Senator PLATT, of Connecticut. Let me see if I understand you. A manufacturer in Germany establishes an office or branch of his house in New York. The person in charge of that office sells the goods to the trade here in New York for a specified price, and the manufacturer abroad delivers them here to the purchaser through the man who has taken the orders?

Mr. WRIGHT. That is all. Really, he takes the orders, the orders are fulfilled on the other side, the goods are shipped to him, and he delivers them.

Senator PLATT, of Connecticut. There is a system of getting orders through commercial travelers, sometimes called drummers. Do such houses have their drummers out through the country taking orders? Mr. WRIGHT. Oh, yes; all over the country.

Mr. WORRALL. There is no difference between New York and the balance of the country in that respect. Marshall Field and Arnold, Constable & Co. are on the same basis exactly.

Senator PLATT, of Connecticut. The dummy, as you call him, or the agent is doing the same that Marshall Field and Arnold, Constable & Co. are doing-sending out all through the country to sell goods? Mr. WRIGHT. To take orders.

Senator PLATT, of Connecticut. You come in competition with that trade, and you find that they are delivering their goods at a price with which you, purchasing similar goods abroad, can not compete? Mr. WRIGHT. We do.

Senator PLATT, of Connecticut. That makes you think they get the goods in at an undervaluation?

Mr. WRIGHT. Most undoubtedly.

Mr. WORRALL. I should think perhaps it is a fair proposition to say that Arnold, Constable & Co. do not buy abroad 10 per cent of the amount of stuff they did fifteen years ago.

Senator PLATT, of Connecticut. Is that true?

Mr. WRIGHT. do not know that it is so big a percentage; but I should say at least 60 to 70 per cent of our silks, our dress goods, are bought in dollars and cents.

Mr. MCKEEVER. Delivered in New York city?

Mr. WRIGHT. Delivered in New York city.

Mr. MCKEEVER. Duty paid?

Mr. MCCREERY. Delivered at your store.

Mr. WRIGHT. Yes.

Mr. GIBB. By the agent of the manufacturer?

Mr. WRIGHT. Yes, sir.

Senator PLATT, of Connecticut. The phrase "dollars and cents has come to have a technical meaning. Does it mean bought in American currency from the person who here represents the foreign house? Mr. WRIGHT. Yes.

Senator JONES, of Arkansas. Do you buy the goods which you get in that way abroad or here?

Mr. WRIGHT. As a general thing we buy here. The agent is here and he shows us the sample. We do buy them abroad, too.

Mr. GIBB. They refuse to sell you?

Mr. WRIGHT. Yes, except in dollars and cents abroad. But a great number of such orders are taken here.

Senator JONES, of Arkansas. Do you mean that they insist on delivering the goods at your store?

Mr. WRIGHT. Yes. They will not quote any mark or franc prices.

Senator JONES, of Arkansas. When you buy goods abroad in that way, to whom do the manufacturers consign them here?

Mr. WRIGHT. Their agent here, whoever he may be.

Senator PLATT, of Connecticut. When you buy articles abroad, when you make a purchase in Lyons, do they send the goods to their agent here?

Mr. WRIGHT. Yes, sir; they have a special agent here.

Mr. WORRALL. I will cite a case which actually occurred. Some time ago the representative of a large house established in the West went abroad, and among other places to Zurich. He told the man he had been recommended to him to buy silks. Not knowing anything about this house, it being entirely new, the man conceived the idea that this man was a representative of the United States Treasury. He told him very plainly he regretted that he had no merchandise left to sell; that he was sold out. He refused to sell the man any goods, and the moment the man left the manufacturer telephoned his competitors that an agent of the Treasury was there; and he left Zurich without buying a piece of goods.

Senator PLATT, of Connecticut. Summing up what you say, is it or not your conclusion that there are serious undervaluations of goods thus consigned?

Mr. WRIGHT. I should say yes, as a matter of fact. If we can not import goods, they must be got in in some other way. We have facilities for buying just as good as any house in the market.

Senator JONES, of Arkansas. Why can you not buy them? Senator PLATT, of Connecticut. Why do not the appraisers stop it? Mr. WRIGHT. There are no comparisons to make. They can not get at the market value. There is no market value on those goods. The goods are sent out in dollars and cents to keep a market value at the place of exportation. The only way in which I think they can get around that is to do what they are doing now—that is, working backward.

Senator PLATT, of Connecticut.

country?

Mr. WRIGHT. Working backward.

