SPECIAL PROVISIONS.

PREFERENTIAL DUTIES AND FOREIGN TRADE ZONES.

STATEMENT OF HON. WESLEY L. JONES, UNITED STATES SENATOR FROM WASHINGTON.

Senator JONES of Washington. Mr. Chairman, I want to ask that a provision be put into this bill similar to one that has been carried, I think, in every tariff bill for a great many years and which was in the Simmons-Underwood Tariff Act, but for some reason has been omitted from the bill as it passed the House. It is a clause providing for preferential duties, with the express provision, however, that it shall not apply where we have treaties to the contrary. I think that it would be well to have this provision in, because it has been included for a great many years, and we are trying to build up the merchant marine; and while, in a practical way, the provision may not amount to anything, it is a notice to other countries that we have not at any rate abandoned this policy, that we maintain it in our legislation so that if any use can be made of it at any time it will be on hand to avail ourselves of.

I submit a provision that I think is in language similar to the language heretofore used, although the rate may be a little bit different. Otherwise it is exactly the same.

(The provision referred to is as follows:)

That a preferential duty of 10 per cent ad valorem in addition to the duties imposed by law, shall be levied, collected, and paid on all goods, wares, or merchandise, whether such goods, wares, or merchandise are on the so-called dutiable or free list of the United States tariff law, which shall be imported in vessels not of the United States or vessels not built, owned, and manned by citizens of the country of which such goods, wares, or merchandise are the products or manufacture; or which being the production or manufacture of any foreign country not contiguous to the United States, shall come into the United States from such contiguous country; but this preferential duty shall not apply to goods, wares, or merchandise which shall be imported in vessels, not of the United States entitled at the time of such importation by treaty or convention or act of Congress to be entered in the ports of the United States on payment of the same duties as shall then be payable on goods, wares, and merchandise imported in vessels of the United States, nor to such foreign products or manufactures as shall be imported from such contiguous countries in the usual course of strictly retail trade.

A discount of 5 per cent on all duties imposed by this act shall be allowed on such goods, wares, and merchandise as shall be imported in foreign-built vessels admitted to registration under the laws of the United States: Provided, That nothing in this subsection shall be so construed as to abrogate or in any manner impair or affect the provisions of any treaty concluded between the United States and any foreign nation.

I desire, also, to call your attention to an amendment that I have offered and had printed and referred to the committee. It is known

as the foreign trade zone bill. This measure was introduced and referred to the Committee on Commerce. We had quite extended hearings with reference to it. We amended the bill in a good many particulars, and finally the bill as amended was reported from the Commerce Committee unanimously. Democrats and Republicans on the committee were heartily in favor of the proposition.

I am not going to take your time to go into it now. I have no doubt that you will look into it very carefully when you come to consider the actual framing of the bill. It seems to me that it can be worked in mighty well in the administrative features of the bill. It is very proper, I think, in the tariff bill, if you deem it wise to adopt it, and I hope that the committee will give that amendment very careful consideration and give the proposition very careful consideration as to whether or not we should do something along that line and whether or not it should go into this bill.

Senator SMOOT. Has it already passed the Senate?

Senator JONES of Washington. No; it is on the calendar but has not yet been called up. I thought, and the committee thought, that after we had reported it it was a very proper thing to be considered by the Finance Committee as one of the administrative features of the bill. I hope you will consider the report submitted, which has been printed.

I am very much obliged to you, Mr. Chairman and gentlemen, and I shall not take any more of your time.

Senator CURTIS. Will you submit a copy of the bill?

Senator JONES of Washington. You will find the amendment in the record. I had it printed and referred to your committee.

ANTIDUMPING.

[Title III, Sections 301-303.]

BRIEF OF MAXIMILIAN TOCH, REPRESENTING TOCH BROS., NEW YORK CITY.

