THE MUSEUM OF MODERN ART, Hon. DANIEL A. REED, Chairman, Ways and Means Committee, House of Representatives, Washington, D. C. DEAR CONGRESSMAN REED: Over the past several years a committee of the American Association of Museums has been working with its members in developing recommendations to liberalize existing customs regulations which affect the importation of works of art and other exhibition material to be shown in public and tax-supported institutions. I understand that these recommendations have been forwarded to you with the request that they be incorporated in the customs simplification bill of 1953 (H. R. 5106) which is currently under consideration by the House Ways and Means Committee. The proposals made by the American Association of Museums (and jointly sponsored by the American Federation of Arts) are intended solely to remove restrictions which affect the importation of objects essential to the educational and cultural activities of public and private institutions in the United States. The Tariff Act of 1930 and subsequent Treasury decisions tend, in some instances, to hamper the work of these institutions. Consequent delays in handling increase importation costs due to higher brokerage fees, storage charges, etc., and impose an undue hardship on institutions partially or solely maintained by limited public and private funds. As director of The Museum of Modern Art, a member museum of the association, I should like to urge you and your committee to give the most careful consideration to these proposals. Yours respectfully, RENE D'HARNONCOURT. AMERICAN KNIT HANDWEAR ASSOCIATION, INC., Re H. R. 5106-Customs Simplification Bill. Hon. DANIEL A. REED, Chairman, Ways and Means Committee, House of Representatives, Washington 25, D. C. DEAR CONGRESSMAN REED: This association, representing the United States manufacturers of seamless gloves and mittens knit directly from yarn, is pleased to submit the following statement on H. R. 5106; and we ask that it be entered in the printed report of the current hearings on the bill. We are in accord with the principal purpose of the bill: to modify certain administrative procedures, which are alleged to cause unnecessary hardships to importers. We wish to go on record in favor of true simplification of customs administrative laws. It is not equitable to maintain unnecessary burdens on importers by continuing administrative provisions which hamper trade. Nevertheless, we emphasize the need for continuation of a protective tariff system in this country for many industries such as ours. We believe Congress should be critical of any moves which would undermine the protective tariff system which has been established by Congress. Any proposal which might weaken our tariff in the name of customs simplification should be objectively scrutinized. In the light of such stated policy, we wish to comment briefly on the following sections of H. R. 5106: Section 4. Marking.-While we trust that those industries directly affected by the proposed repeal of the paragraphs in the Tariff Act dealing with their own specific products will competently testify on such repeal, we urge the committee to emphasize that the repeal of such paragraphs will in no way detract from the obligations of the Secretary of the Treasury to enforce the general marking provisions in section 304 of the Tariff Act. Section 13. Administrative exemptions. The proposed revision of paragraph (b) (3) of section 321 of the Tariff Act, raising the value of articles which would be exempted from the payment of duty, from $1 to $3, would open the gates to unfair import competition. The number of items which might be offered to the public, duty-free, is unforeseeable. It must be borne in mind that the number of products importable under this exemption would not be limited to the number of American products selling for up to $3. Foreign values, based upon low-cost foreign labor, particularly in the Orient, would foster the establishment of an unlimited mail order volume, to the detriment of retail and manufacturing payrolls in this country. Furthermore, the absence of a duty would preclude the compilation of figures on such import volume and value, making it improbable that the injured segments of American labor and management could prove the extent of their injury. We restate our opinion, expressed in previous hearings when the proposed exemption was limited to $10, that the administrative burden which this exemption would allegedly relieve is offset by the magnitude of the harm it would create. We ask that the proposed increase of the exemption to $3 be stricken from the bill, leaving the present $1 exemption under section 321 of the Tariff Act in force. Section 15. Value.