to possible amendments to the act of June 10, 1890, known as the customs administrative act, I have the honor to reply as follows: (1) I respectfully urge the enforcement of section 9 of this act, which has hitherto been ignored. The action of this office on September 8, 1897, first called into use the provisions of this section. We have now secured in the United States circuit court a decision which justifies the application of the forfeiture to all packages which are represented by the importer to be subject to a lower rate of duty or to a less amount of duty than is warranted by the facts. Such representation may be written or oral and may be included as a part of the invoice or on a separate paper, and it may be fraudulent or merely false. If enforced this will prove to be a powerful weapon in the hands of the Government for the securing of accurate and honest invoicing. (2) The proportion of entries which have dutiable values advanced in this division is exceedingly small in nearly all lines, probably from 1 to 2 per cent, excepting invoices of plants and bulbs, of which we advance from 5 to 10 per cent. In this connection it might be proper to add that in the classification of leaf tobacco we advance something over 50 per cent of invoices received, making the rate $1.85 per pound as against an entered rate of 35 cents per pound, the advance amounting to $1.50 per pound. This, however, is an advance of classification, and not an advance of value. (3) The cases of deliberate undervaluation, where the evidence is convincing, are exceedingly small in number. It would be a difficult matter to ascertain or to state the number. With our invoices of plants, where excess of goods are found, it is our opinion that this in many cases is done with intent to defraud. (4) The examiners report that in their opinion all undervaluations are discovered. The assistant appraiser believes the number undiscovered to be small, but arrives at this opinion from general conclusions based upon the thoroughness and integrity of the men attached to this division, whose honesty and efficiency he rates high. It would be impossible to give any estimate based on actual facts. (5) Undervaluations are most frequent in the case of consigned groceries and purchased plants. A large proportion of goods assigned to this division are assessed at specific rates of duty, and therefore in such cases no incentive to undervalue goods exists. (6) The greatest difficulty in determining market values is in fruits, vegetables, and other articles which depend largely upon the crop from year to year; also on merchandise manufactured from fruits and vegetables. (7) The operation of the ten-day bond is unsatisfactory in most cases. (8) Lack of information precludes the possibility of an intelligent answer as to uniformity of appraisement in the various ports of the United States. This is a matter of vital importance, and it is respectfully urged that the Department be urged to devote more attention to this subject. (9) It is the opinion of this office that business would be facilitated if the consignee or agent should be allowed to make additions to the invoice at the time of entry, provided that the market value at the time of exportation be made the basis of the appraisement, as is now done. (10) It is the opinion of this office that the appraisement should be based upon the actual market value on the day of shipment. The rule now in force penalizes ignorance, for in case of excessive valuation it is manifest either that an error has been made or that ignorance of the actual market value has led to such entry as is clearly not designed to defraud the Government of its just dues. Respectfully submitted. T. C. WORDIN, Assistant Appraiser, Tenth Division. STATEMENT OF R. W. MOORE. OFFICE OF THE APPRAISER OF MERCHANDISE, Hon. W. F. WAKEMAN, United States Appraiser. SIR: Referring to the ten questions or propositions submitted by you on November 17, I have to answer as follows: I would state that the answers to many of the questions are based upon my seven years' experience as examiner of chemicals in the seventh division. (1) In relation to the provision of the administrative act which imposes a double duty upon each per cent of advance over the invoice value, it is my opinion that a margin of 5 per cent might be properly allowed, and an advance up to this point permitted without additional duty accruing. In practice it is not found that values on the same goods are absolutely uniform when purchased by different houses, and that a variation to the above extent, but not beyond, is frequently encountered. The collection of the additional duty or the advance of 1 per cent only is so much in the nature of a hardship that it is my opinion that many appraising officers would make an advance of this nature with reluctance. (2) The proportion of entries advanced over entry values is a matter of record and can be ascertained by reference to the books in the appraiser's department. (3) My experience has been that it is very seldom that an importer deliberately tries to undervalue his goods