Mr. COUCH. The value is what the appraiser must find. The point is to inform appraisers so that they will act along common lines.

Senator JONES, of Arkansas. It may be possible for one customhouse to be advised that another custom-house has ascertained the value of a certain staple class of goods to be so much in the country from which exported at a certain time, as a matter of information solely to the other custom-houses, but not as a governing factor? Mr. COUCH. Simply as a guide.

Senator JONES, of Arkansas. As a matter of information.

Mr. BIDWELL. I have no doubt that when you get to the general appraisers they will have some suggestions to make whereby there can be uniformity of appraisement.

Senator JONES, of Arkansas. That is their particular field.

Mr. BIDWELL. It seems to me that that bureau is a very important one to the Government, and would be very important in the line of getting uniform appraisement if it were enlarged to an extent where the appraisers can have supervision over appraisements in all the important ports.

Senator PLATT, of Connecticut. Suppose the special agents of the Treasury Department were charged with the duty of going about from port to port, and examining the work there, and informing the officers of the ports as to how articles were valued, treated, and classified in other ports; would not that help? That would be an enlargement of the work of the special agents.

Mr. BIDWELL. Yes, there might be special agents acting under the immediate direction of the general appraisers for that purpose. Let me say, as an illustration of that point, that the appraiser here bore down pretty heavily on tobacco, on the question between wrapper and filler. It was developed that tobacco entered here, which was classified as wrapper, could be entered at some other port as filler.

Senator JONES, of Arkansas. That was classification?

Mr. BIDWELL. Yes.

Senator PLATT, of Connecticut. The Department sent an appraiser from here to Florida?

Mr. BIDWELL. I think they did. The Department, on the question of tobacco, endeavored to have all the ports understand, if they could, the line between wrapper and filler, so that the classification should be the same at all the different ports. It was a great discrimination, of course, against the business of New York, where we held right down to a strict line of wrapper and filler, that they could take the same tobacco which we called wrapper and bring it through some other port as filler.

Take the St. Gall goods. There is a staple which undoubtedly is used in every port and every city and every town in the United States. When they commenced the advance of St. Gall goods, in my opinion, if they did not they should have taken means to advance invoices of St. Gall goods at all ports, because St. Gall embroideries, invoiced at 18 centimes per 100 stitches, were here advanced 25, 30, or 40 per cent, and importers were still getting them through Buffalo or Philadelphia or Baltimore at 18 centimes. That was a discrimination not only against the business of the port of New York, but against the business of importers.

4

Senator PLATT, of Connecticut. And against the merchants of the port where the advances were made?

Mr. BIDWELL. Yes.

Senator JONES, of Arkansas. There can be but one correct valuation under the law, and that is the market price in the principal markets of the country from which the article comes, at the time of its exportation from that country. There may be difference of opinion about what that is, but there is but one correct value. The others are overvaluations or undervaluations.

Senator PLATT, of Connecticut. Inevitably under the present system there must be a more careful and intelligent examination at the port where they have experts than where they have none, or few.

Mr. COUCH. May I add one word to what you were saying, Senator? The dutiable value is the market value as you defined it, and that is found by the legal appraising officers of the United States. Take section 13.

Senator JONES, of Arkansas. The fact is one thing. The finding of the Government officers is the finding of the fact, and it is conclusive on importers so long as it stands, but the duty of the officers is to find what the actual fact is on the other side.

Mr. COUCH. Precisely, as near as we can.

Senator JONES, of Arkansas. Yes.

Mr. COUCH. But the finding is the legal fact.

Senator PLATT, of Connecticut. A considerable part of the appraisement is appraisement on the wharf.

Mr. COUCH. There is a good deal of that.

Senator PLATT, of Connecticut. That has to be done quickly.

Mr. COUCH. And with reference to the matters you are discussing, none, or comparatively none; that is, with reference to the appraisement of values. The goods that are examined on the wharf are very largely goods which pay specific duties and on which the duty is collected by weight, measure, or gauge. Take, for instance, all liquors in casks. They are examined on the wharf. They are gauged there. The appraiser's sampler takes a sample of those liquors to determine the proof, and the examination of the sample determines the proof. Determination of the proof is made at the appraiser's stores.

Senator PLATT, of Connecticut. There is very little examination of ad valorem goods on the wharf?

