:. Mr. REED of New York. As a matter of fact, there was nothing said because there was nothing in the original bill in regard to this at all. When we were in executive session that was the first time they commenced putting pressure on for something. That is not unusual. We work on a bill and we hold full hearings, which are open to the public, and they come in, but on many bills they will come in at the very last minute when you are writing up the bill and want all kinds of changes. In many instances we do make some changes and come up with a new bill embodying those changes. But this, of course, was at the last minute and I understand the gentleman has a letter from the Secretary of the Treasury making recommendations along this line.

Mr. JONAS of Illinois. I want to say to the distinguished gentleman from New York, we all respect, and I say it and I feel I am justified in saying, the judgment of the Secretary of the Treasury, but he should not be the lone arbiter in this kind of a situation that can create such far-reaching repercussions. Is it wise to commit such arbitrary power in the hands of one man just because he says the amendment is good? I am opposed to it under those circumstances.

Mr. SCOTT. Mr. Speaker, I yield 1 minute to the gentleman from North Carolina [Mr. JONAS].

Mr. JONAS of North Carolina. Mr. Speaker, I have asked for this minute in order to inquire about another amendment, which I understand will be proposed. It is the so-called Knox amendment. Nothing has been said in the debate so far about the Knox amendment, but I understand it is a revision of an original bill, introduced by the gentleman from Michigan [Mr. KNOX]. The number of the original bill was H. R. 4034. I would like to inquire of some member of the committee if there were any hearings on the so-called Knox amendment?

Mr. KNOX. In reply to the gentleman from North Carolina [Mr. JONAS] may I state there had been extended hearings in the committee on the bill, H. R. 4034, which I had introduced. It was discussed at considerable length in the committee. Then the Treasury Department was requested to draft the bill in amendment form. It also has the approval now of the Customs Bureau and Treasury so far as the administration is concerned.

The SPEAKER. The time of the gentleman has expired.

Mr. SCOTT. Mr. Speaker, I yield 3 minutes to the gentleman from Montana [Mr. D'EWART).

Mr. D'EWART. Mr. Speaker, I want to join with other Members in opposing the Eberharter amendment, particularly because of the injury it would do to the wool industry in the United States, which has been so seriously injured throughout the years. The imposition of what is known as the injury test would result in a year's crop of foreign wool arriving in this country before the Tariff Commission could conclude their hearings and afford the relief that is applicable under the countervailing duty. We would have

a year's entire crop of wool on our market injuring our wool industry. With the subsidy on the production and processing of wool, such as in Uruguay and Argentina and other places, they are able to deliver wool 20 to 25 percent below our domestic price, thereby seriously hurting our wool industry.

I was amazed to hear the former majority leader, the gentleman from Massachusetts, speak of the fine condition of the domestic wool industry of the United States under the Democratic ad

ministration. We are in a very serious position. The production of wool in this country is down to about one-third of what it used to be in former years. It got so serious a year ago that a group of 25 Members of the House and Senate, led by Senator O'Mahoney, signed a petition to the Secretary of the Treasury asking him to impose a countervailing duty, which we had made an effort to have applied for over 2 years. And it was not until May 6 of this year, under a Republican administration, that we got the first relief through a countervailing duty.

That is the condition we are facing. That is the injury we are trying to prevent by the Eberharter amendment. I was amazed to hear the statement made about the fine condition of the wool industry that was brought about under the Democratic administration. It is absolutely contrary to the fact.

Mr. PHILLIPS. Mr. Speaker, will the gentleman yield?

Mr. D'EWART. I yield to the gentleman from California.

Mr. PHILLIPS. I agree completely with the statement of the situation regarding wool. But let us understand that it also affects textiles, pottery, tree nuts, specialty crops, and many commodities, all of which find themselves in the same situation.

Mr. D'EWART. That is true. I want, however, to make this point on wool, because it is such a serious example of what has been done by the Democratic administration over the years, in refusing to impose a countervailing duty. And now Mr. EBERHARTER is proposing another amendment today that would extend the time when they could impose these duties until a whole crop of foreign wool was put on our market, thereby breaking the price.

Mr. HALE. Mr. Speaker, will the gentleman yield?

Mr. D'EWART. I yield to the gentleman from Maine.

Mr. HALE. I am very happy to hear the gentleman's remarks, because certainly the opinion in my district is entirely along the lines which he has expressed. I regret very much that this matter should have arisen.

