is sorted to grade, scoured, carded, and combed into balls of top weighing about 10 pounds, ready for processing into yarn. In the foregoing operations, defective and short-wool fibers are removed so that the spinner has an organized and highly uniform strand of wool fibers with which to work.

During recent past years the Treasury Department has announced frequently that wool imports were the largest single source of customs revenue, and for many of those years Nichols & Co., Inc., in the capacity of wool importers, has paid more duty than any other concern. For example, for the 12-month period ending August 31, 1951, we paid the United States Government over $6,000,000 in customs duty. The topmakers in this country are deeply disturbed by the circumvention of congressional intent, as represented in the Tariff Act of 1930. This has become apparent in the growing importation of wool top from foreign countries, particularly the Argentine and Uruguay. These countries maintain multiple rates of exchange favoring the export of this processed wool to this country. For example, in the Argentine the rate of exchange for wool exports is 5 pesos to the American dollar. On processed wools the rate of exchange is 712 pesos to the dollar. Thus there is a bounty on the export of the top equal to 50 percent of the value of the raw wool from which the top is made.

Evidence of the effect of these subsidies is shown in table 1 attached to this statement which may be summarized by saying that from zero in 1947 Argentine top entered here for consumption soared to 3,791,000 pounds in 1951. Likewise, top entering from Uruguay mushroomed from zero in 1947 to 3,773,000 in 1951. In total, the inroad amounts to 7,564,000 pounds in the short span of 5 years, or 4 years of actual imports.

This committee has been told by Frank A. Southard, Jr., special assistant to Secretary John Snyder that

Movement of wool tops into this country in the past few months has stopped completely or been exceedingly small.

Perhaps Mr. Southard has been too occupied on other important matters to realize that textile activity in this country for some time has been badly depressed; that Congress and various Government agencies are being urged to take unusual measures to stem this recession in activity and increase in unemployment-especially in textiles. But as to this matter of tops imports on which Mr. Southard spoke, let us look at the record.

Official figures on arrivals of wool tops in this country (table II) show that in only 3 of the last 6 months of 1951 have tops imports fallen below 1 million pounds a month. In January 1952, the latest month published, they were back up over that million mark. The great bulk is from Argentina and Uruguay, with the latter showing the greatest strength from April of last year onward.

This fact takes on added importance when we examine the official registration of bales sold to export from Montevideo. For the first 6 months of the current season, from October 1, 1951, to March 29, 1952, 13,296 bales of tops had been registered for export to the United

States. As a bale of tops weighs about 550 pounds this means that registrations are at the rate of over 1,000,000 pounds a month from Uruguay alone. This is greater than the 1951 rate of imports of Uruguayan tops for consumption. There are many wool-textile operators in this country without jobs who would welcome this work and be better American consumers for it.

It may be asked, why do we buy these foreign tops if their importation has undesired effects on textile operations here. In answer to that I submit the case that Senator O'Mahoney has reported to you and Government agencies concerned. Fifty thousand pounds of wool were offered at a clean-basis price of $1.42 a pound or the buyer could purchase an equal weight of wool tops at $1.41 per pound. The cost of converting wool tops was then about 48 cents à pound. Gentlemen, if you were operating in a highly competitive market which would you buy?

I have shown you the impressive extent to which our markets are being invaded by foreign products subsidized in their export by multiple-exchange rates. I have given you an illustration of the distortion of values resulting from such bounties. These place it beyond the power of one operating in a competitive market to ignore. In closing, I would like to show how you, the Congress, can reassert its original intent and proper authority in this matter.

The bill before you, H. R. 5505, in section 2 (c) contains two proposed amendments to section 303 of the Tariff Act of 1930. We respectfully urge that you accept the first amendment-page 2, lines 11 through "imposed on the merchandise." on page 3, line 2-and reject the second commencing on line 2 of page 3 with the words "Such countervailing duty shall" through line 15 of that page.

