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PARAGRAPH 419-PLAYING CARDS.
the manufacturer is about 8 cents or 81 cents per pack, so that the internalrevenue tax of 2 cents is about 25 per cent of the net price received by the manufacturer.
When the tax was put on in 1894 it took the industry some time to get ad. justed to the new conditions. Its growth from that date to this has, on an average, annually increased between 5 per cent and 51 per cent. The industry is such a limited luxury and such a peculiar one that the interest of playing-card users readily changes from one game to another without increasing the consumption.
The machinery required in the manufacture of playing cards is mostly special and useless for any other purpose. The labor employed is of a special nature, requiring years of training to become skilled, and the industry thereby a ffords constant and steady employment to such labor, the average wage rate being even higher than the union rate. Labor (printing and lithograph) in the leading foreign countries a verages about one-third of what it is here in this country, so that it would be impossible to compete with foreign countries.
The foreign manufacturers copy us closely in manufacture and even literally copy our designs on the faces and backs. Our export business is very limited, because Russia, France, and other countries prohibit the importation of cards altogether, on account of the industry being a Government monopoly in those countries, and then Canada, England, and its colonies discriminate against us.
The whole industry in this country has not yielded 6 per cent on the investment. We could not compete with the cheap labor of Europe. If the duty were lower, we would have no recourse against their product in this country imi. tating ours, so that our equipment, useless for any other purpose, would have to lie idle, our people would be out of employment, and our stockholders' investment would be practically limited in value to what they would get out of the iand and buildings.
All of these matters are subject to investigation and proof, and we sincerely hope, therefore, that the industry will be allowed to continue as it is without change. Respectfully submitted.
THE UNITED STATES PLAYING CARD Co.
STANDARD PLAYING CARD Co.,
KALAMAZOO PLAYING CARD Co.,
AMERICAN PLAYING CARD Co.,
P RAGRAPH 420.
Manufactures of paper, or of which paper is the component material of chief value, not specially provided for in this section, thirty-five per centum ad valorem.
This concludes the hearings on Schedule M,
COMMITTEE ON WAYS AND MEANS,
January 29 and 30, 1913. The committee met at 10 o'clock a. m., Hon. Oscar W. Underwood in the chair.
Present with the chairman: Messrs. Harrison, Kitchin, James, Rainey, Dixon, Hull, Hammond, Peters, Palmer, Payne, Hill, Fordney, and Longworth.
The CHAIRMAN. The committee will come to order.
Beads and spangles of all kinds, including imitation pearl beads, not threaded or strung, or strung loosely on thread for facility in transportation only, thirty-five per centum ad valorem; fabrics, nets or nettings, laces, embroideries, galloons, wearing apparel, ornaments, trimmings, curtains, fringes, and other articles not specially provided for in this section, composed wholly or in chief value of beads or spangles made of glass or paste, gelatin, metal, or other material, but not in part of wool, sixty per centum ad valorem: Provided, That no article composed wholly or in chief value of beads or spangles made of glass, paste, gelatin, metal, or other material shall pay duty at a less rate than is imposed in any paragraph of this section upon such articles without such beads or spangles.
BEADS AND SPANGLES.
BRIEF OF JULIUS LOEWENTHAL & CO., ON BEHALF OF IM.
PORTERS OF DRESS TRIMMINGS.
New York, February 10, 1919.
House of Representatives, Washington, D. C. DEAR Sir: The object of this brief is to call the attention of your committee to the provisions in paragraph 421, Schedule N, of the tariff act of 1909, which relate to goods we are interested in.
The first provision, covering trimmings and similar articles made wholly or chiefly of beads and spangles, reads as follows:
“Fabrics, nets or nettings, laces, embroideries, galloons, wearing apparel, ornaments, trimmings, curtains, fringes, and other articles not specially provided for in this section, composed wholly or in chief value of beads or spangles made of glass or paste, gelatin, metal, or other material, but not in part of wool, 60 per cent ad valorem.
We have no suggestions to make as to the phraseology or rate in the passage just quoted, other than to express the hope that the duty of 60 per cent ad valorem may be reduced to such an extent as may appear wise to your committee in keeping with your general program of tariff reduction, as well as with the reductions on trimmings which you may decide upon under paragraphs 179, 349, 383, 402, 405.
