boat will serve as well, because air transport will add nothing but a very high transportation charge.

The best method of handling such shipments is to make the entry in New York, after which they can move as domestic cargo without customs' concern. This preferred method is not economically feasible if the cargo arrives in New York after 5 p. m., or on weekends and holidays. Such arrivals are held over until the following business. day, which may delay the shipment from 1 to 3 days. This delay is not because airlines do not operate during those hours, for they operate around the clock. Nor is the delay due to the closing of customs facilities, because these are available around the clock. The difficulty lies in the fact that airlines are not permitted to make informal entries. The carriers are adequately qualified to do all that is required of them, because the cusoms officials prepare the forms and the carriers need only sign as agent of the consignee. Such an agency relationship is recogni ed in many countries and for several purposes.

The United States will not lose revenues under the procedure, for not only are the forms prepared by United States customs employees but the certified air carriers are bonded to satisfy their obligations to the Bureau.

The most expeditious and economical way to eliminate the present bottleneck on air shipments to inland destinations is to authorize the airlines to enter the cargo, by the informal entry procedure, particularly when the shipments arrive after 5 in the evening or on Sundays or holidays. Only in this way can the airlines provide a service which matches their flying speed. An amendment to this bill to accomplish that is attached to this paper as appendix A.

(The amendment in appendix A is the one attached to Mr. Tipton's letter and appears on p. 107.)

Mr. TIPTON. My last comment relates to the inequity which the current customs laws impose on transportation companies. I refer to the charges imposed upon carriers for inspections performed after regular hours and on Sundays and holidays. This committee has considered this problem as it relates to buses, trucks, ferries, and bridges, and has exempted them. However, railroads, steamships, and airlines are still subject to this charge.

To impose these charges on carriers is wrong in principle because the tariff laws are enforced to benefit all Americans. Customs inspections are performed to enforce the tariff laws of the United States in order to protect American industry and agriculture, and to collect Federal revenue. These services benefit all citizens, and there is no reason why the cost should be paid by the transportation companies. Nevertheless, under present law, when an airplane arrives on a Sunday or holiday or at times other than tours of duty of the inspectors, the carriers must pay charges for the inspections.

This charge on carriers is wrong also because it is directly contrary to the statutory policy prohibiting the payment of any part of the compensation of Government officers or employees by any private party. Thus, in an appropriation act of March 3, 1917, it was provided:

No Government official or employee shall receive any salary in connection with his services as such an official or employee from any source other than the Government of the United States, except as may be contributed out of the treasury of any State, county, or municipality, and no person, association, or corporation shall make any contribution to, or in any way supplement the salary of, any Government official or employee for the services performed by him for the Gov

ernment of the United States. Any person violating any of the terms of this section shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punished by a fine of not less than $1,000 or imprisonment for not less than six months, or by both such fine and imprisonment as the court may determine.

For many years that provision was carried as section 66 of title 5 of the United States Code, Executive Departments and Government Officers and Employees. In the rather general revision of the code which was made by the act of June 25, 1948, 62 Statutes 862, this provision was transferred to new title 18, Crimes and Criminal Procedure, where it appears, modified in language but not in substance, as section 1914. That section reads:

Whoever, being a Government official or employee, receives any salary in connection with his services as such an official or employee from any source other than the Government of the United States, except as may be contributed out of the treasury of any State, county, or municipality; or

Whoever, whether a person, association, or corporation, makes any contribution to, or in any way supplements the salary of, any Government official or employee for the services performed by him for the Government of the United StatesShall be fined not more than $1,000 or imprisoned not more than six months,

or both.

These impositions on carriers are wrong because the charges imposed are so exhorbitant. The amount of the premium pay received by customs employees was studied last year by the staff of the Senate Committee on Post Offices and Civil Service, and a report issued which emphasized the oppressive inequities which now exist. Let me read from two of the findings:

It was found—

1. As to earnings: That the overtime earnings of some employees exceeded their regular salaries during 1951. For example, one employee with regular pay of under $5,000 earned over $7,500 in premium pay; another employee, with regular pay of less than $4,500, earned over $6,500 in premium pay ***

3. As to rates: That the average hourly overtime rate of individual employees was, in many instances, 5, 6, 7, and up to 16 times their regular hourly rate of pay. For example, one employee received 288 hours' pay for 57 hours' work; another received 290 hours' pay for 41 hours' work; and another 475 hours' pay for 69 hours' work. Expressed in another way, one employee, for example, earned $1,141 for 79 hours' work, another $607 for 49 hours' work, and another $633 for 39 hours' work.