I have received quite a number of telegrams, and I should like to read from one of them. The owner of the Hathaway Manufacturing Co., at New Bedford, sends one telegram. They had spent $7 million or $8 million in the last few years building up their plant. says in this telegram:

NEW BEDFORD, MASS., July 12, 1953. Hon. DONALD W. NICHOLSON,

House Office Building,

He

Washington, D. C.: Understand customs simplification bill, H. R. 5877, will come before the House Monday morning, July 13 and that the following amendments will be offered:

1. To abolish countervailing duties to offset foreign subsidies sponsored by EBERHARTER; and

2. To permit United States raw material to be processed in a foreign country and reimported into the United States with duty figured only on the added cost of labor and

processing sponsored by KNOX. Both these amendments would be very detrimental to the textile industry for the following rea

1. The countervailing duty amendment would permit a foreign country to subsidize importation of American cotton and preclude the establishment of countervailing duties to offset the subsidies on the reim

portation of goods made from said cotton.

2. United States cotton could be shipped to a foreign country, processed into cloth at low labor costs, and the cloth could be imported into the United States with duty figures only on the labor, making it completely impossible for United States mills to compete. I trust you will oppose both of these amendments with all the strength at your command.

NEW BEDFORD, MASS., July 12, 1953. Congressman DONALD W. NICHOLSON, House Office Building,

Washington, D. C.: Customs simplification bill, H. R. 5877. We hope you will do everything you can to defeat the Eberharter and Knox amendments of this bill and especially the Eberharter amendment pertaining to countervailing duties to offset foreign subsidies also the Knox amendment pertaining to whereby United States material such as cotton processed in a foreign country can be reimported into the United States with duty only aphas been processed. Trust you will contact plied to cost of labor when such material

other Members of Congress in behalf the cotton textile industry.

FRED W. STEELE.

I ask unanimous consent to include 1 or 2 of these telegrams in the RECORD, Mr. Speaker.

The SPEAKER. Is there objection to the request of the gentleman from Massachusetts?

There was no objection.

Mr. SCOTT. Mr. Speaker, I yield 2 minutes to the gentleman from Massachusetts [Mr. NICHOLSON].

Mr. NICHOLSON. Mr. Speaker, this amendment affects other things besides cotton and wool, as was pointed out by the gentleman from California [Mr. PHILLIPS). It also affects the confectionery industry. I understand that Boston, Mass., is one of the largest confectionery outlets in the country.

nia [Mr. HUNTER).

Mr. HUNTER. Mr. Speaker, I, too, wish to take this opportunity to express opposition to the so-called Eberharter amendment. This affects not only wool, as has been pointed out, it can affect a number of other commodities, such as walnuts, almonds, olive oil, and wines. Mr. COLMER. Mr. Speaker, will the gentleman yield?

Mr. HUNTER. I yield to the gentleman from Mississippi.

Mr. COLMER. Just for an observation; it affects all commodities, does it not?

Mr. HUNTER. That is true. It can affect all commodities faced with foreign competition. I feel, because of the fact that there have been absolutely no hearings on this general question, that this is not the proper time to bring up an amendment of this kind. I express opposition to it and, as I say, there are many agricultural commodities in California that may be adversely affected.

I yield back the balance of my time, Mr. Speaker.

Mr. COLMER. Mr. Speaker, I yield 1 minute to the gentleman from Texas [Mr. FISHER).

Mr. FISHER. Mr. Speaker, there is an analogy here in this situation between the Robinson-Patman Act and section 303 of the Tariff Act of 1930. The Robinson-Patman Act was designed to protect, let us say, an independent grocer from unfair competition where wholesale prices to a competitor are below prices by the same wholesaler to that independent grocer. That protects him against that sort of unfair competition.

Section 303 is a sort of Robinson-Patman

provision as applied to international trade; it prohibits foreign governments from subsidizing their industries by export subsidies and thereby enable the exporting competitor to sell his product at low prices, made possible by the export subsidy. The Eberharter amendment would nullify the protection of section 303 of the Tariff Act of 1930, and would give certain rights to foreign countries that by the Robinson-Patman Act we prohibit right here in our own country. It seems to me we should at least provide something like the same degree of protection against unfair foreign competition as by the Robinson-Patman Act we provide against unfair domestic competition.

Mr. SCOTT. Mr. Speaker, I yield 1 minute to the gentleman from Pennsyl

vania [Mr. FULTON].

