value of the Japanese yen in terms of United States currency, resulted in a substantial increase in costs to importers.

Because of these increases in values in Japan, manufacturers of the cheapest grades of cups and saucers apparently were unable to sell their product to American purchasers who could purchase better quality at the minimum prices fixed for export. It was disclosed that some of these manufacturers actually sold to a few importers cups and saucers at prices below the minimum prices fixed by the Federation, but presented to the Federation invoices showing values in accordance with the minimum prices. This was necessary in order to obtain from the Federation the necessary permit for export, without which the articles could not be exported. Duties were in all instances paid upon the basis of the fixed minimum prices which were shown in the consular invoices. Available information indicates that the practice began during the latter part of 1934.

Action looking toward correction of this matter rests with the Treasury Department, and it is known that that Department has it under consideration. An inquiry by the Commission indicates that only a few importers have up to the present time actually purchased Japanese pottery at prices below the minimum prices fixed for export to the United States, and the amount of the imports involved is inconsiderable.

INVESTIGATION OF TRANSPORTATION RATES ON SWORDFISH

Mr. WIGGLESWORTH. Now, we have some swordfish up our way. I notice that is listed in your endeavors.

Mr. MORGAN. Yes, sir; that is an investigation under way.

Mr. WIGGLESWORTH. Some people interested in that item tell me that the Japanese have been landing frozen swordfish on the Atlantic seaboard at transportation rates, which have the effect of cutting the protection in half or more than in half. Do you know whether there is any foundation for that statement?

Mr. MORGAN. Not on anything I have now. I am not personally familiar with all the facts in this study. It is still under way, I should point out.

Mr. WIGGLESWORTH. Would you ascertain if there is available an answer to the question, to that question, and if so, what steps have been taken to counteract that?

Mr. MORGAN. Yes, sir.

Mr. BOLTON. And also whether your transportation section has studied that at all.

Mr. MORGAN. Very good sir. In answer to Mr. Wigglesworth's question respecting the study of the transportation phases in the swordfish investigation, since domestic swordfish are landed fresh in Boston directly from the fishing vessels and frozen in that city, no transportation rates were necessary. Hauling costs from the fishing vessel to warehouse were studied, however.

The transportation rates on Japanese imports into the United States through the port of Boston via ocean steamer were obtained from United States consular invoices and other original entry papers by the customhouse staff of the Tariff Commission.

The services of the Transportation Section were utilized in connection with the ocean-rate phases of this investigation.

DUTIES ON CEMENT

Mr. WIGGLESWORTH. Now, here is another item, under "Cement". I think, prior to the imposition of the 6-percent duty several years ago, up around my bailiwick, in Boston, about 24 percent of the cement was imported. Other figures I have show 13 percent for Providence,

10 percent for seaboard ports and the Carolinas, 13 percent in Florida, 7 percent in Portland, and so on.

Do you know what recommendation, if any, was made by the Tariff Commission in respect to that item in connection with the Belgium treaty?

Mr. MORGAN. The Commission, as a commission, made no recommendation on any of the commodities. We furnished whatever information we had in our files about the cement industry and the cement trade.

Mr. WIGGLESWORTH. Well, the fact that that protection was reduced 25 percent would not be the responsibility of the Commission? Mr. MORGAN. No, sir.

Mr. WIGGLESWORTH. In any sense of the word?

Mr. MORGAN. No, sir.

AVAILABILITY OF TRANSPORTATION COSTS

Mr. WIGGLESWORTH. Now, in the matter of transportation costs that Mr. Bolton has also referred to, do I understand that any Member of Congress can obtain from that section of the Commission information regarding costs of water transportation or rail and water transportation or rail transportation, promptly? Is information of that kind kept available and current at the Commission?

Mr. MORGAN. It is, sir. That is its function with us, the ascertainment, promptly, of all water rates or freight rates or combination rates, together with other studies of the effects of them.

Mr. BOLTON. Both from Japan to this country and from this country to Japan, and so forth?

Mr. MORGAN. Yes, sir. We have the conference rates in all these various oceans. We have endeavored to keep them up to date as much as we can.

