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not only of all fruits of their investment but perhaps even of their capital, too. Such an experience would hardly serve as an inducement to any other entrepreneurs to invest capital abroad which type of investment it is our understanding that our Government is presently trying to stimulate.
Further, in this duscussion we cannot overlook the fact that during the postWorld War II years Uruguay has imported from us more than she has exported to us. In 1951, the year when the greatest amount of Uruguayan tops entered this country, the total dollar volume of Uruguayan exports to this country was only $102 million, whereas she imported from us a dollar volume of $140 million. Such an unfavorable trade balance cannot in the nature of things long continue to exist, and depriving Uruguay of access to our top market must certainly hasten the cutting off of imports from us. It should also be noted that most of Uruguayan exports to us are in raw materials or semimanufactures, the labor value in which probably does not exceed 25 percent. Uruguay imports from us, however, consist of highly manufactured articles, where the ratio of labor value to material value is probably reversed, approximating 75 percent.
We realize that the wool industry and the top making branch of it has suffered recently. We submit that the difficulty is attributable to reduced consumption of wool products in this country rather than the entry of Uruguayan top. The consumption of apparel top in this country between 1943 and 1948 averaged 235 million pounds per year and was never less than 222 million in any year. From 1949 to 1952 the average was 198 million pounds and in 1 year the consumption was as low as 168 million pounds. The reduced use of top here is in no small part attributable to wool products being priced out of the market in which they compete with synthetics, like orlon, nylon, and dacron, and it seems to us elemental that anything tending to increase the price of wool products will further harm rather than benefit both the industry and the growers. We can hardly see how Uruguayan top can, at its present volume of importation, substantially adversely affect either our wool industry or our wool growers and hence how any internal exchange regulations of Uruguay applicable to that top can have any substantial effect on our local economy.
We know that the imposition of these duties has resulted in diplomatic exchanges between Uruguay and our country and charges of bad faith and breach of treaty obligations are freely circulating in Uruguay. The Government, press, and people of Uruguay have all considered it a direct slap at them and in some quarters reprisals are being called for. It is to be hoped that these calls go unheeded and that relations between us and Uruguay, the bulwark of democracy in the Southern Hemisphere, can remain as friendly as they always have been.
In summary, we believe that the imposition of countervailing duties on Uruguayan top has
1. Dealt a severe blow to the Uruguayan economy by seriously jeopardizing Uruguay's ability to maintain even a semblance of a balance of trade with this country;
2. Been an unwarranted interference with the operation of the Uruguayan exchange rate system as a tool for taxation and control of inflation in that country;
3. Subjected this country to the charge of being a treaty violator by one of its stanchest friends in South America;
and all without any particular compensating benefit to our economy or any of our nationals. If this is true in the case of Uruguayan top, which has been selected for particular attack, how much more true will it be when, in accordance with the present mandatory provisions of the Tariff Act, countervailing duties are imposed on other products from Uruguay and from other countries with multiple exchange rate systems for no reason other than the fact that analysis shows that the exchange system operates on them in the same manner. How many other countries will be gratuitously offended and harmed?
It is for this reason that we urge the addition of an "injury clause" to section 303 of the Tariff Act of 1930, in the form set forth at the opening of this statement, so that countervailing duties will only be imposed after full consideration has been given by all Government departments whose operations and policies may be affected by the imposition and that they need not be imposed unless some substantial benefit is to flow therefrom.
Mr. JENKINS. Ladies and gentlemen, from all indications, that brings these hearings to a close. Thank you all for your attention and your attendance.
(The following material was submitted for the record:)
MUTUAL SECURITY AGENCY STATEMENT ON THE CUSTOMS SIMPLIFICATION BILL
The Mutual Security Agency wishes to register strong endorsement of the proposed Customs Simplification Act of 1953, which is designed to clarify existing legislation and to expedite customs operations. Action along these lines would help to reduce complications, delays, and uncertainties, which, at the present time, constitute a substantial barrier to trade and an even greater psychological obstacle to international cooperation in economic matters.