Mr. FULTON. Mr. Speaker, I want to ask one question as to the extent of the jurisdiction of the bill. Does it impinge in any way on the executive agreement known as the General Agreement on Tariffs and Trades? Is it limited to administrative and procedural matters or does it cut across any agreements that have been made under that policy?

Mr. REED of New York. No; it does not.

Mr. AUGUST H. ANDRESEN. Mr. Speaker, will the gentleman yield? Mr. FULTON. I yield.

Mr. AUGUST H. ANDRESEN. When the bill was before us 2 years ago I understood its purpose was to simplify our customs laws so it would be easier for foreigners to ship their products to this country in competition with American industry. I am somewhat confused as I read this bill for I cannot tell whether it has the same objective as the bill had 2 years ago or not.

Mr. SCOTT. I would say that I do not agree with the conclusions of the gentleman from Minnesota.

Mr. Speaker, I desire to set forth at this point certain objections to the Eberharter amendment:

OBJECTIONS TO EBERHARTER AMENDMENT TO

CUSTOMS SIMPLIFICATION BILL

First. The provision was an original Treasury draft but deleted by Treasury at request of majority leaders prior to introduction of the bill.

Second. Not in bill during public hearings and therefore no industry appeared to express opposition.

Third. Two industries-wool manufacturers and wool growers-formally asked for permission to appear on this amendment if committee were to consider it. This permission was not granted.

Fourth. Amendment originally voted down in committee and did not appear in H. R. 5877 when reported as clean

bill.

Fifth. Spokesmen before Rules Committee contended all amendments, including Eberharter amendment, were noncontroversial. This, of course, is a misunderstanding, as in addition to the wool growers and the wool manufacturers, the Cotton Textile Manufacturers

Association and several agricultural as

sociations on the west coast are violent

in their opposition.

Sixth. The text of this amendment has not been known to the public until July 13.

Seventh. With half the countries of

the world subsidizing their exports through various forms of currency manipulation, this amendment merely legalizes those practices which are now against our law.

Eighth. The Treasury in asking for this amendment is seeking an excuse for its failure to enforce existing law. In only 1 or 2 instances, notably in the wool top case, has the Treasury invoked countervailing duties. Yet by the Treasthe United States are being subsidized, ury's own admission many imports to and have been for several years, and yet and have been for several years, and yet the Treasury has taken no action against such illegal practices.

Ninth. This amendment serves notice to the world that if they violate our laws in sufficient magnitude, that we will amend our laws to accommodate the foreign countries irrespective of the impact or injury on American producers.

Tenth. This amendment makes the Secretary of the Treasury the economic czar as to which industries shall be protected and which shall be traded off for reasons of international diplomacy. This is true because there is no standard for the injury test but it is left in the sole discretion of the Treasury to find or not to find injury according to the whim of the Secretary. Because the amendment sets neither standard, policy, objective nor method for the determination of injury, a serious constitutional question is raised as to whether this would not be an exercise by the executive branch of the functions of the legislative branch. legislative branch. This is true because the phrase "serious injury," without any legislative guidepost, is too vague and meaningless to constitute a legislative standard for administrative action.

Eleventh. This amendment is violative of our whole foreign trade policy to strengthen the economies and stabilize the currencies of foreign countries. By encouraging countries to subsidize their exports through multiple currency rates and other forms of currency manipulation, we go against the announced policy of the International Monetary Fund which has already cost us billions of dollars. This amendment permits a country to select any export commodity and apply a special currency exchange rate which will permit the exporter to pay American tariffs and still undersell in this market. This practice is known as selective devaluation of currencies for particular commodities. For instance, when a foreign exporter receives 5 pesos for his dollar derived from exports, the present practice is to give him 7.5 pesos instead of the basic rate of 5 pesos. If we put import fees on agricultural products, the foreign government neutralizes these fees by giving the exporter, say, 10 pesos per dollar or sufficient pesos to pay the United States importation fees and still undersell.

Mr. SCOTT. Mr. Speaker, I yield 1 minute to the gentleman from Michigan [Mr. KNOX].