An illustration of the exorbitant charges paid by airlines is the sum paid by one airline at one airport in one year. That carrier paid $47,000 last year, which was divided, we believe, among seven employees, or more than $6,500 in premium pay for each employee.

This committee was right when it relieved the buses, the trucks, the ferries, and the bridges from these unjustifiable charges in earlier legislation, but we believe that justice should be applied also to their competitors, the railroads, the steamships, and the airlines.

We contend that any consideration of customs administration will be incomplete without a review of these overtime charges. We refer you to bills before this committee which would remove these inequities. H. R. 3550 was introduced by Congressman Dingell in the 81st Congress. H. R. 194 and H. R. 1927 were introduced by Congressman Hinshaw in the last and in the current Congresses. We urgently request that these bills be acted upon promptly.

That concludes my statement, Mr. Chairman.

Mr. JENKINS. I see that you represent the Air Transport Association of America as general counsel. The main part of your position

is that you think the air carriers are not given a right to participate in this program as much as they are capable of doing?

Mr. TIPTON. That is it precisely, Mr. Chairman. We believe that with some adjustments to the customs laws, we can provide a considerably better public service.

Mr. JENKINS. Any other questions?

Mr. SIMPSON. You suggest an amendment to the law, do you not, having to do with the informal entry?

Mr. TIPTON. Yes, sir, it is attached.

Mr. SIMPSON. That is not taken care of in the bill before us?

Mr. TIPTON. It is not taken care of in the bill. The bill provides for the use of informal entries up to $250. The amendment would increase that to $500. The bill does not make any specific reference to the making of informal entries by the air lines as agents for the shippers. Our amendment would cover that point, and it would authorize the Secretary of the Treasury to let us make informal entries.

Mr. SIMPSON. I am kind of a beginner on this. Tell me what the difference is if you come from Europe and you come from New York. Would you not have to stop?

Mr. TIPTON. That amendment relates solely to the entry of goods. It has its effect only on cargo. The practical effect of it would be as follows: Instead of holding let us assume the cargo destined for Chicago arrives at the airport at 6 o'clock on Saturday evening. Mr. SIMPSON. In Chicago?

Mr. TIPTON. I am sorry, it arrives in New York, arrives in the customshouse in New York at 5 o'clock on Saturday. It must be held the following day and then taken up on Monday morning. Mr. SIMPSON. That is a formal entry?

Mr. TIPTON. And then a formal entry is made which then occupies a great deal of time, because it must go through all of the entry and appraisement procedure established by the Bureau of Customs which, depending upon the workload at the time being—well, we have had shipments that have been held for up to 14 days.

Mr. SIMPSON. Under your amendment what would be the situation?

Mr. TIPTON. The situation would be that any shipment of a value of less than $500 could be entered by informal entry, which takes much less time.

Mr. SIMPSON. When you arrived at Saturday evening, at 6 o'clock, what would happen?

Mr. TIPTON. Then the airline would sign the declaration as the agent. The goods could then be released to him upon payment of duty, whatever the duty was. He would then put it on board again and haul it back out to Chicago. That could be done very promptly. Mr. SIMPSON. Thank you.

Mr. JENKINS. Any other questions?

Mr. UTT. I do not have any questions. I have been absent so I did not hear all of his statement. I did want to discuss with somebody here the entry of pleasure craft into the United States. I do not know whether that would be covered in this or not. For instance, our situation in San Diego, people coming up form Escondido on the weekend arrive at, say, 5 o'clock on Friday night and in order to come into the United States they either have to wait until Monday to get off

their craft or their boat, or else pay an extra fee amounting to sixty or seventy dollars for the custom inspectors and the immigration officers to come out and examine the craft or the people.

Is there anything in this bill that would ease that regulation? Fifty percent of the people or 90 percent of the people coming back from Escondido to San Diego arrive on Sunday and they are subject to this terrific custom and immigration fee. Is there anything that can be put into this bill to relieve that situation?

Mr. TIPTON. That bears upon the point that I made just at the close of my statement. The charges to which you are referring that apply to pleasure craft, watercraft, and pleasure aircraft, are charges for overtime of customs employees. I represent airlines and so I had not referred to private aircraft. But the situation is the same. If a private aircraft comes onto an airport after hours or on holidays or on Sunday, he must pay the overtime for the customs employee at the rates that I described in my statement. I referred the committee to bills that are pending before the committee which could be considered in connection with this legislation that would solve the problem for the private aircraft and watercraft owner and the carriers as well. Mr. UTT. That is not covered in the present bill?

Mr. TIPTON. It is not covered in the present bill.

