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Mr. ALTSCHULER. I think so. Of course, it will also make it a lot easier for the particular individual who can bring in $150 worth of stuff without going through formal entry. He will be glad to do it. But it is unfair to his competitor.

Now, when you come, of course, to personal shipments: Mrs. Brown buys a set of dishes abroad for $130. No one is interested in making her go through a formal procedure. She ought to have it as informal as possible. But that is not commercial. She is not competing with anybody. But the man on the street who sells his goods should go through the same formal process as his neighbor who also goes through that formal process.

The second point which I would like to make is that the proposal contained in section 19 (a) of the bill, which proposes to repeal an importer's right to amend his entry is also, in my opinion, unwise. It seems to me that information concerning value, which an importer acquires subsequent to the time that he has filed his entry, should be given to the customs service in writing and I can think of no better way to formalize the giving of this information than by an amended entry which is a formal customs document.

In addition, most good businessmen will want to deposit with the collector of customs such moneys as they believe will be payable to the collector as a result of a higher value. Obviously, they cannot just drop this additional payment into the collector's cash register. A tender of this additional payment will have to be accompanied by some written document, and it just seems to me that the payment made at the time the amended entry is filed will cause less work for the Government, than having it done on some other informal basis. And here again, Mr. Chairman, I wish to state that from my conversations with officers in the Treasury Department and otherwise, the chief purpose for abolishing the amendment entry from the Government's point of view is that it will save what they think is unnecessary paper and clerical work.

Now, of course, if that act, as proposed, is made law, there will be a lot less reason to amend entries than exists at the present time. But there still will be some reasons.

I know from experience that an importer does not always have all of the information at the time he makes his entry. It comes in subsequently. And he is obliged, under the law, to make a disclosure of that subsequent information, particularly where that information may have a bearing on the value and how much duty he should pay.

Now, how is he going to give that additional information? Is he going to call the appraiser up on the telephone? Is he just going to send a check down to the collector? Obviously, no. He must put it into some writing, and he must file it in some orderly fashion, where it can become attached to the entry.

Well, if the customs service has to physically manipulate a letter or a document of some kind to handle this additional information and this additional payment, he might just as well handle it through the formality of an amended entry to which the importing public has been accustomed for scores of years.

I think it is a mistake. I do not wish to be a prophet, but I think if they abolish the amendment of entries, before a decade goes by, they will be back in here asking you to reinstate it.

Thank you.

Mr. JENKINS. Let me ask you another question. How do you stand on section 15? There has been some complaint on section 15. What do you think about that?

Mr. ALTSCHULER. I think it is a decided improvement over the present law. I think that for an appraiser to attempt to appraise on the basis of foreign or export value, whichever is higher, as is in the present law, is wrong. Because appraisers do not and cannot easily acquire the information of value in the country of exportation, but they do have the information about the export price to the United States. And I think the most important point in this whole bill is the abolition of foreign value. I think that that is the greatest good to both the Government and the importer.

The others are procedural things. They do away with nuisances and redtape. But the doing away with foreign value is really of vital substantative importance.

Mr. JENKINS. There have been some complaints about section 15, to this effect: that the appraisers have too much authority, and if they are inclined to be a little shady in their deals, they can practice that. But, on the other hand, an inspector anywhere in this service, can be crooked if he wants to be, can he not?

Mr. ALTSCHULER. Well, I would say that the appraiser having a lot of discretion and authority is all right with me, and so long as the importer who thinks he has abused his discretion or authority-he is entitled to go to the courts and find his remedy. And if you preserve the right of judicial rule, it seems to me that giving the customs officers authority and discretion is a good thing.

Mr. JENKINS. He has the right to complain anyhow, at all times. Mr. ALTSCHULER. That is right.

Mr. JENKINS. Any questions?

If not, we thank you very much, Mr. Altschuler.

Mr. ALTSCHULER. Thank you, Mr. Chairman.

Mr. JENKINS. The next on the list of witnesses is Mr. John Ray. Is Mr. Ray here?

(No response.)

Mr. JENKINS. We will pass him then, and if he comes, we will hear him.