Mr. KNOX. Mr. Speaker, I feel that I should extend a few more words in explanation of the so-called Knox amendment as the question was raised by Mr. JONAS. This amendment would provide that American industry which ships metal products into foreign countries still in the ownership of the American industry, and has processing work done upon them and returned to the United States, with the payment of duty on the cost of processing that was done in the foreign country only. When this bill was originally drafted it was wide open and would have taken in all of the textile manufacturers and so on. But it now contains language that provides just for the metal products that are sent to a foreign country for processing, and that is the duty that would be paid. It is spelled right out in the amendment.

Mr. SCOTT. Mr. Speaker, I yield such time as he may desire to the gentleman from California [Mr. ScUDDER).

Mr. SCUDDER. Mr. Speaker, I desire to associate myself with others opposing the committee amendment to H. R. 5877.

This bill is referred to as the customs simplification bill, but the Eberharter amendment to be offered by the committee would open the door to the great injury of American producers and manufacturers. It would provide that injury to domestic industry must be shown before countervailing duties may be levied to offset foreign subsidies.

Such a provision would open the door for flooding of our American markets with cheap subsidized foreign products.

A few years ago the almond industry in California was practically ruined through the importation of almonds that were subsidized by the exporting country. This could happen to all types of manufactured articles and crops produced in this country. The American farmer, manufacturer and laboring men are the only taxpayers we have to support our Government institutions. If

they are to be confronted with these unrealistic imports subsidized in many instances with our own American taxpayers' dollars, and imported into this country to the detriment of our own industries, it is only a matter of time until such competition shall destroy our American economy.

While this act is called a simplification act I believe that the Congress could be declared to be simple if we permitted the amendment to pass. I most certainly recommend to my fellow colleagues that this amendment be voted down.

Mr. SCOTT. Mr. Speaker, I ask unanimous consent to extend my remarks and include therein a memorandum with a number of objections to the Eberharter amendment.

The SPEAKER. Is there objection to the request of the gentleman from Pennsylvania?

There was no objection.

Mr. SCOTT. Does the gentleman from Mississippi have any further requests for time?

Mr. COLMER. No, Mr. Speaker.

The President of the United States in

his state of the Union message stated his state of the Union message stated that one of the aims of his administration was to simplify customs procedures, and this bill has been reported favorably by the unanimous action of the Committee on Ways and Means. The bill will go far to remove the more serious obstacles and inconveniences which result stacles and inconveniences which result from the procedural and administrative from the procedural and administrative complexities of our customs laws, will complexities of our customs laws, will contribute to the economical operation of the customs service and will remove many unnecessary technical and complex procedures which tend to impose unduly harsh burdens on American importers. The customs service will be able to give improved service to the importing public at a reduced cost to the porting public at a reduced cost to the taxpayer.

H. R. 5877 is based on H. R. 5106, introduced by my distinguished colleague, the gentleman from Ohio [Mr. JENKINS], On the basis of suggestions by the Treasury Department. The Treasury recommendations were based upon the report mendations were based upon the report of a survey of the customs service by a private firm of management consultants, and upon suggestions from the customs service itself, from other Government departments and from representatives of importers and others.

The previous question was ordered.
The resolution was agreed to.

Mr. JENKINS. Mr. Speaker, I move that the House resolve itself into the Committee of the Whole House on the State of the Union for the consideration of the bill (H. R. 5877) to amend certain administrative provisions of the Tariff Act of 1930 and related laws, and for other purposes.

The motion was agreed to.

Accordingly the House resolved itself into the Committee of the Whole House on the State of the Union for the consideration of the bill H. R. 5877, the Customs Simplification Act of 1953, with Mr. CHENOWETH in the chair.

The Clerk read the title of the bill. By unanimous consent, the first reading of the bill was dispensed with.

The CHAIRMAN. Under the rule general debate is to be confined to the bill and is to continue for not to exceed 2 hours, to be equally divided and controlled by the gentleman from New York [Mr. REED] and the gentleman from Tennessee [Mr. COOPER].

Mr. REED of New York. Mr. Chairman, I yield myself 15 minutes.

The CHAIRMAN. The gentleman gentleman from New York is recognized.

Mr. REED of New York. Mr. Chairman, this is one of those highly technical bills that has gone through heretofore under a different number but over in the Senate failed of passage on account of lack of time. We will get to the controversial amendments in due time.

Mr. Chairman, H. R. 5877 is entitled "Customs Simplification Act of 1953." As the title indicates, the bill has for its primary purpose the simplification of customs procedures. It is designed to remove from the statutes many obsolete customs requirements and to give the Treasury Department the legislative authorization necessary to make possible the institution of modern procedures in the administration of customs law.