with intention of defrauding the revenue. Owing to differences of opinion between the appraising officers and the importer as to actual market value at time of exportation, many advances are made, but in a majority of instances the importer honestly believes that the price paid by him for his goods is the correct market value. I (4) Undervaluations through error, inadvertence, or intent are discovered by the appraising officers in almost every instance. think it fair to state that undervaluations through error and inadvertence are often called to the attention of the appraising officers by the importer of the goods before the goods are examined. (5) Undervaluations are as frequent in case of purchased goods as in the case of consigned goods. They are most frequent in the case of goods imported solely by one importer. (6) The greatest difficulty in determining market value is experienced in appraising novel and special goods and those exclusively controlled by one importing house. (7) I have no information on this point. (8) Highly desirable as a uniform appraisement of values in the different ports of the United States would be, it is my impression that such a state of affairs does not exist. (9) The addition to value at time of entry on the part of the consignee or agent would not, in my opinion, interfere with the proper collection of duties in the case of consigned goods, but permission to make such addition would, in many cases, add to the amount of revenue collected. (10) It is essential that duty shall not be assessed upon a less valuation than that of invoice except in cases of manifest clerical error. It would, in my opinion, facilitate the disposition of cases before the Board of General Appraisers if, in cases where a change in classification is based upon a chemist's report, a full copy of the report, as obtained from the United States Laboratory, was forwarded with the answer to the protest, together with all marks, numbers, including laboratory number, which lead to the identification of the sample and shipment. R. W. MOORE, Chemist in Charge, United States Laboratory. Very respectfully, STATEMENT OF G. F. CROSS. Senator PLATT, of Connecticut. What position do you occupy in reference to the matter of collecting duties; what is your official position? Mr. CROSS. I am a special agent of the Treasury Department. Senator PLATT, of Connecticut. Are you chief of the special agents? Mr. CROSS. I am in charge of what is called the second special agency district. That takes in Bridgeport, New Haven, Hartford, Albany, Perth Amboy, Newark, and some subports. Senator PLATT, of Connecticut. And New York? Mr. CROSS. And the city of New York. Senator PLATT, of Connecticut. How long have you been a special agent of the Treasury Department. Mr. CROSS. I have been a special agent of the Treasury Department about nine years. Senator PLATT, of Connecticut. Have you been all of the time in the same position you hold now? Mr. CROSS. No, sir. I was special inspector at one time, before being promoted to the special agency. I was stationed first in Pittsburg. From there I was ordered to Sault Ste. Marie to help establish across the international bridge there the customs business. From Sault Ste. Marie I was ordered to Cincinnati; from Cincinnati again to Pittsburg, and from Pittsburg to New York. Senator PLATT, of Connecticut. What are your duties here? Mr. CROSS. I have charge of the agents, special employees, and special inspectors assigned to duties in this district. Our duties embrace very nearly everything connected with the customs service, including the conduct of officers. We frequently have to make examinations of the customs officers in this district; all questions referred to us by the Department. Authority to expend money is asked for, and such requests are referred to us to investigate and report and make recommendations. Senator JONES, of Arkansas. To whom do you report? Senator PLATT, of Connecticut. You are not under the collector? Mr. CROSS. No, sir. Senator PLATT, of Connecticut. You are immediately under the Treasury Department? Mr. CROSS. Yes, sir. Our immediate officer is the Assistant Secretary of the Treasury, in charge of customs. Senator PLATT, of Connecticut. Do you consider it a part of your duty to detect frauds upon the revenue? Mr. CROSS. Always. Senator PLATT, of Connecticut. And, in addition to that, have you general supervision of the business of the port? Mr. CROSS. It is a general supervision to the extent of wherever we discover any failure upon the part of customs officers to conform to the regulations and forms established by the Department to report the same to the Department. " Senator JONES, of Arkansas. You have no power to correct the action of an officer? Mr. CROSS. We have no power to correct the action of an officer. Senator PLATT, of Connecticut. If there is anything going on that ought not to be indulged in, you are expected to find it out and report it? Mr. CROSS. Yes, sir; and frequently where a charge is made by one officer against another, which goes to the Department, it is sent to us