Mr. COUCH. Comparatively little.

Senator PLATT, of Connecticut. If it is bulky material, like iron or stone or these heavier articles, the duties are usually specific?

Mr. COUCH. Very largely so, and even where they are ad valorem they involve the matter of weighing or measuring, or something of that kind.

Senator PLATT, of Connecticut. So that in your judgment there is not much opportunity for loss to the revenue by wharf appraisement? Mr. COUCH. Not from undervaluation.

Senator PLATT, of Connecticut. The determination of classification is made on the wharf, too.

Mr. COUCH. The examination is made by the appraiser with reference to what the goods are.

Senator PLATT, of Connecticut. Take a very common article, sugar, How is the ascertainment of its value made? The polariscopic degree determines the amount of the duty.

and

Mr. COUCH. Yes, sir. I can give you a sugar entry right now, you can see what it is. Here are the invoices [exhibiting]; here are the bills of lading [exhibiting]; here is the weigher's return [exhibiting]; that is the weight [indicating].

Senator PLATT, of Connecticut. Where is the polariscopic test made? Mr. BIDWELL. It is made in the laboratory, under the appraiser's direction.

Mr. COUCH. It is made in the chemical laboratory, in the appraiser's stores.

Senator PLATT, of Connecticut. From samples which are taken? Mr. BIDWELL. By him.

Senator PLATT, of Connecticut. By him, on the wharf?

Mr. COUCH. No; samples are taken by the appraiser.

Mr. BIDWELL. They are going to sample each bag. They have been sampling groups.

Senator PLATT, of Connecticut. How has the change of law, which permits goods to be shipped by express companies from, the port of exportation to the port of destination in this country by a continuous passage, operated? Has it resulted in any difficulty in collecting the duties, or does it work smoothly and well?

Mr. COUCH. I do not quite catch your point. There are three systems. There is a package law, where the goods are handled by express companies.

Senator PLATT, of Connecticut. That is recent?

Mr. COUCH. It is comparatively recent. There is the I. T. law, of which we have been speaking, and then there is a special law which was passed with reference to goods imported in American bottoms, by which entry is made by the express companies, and if they fail to deliver, they may return the goods and have the money refunded and the goods placed under general order. That is the latest diversion. Senator PLATT, of Connecticut. That is the law to which I refer, where goods sent by American vessels may be passed through the port to the point of destination in the hands of the express companies.

Mr. COUCH. Yes. In the form in which it passed and as we are handling it we have not had very much trouble with it.

Senator PLATT, of Connecticut. You do not think it is practically used for purposes of undervaluation?

Mr. COUCH. No.

Senator PLATT, of Connecticut. You have no examination here? Mr. COUCH. Oh, yes; the goods are examined and appraised and the duties collected here before they leave.

Senator PLATT, of Connecticut. Before they are sent inland; before they are delivered to the express companies?

Mr. COUCH. Yes. The venom was taken out of that measure before it was passed.

Senator JONES, of Arkansas. What law are you talking about? Mr. COUCH. The special express-forwarding law. As originally framed, it contemplated sending the goods right from the wharf. It was rather hazardous. Of course everyone of those specialties adds to the complexity of administration.

Senator PLATT, of Connecticut. What is the method of ascertaining the dutiable value of the goods thus shipped and forwarded?

Mr. COUCH. They are sent to the appraiser's stores in bulk instantly upon landing.

Senator PLATT, of Connecticut. All of them?

Mr. COUCH. All of them.

Senator PLATT, of Connecticut. You do not take samples?
Mr. COUCH. No, sir.

Senator PLATT, of Connecticut. You take all the packages?

Mr. COUCH. Yes, sir. They are sent to the appraiser's stores at once; the papers are made out here on the statement of the express companies, and are sent forward at once to the appraiser's stores to meet them, and whatever the duties are is paid, and the goods are delivered, corded, and sealed.

Senator PLATT, of Connecticut. They are handled expeditiously, I suppose?

Mr. COUCH. They are handled expeditiously; that is, as expeditiously as the volume will admit.

Senator PLATT, of Connecticut. I wish to recur to the ten-day bond. I understood you yesterday to say that if goods in the package examined were advanced, the advance would be applied to the same description of goods in the entire invoice?

Mr. COUCH. Yes.