The effect of this action would be to make unequivocally clear congressional intent respecting the use of countervailing duties to offset bounties or grants directly or indirectly bestowed by foreign interests upon their exports which are subject to duty as United States imports. There is strong indication that this relatively simple scheme of multiple exchange rates, in the light of the Treasury Department's reluctance to act, is proving a contagious method of circumventing, if not negating, our tariff. This action would also eliminate the insertion of the policy of "locking the barn after the horse is stolen." If it takes Treasury years to find a "bounty" in multiple rates of exchange, how dangerously long will it require to determine that an American industry is "injured" or "retarded”?

Finally, if the above suggestion does not win your approval, we urge you strike out section 2 (c) of H. R. 5505 in its entirety.

That part of section 2 (c) which would be deleted reads as follows: Such countervailing duty shall be imposed only if the Secretary of the Treasury shall determine, after such investigation as he deems necessary, that an industry in the United States is being or is likely to be injured, or is prevented or retarded from being established, by reason of the importation into the United States of articles or merchandise of the class or kind in respect of which the bounty or grant is paid or bestowed. The exemption of any exported article or merchandise from a duty or tax imposed on like articles or merchandise when destined for consumption in the country of origin or exportation, or the refunding of such a duty or tax, shall not be deemed to constitute a payment or bestowal of a bounty or grant within the meaning of this section.

(The tables referred to are as follows:)

TABLE I.-Imports into United States for consumption of wool and hair tops from Argentina, Uruguay, and all countries

TABLE II.-General imports into United States of wool and hair tops

Source: Boston Wool Trade Association, special Bureau of Census tabulations.

Mr. WELLMAN. Mr. Chairman, you probably wonder why I am appearing here today, since I have probably been the largest buyer of these tops in South America. I have made some money on them, but I think the currency manipulation should be eliminated because it is throwing our employees out of work.

These tops are coming in in such a big way that it has depressed the textile business terribly. I think it is more to blame for the depression in the textile business than anything today, and should be stopped if there is any possible way of doing so.

The CHAIRMAN. Thank you very much, sir.

Senator BUTLER. Mr. Wellman, evidently you read the testimony that was given by a representative of the Treasury Department the other day?

Mr. WELLMAN. Yes, sir.

Senator BUTLER. I questioned him about how long it was going to take them to establish a countervailing duty.

Mr. WELLMAN. Yes, sir. We are very much upset about it. Certainly, for your information, I do not believe this has been brought out anywhere, but Uruguay can make 50,000,000 pounds of tops a year, and Argentina can make another 50,000,000. The total of these two is half the amount that is made in this country. In other words, they could throw half of our employees out of the combing business in the textile industry in America if this is not stopped.

Senator BUTLER. Thank you.

The CHAIRMAN. Thank you very much, Mr. Wellman.
Mr. WELLMAN. Thank you, sir.

The CHAIRMAN. Mr. Altschuler. You may be seated and identify yourself for the record.

STATEMENT OF BENJAMIN M. ALTSCHULER, COUNSEL, CUSTOMS BROKERS AND FORWARDERS ASSOCIATION OF AMERICA, INC.

Mr. ALTSCHULER. My name is Benjamin M. Altschuler. I am here as counsel for the Customs Brokers and Forwarders Association of America, Inc., whose address is 8 Bridge Street, New York.

I have already delivered to the clerk a written statement which I would like to have entered into the record.

The CHAIRMAN. It will be entered in full, yes; it will be entered into the record.

Mr. ALTSCHULER. And I should like, in addition thereto, to make some brief comments.

The CHAIRMAN. Yes, sir; we will be glad to hear you.

Mr. ALTSCHULER. The Customs Brokers and Forwarders Association of America has a membership of over 400.