for investigation and frequently for us to make recommendation. Senator PLATT, of Connecticut. Have you or not become familiar with the whole business of collecting duties on imported goods? Mr. CROSS. We have to become familiar with the methods, so far as they are known. Up to the present time the ascertainment of the foreign value of goods is difficult in many instances. Senator PLATT, of Connecticut. Practically, you know what is going on in all the divisions of the service here? Mr. CROSS. It is our business to know, so far as we are able. Senator PLATT, of Connecticut. Do you think of any improvement that could be made in what is called the customs administrative law or the administrative features of the customs laws? Mr. CROSS. Here is a letter which I wrote. I did not know that you would want to examine me. I will read it to you, and perhaps you will desire to ask me some questions in regard to it. The letter is as follows: OFFICE OF THE COLLECTOR OF CUSTOMS, Port of New York, November 22, 1898. Hons. O. H. PLATT, J. K. JONES, and NELSON W. ALDRICH, Subcommittee of the United States Senate Finance Committee. SENATORS: In conformity with the request of the Hon. Mr. Platt, for me to answer certain questions which he submitted, as follows: (1) Any suggestions whereby the customs-administrative act might be improved so as to facilitate business convenience and the proper administration of duties? (2) What proportion of entries have dutiable values advanced over the invoice prices? (3) In what proportion of cases where the dutiable value has been increased is it probable that an effort has been deliberately made by the importer to undervalue his goods? (4) To what extent is it probable that undervaluations, either through error, inadvertence, or intent, are discovered by the appraisers? (5) Are undervaluations most frequent in case of goods purchased abroad, or in case of consigned goods? (6) In which class of goods is there the greatest difficulty in determining the market value? (7) How does the ten-day bond operate? (8) Is there a uniform appraisement of values in the different ports of the United States? (9) Would it interfere with the proper collection of duties if the consignee or agent were allowed, at the time of entry, to make additions to the invoice value? I have the honor to inform you that I have no suggestions to make concerning the improvement of the customs-administrative act. In answer to the third question, I have to state that from July 1, 1897, to June 30, 1898, the number of entries liquidated, subject to ad valorem duty, were 106,700. Out of this number 10,209 of the invoices were advanced. This does not include the entries made of merchandise free or specifically provided for. The additional duties accruing by said advances amounted to $2,261,642, and the penalties to $108,545. In answer to the fifth question, undervaluations are most frequent in cases of consigned goods. In answer to the sixth question, it is the opinion of this office that the greatest difficulty in determining market value is on textiles known as fancies" or "novelties." 66 In response to the seventh question, I have to say that the operations of the ten-day bond are against the interests of the Government, The importer, when called upon to furnish the 90 per cent of the merchandise in his possession by the operations of this bond, seldom produces the goods. I believe it should be so amended as to make it a penalty bond and limit its cancellation to three days after the collector of customs receives the return of the appraiser. A sum double the estimated duties, in my opinion, is sufficient, if the bond is so drawn as to make the importer accept it as a liquidated damage. The appraiser can not appraise or correctly describe goods in a mixed invoice unless he has the merchandise before him. In response to the ninth question, I am of the opinion that it would not interfere with the proper collection of duties if the consignee or agent were allowed at the time of entry to add a sufficient sum to make market value. I have no data at my disposal that will justify me in answering the other questions. Very respectfully, G. F. CROSS, Special Agent. Senator JONES, of Arkansas. What do you mean by changing the ten-day period to a period of three days-to begin when? Mr. CROSS. To begin three days after the collector receives the return of the appraiser. Senator JONES, of Arkansas. To begin when the collector receives it? Mr. CROSS. Three days from that time. Senator JONES, of Arkansas. Then you would recommend the abolition of the ten-day bond? Mr. CROSS. I recommend the amendment of the law which authorizes the ten-day bond, so as to Senator PLATT, of Connecticut. The importer is now bound to produce the goods at any time within ten days after the collector receives the return of the appraiser. You would have him bound to produce the goods for three days after that time? Mr. CROSS. Three days after the collector receives the return of the appraiser the bond stands canceled. Senator JONES, of Arkansas. And in all other respects leave it as it is? |