Senator PLATT, of Connecticut. Suppose that the classification of the goods in the package examined is changed; is there any way of making the change of classification apply to the entire invoice?

Mr. COUCH. It would apply without any question at all if the description were the same.

Senator PLATT, of Connecticut. But, as a matter of fact, the package may contain a good many different kinds of goods; and may not other descriptions of goods in the packages not examined escape the proper classification?

Mr. COUCH. Yes, that is possible.

Senator PLATT, of Connecticut. Is it not really a practical result? Mr. COUCH. If the goods are properly invoiced, I do not think the appraiser would have much difficulty in determining the texture. Wherever he would have, he would be apt to call for the goods to be sent in.

Senator PLATT, of Connecticut. He would not get them?

Mr. COUCH. He may and he may not. It depends upon how pressing business is. The ten-day bond serves as a string upon the goods, so that we keep track of them, and it serves as a reminder, if you please. The question whether anything could be recovered by suing on the bond is still pending. If our contention should prove to be correct, it would strengthen the ten-day bond and give it force.

Senator JONES, of Arkansas. But suppose you find that there has been an undervaluation; when the final liquidation is made you ascertain the amount due from the importer just as if the goods were in the hands of the Government.

Mr. COUCH. Whatever the appraiser adds to the invoice, whether it be to an examined or an unexamined package, we include in the liquidation.

Senator JONES, of Arkansas. And an action brought on that would be brought on account of a debt due the Government, and not on the bond?

Mr. COUCH. It would be on a debt due the Government by liquidation.

Senator PLATT, of Connecticut. The penal amount of the bond is twice the value of the entire invoice?

Mr. COUCH. Yes; not the value, but the estimated duties.

Senator PLATT, of Connecticut. That is what I desire to know; is it the value of the invoice or the estimated duties?

Mr. COUCH. The estimated duties.

STATEMENT OF GEORGE R. BIDWELL.

Senator PLATT, of Connecticut. You are collector at the port of New York?

Mr. BIDWELL. Yes, sir.

Senator PLATT, of Connecticut. Have you any suggestions to make to the committee as to how the present administrative customs laws might be improved in the interest of good administration and the collection of the duties?

Mr. BIDWELL. I will state that I have here, which I will present to the committee, a communication prepared by special deputy collector, Mr. Couch, suggesting certain amendments to the administrative act. The subject has had my careful consideration, and I offer this as the suggestion of the office. I believe if the amendments are made as suggested, it will very much improve the administration of the customs laws without endangering the revenue.

The communication referred to is as follows:

Hon. GEORGE R. BIDWELL,

OFFICE COLLECTOR OF CUSTOMS,
New York, October 14, 1898.

Collector of Customs, New York, N. Y.

SIR: Pursuant to your oral request, I have prepared and now submit for your consideration the following memoranda upon various provisions of law applicable to the invoice, entry, appraisement, and liquidation for duty of merchandise subject to an ad valorem duty or to a rate of duty based upon value.

1. The act approved June 10, 1890, which became operative on August 1 of the same year and was amended July 24, 1897, is the one chiefly under consideration. Sections 2 and 3 of this act prescribe the contents, respectively, of invoices of merchandise when actually purchased, or when procured otherwise than by actual purchase; also the declarations required to be indorsed thereon and signed by the purchaser, manufacturer, or agent when produced to the consul, vice-consul, or commercial agent of the United States for certification. Sections 4, 5, 7, and 8 set forth the various legal requirements and restrictions with which the importer, consignee, or agent must comply upon his entry and statement of the value of merchandise imported into the United States.

Sections 10, 11, 12, and 13 provide for official appraisements, the result of which "shall be final and conclusive as to the dutiable value of such merchandise against all parties interested therein," and section 19 defines the basis of dutiable value which is applicable alike to values stated in the invoice, declared in the entry, and required in the appraisement.

Taken collectively, these sections provide a legal method for the ascertainment and determination of dutiable value. They require three separate valuations upon the basis defined in section 19, to wit: The invoice value duly certified in the foreign country before a consul, vice-consul, or commercial agent of the United States; an entered value duly declared upon entry by the importer, consignee, or agent, and the value found by the appraising or reappraising officers of the United States; and whichever of these valuations is highest must be taken and held to be the legal dutiable value.