I returned to America on November 24, after having had the opportunity of study. ing tariff, antidumping, and embargo conditions in England, France, Belgium, and Germany, and I am appearing before you, more or less as an individual, in order to give you such information as I believe the Treasury Department and the Tariff Commission do not possess. I would like to have it plainly understood, however, that I am not criticizing the Customs Division of the Treasury Department nor the Tariff Commission for their lack of information, because from my personal observation neither of these two departments has money enough or men enough to conduct the investigations which I personally made.

England has always been a free-trade country, but since the war she has seen her industries slipping, with every indication of going under. In 1921 she enacted a general tariff bill, called the "Safeguarding of the industries act," in which a duty of 33 per cent has been placed on all industries which needed protection, such as optical glass, optical instruments, scientific glassware, laboratory porcelain, synthetic colors, rare earths, and chemicals. In addition to that, an antidumping law has been enacted, which became a law on October 1, 1921.

I can only quote to you part 2, section B, of the antidumping act of England, which relates to the depreciation in value of foreign currency, which we would do well to follow:

"Evidence as to price at which similar goods can be profitably manufactured in the United Kingdom. Evidence to show that the depreciation in relation to sterling of the currency of the country of manufacture is responsible for the fact that the price at which the goods are sold or offered for sale in the United Kingdom are below the prices at which similar goods can be profitably manufactured in the United Kingdom."

In addition to this England has protected her dye and synthetic chemical industry by means of embargoes and prohibitions which prevent foreign chemicals from coming into the country.

The condition in France is still more interesting, for France has enacted the tariff known as the law of September, 1921, which is composed of four distinct types of tariff. They are known as the old tariff, new tariff, favored-nation tariff, and the coefficient.

The old tariff is the tariff which existed prior to that date and applies to some raw materials not made in France and others not indigenous to France. The new tariff, generally speaking, is a very high tariff on chemicals and manufactured articles. The favored-nations tariff-from which the United States is conspicuously absent favors those countries which France has chosen and is equivalent to the old tariff. But the most important and interesting part is what is called the coefficient. This is a number, 2, 3, 4, or more, in the fourth column of the tariff act, and which in every instance is used as a multiple of the duty assessed. For example, precipitated barium sulphate is assessed at 2 francs per 100 kilos, but carries the coefficient 5, therefore it is dutiable at 10 francs per 100 kilos. A favored nation would, however, pay 50 centimes per 100 kilos.

France has no unemployed men at present; the entire country looks very prosper

ous.

Belgium is in the same condition and has a high protective tariff, but I am not in possession of the latest laws on the subject.

The condition in Germany is exceedingly interesting, in view of the fact that by far the largest part of the plants in Germany are working nights. There is no unemployment, as there is no foreign competition. As I pointed out to the Treasury Department last summer (in June, 1921), Germany in addition to her high tariffs has a list of embargoes which preclude the importation of any material which can be made in Germany out of German raw material. If we wanted to retaliate by shipping 1,000 tons of barium peroxide to Germany at 5 cents per pound, it could not be done, because the material could not enter any of the customs ports of Germany.

Now I desire to call your attention to our antidumping law, enacted in May, 1921, as follows:

SPECIAL DUMPING DUTY, SECTION 202.

"(a) That in the case of all imported merchandise, whether dutiable, or free of duty, of a class or kind as to which the Secretary has made public a finding as provided in section 201, and as to which the appraiser or person acting as appraiser has made no appraisement report to the collector before such finding has been so made public, if the purchase price or the exporters' sales price is less than the foreign market value, (or, in the absence of such value, then the cost of production), there shall be levied, collected, and paid, in addition to the duties imposed thereon by law, a special dumping duty in an amount equal to such difference.

(b) If it is established to the satisfaction of the appraising officers that the amount of such difference between the purchase price and the foreign market value is wholly or partly due to the fact that the wholesale quantities in which such or similar merchandise is sold or freely offered for sale to all purchasers for exportation to the United States in the ordinary course of trade, are greater than the wholesale quantities in which such or similar merchandise is sold or freely offered for sale to all purchasers in the principal markets of the country of exportation in the ordinary course of trade for home consumption (or if not so sold or offered for sale for home consumption, then for exportation to countries other than the United States), then due allowance shall be made therefore in determining the foreign market value for the purposes of this section.

