The Pamphlet Collection of Sir Robert Stout: Volume 56
Difficulties in Reappraisements
Difficulties in Reappraisements.
But the difficulties do not end with what is called, in revenue law, the local appraisement, or the first appraisement. The importer can ask a reappraisement and one of those reappraisers must be a merchant familiar with the character, quantity and foreign value of the merchandise to be appraised. What my predecessor, Mr. Crawford, said in 1817, about merchant appraisers under that system, applies with equal force to the one merchant of the reappraising board under the present system. The General Appraiser at New York receives a salary of three thousand dollars, a mere pittance for one who is really competent for such work and such responsibility. Indeed the salary may almost be said to imply unfitness. There have been during many years, and are now, as I am informed, criticism and complaint of the manner in which reappraisements have been made and are conducted at New York. Here again such criticism and complaint are inseparable from the system. The reappraising board consists of only two members,—one of whom, the merchant appraiser, is selected by the Collector. His service is made compulsory by punitive provisions of law. His compensation for the service is trifling. The range and number of persons, even at the great port of New York, who come within the definition and qualifications of the statute, are not large, because the merchant appraiser must be an expert in the particular article under appraisal. The service is of course not desired, and for the reason given by Mr. Crawford not far from three-quarters of a century ago, which was that the service brings the merchant into disagreeable relations with his associates, or rivals, who import, and deal in, a similar article. As the board of reappraisers consists of only two, there is often an inability to come to a decision, and then the whole question of foreign value goes to the page XL Collector, who, although he maybe competent as Collector, may not be, in all particulars, suitable for the decision of such a question. It is not easy to think of a tribunal more unsuitably organized to execute the provisions of the second section of the proposed bill than is a re-appraising board as at present constituted.
There is another consideration connected with the organization and conduct of a reappraising board which will I am sure commend itself to the consideration of Congress. If the forms of law are pursued by appraising officers, and if there is no fraud on the part either of the importer or of the appraising officers, then there is no officer, or tribunal, executive or judicial, to revise the decision as to value. The decision of the Collector, as to classification, or rate, or amount of duty can be revised, and set aside, by the Secretary of the Treasury, or the Judicial Department of the Government. While the law has not made appraising officers to be judicial officers in a constitutional sense, it has required of them the exercise of very large and high faculties of discretion and judgment. The Supreme Court of the United States has, for that reason, on several occasions heretofore spoken of a reappraising officer as a "quasi judge," and "a legislative referee." Many of these phrases, which imply that a reappraisement is a judicial proceeding, had their origin when the appraising law, differed widely and essentially from the present law, and when an appraisement partook more than now of the character of an arbitration. These, and similar expressions used by the Federal Judges, from time to time, constituted almost the only basis of the contention that was addressed to me, during the last summer, to the effect that an importer had a right to be present at a reappraisement, to confront opposing witnesses by testimony in his own behalf, to sift, test and reduce by cross-examination testimony offered in opposition to the correctness of his invoice, and to have the aid of counsel. As I have explained in my Annual Report; I felt constrained to resist this contention, and chiefly because it is impracticable for reappraisements to be carried on in the forms and manner of a lawsuit. But, having decided that an importer is not entitled of right to be represented on a reappraisement by a lawyer, I stopped the practice which, to some extent, had prevailed by which Special Agents of this Department appeared before the reappraising board in opposition to importers, and thus brought on a contentious litigation. The integrity of the appraising system, and justice to importers as well as the Government, demand that the reappraising board shall be exempt from all undue outside influence, whether exerted by importers or manufacturers, or this Department, when the question of foreign value is alone to be determined.page XLI
One who is at the head of this Department cannot shut his eyes to the fact that a great deal of the contention over local appraisements, or reappraisements, grows out not merely of strife between rival importer but between our own manufacturers, or their representatives, and foreign manufacturers, or their representatives, who consign goods hither for sale on their account. A question has recently been presented to me by protest and appeal, whether or not a manufacturer in this country, not being an importer, is competent, within the law, to sit as a member of a reappraising board, the inference being that, because a manufacturer of a similar article, he naturally had a selfish personal interest in the levy of the highest possible rate upon an imported article similar to his own. Considerations like these tend to illustrate the difficulties, that may exist in the enforcement of the second section of the proposed bill.
