAWLEY, Chairman, Committee on Ways and Means, March 15, 1929. House of Representatives, Washington, D. C. MY DEAR MR. HAWLEY: In reply to your invitation of February 14 for any suggestion relative to the administrative paragraphs of the Tariff Act * * * I indicated that we would present shortly a number of suggestions with regard to certain of these administrative features which have an interest for us in making the Tariff Act help in the promotion of American export trade. * * * This communication will confine itself to matters not involving the import-tariff controversies, but rather those primarily affecting our export trade. We offer suggestions on three subjects: 1. * 2. * * 3. Temporary duty-free importation of samples for examination and possible reproduction. The detailed suggestions of the Department on these subject and the reasons for our recommendations are presented in the attached brief. Very truly yours, E. F. MORGAN, Acting Secretary of Commerce. [Part of the brief relating to sec. 308 (p. 9786)] Section 308. Temporary free admission of samples for examination and reproduction The Department of Commerce has from time to time been approached by American manufacturing concerns with requests for assistance in securing the admission into this country of samples of foreign articles which they found were offering severe competition to their own products in common-export markets. These samples the American producers desired to bring to their plants in the United States for careful examination with a view to possible reproduction of similar articles in the United States. Because of the bearing of these requests: upon the promotion of American export trade, officials of this Department have taken the matter up with the customs service of the Treasury Department, as have also a number of American importers themselves, asking whether, in view of the purpose for which such importations were desired, they could not be granted the privilege of temporary free admission under bond for reexportation within 6 months under section 308 of the Tariff Act of 1922. It was urged that such importations constitute a close analogy to models of women's wearing apparel imported by manufacturers for use solely as models, and to samples imported solely for use in taking orders, which are among the cases now afforded such duty-free importations under section 308. In reply to such requests, the Treasury Department has stated that under the present law, it finds itself without authority to allow such temporary free entry of articles imported for the purpose of examination precedent to possible manufacture. In view of the fact that the privilege sought is not essentially different from those already granted to similar classes of samples under section 308 of the tariff law, the Department of Commerce suggests for the consideration of Congress the addition to that section of a specific provision authorizing the temporary duty-free entry under bond of samples intended to be used solely for comparison and possible reproduction, but not for sale. It is believed that this provision can be granted without injury to domestic producers, since the number of articles involved would be very small and would not enter the markets of the United States, and with possibly considerable benefit in the strengthening of the ability of American producers to compete in foreign markets by supplying the type of article which apparently best meets the local demand. [Tariff Act, 1930, House and Senate reports to accompany H. R. 2667 (Smoot-Hawley bill), pp. 160, 161] Section 308 * * * Molders patterns for use in the manufacture of castings are included in the list of articles which may be imported under this section of the 1922 act. The attention of your committee has been called to the fact that from their very nature such patterns can quickly and easily be duplicated, so that temporary free importation is equivalent to relieving patterns from the payment of duty entirely. They are, therefore, omitted from the list in this bill. Samples may be imported under the section only for use in taking orders. The amendment extends the privilege to samples imported for examination with a view to reproduction. This should materially assist American manufacturing concerns which are meeting severe competition from foreign articles in common export markets, and it is recommended by the Department of Commerce on account of its bearing upon the promotion of American export trade. The number of articles involved would be small and the samples cannot, under the law, enter the markets of the United States without payment of duty. Mr. STRACKBEIN. In order to rectify that section 308, subsection 3, a separate bill was introduced in the House by Mr. Eberharter, of Pennsylvania. The House Ways and Means Committee decided not to make this correction in the bill at that time. However, in subsequent discussion with Representative Mills, he indicated that as far as he was concerned he would be entirely agreeable to having the bill amended in the Senate. It is a very, very short amendment that would make the correction. Senator KERR. Have you got the wording which you suggest there? Mr. STRACKBEIN. There is the wording; yes. As you see here, it is a very short bill. I could at this point, if you have no objection, introduce this into the record. Senator KERR. Let it be inserted in the record at this point. (The document above referred to is as follows:) [H. R. 3711, 82d Cong., 1st sess.] A BILL Relating to the temporary free importation of samples under bond for exportation Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That paragraph (3) of section 308 of the Tariff Act of 1930, as amended, is hereby amended by inserting immediately after the word "samples" the following: "(but not including photo-engraved printing plates imported to be reproduced)". Mr. STRACKBEIN. Mr. Chairman, there is only one more matter to which I want to address myself, and that is the matter of valuation. The present bill would alter our present system of valuation for duty purposes. It would eliminate foreign value, and substitute therefor export value. It is my