BOOK MANUFACTURERS' INSTITUTE, INC., Re hearings on H. R. 5505-Customs Simplification Act. Chairman, Senate Finance Committee, Senate Office Building, Washington, D. C. MY DEAR SENATOR: The only practical protection which the American printer and his employees has today against low-priced competition is the requirement in the United States copyright law that to obtain copyright protection such material must be manufactured in the United States. Tariffs are now so low that no protection against low-wage-rate countries is afforded and more and more competition from foreign publishers is being experienced. Foreign and domestic publishers are waiving copyright protection for some of their works and having them made abroad and then importing them into the United States. We protest the exemption granted in section 11 of H. R. 5505, "for articles imported otherwise than on the person or in the accompanying baggage of an individual arriving in the United States and the aggregate value of all articles in the shipment is not over $10.00, if the articles are intended for personal or household use of the consignee and not for sale, or $5.00 in any other case." This exemption would enable a foreign or an American publisher to establish a book publishing mail order business whereby books could be manufactured abroad in low-wage printing and binding plants and imported duty free in competition with American printers. The c. o. d. provision of the section would not act as a deterrent, for the books could be ordered and paid for in advance of shipment. Attached are copies of two letters which illustrate how very real competition from such substandard wage countries is in spite of the manufacturing clause of the copyright law. Sincerely yours J. RAYMOND TIFFANY. MARCH 13, 1952. Hon. EMANUEL CELLER, House Office Building, Washington, D. C. DEAR MANNY: I am sending you under separate cover a copy of a book called, The Spendthrifts, published by Farrar, Straus & Young, which seems to confound all the arguments of the publishers that American book manufacturers would lose nothing by the change of the copyright law. As you know, the argument has been that publishers would import chiefly technical works that would only enjoy a small sale here among scholars, research workers, etc. Now I find that here is an American publisher importing novels that have been completely manufactured abroad. The Spendthrifts, for example, was printed in Austria and then the sheets were sent to England for binding and finished books were sent to America for distribution. Now, under the proposed copyright bill these books would come in here and would be protected, and where in the world are we American book manufacturers going to be if we have to compete with this type of situation? American publishers can't even afford to print in Chicago and ship sheets to New York for binding because of the costliness of such a procedure, and yet they can ship sheets all over Europe and then send the bound books across the seas to us and obtain copyright protection. Upon inquiry to the publisher, I find that this particular book is not the only book of fiction that he has had done this way. He has imported other novels and sold them here successfully. Apparently this publisher has no copyright on these books and apparently he doesn't care and is perfectly willing to risk piracy. 98600-52-21 Now if he is not interested in even copyright protection on his novels, then certainly we should have manufacturing protection on those books that publishers do think worthy of copyright protection. Sincerely, SIDNEY SATENSTEIN. [From the Publisher's Weekly, March 29, 1952] SIMPKIN MARSHALL. HEAD BUYS BRITISH BOOK CENTRE Capt. I. R. Maxwell, managing director of Simpkin Marshall, Ltd., the major British wholesale bookseller, has purchased controlling interest in the British Book Centre in New York from the Dunstead Trust and has announced a vigorous program of future expansion of the Book Centre's operations in the United States, projects which, if successful, will alter the entire character of British book distribution in this country. [Emphasis added.] Interviewed in New York shortly before flying back to England last week, Captain Maxwell outlined for PW his plans for the Book Centre. "In giving 100 percent complete and efficient service to the American book trade," Captain Maxwell said, "we will guarantee that any British publication will be in New York within 7 days of the time it is published in England. As soon as we can acquire additional warehouse space, we will stock books of all British publishers, not just those that have in the past been represented here by the British Book Centre. [Emphasis added.] In other words, the Book Centre in New York will become a replica of Simpkin Marshall and will be backed up by Simpkin's as far as availability of stock is concerned." The British Book Centre here is not, however, under the financial control of Simpkin Marshall or any other firms controlled by Captain Maxwell. His