The law of customs administration and procedure, as distinguished from the tariff-rate structure, enacted in the Tariff Act of 1930, has been generally revised only once, by the Customs Administrative Act of 1938. Since that time many changes have occurred in industry and commerce which have accentuated the need for modernizing the customs laws. Following the completion of the management survey authorized by the 80th Congress, H. R. 1535, a bill to simplify customs, was introduced in the 82d Congress. Extensive hearings on that bill were held by the Committee on Ways and Means and a new bill H. R. 5505, 82d Congress, was favorably reported and passed by the House. This This bill was not acted upon by the Senate before the end of the 82d Congress.

Public hearings were held by the Committee on Ways and Means on H. R. 5106, at which hearings a representative of the Treasury Department and representatives of interested private groups were heard. Written statements were received from other Government agencies. All witnesses supported customs simplification although a number of witnesses suggested various changes in the bill. Executive sessions on the bill were held and the bill now before you, H. R. 5877, was introduced as a clean bill and embodies the committee's decisions and amendments made to H. R. 5106. bill is strongly endorsed by the Treasury Department and is also supported by Department and is also supported by the Bureau of the Budget and other interested Government agencies.

This

The present bill does not contain any of the features of H. R. 1535, 82d Congress, which were deleted by the committee in drafting H. R. 5505, 82d Congress. Testimony before this committee and the Senate Finance Committee during the 82d Congress on the previous bills was carefully considered in drafting the present bill. I would like to emphasize that H. R. 5877 proposes no change

in the tariff structure and that any change in amount of duties payable under it will not be large.

Perhaps the most important section of H. R. 5877 is section 15, which will simplify and make more equitable the formulas for appraising merchandise for the assessment of import duties. Under existing law, appraisers, in determining the value of imported merchandise, are directed to use foreign value or the export value, whichever is higher. Foreign value is defined as the market value at the time of exportation of merchandise sold for home consumption. Export value is the market value in the foreign country of merchandise sold for exportation to the United States. If neither of these values can be ascertained, then the United States value is used and if that also is unascertainable then the cost of production. In a few special cases the rate of duty is to be based upon the American selling price. Section 15 would eliminate the use of foreign value and make export value the preferred method of valuation if it can be determined; if neither export value nor United States value can be determined, appraisement would be made on comparative value before resort is had to constructed value.

Under the present law, a principal source of expense and delay in administration is the necessity of determining economic facts and conditions in a foreign country.

A report of March 31, 1953, indicates that over 45,000 invoices in the hands of appraisers for more than 90 days were then delayed awaiting a foreign investigation and that the great majority of these investigations are needed to determine foreign value. Delays of 2 or 3 years are not uncommon while awaiting the receipt of all the necessary foreign information. Elimination of foreign value and the use of export value as the preferred method will mean that value will depend principally upon transactions in the United States import trade which should be known or should be readily ascertainable by importers and customs officers. This should mean less expense to the Government and speedier decisions for the importer.

Section 15 would also provide a system of valuation which is less likely to produce arbitrary and fictitious results, which increase uncertainty, since it would provide for the use of actual commissions, profits, and other deductions and not an arbitrarily limited amount, in determining United States value; it would permit the use of actual sales instead of offers in determining export value, United States value, or comparative value; it defines usual wholesale quantities in such a manner as to mean the quantities in which the greater aggregate quantity of the merchandise is sold, whereas under the present law the usual wholesale quantity is the quantity in which the largest number of individual transactions occur.

This section of the bill will eliminate unnecessary expense and delay in the appraisement of merchandise, thereby achieving greater administrative efficiency, and will provide a system for all customs valuations which will be commercially realistic and equitable.

Section 4 of H. R. 5877 will repeal special marking requirements now contained in the Tariff Act which have proved unusually burdensome to importers. The paragraphs which would be amended by section 4 refer to specific items to be imported and-except for paragraph 28-specify in detail that the articles enumerated shall have, when imported, the name of the maker or purchaser as well as the country of origin conspicuously and indelibly marked on the outside of the article. Section 4 would repeal entirely these marking provisions. The amendment is, however, restricted to special marking requirements and the articles would still be subject to the general marking provisions of the Tariff Act so that they will have to indicate to the ultimate purchaser the country of origin of imported merchandise. The committee decided that special marking is not needed for consumer information in view of the general marking provisions. We were advised that its requirement often interferes with the efforts of United States medical men and scientists to get needed instruments for medical purposes and for research, and with trade and commerce generally.