From the wholesale price in this

Senator JONES, of Arkansas. You said a while ago that you could not import those goods. I asked you why, and you did not answer the question.

Mr. WRIGHT. Take silk goods. We can not import them, because we are undersold. The only way we can get them is by buying them in dollars and cents.

Senator JONES, of Arkansas. You mean that when you buy those goods on the most favorable terms in Europe and import them yourselves they cost you more here than you can get them for in this country from an agent who will lay them down in your store?

Mr. WRIGHT. That is right.

Mr. MCKEEVER. The working-backward system is not always correct, because the goods, instead of paying 100 per cent on 100 cents, re invoiced so as to pay 100 per cent on 60 cents on the dollar.

Mr. MCCREERY. I beg pardon. The working-back system is perfect, according to Mr. Wright. On most of the goods-on textile fabricsthe working-back system will work perfectly well. You have the discount that is taken off. The goods are sold for so much; the discount is taken off; the expense of bringing the goods here is considered, and the commission paid to the commission man, and the banker's commission.

Senator JONES, of Arkansas. I should like to hear this gentleman who says it does not work well.

Senator PLATT, of Connecticut. The law is that the appraiser may take into consideration the wholesale price at which such or similar merchandise is offered for sale in the United States.

Senator JONES, of Arkansas. Mr. McKeever suggests that the process of working back will not operate satisfactorily. I should like to know the reason.

Mr. MCKEEVER. For this reason: Suppose the duty is 60 per cent, and those goods, instead of being invoiced at a hundred cents on the dollar, are invoiced at 50 cents, and the foreign manufacturer, instead of paying 60 per cent on every dollar's worth, pays only 60 per cent on 50 cents' worth.

Senator JONES, of Arkansas. That is on the hypothesis that the appraisers do not do their duty?

Mr. MCKEEVER. They do the best they can. They can not get at the value.

Mr. WORRALL. If they do not have the comparison.

Senator JONES, of Arkansas. When they figure it back, why do they not get it?

Mr. MCKEEVER. The foreign manufacturer only pays a duty of 24 cents a yard, instead of 36. He cheats the Government out of 12 cents. Senator PLATT, of Connecticut. The law provides that if the appraiser here has trouble, he shall find what those goods are sold for at wholesale in the United States, and then he shall figure out the deductions and appraise the goods at that value, no matter what they may have been invoiced at.

Senator JONES, of Arkansas. Why does not that compel people to pay fair duties? It seems to me the statement made by Mr. McCreery is absolutely correct, and unless there is some answer to it I shall continue to think so.

Mr. WRIGHT. It is so nearly exact that I do not think it makes very much difference.

Mr. JONES, of Arkansas. This gentleman differs broadly with Mr. McCreery.

Senator PLATT, of Connecticut. The appraiser, Mr. Wakeman, happens to be here, and I will ask him to make an explanation from his standpoint as to whether or not it works justly.

Mr. WILBUR F. WAKEMAN. In the first place, this office has never taken the selling price in the United States as a guide-I think we differ as to propositions-but rather the selling price to the United States. Suppose an invoice comes in which we think is undervalued. We can ascertain through our connections that they paid to St. Gall so much money for a certain line of goods, the duty upon which is 60 per cent. We start then with the proposition of selling to the United States and not in the United States. Now, having that start, you take a unit of value, say representing one hundred, your duty of 60 per cent, and your discount, if you please, to illustrate, say 5 per cent. Then you have a cumulative unit of value. Now, you take the selling price to the United States and divide it by this cumulative unit of value and you have approximately-I say approximately-the selling price in St. Gall. That is a fair statement.

Mr. WRIGHT. That is what I was going to explain-that you get it as nearly as you can.

Mr. WAKEMAN. Take that cumulative unit of value and divide the selling price to the United States by it, and that gives you a guide.

We have never taken the selling price in the United States for that purpose.

Mr. MCKEEVER. It simply bears out my statement that if you take the selling price in the United States and work backward, it is not always, the correct way.

Mr. MCCREERY. Neither Mr. Wright nor I referred to the selling price here.

Senator JONES, of Arkansas. The law does not say anything about the selling price here.

Mr. WRIGHT. The dollar-and-cents man might allow the merchant a little of the difference that he saves from the Government. I suppose that is really what you mean. For instance, suppose we find that the way the appraiser works an article costs 30 cents to the franc to land. I suppose that is what you mean.