The enactment of H. R. 5106 would further the principle formulated by President Eisenhower in his inaugural address when he said that "we shall strive to foster everywhere, and to practice ourselves, policies that encourage profitable trade". Enactment of this legislation is one of the four steps contemplated in the state of the Union message, which recommended that we provide "vital help" to our friends abroad by "revising our customs regulations to remove procedural obstacles to profitable trade."
At the present time, the complexity of our customs legislation, the difficulty of ascertaining the true meaning of the law and of the required mass of interpretative decisions, the considerable delays encountered in establishing final customs liabilities, especially on manufactured goods and on new lines of goods, the complications of import valuations, are all procedural obstacles to profitable trade and, at the same time, generate resentment and ill will against this country. The foreign exporter, who is confronted with an admittedly bewildering body of rules and interpretations or who meets with protracted delays, soon develops the belief that he is the target of discriminatory measures and is being deprived of a fair chance to reach the United States customer. He is not only discouraged from further efforts to sell his wares in the United States, but he may well develop resentment at being treated in what seems to be an arbitrary and unfair manner. A source of many procedural difficulties and of great resentment is to be found in our present methods for valuing imports. Valuation procedures are exceedingly complex and time comsuming. Furthermore they often appear to be unrealistic and inequitable toward some traders and, at times toward some of our allies. The amendments proposed in the legislation tend to: (a) eliminate unnecessary expense and delay in the appraisal of merchandise and (b) produce a system of valuation which is more realistic from a commercial point of view. They are inspired by our recognition of the general principle that the laws regulating trade should be administered with certainty, equity, and economy.
The adoption of measures of simplification will prove of substantial advantages to foreign traders by making our laws and procedures clearer and more orderly. By so doing the proposed legislation will help us in our efforts to extend through the rest of the free world our philosophy of a free, competitive, and expanding economy.
Because this legislation constitutes tangible evidence of our willingness to remedy our own deficiencies and to do our part in the encouragement of profitable trade, its enactment will be viewed and appreciated throughout the free world as an expression of goodwill and leadership and will thus extend the area of mutual cooperation with our friends and allies abroad.
NATIONAL CREAMERIES ASSOCIATION,
Hon. DANIEL A. REED,
Chairman, Ways and Means Committee,
House of Representatives, Washington 25, D. C.
DEAR CHAIRMAN REED: Due to the pressure of other work, it was impossible for me to appear at the hearings on H. R. 5106, recently completed by your committee. Accordingly, I desire to file this letter as a part of the record of such hearings.
The National Creameries Association, of which I am Washington representative, is composed of about 950 cooperative and private dairy processing plants, located in the States of Wisconsin, Minnesota, Iowa, North and South Dakota, Kansas, Nebraska, Michigan, and Wyoming, Our members are interested primarily in the production of manufactured dairy products, and National Creameries Association is directly supported by some 300,000 dairy farmers located in the States named above.
Our particular interest with regard to H. R. 5106 pertains to section 22 of that bill. As we understand the matter, the provisions of section 22 of that bill, and particularly paragraphs (c) and (d) of that section, would in effect make it practically mandatory upon this Government to recognize the practice of the establishment of multiple exchange rates by foreign governments. This we think would be improper, taking into account the frequently voiced plea that foreign trade should be conducted on a free basis, with as much relaxation as possible in the various and sundry devices that, at this time, hinder the free movement of goods between countries.
We think the development of multiple rates is merely another of the devices by which countries can juggle their rules and regulations affecting foreign trade to their benefit, without there being involved any real reason due to comparative advantage in production that would ordinarily be the criterion in the development of export markets for any particular commodity from any particular country. In other words, by juggling the exchange rates, a foreign country could indulge itself in a selective depreciation of its currency in relation to ours. As we testified before your committee with regard to the bill to extend the Reciprocal Trade Act, H. R. 4294, one of the major factors that leads us in the dairy industry to desire the continuation of positive quantitative import controls, is the fact that foreign countries have so depreciated their currencies that their prices have been markedly reduced relative to ours, which places us at a very great competitive disadvantage. This disadvantage is not due to any shortcomings in the efficiency of production in this country, but one due in very large part to the arbitrary action of the exporting countries in devaluing their currencies.