intention, furthermore, is to reduce the conversion factor-currently 22 cents to the shilling-at which British books are sold in this country. [Emphasis added.] Other elements of Captain Maxwell's plan for the British Book Centre are the establishment of a foreign department which will accept orders for any European publication; a publishing operation to bring out here scholarly and nonfiction titles also published by other firms in the United Kingdom; and the creation of the British Book Club to distribute monthly selections chosen by an Anglo-American board of judges. Trade and consumer advertising of British books will be increased, Captain Maxwell told PW, and the British Book Centre will publish a monthly trade bulletin for bookstores with imprint for bookstore distribution, Books To Come, being taken over by Simpkin Marshall from the Central Office of Information, and the British Books of the Month, an established Simpkin Marshall service. A magazine subscription department will also be set up within the British Book Centre. The British Book Centre in New York was originally established by B. T. Batsford in 1949; controlling interest was acquired by the Dunstead Trust last year (PW, April 14, 1951). Ronald Freelander, formerly general sales manager of the McGraw-Hill Publishing Co., Ltd., London, continues as executive vice president of the British Book Centre. Kenneth MacKenzie remains secretarytreasurer and sales manager. The Honorable W. W. Astor, Ronald Tree, and Walter Pierre Courtauld, who had interests in the Dunstead Trust and the center, continue as minority stockholders of the center. Captain Maxwell bought Simpkin Marshall from Sir Isaac Pitman & Sons last fall (PW, December 1, 1951). He is already known here, primarily to libraries, as managing director of Lange, Maxwell & Springer, Ltd., a firm specializing in the export of British and foreign books and magazines of a technical and scientific nature. Early this year Captain Maxwell formed a new company, Simpkin's Sole Agencies, Ltd., a subsidiary of Simpkin Marshall, to handle the books of those publishers whose trade distribution is handled solely by Simpkin Marshall. The Simpkin Marshall operations will, within 2 months, be transferred to new quarters-four times the size of the firm's present location-at 242 Marylebone Road NW 1. Captain Maxwell is currently stirring up wide discussion in Great Britain of his proposed international direct mail order service for publishers based on a master list of 1 million names, broken down into specific categories. Hon. WALTER F. GEORGE, Chairman, Committee on Finance, United States Senate, Washington, D. C. THE SECRETARY OF COMMERCE, Washington 25, D. C., April 29, 1952. DEAR MR. CHAIRMAN: This is to advise you of my views with respect to H. R. 5505, a bill to amend certain administrative provisions of the Tariff Act of 1930 and related laws, and for other purposes. At the time early in 1951 when this legislation was introduced in the House of Representatives, this Department submitted a favorable report thereon, and subsequently, on August 10, 1951, I testified personally before the House Ways and Means Committee to the same effect. The bill now before you, as passed by the House, omits certain provisions that were in the original bill. Even without these provisions, however, H. R. 5505 is in my opinion highly desirable legislation and should be enacted, if at all possible, during this session of the Congress. We favor particularly those provisions which would directly simplify customs procedures and indirectly reduce the cost of customs operations. These include the general valuation provisions; the proposed increased use of informal entries; the proposed higher administrative exemptions for imports of small value; the free entry provisions for travelers and noncommercial exhibitions, temporary entry of samples and other similar articles; the provision on correction of errors; and the provisions dealing with supplies for vessels and aircraft, and with the signing and delivery of manifests. In addition, there are those provisions which would modify present unnecessarily arbitrary procedures in connection with special marking requirements; undervaluation penalties; and the treatment of commingled merchandise. It is important to note that all these provisions are concerned with the mechanics of importing, and would not change the present import duty structure. This Department is, of course, vitally interested in this legislation because of our concern and responsibility for the problems of business, and we are aware that the burden and costs of customs formalities fall first on American impo: ters. H. R. 5505 is, however, a somewhat unusual piece of legislation, in that it commends itself to almost all segments of our economy. By improving and simplifying customs procedures, it would benefit our import trade. It would also in some degree serve the consumer, and from the viewpoint of Government, it would improve and possibly make less