Mr. UTT. It is covered in the Hinshaw bill or in one of the others? Mr. TIPTON. Yes, either the Hinshaw bill or the others.

Mr. UTT. That money we have been paying to the customs officials is not going into the United States Treasury; it is simply a direct overtime payment to the inspector?

Mr. TIPTON. The aircraft owner pays the money to the Government. The Government turns all of the money over to the customs employee.

Mr. UTT. So actually, if I come in from Mexico and pay this $25 or $70 fee, whichever it happens to be, depending upon whether it is Mexicali or San Diego, I am actually paying the customs agent himself even though it goes into the Treasury and out again.

Mr. TIPTON. For his overtime, that is right.

Mr. UTT. It may be $70 for 10 minutes' work? It may be as much as $70 for 10 minutes' work to come out and check me out of my aircraft and come back in again?

Mr. TIPTON. It depends upon the whole situation as to just what the fee is.

Mr. UTT. If I am the only one who comes into San Diego on a Sunday, I pay the full fee, but if there are two who come in, we divide that? Mr. TIPTON. I think that is it. I do not know much about private aircraft as such. But that is the case with the airlines.

Mr. UTT. I know customs regulations on that are deterring people from making weekend trips to Ensenada and other border towns because of the inconvenience of the customs procedure. I would like to see something go into this bill that will correct that situation.

Mr. TIPTON. We certainly hope that something can be done. Mr. JENKINS. What is the volume of dutiable goods that travel in airplanes?

Mr. TIPTON. The value of it?

Mr. JENKINS. The value as compared to what comes in by boat. Mr. TIPTON. I am sorry, Mr. Chairman, I just do not have that.

Mr. JENKINS. That might be hard to get anyway. What I was trying to bring out was this: In one place in your statement here you develop a fact that is interesting. That is that many of these commodities coming across the ocean are bound for points in the interior, big cities in the interior. They would have to be stopped at the coast if they came on boats. If they came in airplanes, they could go on, and that would be a saving for you.

Mr. TIPTON. It would be a very great saving in time and in insurance. As you know, Mr. Chairman, we have to charge the shipper many times the rate that the surface carrier gets because our costs are higher. We try to save him money by moving his goods fast so that he will not have to maintain a large inventory, so his insurance will not be high, and other savings of that sort. That is the reason why all of these hours that I am talking about are just crucial for airlines.

Mr. JENKINS. Yes. In the last 10 years the airlines have increased their mail-carrying facilities, and they also have their express facilities to carry packages and freight. Of course, it would be equipped, then, to handle these quantities that come from foreign countries? Mr. TIPTON. That is right.

Mr. JENKINS. Any further questions?

If not, thank you very much.

(The following letter was later received from Mr. Tipton:)

Re H. R. 5106.

Hon. DANIEL A. REED,

AIR TRANSPORT ASSOCIATION OF AMERICA,

Washington 6, D. C., June 10, 1953.

Chairman, House Ways and Means Committee,

House of Representatives, Washington 25, D. C.

DEAR CONGRESSMAN REED: In my testimony on the above bill on May 27, 1953, I urged that it be adopted with an amendment relieving the airlines, railroads, and vessels of the exorbitant charges for customs inspections. You will recall that when Colonel Gorrell urged similar legislation in 1944, it was approved by your Committee and the House, but failed in the Senate.

We were grateful for your support at that time and want to ask you to support similar legislation in the form of an amendment to H. R. 5106. I am attaching the proposed amendment together with an explanation of it. I hope that when your committee considers this bill you will support the amendment we propose. In addition to the above amendment, I also urged in my testimony that H. R. 5106 be amended to permit airlines to make informal entry of merchandise arriving from foreign points and destined to inland cities such as Detroit and Chicago. Although we can fly from Paris to Chicago in 20 hours, our cargo is often delayed from 1 to 14 days because of the customs procedure now used to clear it between New York and Chicago. These delays can be eliminated if airlines are authorized to make informal entries. This change will not only improve our service to shippers, but it will protect the Federal revenues and save administrative costs.

I am attaching a copy of this amendment together with a short explanation of it for your information. I hope you will support this proposal also when it is considered by your committee.

Sincerely,

S. G. TIPTON, General Counsel.

AMENDMENT TO H. R. 5106

This amendment would permit airlines to mak informal entries of cargo shipments valued at not more than $500 and thereby remove the most important obstacle which prevents the delivery of cargo inside the United States as fast as the airlines can fly it there. For example, the airlines can pick up shipments in Paris at 7 at night and put them down in Chicago at 10:30 the next morning, but under the present law air cargo destined to such inland cities as Chicago and

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