understanding from conversations with officials of the Customs Bureau that most of our imports today are actually based on export value. At the time of the hearing before the Ways and Means Committee I made the statement that it was extremely difficult to reach a conclusion about the merits of this change. The change was recommended by the McKinsey firm in its report, but that report was confidential. I asked to see a copy of it, and was not able to gain access to it. The Tariff Commission had a copy, but it was in confidence. Senator BUTLER. What report is this, again, please? Mr. STRACKBEIN. The McKinsey report, upon which this whole customs simplification bill is based. It is understood that McKinsey & Co. is an industrial-management firm that was employed by the Treasury Department to make an investigation of the customs administration and to seek methods of simplifying that administration. They did recommend this change in basis of valuation. As I undertook to say, I assume that they included in their report certain supporting schedules, documents, factual data upon which they based their conclusion. However, that information, those data, have not been exposed to the public, and, so far as I know, no one outside of official circles has had access to it or has been able to study the supporting data and the detailed analysis upon which their recommendations are based, and in the absence of those data, in the absence of the documentation, in the absence of the analytical data gathered by the firm, it is extremely difficult from the outside to come to any conclusion as to the soundness of the recommendation and as to any possible exceptions that might be made to the recommendations. We are in the position of simply having to take the recommendation on faith. Now, McKinsey & Co. is a reputable management firm of good standing; but, nevertheless, in order to pass intelligently on the conclusions reached it would seem highly desirable to have access to the detailed analysis upon which they themselves base their conclusions. Senator BUTLER. Do you think it would be a good idea for this committee to ask the Treasury for a copy of that? Mr. STRACKBEIN. I think it would be a good idea. I made that request before the Ways and Means Committee. I sought to enlist the assistance of the chairman to gain access to the report, but my request was not granted. Senator BUTLER. The Ways and Means Committee did not have it either? Mr. STRACKBEIN. They do have copies, I understand. Senator BUTLER. The Ways and Means Committee? Mr. STRACKBEIN. Copies have been made available to members of the Ways and Means Committee and to the Appropriations Committee. I am not sure that the report was made available to the Finance Committee of the Senate. Mr. Chairman, with the suggested changes and comments, my organization has no objection whatsoever to a customs simplification bill. Senator KERR. Subject to these suggestions, you recommend approval? Mr. STRACKBEIN. I beg your pardon? Senator KERR. I say, subject to these suggestions you recommend its approval? Mr. STRACKBEIN. That is correct. Senator KERR. All right, Mr. Strackbein; we thank you for your appearance here. Mr. STRACKBEIN. Thank you, sir. Senator KERR. Mr. Richard H. Anthony. Mr. Anthony, you may identify yourself; be seated and give your statement. 98600-52-9 STATEMENT OF RICHARD H. ANTHONY, SECRETARY, THE AMERICAN TARIFF LEAGUE Mr. ANTHONY. My name is Richard H. Anthony, and I am secretary of the American Tariff League, with headquarters in New York City. I have a prepared statement, the early part of which I would like to read, and the latter part of which I would appreciate having inserted in the record at the indicated point. Senator KERR. It may be done if you will give it to the reporter. Mr. ANTHONY. The American Tariff League favors such changes in the customs administration law as will produce true simplification and efficiency in operation. The league would not be expected initially to propose such changes as it has no immediate, day-to-day experience with customs operations as have importing groups. The league's interest in any customs legislation centers in its possible effect on Government tariff policy. The league wishes to express its views on certain sections of the bill. As to other sections, not specifically discussed, the league, in general, offers no objections. SECTION 2. ANTIDUMPING AND COUNTERVAILING DUTIES Our concern over this section is because of its interrelationship with section 13, in which primary reliance in valuation for customs purposes is now to be placed on the export value of imported merchandise, which is the market value or the price of that merchandise for exportation to the United States. As will be seen, the league approves of this change. However, while solving one problem, it creates another. The unit price for exportation to the United States of any particular shipment of goods is not necessarily identical with the export price of such goods to other countries than the United States or to the fair value thereof in the domestic market of the exporting country. Primary reliance on export value exposes the stability of the United States domestic market to abuse. Specifically, a shipment to the United States may be undervalued for customs purposes or may benefit from an export subsidy, yet may slip through at regular duty rates, or free of duty, because the appraiser no longer would be required to consider its foreign value. The only protection from such abuse lies in the provisions of our laws against dumping and against subsidies. Section 2 proposes to amend section 303 of the Tariff Act of 1930, so that the procedures leading to the imposition of a countervailing duty will be broadly the same as those required in the Antidumping Act of 1921. Instead of requiring the imposition of a countervailing duty upon the mere finding that an imported article has the benefit of a foreign export subsidy, as at present, section 2 would prevent such action unless the Secretary of the Treasury also determines that an American industry is being, or is likely to be, injured, or is prevented or retarded from being established. |