The Pamphlet Collection of Sir Robert Stout: Volume 56
Senate Bill No. 1153
Senate Bill No. 1153.
An alternative plan of not attempting to reduce the number of dutiable articles, or prudently substitute specific for ad valorem rates, or eliminate wherever possible the confusion of compound rates, or make more logical and clear requirements on invoices, or strengthen the appraising force, or simplify the things to be done by importers and customs officers, but of endeavoring, on the contrary, to enforce the col- page XXIX lection of existing rates by new and severe coercive laws, is set forth in the Bill now before the Finance Committee of the Senate, "to prevent frauds upon the Customs Revenue." I desire to call attention to that proposed legislation, not only because it so clearly shows the direction in which Congress must go if coercion rather than tariff-reform is to be the policy, but because it enables me to exhibit the executive aspect of the tariff problem, with which aspect I am now chiefly concerned.
|Section 1.||That whenever the dutiable or foreign market value of any article of merchandise imported into the United States, and subject to "ad valorem" duty, or to duty based in whole or in part on values, is found by the appraising officer to exceed the invoice or entered value thereof, whether such invoice or entered value shall be set forth in a certified invoice, a "pro forma" invoice, or in a statement in the form of an invoice, there shall be levied, collected and paid in addition to the duties now imposed by law on such merchandise a further sum equal to 2 per cent, of the total appraised value for each 1 per cent, of the increased valuation as ascertained by the appraisers in excess of the entered value; and if such appraised value shall exceed the entered value more than 15 per cent, the entry shall be deemed fraudulent, and the collector of customs shall seize such merchandise and proceed as in cases of forfeiture for violations of the customs laws.|
|Sec. 2.||That in addition to the methods now authorized by law for determining actual foreign market or dutiable value, and to assist in the ascertainment of such value in the appraisal or reappraisement of any article of imported merchandise, wholly or partially manufactured, and subject to "ad valorem" duty or to duty based in whole or in part on values, when such merchandise has been consigned by any person or persons in any other country to a person or persons, agent, partner or consignee in the United States, or has been obtained otherwise than by actual purchase in the ordinary course of business, it shall be the duty of the appraiser or appraisers to determine, first, the cost of production of such merchandise at the lime and place of manufacture, such cost of production to include cost of materials and manufacture, all incidental expenses, insurance, interest, commissions, superintendence, rent, depreciation of plant, finishing and preparation for shipment, and a reasonable profit for manufacture not less than 10 per centum, and, second, the home value of such merchandise, which shall be ascertained by deducting from the wholesale price thereof in the principal markets of the United States the amount of duties thereon and the cost of trans-portation from the last port of exportation to the port of importation, and in no case shall the dutiable value of such merchandise be appraised upon original appraisal or reappraisement at less than the cost of pro-duction or the home value thereof, ascertained as herein provided.|
|Sec. 3.||That if any owner, consignee or agent of any merchandise subject to ad valorem duty or to duty based in whole or in part on value shall knowingly make or attempt to make an entry thereof by means of any false invoice or false certificate, of a consul, vice-consul or commercial agent, or of any invoice which does not contain a true statement of the actual cost of such merchandise if purchased or if obtained other- page XXX wise than by purchase of the actual market value thereof at the time of I exportation to the United States, in the principal markets of the country from whence the same has been exported or by means of any other false or fraudulent document or paper, or by means of any other false or fraudulent practice or appliance whatsoever such merchandise or the value thereof shall be forfeited to the United States.|
|Sec. 4.||That one-half of all moneys which shall be hereafter paid into the Treasury of the United States from fines, penalties or forfeitures incurred for violations of the customs-revenue laws, shall constitute a fund from which may be paid from time to time, on the joint order of the Secretary of the Treasury and the Secretary of State, who are hereby created a board for this purpose, such sums as they may in their discretion determine, to meritorious officers of the customs or consular service who shall have been instrumental in the detection or punishment of frauds upon the customs revenue, and the Board thereby created shall annually make a report of their doings hereunder to Congress, stating in detail the names of parties to whom has been paid, their positions in the public service, the nature of the services rendered, and amount paid to each.|
|Sec. 5.||That the sixteenth section of the act entitled "An act to amend the customs-revenue laws and to repeal moieties," approved June 22, 1874, be and the same is hereby repealed. And in all suits or informations brought where any seizure is made pursuant to any act providing for or regulating the collection of duties on imports or tonnage, if the property is claimed by any person, the burden of proof shall lie upon such claimant, provided that probable cause is shown for such prosecution to be judged of by the courts.|
|Sec. 6.||That all acts and parts of acts inconsistent with this act are hereby repealed.|
First section.—I respectfully invite a consideration of the question whether confusion and difficulty may not arise in the execution of the first part of this section if it shall become a law. Under our existing system there is the certified invoice value, which is the minimum value for imposing ad valorem duties. There is the entered value, which, when greater than the invoice value, defines a line of value below which the Collector cannot levy ad valorem rates. There is the market value to be ascertained and reported by the appraising officers. And finally, there is the dutiable value, the decision of which by the Collector under general instructions by the Head of this Department is by law made final and conclusive unless certain steps be taken by the importer. Section seven of the Tariff act of 1883 (which section has recently been before the Supreme Court of the United States for interpretation) concerns market and dutiable value. There are other provisions of law, scattered here and there throughout the statutes, which, under certain conditions, may make the dutiable value unlike the market value in the principal markets of the country of exportation, which is to be ascertained by the appraisers, and to which last value I assume the first section refers when it uses the phrase "Foreign market value." Sec- page XXXI tion 2900 of the Revised Statutes inflicts a penal duty whenever the appraised (not dutiable) value shall exceed by ten per centum or more the entered value. But the section of the proposed bill now under consideration makes a change by levying the penal duty whenever the "appraising officers" shall find that the dutiable value shall exceed the entered value.
The language used in describing, and defining, the rate or amount of additional duty would be more satisfactory if it indicated to importers, and to the country, more clearly what the ratio of that additional duty will be. The "total appraised value," referred to in the first section, may not be the same as dutiable value, but is the entered value to be compared, in the infliction of a penalty, with the appraised value, as found by the appraisers, or with the dutiable value, as finally decided by the Collector, and against which a protest, appeal and suit can be applied?