Now, with the device of multiple exchange rates, any foreign country, if it so desires, by juggling its exchange rates applicable to different commodities or groups of commodities, can in effect devalue its currency on a selective basis-encouraging through this device the exportation of some commodities, and discouraging others. We think this is entirely improper, and that no law should be enacted that in effect recognizes this practice in our customs procedure, thereby, at least indirectly, giving the approval of the Congress to such an arbitrary and capricious practice. We realize that this country cannot dictate the exchange rates established by foreign countries with respect to their currencies. However, we submit that it is entirely within the prerogatives of this country to refuse to recognize multiple exchange rates in developing the rate of exchange that will be applied to imports into this country, for the purpose of our own customs laws.
The technique for handling this problem of multiple rates, on a basis which we believe much more sound and of benefit to American businessmen, including importers, has already been developed in H. R. 3810 (80th Cong., 1st Sess.), as described in Report No. 689, and submitted to the House by the Ways and Means Committee June 25, 1947. That bill was for the purpose of stabilizing "procedure in determining the value of foreign currencies in terms of United States dollars for custom purposes.' The major provision of the bill can best be described in terms of the Ways and Means Committee's own report on the bill, as follows:
"In recent years many foreign nations have set up systems of dual or multiple exchange rates for the conversion of their currencies, such systems were practically unknown at the time of the passage of the Tarif Act of 1930."
“Under the bill (H. R. 3810), when the Federal Reserve Bank of New York certifies that there are dual, or multiple exchange rates, the Secretary of the Treasury would be authorized to name a single official rate which cannot be higher than the highest nor lower than the lowest certified to him by the bank. This rate shall be as nearly representative as is practicable of the rate of exchange or the combination of such rates used most generally in effecting the transfer of payment for commodities exported from that foreign country to the United States."
We think that the provisions of the Kean bill (H. R. 3810), insofar as they pertain to the matter of determination of exchange rates for custom purposes, are far superior to the provisions of the Jenkins bill, (H. R. 5106), now before your committee, and suggest that the provisions of the Kean bill, insofar as they are appropriate, be substituted for section 22 of H. R. 5106.
OTIE M. REED,
Washington Representative National Creameries Association.
NATIONAL COTTON COUNCIL OF AMERICA,
Hon. DANIEL A. REED,
Chairman, Committee on Ways and Means,
House of Representatives, Washington 25, D. C.
DEAR MR. CHAIRMAN: The National Cotton Council of America which is an industry organization representing the six primary segments of the cotton industry-producers, ginners, warehousemen and compressmen, crushers, merchants and spinners-wishes to urge the passage of H. R. 5106, Customs Simplification Act of 1953.
The cotton industry believes that a high volume of trade built on a sound economic basis is desirable not only from the standpoint of the 9 million people directly and indirectly concerned in the production, processing, and marketing of cotton and cotton products but also from the standpoint of the economy in general.
Our complex, cumbersome, and antiquated customs procedures hamper foreign Simplification of customs procedures is long overdue and though this is only a minor aspect of this country's foreign trade problem, it is nevertheless an important one.
The Jenkins bill, H. R. 5106, provides for most of the reforms in our customs laws pertaining to administration and procedure that have been advocated and should remove many of these obstacles to international trade.
We request that this statement be made a part of the official record of the hearings of your committee.
WM. RHEA BLAKE,
STATEMENT REGARDING PROPOSED CUSTOMS SIMPLIFICATION ACT OF 1953. H. R. 5106, SUBMITTED BY TOBACCO ASSOCIATES, INC., RALEIGH, N. C., AND BURLEY AND DARK LEAF TOBACCO EXPORT ASSOCIATION, Inc., LEXINGTON, KY.
JUNE 1, 1953. It has been generally recognized for a long time that the customs procedures of the United States are antiquated, cumbersome, and, in some cases, unjust. Unquestionably, this fact has been a deterrent to our foreign trade-restricting imports and thus limiting exports.
We, therefore, strongly recommend that the Jenkins bill, H. R. 5106, which modernizes and simplifies these outdated customs procedures, be acted upon favorably by your committee and the Congress.
There is a general feeling that this action is long overdue and is an absolute necessity in view of the changes which have occurred since these procedures were last revised.
