of exportation at fixed prices, "less varying discounts, depending upon the status of the customer"; that the manufacturer did not issue printed price lists; that orders for the cards and calendars were taken by salesmen representing the manufacturer; that a "separate series of numbers is assigned each group of cards selling at the same price and these numbers denote to the traveler [the manufacturer's salesmen] the selling price"; that the "first number of a series indicates the year in which the designs were offered"; and that he had been told by "Mr. Savory" that no alteration would be made in the prices which had remained the same for several years. The witness then stated:

There is reproduced below a complete list of all series of standard lines of cards and calendars sold both in the home market and to Dennison, together with the manufacturer's home-market price per gross or per dozen.

The manufacturer does not encourage a wholesale business as they maintain a staff of salesmen who call upon the retail trade to solicit orders.

There are approximately 1,200 customers in the home market who purchase cards and calendars and all are retailers except four. Three of these four customers are wholesalers and one a retail firm operating chain stores to whom preferential treatment is given in the matter of discounts because of the large volume of annual business.

The wholesalers are granted higher discounts because of their status as such “irrespective of the quantities purchased."

Discounis:

It is customary in the home trade to solicit orders in May or June, deliveries to be made in the autumn, settlement to be made in January.

10% for settlement January. 2% cash, only if paid within 14 days from date of invoice.

CARDS AND CALENDARS

W. Ritchie & Sons, Ltd. (wholesalers):

25%, 5%, and 22% for settlement in January. Extra 21⁄2% if paid within 14 days from date of invoice.

For the year 1931, an extra 5% for all business in excess of £350, which is the total amount of business for the year 1930.

CARDS

W. H. Smith & Sons, Ltd. (wholesalers): 25% & 10% settlement January.

CALENDARS

25% & 22% settlement January. Extra 22 % if paid within 30 days from date of invoice.

CARDS AND CALENDARS

Dennison Mnfg. Co., London (wholesalers):

33%% trade. 22% cash only if paid within 7-10 days from date of invoice.

CARDS AND CALENDARS

Boots Pure Drug Co. (chain stores):

1930-25% & 22% settlement January.

1931-Cards-For total order of £1,500 nett, an extra 22%. If not less than £2,000 nett, 5% extra.

Calendars. For total order of £500 nett, an extra 5%. This order has been placed. If not less than £1,000 nett, 10% extra.

Proportion of business at various discounts:

Mr. Savory refused to permit me to make an analysis of sales to determine the proportion of the total annual business done at each trade discount, for the reason he stated, that he could not divulge to anyone, not a member of the firm, this highly confidential information. He did state, however, that by far the greater proportion of the total annual business is done with retailers. This is apparent, since there are approximately 1,200 retailers who purchase cards and calendars, to only four (4) firms who are treated as wholesalers.

Retailers purchase from 2 doz. to 3 doz. each number, a total of from 5 dozen to 42 dozen in a yearly order.

The average is approximately 8-10 dozens.

Wholesalers purchase in quantities of 6, 12, and 24 dozens each number. Last year (1930) W. H. Smith & Sons purchased 90 dozen.

CARDS

Retailers purchase from 1⁄2 doz. to 1 dozen of a number and a total of from 5 to 50 dozen.

Wholesalers purchase in quantities of 12, 24, & 36 dozen of one number. 1930, Boots Drug Co. purchased 57 gross. (Italics in body of quote ours.)

In

The importers introduced in evidence Exhibit II, an affidavit of Mr. Ernest Wyman Savory, wherein the witness stated that he was at that time, and had been for 32 years, a director and chairman of E. W. Savory, Ltd., of Bristol, England; that he was intimately acquainted with the affairs of his company; and that, due to the fact that he had personal contact with the trade during that period of time, he had

personal knowledge of the customs of the trade in the British Isles dealing in Christmas greeting cards and calendars (hereinafter referred to as "the said goods") such as supplied by the company to the Dennison Manufacturing Company, of Framingham, Massachusetts, U.S.A., and to retailers and wholesalers in the British Isles.

During the year 1931 practically all of our sales to our wholesale customers (Boots Pure Drug Co., W. Ritchie & Sons Limited, W. H. Smith & Son Limited, and Dennison Manufacturing Company) have been in the usual wholesale quantities in the ordinary course of trade in the said goods in the British Isles viz, one gross each or more for the cheap items and one half gross each or more for the expensive items except for a few sales made as an accommodation to these customers, of say a dozen or so of an item, and the average value of shipments to these customers has been approximately four hundred and ten pounds sterling and the average quantity has been approximately three hundred and ten gross, whereas, on the other hand, all of our sales to the retailers have been in less than the usual wholesale quantities hereinbefore stated, and shipments have ranged in value from five shillings upwards.

On this record the trial court held that the usual wholesale quantities in which the involved merchandise was sold in the "British Isles" were the "quantities purchased by the wholesalers and not the smaller quantities purchased by the retailers", and that the entered values represented the foreign values of the merchandise. Judgment was entered accordingly.