The next witness is Mr. Eugene R. Pickrell,


Mr. PICKRELL. Mr. Chairman and members of the committee, my name is Eugene R. Pickrell. I am an attorney-at-law, with offices at 10 East 40th Street, New York, N. Y. I specialize in customs, tariff and Federal matters, and have been engaged in such practice for upwards of 20 years. I have been admitted to practice before the courts of record of the State of New York, United States Customs Court, United States Court of Customs and Patent Appeals and several Federal courts. I was formerly chief chemist of the United States Customs Service, port of New York. Since the Tariff Act of 1922 was enacted by Congress, I have handled matters relating to importations of coal tar products before the United States customs officials and before the United States Customs Court and the United States Court of Customs and Patent Appeals.

I appear before this committee in behalf of my clients, Carbic Color and Chemical Co., Inc., and Sandoz Chemical Works, Inc., importers of coal-tar dyes, coal tar-intermediates and coal-tar auxiliaries, with offices located at respectively, 451-453 Washington Street, New York, N. Y., and 61 Van Dam Street, New York, N. Y.

I wish to direct my few remarks to section 19 (a) of H. R. 5106. Section 19 (a) of the bill deletes from section 487 of the Tariff Act of 1930 the following phrase:

or at any time before the invoice or the merchandise has come under the observation of the appraiser for the purpose of appraisement.

Section 487 of the Tariff Act of 1930 permits the amendment of customs entries at any time prior to appraisement. The deletion of the above-mentioned provision in section 487 of the statute eliminates this right to amend customs entries.

Under the provisions of paragraphs 27 and 28 of the Tariff Act of 1930, the ad valorem duties on all coal-tar products are based on either United States value or American selling price, depending on whether or not the imported coal-tar product is competitive with a similar domestic product. If it is competitive, the ad valorem rate of duty is based on the selling price, known as the American selling price in the United States of a comparable domestic product. If it is not competitive, the ad valorem duty is based on United States value which is defined in section 402 (e) of the present statute.

There are only 2 or 3 classes of products other than coal-tar products upon which the ad valorem rates of duty are assessed on the American selling price. The ad valorem duties on all other classes of merchandise are based on either foreign value or export value, whichever is the higher. In the absence of these two bases, then United States value, and in the absence of foreign value, export value and United States value, then on cost of production.

In the determination of whether or not the ad valorem rate of duty on an imported coal-tar product should be based on United States value or American selling price, and if the latter, the amount of same, it is necessary to make comparative tests of such imported coal-tar products with domestic coal-tar products.

The present procedure in making customs entry, amendment of such entry and appraisement of coal-tar products may be illustrated by an importation of a coal-tar dye.

When an importer, such as my clients, receives a consular invoice covering an importation of coal-tar dyes (and such invoice usually covers 6 or more coal-tar dyes) he submits a copy of same, together with a submission sheet, requesting information as to the proper dutiable values, to the United States appraiser at the port of entry prior to making customs entry. On the submission sheet he advises. the United States appraiser as to whether or not each of the coal-tar dyes is competitive or noncompetitive; if noncompetitive the United States value and if competitive, the American selling price. The United States appraiser informs him in writing on the submission sheet which of the coal-tar dyes he considers competitive, which noncompetitive, the United States values for the noncompetitive coal-tar dyes and the American selling prices for the coal-tar dyes which are competitive. If the United States appraiser has no definite information on any one of the coal-tar dyes, he advises the importer on the

submission sheet that he is going to test that dye and later, which is usually after a lapse of 4 to 8 weeks, the United States appraiser advises the importer as to whether the dye marked "test" is competitive or noncompetitive and the United States value or American selling price. The importer checks the information given to him by the United States appraiser on the submission sheet and if he is in agreement and there are no dyes to be tested, he makes customs entry in accordance with this information. If he is not in agreement he makes entry according to his own information and recalls the invoice so he can amend the entry at a later date, after he has made his tests, checks the information given to him by the appraiser and confers with the latter in an endeavor to reach an agreement. If he reaches an agreement and it is different from his original entry he amends the entry accordingly. If he does not reach an agreement, he advises the United States appraiser to appraise, and then he files his appeal for reappraisement, which is sent by the United States collector of customs to the customs court for adjudication.