-In the proposal to amend section 402 of the Tariff Act, foreign value is eliminated and export value is substituted for the present choice between foreign value and export value. We understand that foreign value is difficult to ascertain and that export value, the present alternative, is used predominantly. Nevertheless, we prefer retention of the present alternative which gives preference to foreign value where ascertainable, until it can be clearly shown that export value is carefully enough defined to forestall abuses which would result in lower tariff duties. Even more objectionable is the introduction of comparative value. We are at a loss to discover why it was introduced as an alternative basis of valuation. Not only do we deem it unnecessary, but we find it so loosely defined that it is a potential loophole for evasion of the proper assessment of duties. In view of the questionable character of section 15, we plead that it be stricken from the bill. Section 22. Conversion of currency.-When speaking of the "par value" of currencies, we believe that it would be sound to qualify par value by expressing value in terms of the number of grains of fine gold contained in the several monetary units. GATT CAVEAT We note that H. R. 5106 omits the caveat which was an important part of H. R. 5505, stating that "The enactment of this act shall not be construed to determine or indicate the approval or disapproval by the Congress of the executive agreement known as the General Agreement on Tariffs and Trade." In view of the general controversial ramifications of the United States position on detailed questions following the signing of the executive agreement, and specifically in view of this industry's experience in appealing for consideration under article XXVIII of GATT, we emphatically urge that such a caveat be made a part of H. R. 5106. We reiterate our endorsement of true customs simplification when it is proposed within the realm of administrative progress, taking exception only to those proposals which would effect tariff changes under the guise of simplification; and we urge passage of the bill with the modifications suggested herein. Respectfully submitted. Re H. R. 5106. AMERICAN KNIT HANDWEAR ASSOCIATION, INC., COMMITTEE ON WAYS AND MEANS, GENERAL CHEMICAL DIVISION, House of Representatives, Washington, D. C. DEAR SIRS: We import sulfur ore in the form of pyrites (sulfide of iron) from Canada, which is classified free of duty under paragraph 1777, Tariff Act of 1930. However, this ore contains minute quantities of lead, not exceeding 0.1 percent. Because of an omission in paragraph 391 of the 1930 Tariff Act, a duty of 3⁄4 cents per pound is being assessed against the lead content of this ore, even though the lead is not recovered, does not enter into competition with any domestic lead, and the cost to the Government of collecting the duty is many times the amount of the duty collected. As H. R. 5106, the proposed Customs Simplification Act of 1953, would amend paragraph 391 of the 1930 Tariff Act in other respects, we believe it should at the same time correct this omission, remedy the unfair treatment of importers of this material, and avoid loss to the Government resulting therefrom. So far as here pertinent paragraph 391 provides as follows: "PAR. 391. Lead-bearing ores, flue dust, and mattes of all kinds, 11⁄2 cents 1 per pound on the lead contained therein: Provided, That such duty shall not be applied to the lead contained in copper, gold, or silver ores, or copper mattes, unless actually recovered:" It should be noted, however, that the provision for zinc-bearing ores in paragraph 393 of the 1930 Tariff Act contains the following exception: "except pyrites containing not more than 3 per centum zinc". Consequently, in contrast to the duty imposed on the lead content of pyrites, no duty whatsoever is imposed on the zinc content of pyrites containing 3 percent or less zinc. To end this unfair and discriminatory treatment, we request that a similar exception be incorporated into paragraph 391 by changing proposed section 5 (a) of H. R. 5106 to read as follows: "SEC. 5. (a) Paragraph 391 of the Tariff Act of 1930, as amended (U. S. C., 1946 edition, title 19, sec. 1001, par. 391), is hereby amended to read as follows: "Lead-bearing flue dust, mattes, and ores of all kinds, except pyrites containing not over 11⁄2 per centum lead: Provided, That the duty provided for in this paragraph shall not be applied to the lead contained in copper, gold, silver, or tin ores or copper mattes unless actually recovered.' "The Secretary of the Treasury is authorized to make all necessary regulations to enforce provisions of this paragraph." This exception is fully supported by the policy expressed in paragraph (g) of section 8.48 of the Customs Regulations of 1943, which requires the collector of customs to deduct 12 percent from the lead content of any dutiable import made under a contract providing for a 12 percent lead allowance. In further support of the requested change, we should like to call the committee's attention to the following additional facts: Pyrites such as we import is not mined for its lead content at all, but for gold, copper, or zinc. After the removal in Canada of the gold, copper, or zinc, the pyrites is shipped to us for the purpose of removing the sulfur to make sulfuric acid. For this purpose, any lead which may be found in the pyrites is not only unwanted but is actually detrimental. Consequently, our supply contracts are designed not to allow, but to minimize to the greatest possible degree the presence of lead. Sulfuric acid is one of the most important basic chemicals being used by American