They are located in all of the principal ports of the United States. A customshouse broker is the first person outside of the Government who deals with merchandise when it arrives in the United States, and as foreign freight forwarders they are the last people outside of the Government representatives who deal with merchandise exported. They are, therefore, very much concerned with any legislation or procedure that touches upon the import or export of merchandise. As an association they endorse many of the provisions of this bill. The purpose of the bill, a stated by the Treasury Department, is to simplify the operation, to reduce expenses, and to reduce the delay incidental to administration, and to eliminate inequities which would add to the difficulties of enforcement.

Customshouse brokers favor these principles, but although the association favors many of the provisions, it finds that there are some which need modification or amendment.

First of all, I would like to speak of section 13 of the bill, which deals with value.

Now, the bill proposes the elimination of foreign value as a basis for determining value. Our association favors that, but we do believe that this section is faulty in that it does not set a definite time limitation for the appraiser to appraise his merchandise.

Under existing law and under this proposed amendment, the appraiser of the United States can take as long as he likes, and when I say as long as he likes, as much as a dozen years if he cares to, to appraise an importer's merchandise, and it happens in many cases that an importer has distributed his merchandise and it has been consumed long before the appraiser determines what the value is. Now, we say that particularly with the elimination of foreign value as proposed in this bill, the appraiser of the United States Customs Service ought to be able within some time limitation, be it 4 months or 5 months or 6 months, or whatever you gentlemen feel is right, he should have some limitation on the time during which he should appraise.

Senator BUTLER. That appeared to be the only explanation that the Treasury representative had the other day in reply to my questions about their not establishing a countervailing duty, because they had not been able to establish a value.

Mr. ALTSCHULER. Well, we think that there comes a time when he has to "fish or cut bait." We do not think he can do any more in

6 years than he can do in 6 months.

The second proposal that we think is necessary in connection with this section 13 is that the appraiser should be obliged to state in his appraisement what is the basis of his value, that is, whether it is export value or United States value or comparative value; that the importer should not have to guess at what the appraiser did as his basis of value.

After all, this is a fair dealing, and there is no reason why the appraiser should not say to the importer, "I have appraised your merchandise on the basis of export value," or "I have appraised your merchandise on the basis of United States value." There ought to be no secret about it.

Now, the second problem which I would like to take up is the one under section 17 of the proposed bill. Under that proposal the Treasury Department would do away wth the present right of an importer to amend his entry, but would retain duties for undervaluation albeit in a different sense than it retains it now.

We feel that it is not fair to an importer to say, "Once you have filed your entry, which must be done within 48 hours after importation, you may never come in and file an amended document, even though you have information showing that the information which you first gave to the Government was not correct."

Whether the new information is favorable to the Government or to the importer makes no difference. He should be permitted to put in a document filed with the Government his amended figures.

It is true that under the proposal he could come and tell the Government about it, but he wishes to put himself on record so there can be no mistake about it.

In the same section the Government proposes to retain the duties for undervaluation although they are not referred to in the Tariff Act as penalty duties-they are-and there is no ceiling on them.

Now, we believe it is entirely unnecessary to have these penal duties, and I should like to refer you to the statement of Assistant Secretary Graham on page 7, in which he states:

Of course, if there is actual fraud, other provisions of the customs laws can be invoked

and that is our position.

If the man has been honest, then there is no reason for imposing penalties, penal duties. If he has been dishonest, there are other administrative and criminal provisions under which he may be punished and we, therefore, think that these penalty duties under section 489 should be eliminated entirely.

Now, the third proposal we wish to make is in connection with section 15 of the proposed bill which deals with certified consular invoices and informal entries, and I would like to emphasize there, both from experience as a former Government officer in the Treasury Department and from experience representing importers in the customs service and this Brokers Association, that it would be faulty to raise the ceiling from $100 to $250 under which importers may enter their goods in an informal basis.

With modern methods of transportation, with airplanes bringing cargo daily, a man could do quite a business in having shipments up to $250 arrive and have them entered informally without any consular invoice. An informal entry is one where the inspector does the whole