"(c) If it is established to the satisfaction of the appraising officers that the amount of such difference between the exporters' sales price and the foreign market value is wholly or partly due to the fact that the wholesale quantities in which such or similar merchandise is sold or freely offered for sale to all purchasers in the principal markets of the United States in the ordinary course of trade, are greater than the wholesale quantities in which such or similar merchandise is sold or freely offered for sale to all purchasers in the principal markets of the country of exportation in the ordinary course of trade for home consumption (or if not so sold or offered for sale for home consumption, then for exportation to countries other than the United States), then due allowance shall be made therefor in determining the foreign market value for the purpose of this section."

This shows how superficially the manufacturers in the United States are being protected under section 202 just quoted. I speak from personal experience, having had an interview with the chief of the customs division. This law clearly indicates

that, after you have shown that foreigners are selling in this country at ruinous prices, and that an industry is being injured, and is prevented from being reopened, no power or no sanction has been given to this law so that the injury may be remedied. It is, therefore, quite obvious that in the new traiff some officer of the United States must be given authority to act, and act quickly.

I furthermore call your attention to H. R. 7456, which is the tariff act of the Ways and Means Committee, and I want to point out to you that, with the exception of the dye industry, which has already been safeguarded in the emergency tariff, many parts of the bill are superficial, and carelessly drawn. Many of the mistakes which appear in the Underwood tariff, and which the Underwood bill copied from the previous tariff acts, are present in the Fordney bill, H. R. 7456.

As an example, certain chemicals are mentioned on page 5, paragraph 11, then paragraph 12 goes on to shoe polishes; and then on page 21, paragraph 64, the chemicals are taken up again from page 5.

The same contradictions which appear in former tariffs appear in the Fordney bill, as, for instance. on page 22, paragraph 74, zinc oxide ground in oil is dutiable at 2 cents per pound, and on page 21, paragraph 63, enamel paint, which is also zinc oxide ground in oil, is dutiable at 25 per cent. These contradictions lead to litigation, and even though the greater tariff would prevail, it costs the Government a great deal of money to decide these things, which should be unequivocally stated in the tariff act. Finely powdered, washed, witherite is free, but under the name of barium carbonate, which is the same thing, it is dutiable.

Much of our unemployment has been due to the delay in formulation of the tariff. Millions of dollars in duties could have been collected, and the tax burden thereby lightened.

If there be any further information that you want I will be glad to give it to you.

BARGAINING PROVISIONS.

[Title III, Sections 302 and 303.]

STATEMENT OF CHARLES H. BENTLEY, SAN FRANCISCO, CALIF. REPRESENTING THE CALIFORNIA PACKING CORPORATION AND THE NATIONAL CANNERS' ASSOCIATION.

Mr. BENTLEY. My name is Charles H. Bentley; I am vice p sident of the California Packing Corporation and chairman of the foreign trade committee of the National Canners' Association, an organization representing the bulk of the canning industry in the United States, including canned meats, milk, fish, fruits, and vegetables. These products all come in the agricultural schedule.

In our request for a tariff on canned foods we have been concerned not so much in the matter of securing a protective tariff as with the idea of securing a trading basis, in order that we may negotiate reductions in certain foreign countries which at the present time are shipping canned foods to this country, and will continue to do so under the provisions of the pending bill, on a much lower rate of tariff than they charge us on similar products which are going to their

countries.

In other words, in our endeavor to develop foreign markets on our products we find ourselves cut off by high import duties, much higher than the duties contemplated in our own country on similar products.

In order to meet this situation two clauses have been put in the special provisions of the tariff bill-302 and 303, and 302 gives administrative freedom within certain limits, giving the President the power to raise the duty against goods coming from a given country which levies a higher rate of duty on similar products as compared with the duties in this country.