Mr. WAKEMAN. It does not make any difference. Then we find out the dollars and cents, and we can easily get at what it ought to be. Mr. WORRALL. If you can get the selling price in the United States

Senator PLATT, of Connecticut. Mr. Wright said that he thought the busines among importing merchants of his class of buying goods abroad and importing them themselves had fallen off 50, 60, or 70 per cent. Do the rest of you gentlemen confirm him in that statement? Mr. GIBB. I do not confirm it so far as my lines of goods go, because mine are more fancy lines. It has not affected us to that extent. has affected us. It has closed a great many markets to us from importing direct. We are obliged to get our goods through manufacturer's agents here.

It

Senator PLATT, of Connecticut. Is that true with you, Mr. McCreery? Mr. MCCREERY. Not to so great an extent as Mr. Wright says. Senator PLATT, of Connecticut. To a considerable extent?

Mr. MCCREERY. Yes; to a considerable extent.

Mr. WORRALL. My business is entirely different. We are importers of English goods only.

Senator JONES, of Arkansas. Did Mr. Wright make that statement as applicable to anything but silk goods?

Mr. WRIGHT. Silk and dress goods.

Mr. WORRALL. You still buy English goods the same as we do in the currency of the country there and have them come out. It is universal, I suppose, or almost so; but of course they have a distribution which is very wide. Ours is very limited.

Mr. WRIGHT. In regard to the bond question, I agree entirely with the remarks made by Mr. Worrall. Instead of making it ten days, make it five days at the most.

Senator PLATT, of Connecticut. Do you agree with Mr. Gibb that the bond is a dead letter?

Mr. WRIGHT. Yes, sir.

Senator JONES, of Arkansas. How much better would it be if we made it five days?

Mr. WORRALL. We would then have a chance of shipping our goods out and getting them back. We would then have a chance of complying with the demand of the Government, which we do not now have, because now the goods are distributed. No man can carry on

his business in the city of New York with that system carried out. Senator JONES, of Arkansas. I can not see how the five days' arrangement would improve it.

Mr. WORRALL. Shipping to the West, I can get hold of the goods in five days.

Senator JONES, of Arkansas. If they are asked for within five days, you can do it now. If asked for within seven days you could not do it then and you can not do it now. What is the difference?

Mr. WRIGHT. In one case we would be complying with the law. the other case a man would not.

In

Senator PLATT, of Connecticut. What Mr. Worrall suggests is that the appraiser ought to be able within five days, having consular samples in advance, to determine whether he wants the whole invoice. Senator JONES, of Arkansas. If he does, he can ask for them now within five days. That does no harm. If you had the law limited, say to five days, it seems to me it would only aggravate the trouble. It makes the law deader than it is now.

Mr. MCKEEVER. It is ten days after the delivery of the public stores package, and the public stores package may be a matter of a week or longer after the incoming of the steamer. Mr. Worrall suggested five days after the receipt of the free goods; that within five days from the time he gets the cases that go to the stores the appraiser should have the right to call for the balance of the goods. But the law at present is ten days after the discharge of the public stores package.

Senator JONES, of Arkansas. But he can call for the goods within five days if he chooses.

Mr. MCKEEVER. In a day, if he chooses.

Senator PLATT, of Connecticut. The importer, Mr. Worrall thinks, ought not to be required to keep the goods longer than five days. Senator JONES, of Arkansas. They do not do it now.

Mr. WORRALL. No.

Mr. MCKEEVER. No man could do business if he did.

Mr. GIBB. As a matter of fact, the law does not affect anybody. If the appraiser's office wants to revise any particular lot of goods that may be in any particular case, they send up and ask to have the goods returned. We say, "We can not; it is impossible; the goods have all gone in a thousand different directions; but we will give you samples as near as we can. We never have had any difficulty. It is only once in years that they have ever done such a thing, and when they do they are reasonable and sensible about it. They know we have not the exact goods, but we can show them where they have been sold. Senator PLATT, of Connecticut. If you assume that a man is dishonest, he will probably be dishonest in the samples.

Mr. WORRALL. They have the consular samples here always. Senator PLATT, of Connecticut. If he furnishes samples which are not representative of the goods in the cases, will it be detected by the consular samples?

Mr. WORRALL. It should be.

Mr. WRIGHT. I do not know that that applies in fancy goods.

STATEMENT OF DANIEL MCKEEVER.

Senator PLATT, of Connecticut. Whom do you represent? Mr. MCKEEVER. I represent Geo. Borgfeldt & Co. I merely wish to say one thing. While indorsing everything that has been said, I wish to call the attention of the committee to section 18, which provides that decisions on reappraisement shall be published. I think