The league can find no justification for thus weakening the countervailing duty procedures. According to the table entitled, "Analysis of Legislative Proposals Contained in H. R. 1535," the predecessor of this bill, inserted by the Treasury Department on pages 77 and 78 of the published hearings thereon in the House, the proposed changes requiring evidence of injury in both the dumping and countervailing duty cases originated in the abandoned Habana Charter for an International Trade Organization (art. 34, pars. 4, 5, 6) and in the General Agreement on Tariffs and Trade (art. VI, pars. 3, 4, 5). According to the analysis, they were not recommended by the McKinsey survey nor initiated by the United States Treasury Department.

Senator BUTLER. At that point, apparently from that remark you are familiar with the McKinsey report of the Treasury.

Mr. ANTHONY. Well, as the previous witness said, none of us on the outside has had any access to that report, so that while I am familiar with the tabulated findings, as revealed by the Treasury Department, none of us have ever seen the actual report.

Senator BUTLER. I think, Mr. Chairman, it might be a good idea for the chairman of the committee to request a copy of that for the members of the committee. I understand the House committee members were provided with copies, and I think we should be.

Senator KERR. We will discuss that.

Mr. ANTHONY. The Treasury might well hesitate to recommend provisions that would make the countervailing duty procedures less likely to be invoked, inasmuch as it would be proposing a reduction in potential Federal revenue.

The Treasury has declared that the major purpose of this bill is to simplify customs administrative procedures, and the contention is advanced that, if these totally different abuses, dumping and foreignexport subsidizing, are treated according to a single formula, simplification would follow. This may be true, but the league does not go along with the Treasury's suggestion of weakening the countervailing duty procedures. If any standardization of the two procedures is to be accomplished, it should be on the basis of tightening the provisions of the Antidumping Act, and keeping the countervailing duty procedures as they are in our present law, with the addition of the amendment suggested in this bill on page 2, lines 11 through end of the quote on line 15, whereby the use by foreign countries of multiple official currency rates of exchange is specifically included in the criteria of abuses for which countervailing duties may be imposed.

The Antidumping Act is a separate statute from the Tariff Act. It empowers the Secretary of the Treasury to investigate and find whether an American industry is being injured or threatened with injury, or is prevented from being established, by the dumping of foreign merchandise here, as defined in the act. The Secretary of the Treasury may make such investigation as he deems necessary and if he finds a case of dumping, he is required to make such finding public with as much detail or to the extent he deems necessary. Present law also provides for immediate precautionary action by the customs appraiser, if there is suspicion of dumping. If a case of dumping is found, there

is levied a special dumping duty in an amount equal to the difference between the sales price and the foreign market value, or in the absence of such value, then the cost of production in addition to the duty imposed by the Tariff Act, if any.

Section 13 of this bill eliminates, by omission, the "foreign value" basis as a measure or yardstick against which to assess an ad valorem duty on imported merchandise. The effect of this omission seems to deprive the Bureau of Customs of any current information on the "foreign value" of such imported goods. On the other hand, the Antidumping Act, which carries its own administrative provisions and -definitions of terms, and which would still be in effect, requires that the customs authorities be kept informed on "foreign value" since that is the fair market value in the country of exportation, against which the export sales price to the United States is measured to determine if any dumping exists. No contradiction is involved, however, because the two laws have quite different purposes.

In the Antidumping Act, we are speaking of determining whether export sales to the United States are below fair market values abroad for suspected shipments, and in the Tariff Act we are speaking of values used as bases for the appraisement of all imports subject to ad valorem duties.

The Antidumping Act can be properly administered, without the necessity of maintaining the cumbersome procedures used now and in the past to obtain the information on "foreign value” for the purpose of general appraisal.

The league has studied this problem to determine whether there. exists in international trade a well-established procedure which would assist our customs authorities in keeping posted currently on "foreign values," in a simple and inexpensive manner. The answer seems to come from Canada, where antidumping procedures are considered seriously and where action is taken automatically, whether there be the threat of injury or not. Canadian import regulations require that all exporters to Canada file, with every shipment, a form certifying the "fair market value" in the country of export of the merchandise under consideration when sold to the same category of purchaser. Senator BUTLER. There is no such provision in the American customs?

Mr. ANTHONY. There is no such provision of that type.
Senator BUTLER. And you recommend that here?

Mr. ANTHONY. Yes, we do.

Known as Forms M and N, the declaration is not given under oath but is subject to the laws on perjury. This procedure has been followed in Canada for three-quarters of a century and is well understood by exporters to Canada the world over. It would cause little additional burden or expense to exporters to the United States of our customs administrative procedures required that exporters supply the same information to us as they are already required to supply to the Canadian customs authorities.

Our countervailing duty provisions, which date back to 1897, and the Antidumping Act of 1921 both stipulate that any investigations thereunder are to be made by the Secretary of the Treasury. These laws were enacted prior to 1922, when the role of the United States Tariff Commission was enlarged from that of a Federal fact-tabulating body to that of a fact-finding body charged also with making recommendations for action. The Tariff Commission is staffed by experts whose functions call for the continuous study of the economic effects of imports on domestic production. The countervailing duty and the antidumping investigations are the only investigations which are not made by the Tariff Commission under our present tariff laws. In the interest of economy and simplification, Congress should empower the Tariff Commission to make the investigations and recommendations required under the Antidumping Act and the countervailing duty provisions of the Tariff Act. These investigations are not properly customs procedures, but seem to fall within the purposes for which the powers of the Tariff Commission have been broadened since 1922. In accordance with its statutory responsibilities, the Tariff Commission should make such reports available to the President, to the House Committee on Ways and Means, and to the Senate Committee on Finance.

