"That whenever any goods, wares, and merchandise shall have been entered and passed free of duty, and whenever duties upon any imported goods, wares, and merchandise shall have been liquidated and paid, and such goods, wares, and merchandise shall have been delivered to the owner, importer, agent, or consignee, such entry and passage free of duty and such settlement of duties shall, after the expiration of one year from the time of entry, in the absence of fraud and in the absence of protest by the owner, importer, agent, or consignee, be final and conclusive upon all parties." (Act June 22, 1874, sec. 21, 18 Stat. L., 190.) The objection to this section will here be stated, followed by a proposed section to take its place: (1) It deals only with reliquidations, not liquidations. The law nowhere prescribes any limit of time within which a collector must complete his ascertainment or liquidation of duties. If he once liquidates, the above section prevents him changing or correcting that liquidation more than a year after the date of entry. In one case an entry was apparently mislaid in the customhouse for eight years, when the collector made the first liquidation, brought suit against the importer for the excess duty which he found due, and recovered about $900. (United States v. De Rivera, 73 Fed. Rep., 679.) Other cases holding that there is no limitation on the first liquidation are Grandolfi v. United States (74 Fed. Rep., 549); Abner Doble Co. v. United States (119 Fed. Rep., 152); Pacific Creosoting Co. v. United States (T. D. 32346). The collectors are not required to notify importers of their liquidations, but simply to post a list of liquidations daily in the customhouse. If the importer fails to take notice of the liquidation and files a protest within 15 days thereafter, the liquidation is conclusive upon him. He should not be required to examine these lists daily for years in order to preserve his rights. There should come a time, to be fixed in the discretion of Congress, when he may know that the account is closed; that his liability is ended. The collector, should be given as much time as is considered necessary for the protection of the Government's interests and no more. The collector's power to reliquidate old entries quite often operates against a single importer and not against others. Let us suppose there are several parties importing one kind of goods in common and that one of them imports another kind of goods also. The collector suddenly decides that he has been passing the goods imported by all at too low a rate. It is impossible for him to go back and pick out all old entries embracing that kind of goods, as far as the statute of limitations would permit, and he does not attempt it, but applies. his new interpretation of the law to subsequent liquidations. But if some question happens to arise about the one man's shipments of a different sort of goods, the collector will reliquidate the entire contents of his entries and he will have to pay additional duties on shipments that arrived at the same time as his competitor's, from whom no additional demand is made. In order, therefore, to preserve as far as possible the equal treatment of different taxpayers the period of limitation should not be unduly extended. (2) The time of entry is not the proper date for the statute to begin to run. It should begin when the entry is ready for the collector's action, which is usually the date on which the values of all the goods on the entry have been finally fixed, either by the local appraiser without appeal or by a single general appraiser without further appeal, or by a board of three general appraisers. Cases occur where the Board of General Appraisers consumes considerable time in the investigation and consideration of reappraisements. In some instances the appraisements may be completed and the entry may not be ready for final liquidation, on account of the absence of the consular invoice or other papers, for the production of which bond is given at the time of entry. It is suggested, therefore, that the statute begin to run when all the appraisements are completed or when all the papers are complete; that is to say, the later of the two dates. The reason for saying "all the appraisements" is that sometimes several invoices of different sorts of goods are embraced in one entry, and the collector always liquidates the entire entry at one time. One invoice may be appraised at a different date from another, so it is necessary to wait for the appraisement of the last invoice on the entry. (3) The purpose of the exception of goods not yet delivered to the importer is evidently to permit a reliquidation under a new tariff act of goods remaining in bonded warehouse, in accordance with provisions like subsection 19 of section 28, tariff act of 1909. When goods are entered in bond the appraisement and liquidation are proceeded with at once, only the delivery and payment being delayed. A new act containing a provision like subsection 19 therefore requires a considerable number of reliquidations. The proposed section makes an exception of such entries, but will do no harm if Congress should