of the Congress" set forth in the act, he must make such finding public. The ad valorem duty upon the article shall, when his proclamation becomes effective,1 be based no longer upon its ordinary invoice value but upon its "Amer✅ican selling price ". The rate based upon the American selling price must be fixed by the President and must be just sufficient to equalize the differences in cost of production at home and abroad, subject to the limitation that it shall not be greater than the rate specified in the Act, nor less than such rate by more than fifty per centum thereof. This is an interesting survival of the principle of American Valuation, the general application of which to articles subject to ad valorem duties was provided for in the tariff bill as it passed the House.

3

'Fifteen days' notice is provided for.

"The American selling price of any article manufactured or produced in the United States shall be the price, 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 delivery, at which such article is freely offered for sale to all purchasers in the principal market of the United States, in the ordinary course of trade and in the usual wholesale quantities in such market, or the price that the manufacturer, producer, or owner would have received or was willing to receive for such merchandise when sold in the ordinary course of trade and in the usual wholesale quantities, at the time of exportation of the imported article.-Sec. 402, subdiv. (f); op. cit., p. 950.

In case there is no similar or competitive article produced in the United States the American selling price could not be determined. In that event the value for the calculation of the ad valorem duty remains the "foreign value" or the "export value ", which ever is higher. If neither of these can be ascertained satisfactorily, then the value for such calculation is the "United States value ", and if this cannot be satisfactorily ascertained, then the "cost of production".-Sec. 402 (a).

"Foreign value" is the price at which articles are freely offered for sale in the principal markets of the country of origin at the time of export.-Sec. 402 (b).

"Export value" is the price at which such articles are freely offered for sale for export to the United States.-Sec. 402 (c).

'United States value" is the price at which such articles imported from

In ascertaining differences in cost of production consideration is to be given, if practicable, to the differences in such elements as wages and cost of materials, to the differences in wholesale selling prices of domestic and foreign articles in the United States, to such governmental or other advantages, as may be granted to foreign producers and to any other advantages or disadvantages in competition. Investigations must be made by the United States Tariff Commission, and there may be no changes in duties except on the basis of such investigation. Reasonable opportunity to be heard must be granted to all interested parties. When the conditions which produce the altered duty have passed, the original duty may be revived or an appropriate modification proclaimed. Whenever in the schedules of tariff rates it is provided that a duty shall not exceed a specified ad valorem rate, no rate determined under Section 315 shall be greater than the maximum so specified.

(b) Section 316

In an address before the American Manufacturers Export Association delivered October 26, 1922, Dr. W. S. Culbertson, who is Vice Chairman of the United States Tariff Commission, said, in regard to Section 316 of the Tariff Act of 1922:

The second of these new provisions . . aims to protect American industry against unfair methods and unfair acts in the importation of goods. Under this section additional duties

abroad are freely offered for sale in the principal market of the United States. Sec. 402 (d).

The "cost of production" includes not only expenses for raw materials, fabrication and packing, but also for general expenses and limited profits. -Sec. 402 (e).

Any domestic coal-tar product mentioned in sec. 1, paragraphs 27 or 28, is to be considered similar to or competitive with any imported coal-tar product which accomplishes substantially equal results.-Sec. 315 (d).

may be imposed upon importations by any individual engaging in unfair price cutting, full-line forcing, commercial bribery, or any other type of unfair competition, and if the unfair competition is of an aggravated character, the offending person may be prohibited from importing goods into the United States. This is admittedly a difficult field, but it must be evident that in some such flexible provision as this lies the only hope of an effective protection of American industry against the variety and subtlety of the attacks which may be included under the term unfair competition.1

By this section

unfair methods of competition and unfair acts in the importation of articles. . . . . . or in their sale . . ., the effect or tendency of which is to destroy or substantially injure an industry, efficiently and economically operated, in the United States, or to prevent the establishment of such an industry, or to restrain or monopolize trade and commerce,

are declared to be unlawful. When the President, after investigation by the Tariff Commission, finds any such practice to exist, he is directed to levy upon the imported articles in question additional duties sufficient to offset the effect of the unfair practice, but not less than ten nor more than fifty per centum of their value. If he is satisfied of the existence of extreme cases of unfair acts, he is directed to exclude from entry into the United States such articles as he shall deem the interests of the country require, when sought to be imported by persons guilty of violating these pro

visions.

'From the mimeographed text released to the press. The text of Section 316 is given in Appendix 8.

"Value is defined in sec. 402. Section 316 may be considered as an important adjunct to anti-dumping legislation.

The Tariff Commission promptly issued detailed rules of procedure for the guidance of persons desiring it to make investigations under the three flexible-tariff sections.1 In his above-quoted address to the American Manufacturers Export Association Dr. Culbertson discussed them as follows:

They set forth how applications for investigations shall be made and under what conditions and in what manner the Commission will conduct formal investigations upon which the President may change the tariff law. Anyone can apply for an investigation. The application need not be in any special form, but it must be in writing and signed by or on behalf of the applicant. It must also recite the relief sought and the reasons therefor. Obviously, the mere filing of an application does not obligate us to proceed formally. We shall not order an investigation unless the application or a preliminary investigation discloses to our satisfaction that there are good and sufficient reasons for doing so under the law.

We can order a formal investigation upon our own initiative as well as upon application and we are not confined to the issues presented in an application; we may broaden, narrow, or modify the issues to be determined.

When we finally decide to proceed formally with an investigation, we shall issue and publish a notice of its nature and scope. Any person who then can show to our satisfaction an interest in the subject matter of the investigation may enter his appearance in person or by a representative. He will be notified of public hearings and afforded opportunity to offer such testimony as we may deem necessary for a full presentation of the facts. Our hearings will usually be open to the public. Evidence submitted will be subject to verification from the books and records of the parties in interest. In conjunction with hearings we shall conduct field investigations both in the United States and in foreign countries.

'The rules of Procedure are given in the sixth annual report of the U. S. Tariff Commission (1922), pp. 64 et seq.

In the case of formal investigations our procedure will be judicial in character. Our rules provide for the attendance and examination of witnesses, the production of documentary evidence, the issuance of subpoenas, and the taking of depositions. The commissioner or investigator in charge of any investigation will summarize the hearings and the information obtained by field investigation and will prepare a report. Parties of record will be permitted, before they file their briefs, to examine this report, as well as the record, except such portions as relate to trade secrets and processes.

Final hearings will, of course, be before the Commission. Parties of record may file briefs and in some cases present oral arguments. Our findings will be in writing, and will be transmitted with the record to the President for his action.1

2

During the first year of the operation of the Tariff Act of 1922 the Tariff Commission conducted numerous investigations and some public hearings; the first exercise of the rate-making powers conferred by the flexible-tariff provisions occurred, however, on March 7, 1924, when the President, under authority of Section 315, proclaimed:

An increase in . . . . duty on wheat from 30 cents per bushel of sixty pounds to 42 cents per bushel of sixty pounds;

An increase in . . . . duty on wheat flour, semolina, crushed or cracked wheat, and similar wheat products not specially provided for from 78 cents per hundred pounds to $1.04 per hundred pounds;

A decrease in . . . . duty on bran, shorts, and by-product feeds obtained in milling wheat (within the limit of total decrease provided for in said Act) from 15 per centum ad valorem to 71⁄2 per centum ad valorem.

Such is the Flexible Tariff as launched into American

'From mimeographed press release. See also Culbertson, "The Making of Tariffs," Yale Review, Jan., 1923.

'See current issues of Commerce Reports and press statements.