Section 4 also contains a new provision which will permit the Secretary of the Treasury, in his discretion, to grant relief in hardship cases under the general marking requirement. If articles are not properly marked before importation and the failure to mark was not due to any intent to avoid compliance with the marking laws and the articles cannot be marked after importation except at an expense which is economically prohibitive, the Secretary could permit the importation. At the present time, the Treasury Department is without authority to grant relief to innocent importers in such situations.

Another important provision of the bill is section 2 which will facilitate the modernization of the internal accounting procedures of the Bureau of Customs, by removing certain restrictive statutory provisions relating to accounting and recordkeeping functions. These functions. These statutory functions are vested mainly in the comptrollers of customs and require too much detailed review and checking. As a result, repetitive accounts have to be maintained and certain accounting processes which are performed in the offices of the collectors of customs have to be duplicated. These statutes are so restrictive that they preclude some of the procedures which should be a part of a modern program of internal audit. This section will not eliminate any necessary controls and safeguards over customs accounting. Customs will continue to have an internal audit program, but it will be more flexible and useful, as I well as less costly and the Comptroller General will continue to provide the external audit program, including a check upon the effectiveness of the customs accounting system and internal audit and control.

Another important section of H. R. 5877 is section 22 relating to the conversion of currency for customs purposes. The section will make one substantial change in the existing procedure

but the result aimed at is the same as under present law. The section designed to get rid of an archaic statutory provision for a declaration of gold coin parities which is almost entirely useless today, to restate the rules for converson in terms of international finanical relationships as they exist in the world today and to simplify the day-to-day computations of customs duties. The section maintains the principle that commercial rates of exchange should govern the calculation of customs duties.

Since 1894, the Secretary of the Treasury has been required to proclaim quarterly the value of the standard coins in circulation of the various nations of the world, based upon estimates of the Director of the Mint. These proclamations now serve little function since customs duties are rarely based upon these values. Section 22 would repeal that requirement and would provide in lieu thereof that the Secretary of the Treasury publish a list of par values which he finds are maintained by foreign countries for their respective currencies. These par values would be used whenever for customs purposes it is necessary to convert into an amount in the United States currency any amount expressed in foreign currency, except when there are one or more rates of exchange which vary by more than 5 percent from the par value. In cases in which there is no par value or there are rates of exchange which vary by more than 5 percent from the par value the rate used would be that certified daily by the Federal Reserve Bank of New York based upon market rates in New York. Section 22 would permit the recognition of multiple rates of exchange and would permit multiple certification by the Federal Reserve Bank consistent with the decision of the Supreme Court of the United States in Barr against United States.

Section 13 of H. R. 5877 relates to administrative exemptions. The purpose of these provisions is to avoid waste of customs manpower in determining and collecting trivial amounts of money. Section 13 would amend section 321 of the Tariff Act to, first, increase from $1 to $3 the amount of the difference between estimated or tentatively assessed duties and actual duties which may be disregarded; second, permit free entry of bona fide gifts from persons in foreign countries to persons in the United States up to $10; and third, allow persons to bring with them articles up to $10 in value for their personal use. The limitation of $1 in the present law on free entry in other cases has not been changed. Moreover, the Secretary would be enabled to reduce any of these amounts if he finds it necessary to protect the revenue. The basic traveler exemptions contained in paragraph 1798 of the Tariff Act would not be affected by these administrative exemptions.

There are a number of other sections in H. R. 5877 which are of comparable importance to some of those I have just outlined. Among these are provisions to eliminate time-consuming and cumbersome procedures in connection with warehouse transfers; to repeal the provision in the present law for under

valuation penalties; to permit correction by customs officers of admitted errors without appeal to the courts. The bill also contains a number of other provisions of lesser individual importance but which are cumulatively of major importance.

The sections of this bill which I have touched upon, when taken together with the other provisions of the bill, will in the opinion of the Committee on Ways and Means, go far to remove the more serious obstacles to trade which are contained in the administrative as distinguished from the tariff-rate provisions of our tariff act, and to provide for more economical and efficient operation of the customs service in the interests of the public than is presently possible. I believe that the committee has resolved the few controversial points to the maximum extent consistent with an effective revision of customs procedure, and I strongly urge the prompt passage of this long overdue legislation. I think from what I have already read to the House you can see the vast task that has confronted the committee. This overhaul has been needed for a long time. Those who have traveled very extensively or who have done very much business, either in exporting or importing, realize the difficulties we face in this great field.