The tendency of my thoughts in respect to reappraisements at the port of New York is to advise appropriate and particular legislation for that port. The appraising system is not now, and never ha" been, the same in all the collection districts. In those wherein entries are few, and little duty is collected, the Collector, or Naval Officer, as the case may be, is an appraising officer. Even in the larger ports, like Boston, or Philadelphia, or Baltimore, where the business is very much less than at New York, the arrangements of the appraising force are different from those existing at the last-named port. It will be well, I think, to create a reappraising board at the port of New York to consist of three General Appraisers, competent for the important work, and with sufficient salaries. The board should consist of three instead of two, so as to prevent probability of disagreement as when the board consists of only two. The decision of this board should be final, so as to relieve the Collector of the reappraising work which is now thrown upon him. I do not think that abandonment of the present plan of selecting a merchant to be a member of the reappraising board will work any injustice to importers or consumers, or to the Government. It will be within the discretion of Congress to make the tenure of office of the members of this board such as may be thought best. They can be nominated by the President and confirmed by the Senate, as are Justices of the Supreme Court, and Judges of all the other Federal Courts. Federal Judges sitting in Admiralty decide mixed questions of law and fact without the intervention of a jury, and I see no reason why executive officers may not, as reappraisers, be intrusted with functions not-more delicate, or important.
Third Section.—This section is a modification of Section 2864 of the Revised Statutes, and of a provision in the law of June 22d, 1874. It page XLII covers merchandise obtained by purchase, as well as that obtained otherwise than by purchase. It implies that an invoice of the former must have the same elements as those now required by law. But if the merchandise be obtained otherwise, then, by the proposed third section, the invoice of a manufacturer must contain, "the actual market value tit the time of exportation to the United States in the principal markets of the country from whence the same has been exported." The present law declares that an invoice of merchandise sent hither by the manufacturer must contain "the actual market value thereof at the time, and place, when and where the same was procured or manufactured" The change, it will be seen, is both as to the time and as to the place. I have already intimated the advantage in my opinion of changing the time required in such invoices.
Fourth Section.—It is with some diffidence that I interpose any objection to the fourth section, which proposes that one-half of the proceeds of fines, penalties or forfeitures shall be deposited in the Treasury subject to the joint order of the Secretary of the Treasury and the Secretary of State, who are authorized to distribute this fund in their dis-cretion "to meritorious officers of the customs or consular service who shall have been instrumental in the detection or punishment of frauds upon the revenue." If this section should become a law there will I fear be a practical difficulty in a practical execution thereof at the distant ports by a tribunal sitting in Washington. No work could be more vexing for an executive officer than the distribution of such a fund. Any such law, if deemed necessary and enacted by Congress, should, as did the law of 1789, define exactly what portion of the pro-ceeds of a forfeiture shall be paid to a seizing officer, and what portion shall be paid to an informer, or to informers, by whose information the seizure was made and the forfeiture accomplished. Under the law of 1799, such questions were judicial questions determined by the Court when called upon to distribute the proceeds of the forfeiture paid into the registry of the Court. The facts, being local, should be judicially examined in the same place where they arose, and be disposed of, if need be, by contentious litigation. The Bill (S. B. No. 1153) proposes not only to revive the "Moiety System," but to revive it in a most objectionable form.
Fifth Section.—This fifth section in prescribing the rules for the burden of proof only refers to a suit, or information, "in rem,"o when a seizure is made. It makes no provision for a suit to recover the value of the merchandise when the property cannot be seized.
Sixth Section.—There should be an exhaustive review of existing legislation, and a defining, describing, and identifying of the former laws page XLIII which, in the opinion of Congress, will be inconsistent with the proposed Bill if it shall become a law.