costly our customs administration and thereby be of benefit to the taxpayer. One final consideration favoring enactment of such legislation at this time may be found in its small but not insignificant contribution to the objectives of our foreign aid programs. To the extent that simplification of our customs practices encourages foreign firms to take advantage of commercial possibilities in the United States market, it should reduce the cost and shorten the period of assistance which the United States is giving to various friendly foreign countries to help them get on a self-supporting basis. We are advised by the Bureau of the Budget that there would be no objection to the submission of this report to your committee. If we can be of further assistance to you in this matter, please call upon us. Sincerely yours, CHARLES SAWYER, Secretary of Commerce. STATEMENT OF ROY A. CHENEY, PRESIDENT, UNDERWEAR INSTITUTE, NEW YORK, N. Y. I am Roy A. Cheney and am president of the Underwear Institute, a voluntary association representing approximately 80 percent of production of underwear and fabric gloves in the United States. I would like to call attention of this committee to the real objection we have to section 321 of H. R. 5505, now being considered. By its title, this bill is designed to simplify present customs procedure. There is no objection to this. But in section 321 of this bill there is a provision that would invite a mass of foreign competition for American manufacturers. It is inconceivable that the author of the legislation appreciated the danger that lies in this one section. Our manufacturers of underwear in this country know competition well. When one enters this field he does so with the knowledge that to succeed hemust be able to serve the consumer with goods they want and at a price they are willing to pay. If he fails to so serve, he cannot stay in business. This we know. However, American manufacturers cannot compete with foreign underwear manufacturers under the circumstances that would be set up by this bill. We must maintain manufacturing plants. In order to serve our customers we must go into the market and buy materials and supplies in quantities to satisfy demands, and make up and manufacture styles and colors that will appeal. Besides the above we must hire help to man our mills and factories, promote the sale of goods, for, after all, the economy of this country prospers not because of the goods our underwear mills and glove factories produce alone, but rather upon what is sold across the counters of our wholesalers and retailers. Next comes the burden of taxes that are levied by the Federal, State, and local governments. Many States and many municipalities have sales taxes. Also, when we import foreign-made materials we must pay duty upon them before we can offer them for sale in the shape of finished garments. Contrast this situation with that of the alien operator, if this bill is passed. According to section 321 of H. R. 5505, a foreign operator, no doubt from a country that has been the recipient of billions in aid, partially paid by the taxes upon American manufacturers, wholesalers, and retailers, can advertise and sell in this country goods selling for $10 a shipment and mail them to our customers duty-free. The irony of this situation is that we would find some of the tax dollars we have paid being used to damage us. A foreign operator could place an advertisement in a newspaper or magazine in the United States and offer to sell underwear, gloves, lingerie, and a host of other items. These items could be priced upward of $10. Realize that the alien advertiser does not maintain quarters in this country. He does not pay any real-estate, income, or other taxes. He pays no duties. He does not maintain a selling force. His only expense would be the advertisement. The members of our association representing glove and underwear manufacturers feel that this type of competition should not be permitted and we pray that this committee will erase this harmful section. An amendment to the House bill was considered by some to remove the harmful features of section 321. This amendment would prevent c. o. d. shipments under this bill. But, gentlemen, I can assure you that any foreigner who could offer for $10 a sweater, that an American manufacturer could not produce for less than $12 or $14, would not be discouraged by the ban against c. o. d. shipments. We honestly believe that this section is unfair and unjust and places upon several segments of our economy a double load. The retailer, wholesaler, and' manufacturer would be forced to help pay the bill for foreign aid and then beplaced in jeopardy by foreign competition created by this proposed legislation. Please let me urge you to a serious consideration of this request. The members of our association sincerely hope that the committee will delete section 321 of H. R. 5505. NATIONAL MILK PRODUCERS FEDERATION, Hon. WALTER F. GEORGE, Chairman, Senate Finance Committee, Senate Office