The economic status of tobacco growers of the United States depends, to a large degree, on the level of United States foreign trade. Over one-fourth of the total tobacco produced in this country is exported. Exports of many United States commodities, including tobacco, would be substantially larger than they are at the present time if foreign countries could earn more dollar exchange by increasing the export of their goods to the United States.
Not only would many individual segments of our economy benefit by the enactment of this legislation but, even more important, our foreign relations would get a substantial boost at a time when it is much needed. Our allies must be able to do a substantial volume of trading with us if they are to steer clear of the Soviet orbit. This legislation would enable them to increase their level of trade with us. RANDOLPH S. TAYLOR,
Executive Secretary, Burley and Dark Leaf Tobacco Export Association, Inc.
J. B. HUTSON,
NATIONAL ASSOCIATION OF ALCOHOLIC BEVERAGE IMPORTERS, INC.,
Hon. DANIEL A. REED,
DEAR MR. CHAIRMAN: This association, the National Association of Alcoholic Beverage Importers, Inc., desires to go on record in support of H. R. 5106, Customs Simplification Act of 1953. This organization is a nonprofit trade association composed of American firms and American businessmen who import alcoholic beverages into the United States. Our members are responsible for the importation of more than 80 percent of all imported alcoholic beverages taxpaid for sale in the United States.
H. R. 5106 provides for amendments to certain administrative provisions of the Tariff Act of 1930 and related laws which would be very helpful to the efficiency in the moving of merchandise into the country. Although we support all provisions of this proposed act we especially support the following proposed provisions:
(1) Section (c) of section 315 of the Tariff Act of 1930 as provided in section 3 (a) on page 6 of H. R. 5106.
(2) The amendment to paragraph 812 of the Tariff Act of 1930 as provided in section 6 (a) on page 9 of H. R. 5106.
(3) The amendment to section 313 (c) of the Tariff Act of 1930 as provided in section 12 (b) on page 22 of H. R. 5106.
Very truly yours,
HARRY L. LOURIE, Executive Vice President.
SIBER HEGNER & CO., INC.
Re new customs simplification bill (H. R. 5106) by Representative Thomas A. Jenkins.
COMMITTEE ON WAYS AND MEANS,
House of Representatives, Washington, D. C.
GENTLEMEN: In view of the public hearings to be held on this bill commencing June 1, 1953, we wish to draw the committee's attention to one of the many problems an importer has to contend with concerning an administrative function of the Customs Division that could very easily be improved. We have reference to customs entries covering merchandise dutiable on weight basis.
Considerable time elapses from date of customs entry to date of liquidation, from as much as 6 months to a year or more, during which period an importer never knows what additional duty he may be liable for.
We cite, for example, one of our recent imports from Switzerland of rayon staple fibre yarn that arrived at New York on July 28, 1952, cleared customs on August 1, 1952, but was only liquidated on May 7, 1953 or more than 9 months from date of entry.
On liquidation we were notified that customs weighers report showed an increase in weight, thus increasing total value. As a result, additional duty was levied on higher value at ad valorem rate of 221⁄2 percent plus 64 cents per pound on the increase in weight. On the importation referred to the entered weight was 4,490 pounds and customs reported landed weight to be 4,503 pounds, an increase of 13 pounds as you will note from copy of custom broker's liquidation report attached for your information.
Is there any reason why an importer has to wait until entry is liquidated before he finds out that additional duty has been levied? Our suggestion is that when the goods are weighed by customs weighers at the dock, a copy of the weight report or at least the results thereof be passed on to the importer. Then the importer knows shortly after the goods have cleared customs whether any additional duties will be due on liquidation and can set up reserves if necessary. Otherwise, as it is now, the importer does not know if there will be any additional duty until liquidation when a notice is received (customs form 5107) that additional duty is due. If no additional duty is due, the importer hears nothing and never knows when the entry is finally liquidated.
We compliment the committee on their endeavors to enact legislation that will streamline and simplify our cumbersome customs regulations, and hope that definite results will be accomplished at the present session.
Very truly yours,
FREDERIC A. FERY, Jr., Assistant Secretary.