tons as compared to 495,126 long tons for the prewar period 1937 to 1941, inclusive. This represents a decline of 1.7 percent for the postwar period. Between these two periods the population of the United States increased 14.5 percent. Copra and coconut oil imports should, therefore, have been more than 16 percent greater had the prewar rate of importation per capita been retained. UNITED STATES WORLD'S GREATEST EXPORTER OF OILS AND FATS The world production of oils and fats, according to the Office of Foreign Agricultural Relations publication Foreign Crops and Markets of March 5, 1951, amounted in the year 1950 to 22,900,000 short tons. Production in the United States accounts for more than one-fourth, or, to be exact, 26.89 percent of this total. The annual copra and coconut oil production of the Philippine Islands amounted in 1950 to 640,000 short tons in terms of oil-which is only 2.8 percent of the world supply of oils and fats. The Filipinos consume a considerable tonnage of their production, i. e., about 75,000 short tons, which leaves around 565,000 short tons for export as copra and oil. When the processing tax was levied on coconut oil in 1934 the United States was a net importer of oils and fats, including the oil equivalent of imported oilseeds, of about 1 billion pounds per annum. Under postwar conditions we have assumed a position of net exporter of 1 billion pounds per annum. The change in the American position from net importer to net exporter means that whatever Philippine coconut oil is excluded from the United States by the 3-cent processing tax or the customs duties proposed in H. R. 1535 will be encountered by our exportable surpluses in world markets. Since the processing tax depresses the market price for Philippine copra and coconut oil, the retention of the tax as such or as a customs duty will be detrimental to the very interests it was originally designed to protect as they will be obliged to meet its competition at a lower level of price than if admitted into the United States tó be absorbed by markets such as that in the soap-making field which is rapidly being taken over by synthetic detergents. Gentlemen, if I were now a Member of Congress representing a district producing cottonseed or soybean oil I would surely fight to remove the 3-cent tax from coonut oil so that my constitutents might have the resulting advantage in world markets. Exports of oils and fats from the United States in 1950, according to the Bureau of Agricultural Economics publication Fats and Oils Situation for FebruaryMarch 1951, totaled 2,084,000,000 pounds, including oilseeds and fats and oils products in terms of oil. Total United States production of oils and fats from the 1950 crop, according to the June 2 issue of Fats and Oils Situation was 12,315,000,000 pounds (6,157,500 short tons). This means that at the rate of 1950 exportation we are selling close to 17 percent of our total production in world markets. Our edible oil and fat production from the 1950 crop was 8.9 billion pounds. Principal exports of food oils and fats in 1950 were: lard, 501.4 million; cottonseed oil, 140.2 million; soybean oil, including oil equivalent of soybeans, 486.7 million; peanut oil, including oil equivalent of peanuts, 61.3 million. Total exports of edible oils and fats in 1950 were 1,218,800,000 pounds-which, applied against the 1950 crop of 8.9 billion pounds of edible oils show that exports moved out at a rate of about 14 percent of total production. The United States production of inedible fats and oils from domestic materials is estimated by the Bureau of Agricultural Economics to be around 3.4 billion pounds. Inedible tallows and greases account for the largest proportion of the nonfood fats and oils production in the United States. Inedible tallow and grease production in 1950, according to Fats and Oils Situation for May-June 1951, was 2,267,000,000 pounds. Of this production 67.3 million pounds of greases and 468.6 million pounds of inedible tallow were exported; a total of 535.9 million pounds. This figure represents 23.6 percent of total production which had to be sold in world markets in 1950. Other exports of inedible oils and fats in 1950 include: fish oils, 76 million pounds and linseed oil and oil equivalent of flaxceed, £4.7 million pounds. These figures on exports show that there could be no possible means whereby the United States could profit either on its edible or inedible production of oils and fats from retaining the 3-cent per pound processing tax on coconut oil. Mr. Chairman, the problem of the Filipino is how to get dollars. He needs dollars to pay for the canned milk, flour, canned fish, and other food products which he buys from the United States. He needs them for the fertilizer, agricultural implements, and textiles he buys from us. Since coconut products represent 58 percent of Philippine exports, the quickest way to increase the Filipino's supply of earned dollars is to repeal the 3-cent processing tax on coconut oil. Not only would we have the satisfaction of having removed an unjust tax which directly affects the Philippines and no other country, but we would enhance the ability of the Filipino to buy more of the products of the United States. H. R. 1535 PROPOSES TO FREEZE COPRA AND COCONUT-OIL TAXES UNTIL 1947 Section 23 of H. R. 1535 contains a very novel proposal. While it proposes to convert the processing taxes to customs duties, it says on page 43 that the Philippine Republic must continue to consider them as "internal taxes." In other words, we set up a legal fiction. The purpose of the creation of this legal fiction is to prevent the Philippine Republic from claiming exemption from them as customs duties under section 201 of the Philippine Trade Act of 1946. The following paragraph, however, cuts even deeper. It provides that the converted duties may not be subject to modification under section 350 of the Tariff Act of 1950. In other words, it is proposed after converting the tax to a customs duty to freeze it until July 3, 1974. This appears to be a most unjust