This has been the procedure on importations of coal-tar products since the enactment by Congress of the Tariff Act of 1922; in other words, 30 years. This practice is pursuant to the provisions of section 487 of the present statute. It has been very satisfactory to importers and domestic manufacturers of coal-tar products, and as a result, there has been comparatively little litigation. I understand that there are approximately 3,000 entries per year at the Port of New York, covering coal-tar products and that the amendments of such entries are approximately 10 percent, or 300 customs entries.

My clients and other importers of coal-tar products are very disturbed over the possibility of the elimination in this bill of the legal right to amend customs entries covering importations of coal-tar products, and further elimination of a satisfactory procedure which has been in effect for 30 years. These importers of coal-tar products object to an elimination of a legal right and the substitution therefor of an administrative practice, subject to the notions, the whims, and the personal feelings of administrative officials.

The proponents of the elimination of the right to amend customs entries have given as their reason the amount of paper work entailed in the amendment of customs entries. As far as coal-tar products are concerned, the paper work at the Port of New York is very small and only amounts to amendments of about 300 customs entries per year.

Frequently, there are importations of coal tar dyes, coal tar intermediates, coal tar auxiliaries and coal tar pharmaceuticals that have never been imported before; so at the time of entry, the importer probably has some knowledge as to whether or not such imported product is competitive or noncompetitive, and if competitive, the American selling price, but this information is insufficient to warrant making customs entry with certainty. He must rely on information obtained from the appraiser and information that he obtains subsequent to importation, pursuant to investigation. In such instances, it is imperative that he have the right to amend customs entries covering importation of such new products.

There is always a risk in the importation of coal-tar products which have been previously regarded as noncompetitive. Frequently it happens that between the date of placement of an order for an importation of a noncompetitive coal-tar product from abroad and the

date of exportation of such product, it has become competitive without knowledge of the importer. The ad valorem rate of duty will then be assessed on the American selling price. The importer had sold the coal-tar product prior to importation at a price which included the lower duty based upon its noncompetitive status. He is forced to pay a higher duty based on the American selling price, and thereby suffers a loss in the transaction.

The denial of the right to amend customs entries covering importations of coal-tar products will probably increase the litigation as to dutiable value on such merchandise before the United States Customs Court and the United States Court of Customs and Patent Appeals. The importation of coal-tar products is a hazardous enterprise. To deny importers the right to amend their customs entries will make the importations more hazardous and create additional difficulties. The elimination of paper work in the amendment of only 300 customs entries per year at the port of New York is an unfair compensation for the additional hazards and difficulties created by the denial to amend entries of such products.

Mr. JENKINS. Thank you very much for your presentation, Mr.


The next witness is Mr. Max Berkowitz. Is Mr. Berkowitz here? All right, Mr. Berkowitz.


Mr. BERKOWITZ. Mr. Chairman and gentlemen, my name is Max Berkowitz. I am a director of the National Authority for the Ladies' Handbag Industry, a national trade association of handbag manufacturers. There are 250 handbag manufacturers in our organization and they produce approximately 70 percent of the total production of handbags in the United States.

We have appeared before this committee on several occasions in the past, and have always received the inost considerate and courteous attention, for which I wish to sincerely thank you.

The two major problems confronting the handbag industry, today, and for the past few years, are the 20 percent excise tax on handbags and the importation of handbags from foreign countries. These two problems have been subject to many industrywide meetings, formation of committees, and considerable other activity to combat and eliminate the havoc, unemployment and insolvency that has been wrought by these two problems. We have appeared before congressional committees before, on each of these subjects, separately, and have shown by conclusive facts and figures that each in its own way has contributed to creating a depression in the handbag industry. Together the excise tax and the imports-combined to make an insurmountable obstacle to operating a profitable business. The handbag industry has shrunk from 800 firms doing a wholesale volume of $200 million in 1946 to 500 firms doing $135 million in 1952. The firm that shows a profit in the handbag industry is a rarity. This deplorable condition, which is a sad commentary on the American business scene, is directly attributable to the inequitable, unsound, and discriminatory features of the 20 percent excise tax and the reduction of the rate of duty.

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