Building, Washington, D. C. DEAR SENATOR GEORGE: We would like to have inserted in the hearing record this brief statement of the position of the National Milk Producers Federation on H. R. 5505 relating to customs simplification. The federation, as you know, represents some 450,000 dairy-farm families and the cooperatives which they own and operate and through which they act together to process and market their milk. Our members are not concerned directly with customs procedures and formalities. The general principle of customs simplification, if limited to that, appears to be sound and desirable. Protection of domestic industry should be accomplished by direct means and not through cumbersome customs procedure. H. R. 1535, as introduced, contained several objectionable features; mostly matters other than customs simplification, and the federation appeared at the hearings before the House Ways and Means Committee in opposition to some of those features. We opposed the reduction of the tariff on adulterated butter and filled cheese. In connection with the proposal to change the present 3-cent processing tax on -coconut oil, palm oil, and palm-kernel oil to an import tax insofar as it applies to imported raw products, we asked that the status of the tax under the trade agreements be left unimpaired. To that end, we recommend that the processing tax continue to apply to domestic products and that the prohibition in the bill against modification of the import tax through trade agreements be retained in the final enactment. All of these matters were taken care of by the House committee. In addition, other provisions of H. R. 1535 not relating directly to customs simplification were deleted when the clean bill (H. R. 5505) was reported and passed, and a section was added to make it clear that the passage of the bill would not indicate approval or disapproval of the General Agreement on Tariffs and Trade. The federation would oppose any change in H. R. 5505 which would undo the above improvements made in the House. We are not sure of the effect of subsection (e) of section 22 of H. R. 5505 (p. 41), relating to taxes imposed under section 2491 of the Internal Revenue Code where the tax would be in contravention of a trade agreement. If this subsection is retained in the reported bill, we would like the committee to consider adding a statement in the report to the effect that this subsection would not affect the treatment of the import taxes set up in lieu of processing taxes by section 22 of the bill. The dairy farmers in this country are desperately in need of protection against imports from countries where wages and standards of living are lower. Uncertainty over the effectiveness of such controls after July 1 is already having an adverse effect in relation to prices, planning, and commercial storage. If section 104 of the Defense Production Act is not extended, our domestic source of supply of a vital and essential food will be impaired at a time when we can least afford to rely on foreign sources. But, as indicated above, we believe that issue should be met directly and not through opposition to customs simplification. Sincerely yours, (Signed) Chas. W. Holman, CHARLES W. HOLMAN, Secretary. CARPET INSTITUTE, INC., New York City, April 30, 1952. Memorandum re customs simplification bill (H. R. 5505). COMMITTEE ON FINANCE, United States Senate, Washington, D. C. I. STATEMENT GENTLEMEN: This memorandum is submitted by the Carpet Institute, Inc., which represents over 90 percent of the domestic manufacturers of wool carpets, rugs, and floor coverings. We are in favor of any action which would simplify technical procedures in connection with the administration of the customs laws. However, we do not believe that any action should be aken which would directly or indirectly result in the equivalent of a reduction in present greatly reduced tariff rates of duties. Your committee is, of course, familiar with the fact that there have been many trade agreements negotiated with foreign countries under the Trade Agreements Act of June 12, 1934, as extended from time to time. The rates of duty prescribed in the said act of 1930 on wool carpets and rugs have been reduced in some cases as much as 75 percent and any action which might indirectly result in a further lowering of these duties would be harmful to our industry. We filed a memorandum with the Committee on Ways and Means dated September 7, 1951, with reference to the bill which was then pending before that committee and which was designated as H. R. 1535. The committee, however, when reporting said H. R. 5505 to the House on October 1, 1951, stated in part on page 2 of its report: "Your committee held extensive hearings on H. R. 1535 and deliberated at length on it in executive sessions. H. R. 5505 was introduced as a clean bill and reflects your committee's decisions on, and amendments to, H. R. 1535. The present bill, as a result of these hearings and deliberations, is truly a customs simplification bill. |