DEFINITION OF CONFERENCE RATES

Mr. BOLTON. Conference rates; you speak of conference rates; what does conference rates man?

Mr. MORGAN. These concentrations of shipping interests that go into what they call conferences and make joint agreements about the rates that will be charged by each member of the conference between certain ports. We have the North Atlantic conferences; we have the Baltic conferences and the Mediterranean conferences and many others designated by waters and ports.

Mr. BOLTON. Those rates prevail as having been finally agreed to by the conference?

Mr. MORGAN. I am given to understand that they agree with each other that these are the rates that they will charge, but whether they are bound to observe them in the last instance, I am not so sure. There are penalties provided where conference members do not observe the rates on conditions of affreightment as agreed by the member lines forming a particular conference.

Mr. BOLTON. How are the American shippers represented in those conferences?

Mr. MORGAN. By the membership of companies who are active in that trade.

Mr. BOLTON. But, I mean, off-hand, we know that the British or the European shipping lines are much greater than the American and therefore we are at a disadvantage in any freight agreement, as I understand it.

Mr. MORGAN. That may be so, sir, although I do not know enough about the ocean shipping game to make any statements of that kind.

Mr. WIGGLESWORTH. Do you know what percentage of representation we have in reaching those agreements with respect to rates? Mr. MORGAN. No, sir. We will be able to get the information. (The information referred to is as follows:)

There are more than 100 off-shore ocean freight conferences. The American representation in each of these is not readily available in brief form. A few examples are:

Conference

American Foreign members members

North Atlantic Westbound Freight Association..
North Atlantic-United Kingdom Conference..
North Atlantic Continental Freight Conference.
Gulf-United Kingdom Conference.

Gulf Mediterranean Port Conference.

28462

10

Mr. MORGAN. I think the answer is, We can either abide by those rates or not, as we wish. The rates are really set by the British companies.

Mr. WIGGLESWORTH. Do you consider that this item is an important item when it comes to making a tariff rate for consideration in any of these reciprocal agreements?

Mr. MORGAN. It is stated in the Tariff Act of 1930 that transportation rates shall be taken into consideration in arriving at certain rates of duty.

Mr. WIGGLESWORTH. In the matter of potatoes, I am told that you can bring them from Canada into New York at 47%1⁄2 cents per hundred pounds and it costs 50 cents from Maine to New York, and if you want to bring them from Colorado or Idaho it costs $1.02. What does the Commission do in a case of that kind? Do they take that into consideration in such recommendations as they make for the Canadian treaty, for instance?

Mr. MORGAN. They would furnish the information, sir, as to what the varying rates were if called upon for it, and I daresay they would include it in any summary of tariff information, that is the freight rates from the principal source of production to the principal consuming market, and from the principal foreign source to the principal consuming center, but I do not think they make any particular recommendations as to what action should be taken based on those differences. The whole situation is surveyed and that is certainly one of the important factors.

Mr. WIGGLESWORTH. Similarly, for sawed lumber, out in the Northwest, I understand that you can ship from Canada, either to the Atlantic or the Gulf ports, at a differential of about $8.75 as compared with $12.50 in favor of Canada. That should be taken into consideration in any report that you might make with reference to that Canadian treaty.

5

Mr. MORGAN. I should think it would, sir, but I would like to have let me get whatever information we have on that line and submit it a little more accurately.

you

Mr. WIGGLESWORTH. Without being an expert, it would seem to me that we cut the $4 protection to $2 and raised the handicap of $1.75 for every thousand feet produced in America, in our northwest, as the result of that action, and I was wondering to what extent the Tariff Commission assumed responsibility in these treaties.

Mr. MORGAN. All I can say is that I know the question of freight rates, ocean rates, enter into any serious consideration that the Tariff Commission gives to a rate adjustment study. I assume, on that basis, that information of that kind was available at the time Canadian negotiations were under way.

INABILITY TO REDUCE ESTIMATES MADE FOR 1937

Mr. WIGGLESWORTH. Now, let me ask you one question about the dollars and cents here. You are asking, as I see the appropriation, the same sum as you asked last year. There is a slight cut. I think there is no reduction in personnel.

Mr. MORGAN. Yes, sir.