industry in the production of steel, petroleum and many other essential products. In the manufacture of sulfuric acid, pyrites is used as a substitute raw material for elemental sulfur which has been and continues to be in short supply. By thus relieving the sulfur shortage, the importation of pyrites from Canada contributes to the national welfare and the defense effort. The amount of lead in the pyrites in question is relatively so small that it is never recovered and never goes into competition with any lead produced in the United States or elsewhere. There is, therefore, no need to have any duty on this lead content, from the point of view of protecting any American industry and, in fact, the duty presently imposed cannot possibly serve any useful purpose. A pound of our imported pyrites (containing 0.1 percent of lead, the maximum found to date) is presently subject to a duty of 0.075 cents (71⁄2 ten-thousandths of 1 cent) per pound. An average carload of imported pyrites contains 60 tons or 120,000 pounds of which the 0.1 percent lead content would be 120 pounds, and the duty 90 cents per carload. With hundreds of thousands of tons being imported each year, the penalty imposed by this duty is substantial. În order to collect the duty of 90 cents per car, the United States customs officers at Buffalo, N. Y., are compelled to take accurate samples out of every car and then send the samples to the United States customs laboratory at the port of New York for careful analysis by a United States chemist to determine the exact lead content. The cost of a reliable chemical analysis alone is at least $5. When to this is added the cost of taking samples at Buffalo and sending them to New York, it is apparent that the total cost of collecting the duty of 90 cents per car is at least 10 times the duty collected. It is the policy of the United States to avoid, if possible, the expense and inconvenience of collecting duties which are disproportionate to the amount of such duties. This policy is expressed in sec. 321 of the Tariff Act of 1930, as amended This rate was reduced to 34 cents per pound under the Torquay Trade Agreement (T. D. 52739). (U. S. C., 1946 edition, title 19, sec. 321) which authorizes the Secretary of the Treasury to admit articles free of duty when the expense and inconvenience of collecting the duty would be disproportionate to the amount of such duty. However, this authority is not broad enough to apply to the ordinary commercial transaction, as it is limited to articles not in excess of $5 in value accompanying and for the personal and household use of persons arriving in the United States, or $1 in value in any other case. Sec. 13 of H. R. 5106 would broaden this authority to allow persons to bring with them articles up to $10 in value for their personal use and to allow free entry up to $3 in other cases. Thus, although the policy of avoiding the expense and inconvenience of collecting disproportionate amounts of duty would be continued and enlarged in H. R. 5106, it would still not be broad enough to take in commercial transactions. Therefore, our only relief would be by amendment of par. 391 of the Tariff Act of 1930. CONCLUSION We have been advised by the Bureau of Customs that our only avenue for relief is legislation. We believe that the proposed Customs Simplification Act of 1953 would be the proper vehicle for such relief. The lead content of the pyrites which we import is not commercially recoverable and is not in fact recovered as its recovery would be economically prohibitive. It does not enter into competition with any lead produced or used in the United States. The payment of the duty results in a penalty on the importer. The collection of the duty results in a net loss to the Government. Any duty on pyrites containing up to 12 percent lead can serve no useful purpose. Paragraph 391 of the Tariff Act of 1930 should be amended and simplified by excepting therefrom any pyrites containing not more than 12 percent lead. This would conform to the policy expressed in paragraph 393 (which exempts pyrites containing less than 3 percent zinc), and section 321 of said act, and in paragraph (g) of section 8.48 of the Customs Regulations of 1943. For the foregoing reasons, we urge that the amendment we have requested be adopted. Respectfully. GENERAL CHEMICAL DIVISION, Hon. DANIEL A. REED, CHAMBER OF COMMERCE OF THE UNITED STATES, Chairman, House Committee on Ways and Means, DEAR MR. REED: The Chamber of Commerce of the United States supports the principles of H. R. 5106 pending before your committee to provide for customs simplification. Even before Congress began considering this forward step in 1950, the membership of the national chamber stated that simplification and modernization of the customs administrative provisions of our tariff laws was of prime importance. Therefore, we have consistently urged your committee to start legislative action as you did. Customs simplification is a universally accepted approach to facilitating world trade. The uncertainties and delays in the current outmoded procedures not only have been costly to the American importer but have been an important deterrent to those seeking to