The Appellate Division of the Customs Court, on the Government's application for a review of the judgment of the trial court, in an opinion by Cline, Judge, held that the foreign values of the merchandise were the prices paid by the "retailers", that is, the basic prices set forth in the report of the special agent, less discounts of 10 per centum and 21⁄2 per centum, plus costs of containers and coverings of whatever nature, and all other costs, charges, and expenses incident to placing the merchandise in condition, packed ready for shipment to the United States, and, accordingly, reversed the judgment of the trial court. In the course of its opinion, the court, after carefully considering the evidence in the case, stated:

On the evidence presented, we believe that the trial court erred in finding that the price paid by "wholesalers" in the foreign market represents the foreign

market value of this merchandise, as defined by section 402 (c) of the Tariff Act of 1930. We find that the weight of the evidence herein establishes that the greater portion of the total annual business of this manufacturer consists of sales to 1,196 retailers in usual wholesale quantities of less than 1 gross each of the cheap items, and less than one half gross each of the expensive items, at fixed unit prices less discounts of 10 per centum and 21⁄2 per centum; and that sales are made, usually in larger quantities, to 4 preferred customers, 3 of whom are granted larger discounts by reason of their status as "wholesalers", irrespective of the quantities purchased, and the fourth, a chain store, being granted preferential discounts by reason of its unusually large purchases.

With reference to a few items on the invoices for which no unit or basic prices appear in the report of the special agent, the court held:

* * We note that the unit prices of a few items involved in the cases at bar are not shown in Exhibit 1. As to those items, the unit prices returned by the appraiser, which are presumptively correct under section 501 of the act of 1930, must prevail.

It is contended by counsel for appellants that the Appellate Division of the Customs Court erred in not affirming the judgment of the trial court; in finding and holding that the usual wholesale quantities of the involved merchandise were "less than 1 gross each of the cheap items, and less than one half gross each of the expensive items"; in not finding and holding that the sales in the usual wholesale quantities, and in the ordinary course of trade in the "British Isles", were at trade discounts of 25 per centum and 10 per centum for the cards, and 25 per centum and 21⁄2 per centum for the calendars. Counsel for appellants further contend that the sales to the "retailers" do not constitute sales in the usual wholesale quantities; that, if the sales to the wholesalers do not represent foreign values, the court should have held that the sales of the involved merchandise were restricted to two classes of purchasers-wholesalers and retailers; that the merchandise was not freely offered for sale to all purchasers, within the statutory definition of foreign value; and that, therefore, the evidence was not sufficient to overcome the presumption of correctness attending the appraiser's decisions.

It is contended by counsel for the Government that the burden was upon appellants--the importers-before the trial court to overcome. the presumption of correctness attending the local appraiser's appraisements, and, as they failed to overcome that presumption by competent evidence, "their appeal was subject to dismissal, in which event the appraised values should have been affirmed by the trial court"; and that there is substantial evidence of record to sustain the judgment of the Appellate Division of the Customs Court.

Section 402 (c) of the Tariff Act of 1930 reads:

SEC. 402.

(c) FOREIGN VALUE.-The foreign value of imported merchandise shall be the market value or the price at the time of exportation of such merchandise to the United States, at which such or similar merchandise is freely offered for sale to all

purchasers in the principal markets of the country from which exported, in the usual wholesale quantities and in the ordinary course of trade, including the cost of all containers and coverings of whatever nature, and all other costs, charges, and expenses incident to placing the merchandise in condition, packed ready for shipment to the United States.

It has been held repeatedly by this court that, under the Tariff Act of 1922, no presumption of correctness attended the appraisement of the local appraiser, and that, on an appeal from his decision, the proceeding before the trial court was a trial de novo. Johnson Co. v. United States, 13 Ct. Cust. Appls. 373, T.D. 41318; United States v. Tadross & Co. et al., 14 Ct. Cust. Appls. 10, T.D. 41528; Happel & McAvoy, Inc. v. United States, 16 Ct. Cust. Appls. 161, T.D. 42791; Meadows, Wye & Co., Inc., et al. v. United States, 17 C.C.P.A. (Customs) 36 T.D. 43324; United States v. T. D. Downing Co., 20 C.C.P.A. (Customs) 251, T.D. 46507.

However, section 501 of the Tariff Act of 1930 provides, among other things, that

The value found by the appraiser shall be presumed to be the value of the merchandise and the burden shall rest upon the party who challenges its correctness to prove otherwise.

Accordingly, we must hold that, in the case at bar, the values found and returned by the local appraiser in each of the cases involved herein were presumed to be correct, and that the burden rested upon the importers, in Reappraisement 100788-A, and upon the Government, in the other six reappraisement cases, on the trial before the associate judge sitting in reappraisement, to overcome the presumption of correctness attending the appraisements of the local appraiser. See Golding Bros. Co., Inc. v. United States, 21 C.C.P.A. (Customs), T.D. 46926.

We are unable to agree with counsel for appellants that the prices paid by the wholesalers, W. Ritchie & Sons, Ltd., W. H. Smith & Sons, Ltd., Dennison Manufacturing Co. of London, England, and the retail firm, Boots Pure Drug Co., operating chain stores, to each of whom the special agent reported preferential treatment was given in the matter of discounts, to the last-named company because of the large volume of annual business transacted by it, and to the wholesalers on account of their status, without regard to the quantities purchased by them, constitute the market value or prices at which such merchandise was freely offered for sale to all purchasers in the country of exportation. There is not only substantial evidence to sustain the holding of the Appellate Division, that those purchasers received preferential treatment in the matter of discounts, but it also clearly appears, as held by the court, that the discounts given to them, and, accordingly, the prices paid by them, were not uniform. In fact, no two of them paid the same prices. Accordingly, as the