Senator BUTLER. Do you make any exact proposal that you want put in, in this House bill to accomplish that purpose?

Mr. ANTHONY. Well, we propose that the Tariff Commission be substituted for the Secretary of the Treasury in both the antidumping and the countervailing duty provisions, the two acts, and that could be done within this bill in section 2.

Our suggestions on this point were formulated some time back, and on the first day of these hearings, the Secretary of the Treasury, or his representative here, said that they had been discussing this matter with the Tariff Commission and had come to an agreement that the Tariff Commission could take over a portion of the investigatory procedures under these two acts.

We welcome that more as indicating that the two agencies involved believed that it could be done, but I think that I ought to explain to the committee that our proposal goes beyond that made by the Treas

ury.

The Treasury proposal is that the Tariff Commission investigate only the domestic injury element in the Antidumping Act as it is today, and also in the case of countervailing duties, provided this bill passes, with the injury test added to the coutervailing duty provisions, although we feel that it should not be added.

We go beyond that proposal and ask that the Tariff Commission also make the investigation of the actual dumping case after it has been brought to their attention, and of any subsidy that would seem to demand remedy by way of a countervailing duty.

SECTION 3. SPECIAL MARKETING REQUIREMENTS

If the Committee on Finance reports favorably on this section, which eliminates various special marking provisions existing in the commodity schedules of the Tariff Act, we urge that the committee make it clear, in its report, that the purpose in so doing is simplification of administration, but that the committee attaches considerable importance to the strict enforcement of the basic marking requirements contained in section 304 of the Tariff Act of 1930, as amended.

SECTION 11. ADMINISTRATIVE EXEMPTIONS

Fears have been expressed by retail groups and some domestic producers that the exemption of $10 shipments from tariff duties, allowed under section 11, may foster foreign mail-order business to the detriment of domestic trade channels. The provision for permissive action by the Secretary of the Treasury to prevent abuses does not quiet these fears. The league's position is that the traiff should be administered equitably so that neither the domestic producer, wholesaler, nor retailer is discriminated against. We urge that proper safeguards be included in the exemption, which many league numbers believe is too broad as it now appears in the bill.

SECTION 13. VALUE

The league's views on this section are confined to two provisions: (1) the inclusion of "comparative value" among the bases of valuation for customs purposes; and (2) the elimination, from the value of imported merchandise, of internal taxes imposed in the country of origin or exportation.

Comparative value: Section 13 of the bill changes the present law governing valuation of imported merchandise for the purpose of assessing ad valorem duties thereon, in two ways:

1. It eliminates the first basis, "foreign value," and hence the necessity of determining whether "foreign value" or "export value" is the higher. The league has no objection to this change, subject to the recommendations we have already made in discussing section 2 of the bill.

2. It introduces an entirely new basis, "comparative value," to be applied if the appraiser cannot ascertain satisfactorily either the "export value" or the "United States value," both of which are retained as in the present law, with some of their terms redefined. The league believes that the introduction of "comparative value" is unnecessary and undesirable, and that it should be eliminated from the bill.

The creation of "comparative value" is a step toward simplification of customs procedures only in the sense that it means abandoning strict standards of appraisal if they prove difficult or irksome to apply.

Senator KERR. Do you have an opinion as to why the creation of comparative value is undertaken in the bill?

Mr. ANTHONY. Well, I have an opinion that it would permit the appraiser to disregard some of the stricter standards and, therefore

Senator KERR. I understand you to say that. The question I asked you is, Did you have an opinion as to the motivating reason for the inclusion in the bill of the provision.

Mr. ANTHONY. I think many importers would like to see the provisions governing valuation changed in such a way that virtually the invoice value would always be taken, and that very little investigation of the values as now defined in the bill will occur. It certainly

would

Senator KERR. Then what you are saying is that the purpose is to make it easier to import foreign products into this country?

Mr. ANTHONY. And undoubtedly at a lower level of protection, assuming the same rates of duty apply.

Senator KERR. Yes.

Senator BUTLER. One purpose, too, is apparently for the simplification of administration at this end of the line.

Mr. ANTHONY. I am sorry, Senator Butler, I did not hear that. Senator BUTLER. It would simplify the administrative problems here.

Senator KERR. He attacks that in the statement.

Mr. ANTHONY. It would simplify

Senator KERR. He says it would be a false simplification.
Mr. ANTHONY. Yes.

Senator BUTLER. You think it is too much simplification?

Mr. ANTHONY. Yes; I mean, simplification is fine if it serves a useful purpose, but if it simply means letting the bars down and giving a man an easy way of administering the functions in the bill that is false simplification in our view.

We must suppose that Congress wishes to protect the revenue and maintain the protective level of duties established under congressional authority. Hence, high standards of valuation procedure should be maintained.

The language of "comparative value," which permits the appraiser to attempt to ascertain or to estimate the value of the merchandise under appraisal by considering other types of merchandise, opens an entirely new field of appraisal procedure. This new yardstick is so loosely and vaguely defined as to invite frequent recourse to the courts for interpretation. It permits customs officials to exercise an inde terminable range of discretionary judgment and therefore appears to lead to the adoption of arbitrary or fictitious values, which may even withstand court scrutiny because of the lack of clear criteria.

It is reasonable to ask Congress to make the work of customs appraisers less onerous, providing the revenue is protected and continuity of approach maintained, so that importers and domestic producers alike will know where they stand from day to day. The league fears that "comparative value," while it may ease the burdens of appraisers, will induce capricious decisions and, in the long run, will so demoralize appraisal procedures that loss of revenue and lowering of the level of protection on imports will follow.

The relatively few cases which cannot be applied against "export value" or "United States value" can then be approached under "constructed value." In the rare case of a shipment so difficult of appraisal that it cannot be matched against any of these three bases