way to treat the Philippines for whose welfare we continue to bear responsibility. The 3-cent processing tax was levied in 1934. The Reciprocal Trade Agreement Act likewise went into effect in 1934. During the 17 years that it has been in effect we have lowered, through reciprocal trade agreements with many nations, thousands of tariff duties. With few of these nations have we had ties as close as those between the United States and the Philippines. Yet in the 17 years that the 3-cent-per-pound processing tax has been in effect against Philippine coconut oil we have made no effort to modify it. In the specific instance of babassu oil, the United States has utilized section 350 of the Tariff Act of 1930 to bind a closely competitive oil on the free list. Babassu oil like coconut oil is high in lauric acid. It is this fatty acid which makes them valuable for many essential needs. Both contain in excess of 45 percent lauric acid. Babassu is the only other high lauric acid oil which is readily available to the United States market. Babassu oil was initially bound on the free list in the trade agreement effected with Brazil in 1936. It was again bound in the General Agreement on Tariffs and Trade as negotiated at Geneva in 1947. The Philippine Republic insists that this is discriminatory and a violation of the Philippine Trade Act of 1946 and their trade agreement with us; and I think they are right. The discrimination ought to be removed by the repeal of the 3-cent tax on coconut oil. This action is all the more requisite now because the United States Government is taking steps under the point 4 program for Brazil to increase the production of babassu oil. The point program would promote mechanization of the industry and improve transportation conditions in babassu growing areas. As I have stated, it is proposed in H. R. 1535 to freeze the 3-cent processing tax, after conversion to a customs duty, for an additional 23 years. The finality which would be indicated by an action of this kind would seem to mean that the inherent injustice in the 3-cent per pound processing tax could never be rectified. Gentlemen, I just do not believe that the hearts of the people of the United States are that calloused. The Philippines are still our responsibility and will be until their independence is a success. Their craft is already wobbling in the 8-year free-trade period of the Philippine Trade Act of 1946 which everyone had hoped would be an easy passage. They are to hit the first rapids after July 4, 1954, when we begin to apply graduated tariff duties to part of their exports to us and declining quotas to the balance. I doubt that they can negotiate the passage unless we do something to help their chief industry, namely, the coconut products industry, and that means to repeal the processing tax. A very simple amendment will accomplish the objective: It would be to insert a new paragraph (b) on page 39 of H. R. 1535, reading: "Section 2470 (a) (1), Internal Revenue Code (U. S. C., 1946 edition, title 26, sec. 2470 (a) (1)), is amended by striking out the words 'coconut oil' following the words 'processing of." It will also be necessary to remove from the various subdivisions of section 23 of H. R. 1535 all reference to the proposed change-over of the 3-cent per pound processing tax to a tariff duty applicable to copra and coconut oil. TABLE II. Use of coconut, cottonseed, and soyabean oils in margarine-Percentage of total oils used and production of margarine, fiscal years (ending June 30), 1924 to 1950, inclusive 1 In thousands of pounds. 2 Percentage of "Total oils and fats." Source: Annual Report of the Commissioner of Internal Revenue. CHAMBER OF COMMERCE OF THE UNITED STATES, 'The Honorable WALTER F. GEORGE, Chairman, Senate Finance Committee, United States Senate, Washington, D. C. DEAR SENATOR GEORGE: The Chamber of Commerce of the United States of America wishes to register its approval of the purposes of H. R. 5505 as set forth in the report of the House Committee on Ways and Means, October 1, 1951. The purposes of this bill (H. R. 5505), as passed by the House on October 15, 1951, and now receiving the consideration of your committee, are in full accord with the policies of this organization. I am attaching the attitude of the national chamber's membership on this subject. Respectfully yours, (Signed) C. R. Miles, POLICY STATEMENT OF MEMBERS OF THE CHAMBER OF COMMERCE OF THE UNITED STATES FAVORING CUSTOMS PROCEDURE REVISIONS We recommend that all countries seek to modernize, simplify, and standardize their consular and customs administrative regulations and consular and trade formalities and documentation by thorough and over-all revisions. We need immediate administrative and legislative action to effect modernization and simplification of our customs administrative regulations and customs provisions of our tariff laws. The Treasury Department should immediately effect desirable changes which can be accomplished by administrative action, and transmit to Congress its recommendations for changes requiring legislative action. The Treasury Department, in cooperation with its Customs Bureau, the Departments of State and Commerce, the United States Tariff Commission, and any other appropriate Government agencies, should continue to survey such laws and regulations. Hon. WALTER F. GEORGE, WILLIAMS, CLARKE CO. Wilmington, Calif., January 26, 1952. Chairman, Senate Finance Committee, Washington, D. C. DEAR SIR: We refer you to H. R. 5505, Customs Simplification Act, now before the Senate Finance Committee for consideration, it having passed the House on October 15, 1951. We heartily endorse this bill for its purpose and necessity and trust that you will exercise your influence with the committee and on the floor of the Senate to provide the support necessary for its enactment into law. This bill does, however, contain certain features which in our experience we firmly believe need to be remedied to make it the law it hould be. To this end we supply the following information for your guidance and request that