I think great effort is being made abroad between the countries to simplify the customs procedure which are most annoying to people who are traveling abroad. But this has been a difficult task. The burden of simplification legislation was assigned to the author of the the bill, the gentleman from Ohio [Mr. JENKINS]. He held fine and exhaustive hearings. He had many customs experts before him. There has been quite a bit of controversy in regard to the Eberharter amendment. Hearings were held on May 27, 28, 29, 1953. On June 1, 1953, I received a letter from the Assistant Secretary of the Treasury, a very able, a very distinguished lawyer, H. Chapman Rose, who is well known in the legal profession throughout this country. He said:

Hon. DANIEL A. REED,

JUNE 1, 1953.

Chairman, Ways and Means Committee,
House of Representatives,
Washington, D. C.

MY DEAR MR. REED: During the course of my testimony before the Committee on Ways and Means on H. R. 5106, the customs simplification bill, I indicated that the Treasury Department had additional suggestions for customs simplification legislation that were not included in H. R. 5106, and Mr. EBERHARTER requested that they be made available to the committee.

I was referring to a proposal that has been the subject of prior discussion which would (a) add an injury requirement to section 303 of the Tariff Act regarding the imposition of countervailing duties, and (b) transfer to the Tariff Commission the jurisdiction to antidumping statute and under section 303. determine injury in cases arising under the

However, in view of the President's request to the Congress for a Commission to review foreign economic policy, the Treasury does not wish to suggest (b) above for present consideration by your committee. Provisions transferring the Treasury's present injuryfinding determination under the Antidumping Act to the Tariff Commission and giving the Tariff Commission the authority to determine injury in countervailing duty cases.

are appropriate for consideration by the proposed Commission in connection with a review of the proper role of the Tariff Commission and other agencies of the Government in this field.

For the present, the Treasury Department believes that the one addition to H. R. 5106 which it would now recommend is an amendment to section 303 of the Tariff Act providing that countervailing duties should be imposed only where injury exists or is threatened to a domestic industry. The Department suggests consideration of the enclosed draft amendment to section 303 of the Tariff Act which would accomplish this purpose. I am sending a copy of this letter and its enclosure to Mr. EBERHARTER and Mr. JENKINS.

Very truly yours,

H. CHAPMAN ROSE, Assistant Secretary of the Treasury. Here is the proposal:

Section 303 of the Tariff Act of 1930 (U. S. 1946 edition, title 19, sec. 1303) is amended by inserting at the end of the first sentence:

"Such countervailing duty shall be imposed only if the Secretary of the Treasury shall determine, after such investigation as he deems necessary, that an industry in the United States is being or is likely to be injured, or is prevented or retarded from being established, by reason of the importation into the United States of articles or merchandise of the class or kind in respect of which the bounty or grant is paid or bestowed."

That practically sums up the Eberharter amendment. As you notice, the letter is dated June 1, and the hearings were closed, and this was just before we had gone into an executive session on this bill. That is true of some of the other amendments. As I said before, it is very difficult in a technical bill like this to bear witness, and then at the last minute have people come in and say here is something that ought to be changed or here is an amendment that ought to be put into the bill. And you never do get through. Several times we have gone back and introduced clean bills trying to accomplish these purposes. What I would like to see done is if we can have this technical bill sent to the other body with such perfections or imperfections as the House may work its will on so that we can pass this bill which has been plaguing the country for such a long time. I would like to see it go over to the other body in time to dispose of it, and have it enacted into a law.

Mr. Chairman, that concludes my statement now. Later if a further explanation is required on this Eberharter amendment, I will be very glad to give it or have the gentleman from Pennsylvania [Mr. EBERHARTER] explain it to us as well as the gentleman from Ohio [Mr. JENKINS]. I congratulate the gentleman from Ohio [Mr. JENKINS], for the very excellent and arduous work which he and the committee members have put in on this bill. The House will work its will on this bill, but I invite your cooperation in the perfecting and completing of legislation of this rather difficult character. We have a long, hard program ahead of us. We are sending the bills to the Rules Committee as rapidly as we can so that all those who have an interest in the legislation that is coming on will have an opportunity to have that legislation considered and passed.