Mr. WIGGLESWORTH. You are asking, however, compared with 1935, you are asking $945,000 as compared with $826,000 for your general item, and you are asking a slight increase in the printing and binding item. Last year, when you came before this committee, as I recall it, you laid considerable emphasis on the work that you were doing under the National Recovery Administration. You had a number of investigations and, I think, I have seen the pottery investigation. That was an 18 months' job.

Mr. MORGAN. Yes, sir.

Mr. WIGGLESWORTH. And in the break-down, if I read it correctly, that you gave us for the hearings last year, you designated an expenditure under the N. R. A. of $94,834, and for the preceding year, for the same purpose, $91,132.

Now, my question is, National Recovery Administration having gone out the window, why can we not cut this appropriation to some extent commensurate with that total?

Mr. MORGAN. It is true, the N. R. A. activity has terminated so far as active investigations are concerned. The Congress, however, has given us a new activity under section 22 of the Agricultural Adjustment Act of practically the same character. What we shall be doing under that in 1937 is something for which we are trying to provide now.

Mr. WIGGLESWORTH. But you have had, of course, under the A. A. A. for 1 year, if not 2, before this. Has that been materially increased?

Mr. MORGAN. Congress has given us an entirely new function under section 22-import control.

Mr. WIGGLESWORTH. What was the function under the A. A. A. before that?

Mr. MORGAN. Cooperation, simply cooperation with the Agricultural Adjustment Administration.

Mr. WIGGLESWORTH. Does not this come under the head of cooperation?

Mr. MORGAN. This is a function where we investigate, find the facts and report to the President just like we do under section 336 of the Tariff Act. This implies and requires far more

Mr. WIGGLESWORTH (interposing). Is that burden going to amount to the same burden, in your judgment, as you had under the National Recovery Administration?

Mr. MORGAN. We have been assuming so, Mr. Wigglesworth, but of course no one knows. We heard, as soon as this power was spoken of in the congressional halls up here, that quite a number of interests were anxious to take advantage of the protection of agricultural programs afforded by section 22, the control of imports.

Mr. WIGGLESWORTH. When was that power or duty placed in your hands?

Mr. MORGAN. Last August.

Mr. WIGGLESWORTH. Have you had any work under it, to date? Mr. MORGAN. We have not. The President just promulgated the procedure, got out an Executive order outlining what the procedure was to be, about 3 weeks ago.

Mr. WIGGLESWORTH. Would we not be justified in making a material slash in there for the fiscal year 1937?

Mr. MORGAN. We think it unwise to make any such recommendation to Congress. Our present force down there is around 300 and is what it has been for approximately the last 3 or 4 years.

Mr. WIGGLESWORTH. It is 10 bigger than it was 2 years ago, is it

not?

Mr. MORGAN. Well it may be 10, more or less. We have as many as 50 or 60 changes during the year, but the total remains somewhere around 300. It may run from 290 to 310, and, with a stable organization of that kind, one that is accustomed to handling whatever the tariff problems are, it seems wise to us to continue.

We would think that, even though we were not greatly active under section 22, the Commission would still be busy with its general work, enough to justify in every sense the appropriation for which we are asking at this time.

Mr. WOODRUM. It can also be fairly assumed that the coming Congress will submit special matters to you for consideration.

Mr. MORGAN. That has been the basis upon which we have operated for the last 3 years. They have not only asked us for a lot of work but have assigned us new functions. They just gave us a new job that we were to do as long as the legislation authorizing it continued. Mr. BOLTON. Which you have done without any increased personnel?

Mr. MORGAN. Yes; and without any increase in appropriation. The only time we ever get any money is when we come before this committee.

Mr. WOODRUM. In case the A. A. A. was declared unconstitutional prior to the 1st of July, is it fair to assume that this $95,000 set-up for that activity would not be required?

Mr. MORGAN. Of course, we have not set up that much, I believe, for that activity this year.

Mr. BOLTON. It is under activities of projects, $95,000?

Mr. MORGAN. Yes; I see that is the figure. Well, as I say, even though that activity were to go out, the force of men at the Tariff Commission that would otherwise have been devoted to that, would