see fit to repeal subsection 19. (4) The words "in the absence of protest" have caused much uncertainty. Collectors have generally taken the ground that the filing of any protest would permit any reliquidation whatever on the entry at any time, including changes in the duty previously assessed on goods not referred to by the protest at all. An entry may have two or more kinds of goods entirely foreign to each other. One entry made by an express company or forwarding agents often embraces goods for many owners. Usually an entry includes all merchandise on one ship for one importer or consignee. The protest usually relates to only one class of goods So the filing of a protest on one kind of goods on an entry should not affect anything else merely because it is on the same entry. Collectors also have raised the duty above their original assessments more than a year after entry on goods covered by a protest claiming a lower duty. The Board of General Appraisers recently rendered a decision apparently disapproving this but suggesting that the statute did not run during the pendency of the protest, but that after it was decided the collector might reliquidate sustaining the protest and then reliquidate again restoring his second liquidation. (T. D. 32581.) This decision has been appealed by both the Government and the importers and is pending in the Court of Customs Appeals. If the court should affirm the board. there would be an end to the finality of both board and court decisions. The proposed section cuts off the power of the collector to reliquidate after the filing of the protest, as to goods protested, except where the protest is sustained, when he can, of course, reliquidate in accordance with the board or court decision. This is the only sensible procedure. The protest is practically an appea! from the collector's decision and should not be filed until his decision is made beyond recall. In the following section the period allowed the collector is eight months for the collector alone. This is thought to be about equivalent to the purpose of the present law, which allows one year for both appraiser and collector. The great majority of liquidations at the port of New York are made within three months after entry and at other ports in much less time. PROPOSED SUBSTITUTE SECTION FOR SECTION 21, ACT OF JUNE 22, 1874, 18 STATUTES AT LARGE, 190. “That the liquidation of duties shall be made within eight months after the final appraisement of all the merchandise embraced in the entry, or within eight months after the production of any papers for the production of which bond was given at the time of making the entry. In case of failure to make the liquidation within the time hereinbefore prescribed, the entry shall be deemed to be liquidated without change as of the date on which such time expires. Any entry may be reliquidated within the time hereinbefore prescribed to correct errors either for or against the United States, but when protest is filed no further reliquidation shall be made as to goods protested, except to comply in whole or in part with one or more claims made in such protest. This section shall have no application to fraudulent entries or entries accompanied by fraudulent invoices or other papers, and shall not prevent the reliquidation of duties on any goods in bond or otherwise in the possession of the customs officers when such reliquidation is required by any act of Congress." It is believed if these amendments suggested were adopted and put in the form of law: There would be fewer appeals from appraisements and a less number of protests filed. The form of the customs administration law could be greatly improved. It is now found partly in the Revised Statutes, partly in the acts of June 22, 1874, March 3, 1875, and sections 20 and 21 of the act of July 31, 1894, and in the tariff act of August 5, 1909. There are also some sections in the Revised Statutes that are obsolete. I would suggest the appointment of a commission to rearrange and consolidate the various sections of the Revised Statutes and the acts of Congress and simplify the language of all the statutes bearing on the subject of administration of the customs law. In the three years of 1894, 1895, and 1896 the average number of protests filed a year was 21,364. In the three years of 1910, 1911, and 1912 the average number filed a year was 94,472, each protest was an appeal from the rate and amount of duty as sessed by the collector to the Board of General Appraisers, and each was a case to be decided. About four-fifths of these protests were from the port of New York, the remainder from the rest of the country, including Alaska and our insular possessions. In the year 1900 there were 2,561 appeals from appraisements to a general appraiser, of which 2,080 were from the port of New York and 481 from all other ports. In the year 1912 there were 5,796 appeals from appraisements, of which 4,543 were from the port of New York and 1,253 from all other ports. These figures show an unwarrantable increase in the number of protests and appraisement cases, and that importers in at least this number of cases believed they had not