The provision in paragraph 421 in which we are chiefly concerned is the proviso following the words just quoted, which reads as follows:
PARAGRAPH 421-BEADS AND SPANGLES.
“Provided, That no article composed wholly or in chief value of beads or spangles made of glass, paste, gelatin, metal, or other material shall pay duty at a less rate than is imposed in any paragraph of this section upon such articles without such beads or spangles.”
We have already had occasion to call your attention to the confusion created by the proviso, in our briefs dealing with paragraph 179 of Schedule C and paragraph 405 of Schedule L, respectively, and shall summarize here the difficulties it has created in the administration of the law.
Paragraph 179 provides that trimmings and similar articles "made wholly of or in chief value of tinsel wire, lame or lahn, bullions, or metal threads" shall pay a duty of 15 cents per pound and 60 per cent ad valorem.
Paragraph 405 provides that the same articles if made "wholly or in chief value of yarns, threads, filaments, or fibers of artificial or imitation silk or of artificial or imitation horsehair,” shall pay a duty of 45 cents per pound and 60 per cent ad valorem. Although the law thus very clearly provides that only articles composed wholly or in chief value of the materials enumerated shall pay the compound duties provided in the respective paragraphs just quoted, the collector of customs at the port of New York, through which most of these goods coming into this country are imported, has ruled that under the proviso of paragraph 421 trimmings made of chief value of beads are nevertheless dutiable at the compound rates of paragraph 179 or paragraph 405 if they contain a single thread of tinsel or artificial silk.
As we have shown by samples attached to our briefs on paragraph 179 (Schedule C) and paragraph 405 (Schedule L), this has resulted in the imposition of a duty of 45 cents per pound not on the weight of artificial silk, for which the specific duty is supposed to compensate the domestic manufacturer, but almost entirely on glass beads, which constituted 97 per cent of the weight of the sample submitted.
This is clearly against the intent of the framers of the law. If it had been their intention to levy the compound rates of 15 cents per pound and 60 per cent ad valorem, and 45 cents and 60 per cent ad valorem, respectively, irrespective of whether those materials constituted the chief value of the articles or not, paragraphs 179 and 405 would have been worded accordingly. This is exactly what the law does in the case of trimmings containing wool, when it provides in paragraph 383 for a compound rate of 50 cents per pound and 60 per cent ad valorem on trimmings and similar goods “made of wool or of which wool is a component material.” Having worded, however, paragraphs 179 and 405 so as to apply to goods made "wholly or in chief value” of the materials referred to, it could not have meant that the proviso of paragraph 421 shall be taken to completely reverse that meaning.
CONTRADICTING DECISIONS UNDER THE PROVISO OF PARAGRAPH 421,
How confusing the language of the proviso of paragraph 421 is is best attested by the fact that no two bodies of customs officials have been able to agree upon an interpretation of the same. Thus in the case of United States v. Ewing & Clancey the collector's ruling was completely reversed by the Board of General Appraisers, which sustained the contention of the importers (G. A. 7303, T. D. 32045). But when the Government appealed from the decision of the board to the United States Court of Customs Appeals the latter rendered a decision reversing both the judgment of the Board of General Appraisers and the ruling of the collector, and taking a middle ground, the reasons for which will be found by your committee, if you care to pursue the subject further, in the decision of the court rendered May 8, 1912. (U. S. V. Ewing & Clancey, No. 829, T. D. 32624.)
PROPOSED AMENDMENT OF PARAGRAPH 421.
But no matter which interpretation of the proviso may be considered right, the fact remains that a provision of law which lends itself to three different interpretations by three bodies of experienced customs officials, including two judicial bodies which devote themselves exclusively to the study and interpretation of our customs laws, manifestly needs modification, so as to clearly mean but one thing. We respectfully suggest that the best way of mending the confusing proviso of paragraph 421 is by ending it.
While the suggestion may seem radical it offers the only way out of the legal muddle created by that proviso. There is not a single point it can legitimately cover that is not already amply covered by other paragraphs in the law. Every material of which trimmings and similar articles are made is provided for in paragraphs 179 (tinsel wire), 349 (cotton and other vegetable fibers), 382 (wool), 402 (silk), 405 (artificial silk and artificial horsehair), and 421 (beads or spangles of glass, paste, or metal).