enter American markets. For the above reasons, we strongly urge your committee to act favorably and promptly on this legislation. Beyond the field of legislation, the national chamber believes that there should be continuous action on the part of the responsible agencies of Government to improve and simplify the administrative machinery and regulations. We also believe that there should be international action to modernize, simplify and standardize customs, consular, and other trade documentation and formalities. I would appreciate it if you would make this letter a part of the record of your hearings. Cordially yours, CLARENCE R. MILES. RESOLUTION FAVORING THE PASSAGE OF CUSTOMS SIMPLIFICATION ACT (H. R. 5505) (1951) ADOPTED BY THE CHAMBER OF COMMERCE OF PITTSBURGH, MAY 12, 1953 The Chamber of Commerce of Pittsburgh with a membership of 3,600 businessmen in the Pittsburgh area, adopted the following resolution at its board of director's meeting on May 12, 1953: "Resolved, That the Chamber of Commerce of Pittsburgh recommends the passage of Customs Simplification Act (H. R. 5505) (1951). Present customs regulations are causing great difficulties for our importers, and many unnecessary costly procedures. Consular invoices and consular visas should be abolished since they merely duplicate information contained in commercial invoices. A number of foreign countries have eliminated the consular invoices requirements in order to reduce the burden in doing international trade. The United States should follow this example to encourage rather than discourage international trading." STATEMENT SUBMITTED BY WILLIAM S. SWINGLE, PRESIDENT OF THE NATIONAL FOREIGN TRADE COUNCIL, RELATING TO H. R. 5106 The National Foreign Trade Council, Inc., wishes to place itself on record in support of the general principles embodied in H. R. 5106 and in urging the enactment of a customs simplification measure in conformity with these principles. The council, which was founded in 1914, comprises in its membership manuturers, merchants, exporters, and importers, rail, sea, and air-transportation interests, bankers, insurance underwriters, and others interested in the promotion and expansion of the Nation's foreign commerce. In the interest of a large and expanding volume of American foreign trade, the council for more than 25 years has been urging the revision and simplification of the unduly burdensome and highly restrictive customs administrative law and procedures of the United States. Strong recommendations to this end have been included in the final declarations of many national foreign trade conventions sponsored by the council. Typical of such recommendations of earlier national foreign trade conventions was that of the 16th convention, which was held in Baltimore, Md., April 17-19, 1929. In its final declaration, that convention stated: "We again express the hope that Congress will take early action upon the long pending measure for revision and simplification of the customs administrative law, and we point out that the great bulk of the friction and difficulties which arise out of the international movement of merchandise spring from the cumbersome customs administrative regulations." The most recent expression by a national foreign trade convention on the subject of customs simplification was that of the 39th convention. This convention, held in New York City November 17-19, 1952, and attended by more than 2,000 representatives of American foreign trade and investment interests from all sections of the country, in its Final Declaration stated: "The convention expresses its keen disappointment that the 82d Congress failed to complete action on the customs simplification bill. It urges that the Treasury Department again bring forward a bill designed to modernize the administrative and procedural laws, with the object of giving improved service to the importer, at the least cost to the taxpayer, and with the greatest benefit to the consumer." As regards H. R. 5106, the emphasis which it places upon improvement in customs valuation procedures is especially commendable. The archaic, highly complex, and extremely restrictive valuation provisions of the customs administrative law of this country is responsible for the exasperating uncertainties, extraordinary difficulties and prolonged delays involved in clearing many articles of foreign merchandise through the customs portals of the United States. These provisions have also been prolific of prolonged and costly litigation which, in conjunction with the other obstacles to customs clearance, has greatly added to the inconvenience and cost to American consumers of imported products. Under existing legislation, the value of imported merchandise for the purpose of assessing ad valorem duty is determined according to the provisions of section 402 of the Tariff Act of 1930. Section 15 of H. R. 5106 provides for a substantial revision of section 402 so as to effect the following: (1) Elimination of "foreign value" as a basis for assessment of duties. (2) Designation of "export value" as the primary basis of valuation. (3) If the "export value" cannot be ascertained satisfactorily, then the use of "United States value." |