been fairly and justly dealt with in the administration of the customs laws. There is entirely too much litigation in respect to the administration of the customs laws between the Government and the people. It is an old maxim fixed in the law of fundamentals: "That it concerns the State, that there be an end of litigation." SUPPLEMENTAL BRIEF ON SPICES ON THE FREE LIST. H. J. GIBSON. Hon. OSCAR W. UNDERWOOD, JANUARY 29, 1913. Chairman Committee on Ways and Means, House of Representatives, Washington, D. C. DEAR SIR: I wish to add the following to the brief submitted to your committee by the undersigned on spices, unground," on January 7, 1913, and printed in your hearings No. 2, on pages 279-281, in reply to some statements made to your committee by those advocating that spices be left as they are in the present act and as they have been ever since the tariff act of 1883, i. e., "the ground spices" dutiable at 3 cents a pound and "the whole or unground spices "free. Of course the spice grinders and the manufacturers of oils, perfumeries, and fancy soaps in which spices are used want this condition to remain. Why do they want a duty of 3 cents a pound on the ground spices and no duty on the whole or unground? They want to collect a duty of 3 cents a pound and put it in their pockets instead of any revenue going to the Government from spices. It is surprising to see how tenaciously "the interests" contend for keeping the tariff on spices as it is. They say that the spices-cassia, cinnamon, cloves, nutmegs, allspice, or pimento-are not luxuries. How absurd such a statement. They have always been known as luxuries in trade and commerce. Our tariff acts have always treated them as luxuries and have often grouped them with tobacco and wines. For instance, in the tariff act of August 10, 1790, section 1, * * * “Pepper, per pound, six cents; pimento, per pound, four cents; manufactured tobacco, per pound, six cents; snuff, per pound, ten cents;" and also in the Democratic low-tariff act of 1846 spices were put in the same schedule, B, and at the same rate of duty as "segars, snuff, and all other manufactures of tobacco; wines, burgundy, champagne, claret, madeira, port, sherry, and all other wines and imitations of wines." The Standard Dictionary defines luxuries as follows: "That which gratifies a nice or fastidious appetitie; specifically, any article that ministers to comfort or pleasure and yet is not necessary to life." Do not spices come within this category? If we are to have a duty for revenue it ought to first and foremost be put on luxuries and not on the necessities of life, and to be put on luxuries in the form in which they are imported. For revenue purposes you might as well put a duty on "jack-o'-lanterns" as on ground spices and leave unground or whole spices on the free list. Some of the witnesses had great fear if a duty was put on unground spices it would have the effect of adulterated ground spices coming in from abroad. This is another unreasonable fear. If unground spices are made dutiable, a commensurate or corresponding duty will be put on ground spices, of course. Ground spices never have been imported and it is not likely they ever will. The quotation from Dr. Doolittle on page 2428 substantially shows that the adulteration in spices and the grinding of worm-eaten, moldy, immature spices have been done by these domestic converters of spices; for, as he says, "They are brought into this country in the whole state." They want protection, particularly on the ground spices, for two reasons, says their spokesman (p. 2437): First. because 50 to 60 per cent of the selling price is labor. Now, it is the question of labor that makes the price of spices higher than the material itself." If this statement is true, these people ought to look into the cost of their manufacture. It is a saying among manufacturers that if the labor cost is more than 15 or 18 per cent of the cost of the material it is too much and there is something wrong that needs looking into. The second point, for wanting a duty on ground spices, is still more illjudged than the other; for, said the same spokesman, "We also make the point. Mr. Chairman, that the use of spices is more important to the poorer classes than it is to the better to do. In other words, they have to do with poorer food, perhaps, and the poorer food is made palatable by spices." This is a poor argument that the poor should use spices to make spoiled or partly decayed food palatable, so they can eat it. The poor need palatable food, and if they have that, their natural appetite is the best spice, and all they want. The duty on whole spices will not perceptibly, if at all, increase the cost of living. They have not gone up in price with other things, except on one or two articles, and that has been occasioned by an unusually short crop in the particular countries in which they are grown, and this is always the case. They are not used by the great masses of the people, and their use can be dispensed with by those who can afford them without injury to their health, but the masses of the people must have food, clothing, and shelter. About 10 per cent of