you seek the changes in the law to correct the deficiencies to be outlined. Section 13 of the proposed bill should set a definite time limitation within which the customs appraiser must complete his appraisement. In the past, as now, without such a time limit it is not uncommon for an appraisement requiring payment of increased duties to be completed 10 years or more after the goods have arrived, been entered, and delivered to the importer. You can readily see that such delay can result in many situations detrimental both to the Government and the importer. From the importer's standpoint it may cause serious financial difficulty, and more important, when an importer knows that certain items will be subject to delays because of withheld appraisement, he will cancel orders for such merchandise thus interrupting a normal flow of trade. Such delays may also cause the Government to lose revenue for, in such a period of time, the importer or his surety may become nonexistent or bankrupt, making collections impossible. Certainly an agreement could be reached as to what would constitute a reasonable time in which the appraiser should be required to determine the value of imported merchandise entered in the usual normal customs procedure. Section 16 of the bill would increase the ceiling on informal entries from $100 to $250. Here we are concerned with commercial shipments only. It is estimated that under the proposed bill, and using mail, air and surface transportation facilities it would be possible for a single importer to bring into the country merchandise valued at a minimum of $250,000 per year. Since merchandise imported informally is not subject to expert examination, classification, and appraisement, it is logical to presume that importers would flock to adopt this method of importation. The normal customs safeguards and importations of embroidery, handkerchiefs, semiprecious and synthetic stones and many other commodities would disappear and the way to many abuses would be wide open. In addition, since each present formal entry would be broken up into many informal entries, the number of transactions would be multiplied and customs personnel would have to be increased accordingly, thus causing greater expenditure instead of the economy which is sought. Re section 17: This proposed section eliminates amendment of entries and deals with duties on undervaluation. The proposal which would abolish the right of amendment of an entry under any circumstances once an entry has been made is too harsh and is entirely unnecessary. There are situations where, from the point of view of the Government, of the customhouse broker, and of the importer, it would be salutary to permit amendment of entries. right to amend the entry, the additional duties provided for in this section may well be imposed upon an innocent person who, if permitted to amend his entry, would have avoided these additional duties and yet paid to the Government what was lawfully due. Without the We believe that the concept of additional duties is wrong and should be discarded entirely. If there is an honest dispute between an importer and the Government, the dispute should be resolved in the proper forum without any penalty. If an importer is fraudulent or deceptive, there are other provisions of law which amply punish him, either through criminal prosecution or civil penalties against him personally or against the goods imported. We believe the above-mentioned observations are of the greatest interest to the entire importing community and it is for this reason that we present them to you and solicit your support of them. Should you need additional information, verification, or other data in referenceto the foregoing, please let us know as we want to assist you in any way possible with this matter. Very truly yours, WILLIAMS, CLARKE CO. By JAMES CLARKE NATIONAL FOREIGN TRADE COUNCIL, INC., Reference H. R. 5505 Hon. WALTER F. GEORGE, Chairman, Senate Finance Committee, Senate Office Building, Washington, D. C. MY DEAR SENATOR GEORGE: The National Foreign Trade Council for many years has urged a simplification of United States customs administration. The final declaration of the Thirty-eighth National Foreign Trade Convention, held in New York October 29-31, 1951, contained the following recommendation on customs simplification: "The convention is gratified that the House of Representatives has recently approved, by voice vote, the customs simplification bill, H. R. 5505. It urges that the Senate complete action on this legislation promptly at the next session of Congress. It expresses the hope, however, that the Senate will give careful consideration to the suggestions for amendment submitted by business to the House Ways and Means Committee. "The convention commends the Treasury Department and the Bureau of Customs for the progress made in simplifying customs procedures where such steps could be taken without new legislative authorization. It regards the proposed revision of the draw-back procedure, and the administrative improvements which have been instituted in the inspection and clearance of certain bulk shipments, as well as mail and air entries, as significant achievements in this direction. "The Foreign Trade Zones Board is also commended for the completion, in cooperation with the Bureau of Customs, of simplified regulations and procedures for merchandise transferred to our foreign-trade zones." Among the suggestions which our council made to the House Ways and Means Committee for amendment of H. R. 1535 (the previous Simplification Act) were the following: "Reference: Section 313 (b) of the Tariff Act of 1930-Extension of time limitation to 3 years "Section 313 (b) as constituted in the Tariff Act of 1930 contains a time limitation of 1 year in which the imported sugar, nonferrous metals, or ores containing nonferrous metal, may be used in manufacture. The proposed extension to 3 years seeks to place articles manufactured under section 313 (b) on a more equitable basis vis-à-vis articles manufactured under section 313 (a) which |