Mr. Chairman, it will be recalled that a customs simplification bill very similar to the pending bill passed the House in to the pending bill passed the House in the last Congress. It was not acted upon It was not acted upon in the Senate.

The administrative and procedural provisions of our customs laws have been generally revised only once since the enactment of the Tariff Act of 1930, and that was by the Customs Administrative Act of 1938. Since that time, there have been many changes in technology, industry, and commerce, which have made very acute the need for another general revision. The pending bill covers administrative and procedural provisions only, and does not make any change in tariff classifications or rates of duty.

By far the most important provision in the pending bill is section 15, relating to the basis of valuation for the assessment of duties. Under existing law, the value of imported merchandise for the purpose of assessing duty in most cases is either foreign value or export value, whichever is higher. The bill would eliminate the foreign value basis of valuation and substitute the export value basis. Under present law, customs officials have found it very difficult, expensive and time consuming in determining foreign value. It is not uncommon for foreign value. It is not uncommon for 2 or 3 years to elapse before all neces2 or 3 years to elapse before all necessary information is secured in order to sary information is secured in order to set the foreign value. By making export value the preferred method of valuation, it will be possible to eliminate much of the delay and expense involved under present law, where foreign value has to present law, where foreign value has to be determined.

In general, export value is defined under the bill as being the market value or price, at the time of exportation to the United States of the merchandise, at which such or similar merchandise is freely sold or offered for sale in the country of exportation in the usual wholesale quantities for exportation to the United States.

In addition to the use of foreign value or export value, whichever is higher, under present law, the United States value is used if neither foreign nor export value can be ascertained, and if the United States value cannot be ascertained, then the cost-of-production basis is used. is used. In addition, there are a few special cases, such as chemicals and rubber footwear, where the American selling price is used.

The bill makes no change in the American selling price basis for valuation. The bill retains the use of United States value as a basis of valuation, with some amendments to make this basis more realistic, by using actual commissions, profits, and certain deductions, rather than arbitrary amounts as under present law.

A new basis for valuation, comparative value, is established by the bill. This basis is to be used if neither export value nor United States value can be determined, and is designed to establish a basis which can be relatively easily determined by looking to merchandise which is comparable to the merchandise which is being appraised. If comparative value,

cost-of-production basis would still be used, as under present law.

The bill also defines certain terms in the value sections so as to make the value determinations more realistic, and clarify and make more certain the concepts which the terms are intended to cover.

The Treasury Department advised our Committee that the adoption of the changes proposed in the basis of valuation provisions of the customs laws would make a major contribution toward simplification and efficient administration of the customs laws.

Section 2 repeals certain obsolete accounting provisions which at present cause unnecessary duplication in accounting procedures which lend little or nothing to the protection of customs revenue, while unnecessarily consuming the time of customs employees. The amendments proposed will permit the establishment of modern internal accounting procedures.

Section 3 has to do with the rate of duty which is applicable to imported merchandise. Confusion at present exists as a result of a series of Customs Court decisions. An example of the present situation is the case of a suspension of duty on an article by Congress or the termination of a suspension. Section 3 provides that the merchandise is subject to the rate of duty in effect, in general, when the documents on the imported merchandise and the duties required to be paid have been deposited with appropriate customs officials.

Section 4 repeals certain special marking provisions which are required in the case of surgical instruments, knives, scissors, coal tar products, and so forth, which require that the articles imported must bear the name of the maker or purchaser, as well as the country of origin, on the outside. These special markings are not needed for consumer information, and they often interfere with the efforts of doctors and scientists to import instruments which they need for medicinal purposes and for research, as well as interfere with trade and commerce generally.

The general marking requirements of the Tariff Act would still be applicable. Under these requirements, the country of origin of the imported articles must be indicated on the articles.

Section 5 repeals a provision of present law requiring that lead and zinc-bearing ores be transported from ports of entry to sampling or smelting establishments for sampling and analysis. Such a requirement results in unwarranted inconvenience and expense to importers. Sampling and analysis, under the bill, would be in accordance with regulations issued by the Secretary of the Treasury. The Treasury Department feels that this change will be in the interest of the importing public and also be more economical and efficient for the Bureau of Customs.

Section 6 repeals certain obsolete provisions.

Section 7 eliminates unnecessary investigations, paperwork and search of records in order to establish trivial amounts of drawback of duties or tax