the cloves, cinnamon, and allspice, or pimento, are used in the whole or unground state in the barrooms and saloons of this country. Some 50 per cent of the cloves is used for making oil of cloves, and the oil of cloves has been coming in free, and so has the oil of cassia, cinnamon, and mace, and many oils that are luxuries and that are used for making purely luxurious articles. Probably not more than 40 per cent of these spices, except pepper, is ground. The last Republican House understood that whole or unground spices was a good subject to produce revenue, for they put a duty of 30 per cent on all these spices. The former chairman of the Ways and Means Committee, who was instrumental in having these whole spices put on the dutiable list in the House tariff bill in 1909, said (p. 277 of these hearings): "I want to say to you (the writer) that we put this duty on because we were looking around for revAnd we struck spices, and put them on. The bill went to the Senate with that provision in. Afterwards we incorporated a corporation tax which has brought in a revenue of $27,000.000 per annum or more, and we found we did not need this duty on spices." enue. ** * * If your committee desires, you can raise a revenue of $5,000,000 to $6,000,000 per annum from these spices, and it will go directly into the Treasury for the support of the Government, and its payment will not be felt, and it will not increase the cost of living to the masses of the people. These spices can not be grown here; they can not even be hothoused; they are luxuries, and all luxuries should be taxed, the same as tobacco and wines, the same as they were in the days of our fathers. Respectfully submitted. W. J. GIBSON. The CHAIRMAN. The next witness is Mr. Hull, of Hull & Reeve. TESTIMONY OF MR. JOHN A. T. HULL. The witness was duly sworn by the chairman. Mr. HULL. Mr. Chairman and gentlemen of the committee, I want to very briefly call your attention to one or two matters in the administrative part of the bill, and will state very frankly that I do not know that I am at all competent to advise the committee as to the 72318 No. 26-13-3 best method of procuring it, and if I can only secure the attention of the committee to the matter I will have accomplished all that I hope to do in this matter. I desire first to call the attention of the committee to the subject of dumping. The people of this country have a prejudice against our manufacturers dumping their goods in foreign countries, and should be willing to protect our manufacturers from dumping by foreigners in the markets of the United States. I take the liberty of submitting a very short brief on that, calling attention to the laws of Canada and some of the other countries. The next administrative feature that I desire to call attention to is that in regard to drawbacks. The present law has a section on drawbacks. It works a hardship on our manufacturers in requiring the factories, especially in corn products, to close down the factory and clean out all the domestic product and then close the factory, when they have run on the foreign product, until it is entirely eliminated, before they can start up again in the domestic product, causing quite a loss to the manufacturers in that respect. And about all we hope to do in this connection is to call the attention of the committee to it and quote the laws of France and some other countries. The CHAIRMAN. Is that in the law, or is it a regulation? The CHAIRMAN. That is a department regulation? Mr. HULL. A department regulation. Mr. HILL. It is in the law-you refer to the identification? Mr. HULL. The identification. The regulation as to how it shall be done is made by the Treasury Department. Mr. HILL. What you want to get is a substitution clause? Mr. HILL. You will remember that was in the bill as passed by the House, the Payne bill, and it was stricken out in the Senate. Mr. HULL. I would like a substitution clause by which the Government can be absolutely protected, but the manufacturers are put to very much loss in transferring from one line of work to the other. Mr. HAMMOND. You want to quote an amount of value in its identification of product? Mr. HULL. Yes. France, I think, has a valuation established on starches-in each bushel of corn so much starch. I do not know that that is fair, because the French law gives such a valuation on the amount in rate that it is practically a bonus; and I would hardly approach this committee with the hope of getting any bonuses. Mr. HILL. Mr. Hull, we considered the French clause when the substitution clause was put in the Payne tariff bill as it passed the House, but it was not considered wise to adopt that, because the French Government gives a certificate which is negotiable and transferable to another person. Mr. HULL. Yes. Mr. HILL. But the section put in the Payne tariff bill was a substitution clause for the same parties that made the inquiry. I think it was stricken out by the Senate. Mr. HULL. I sincerely hope that, in the interest of our manufacturers, regardless of the question of the amount of the tariff, some method will be reached by which they will not be put to the expense |