made. I think it is fair to ask why it was that this committee waited for six years, from 1900 to 1906, before they submitted-before they made an effort to have these recommendations incorporated into lawif the conditions have been such as Mr. Smith represents them to be.

I had intended to call your attention to a certain report of the Boston association composed of manufacturers, merchants, and so on, who made a report on the conditions of the customs laws and their administration away back in 1886, but owing to the short time at my disposal I will have to omit that.

I wish to call your attention to an address delivered before the American Chamber of Congress, in Paris, contained in their bulletin No. 42, of November, 1905, being an address delivered by Andrew D. Lillie, the second vice-president, in respect to the manner in which goods are consigned to this country and constantly undervalued by the present law:

It is easy to see how it is and why it is that under the workings of an ad valorem tariff firms attempting to import foreign goods on invoices representing actual prices of purchase are and must be more and more crowded to the wall by concerns whose invoice prices are set merely with the intention of striking the very lowest figures on which the importer deems it prudent to venture in running the gantlet of the custom-house. And, be it remarked, many of these undervaluing firms are concerns of restricted means, slim credit, of small general repute, and whose only advantage is found in the fact that they habitually and systematically take the fullest advantage of the rich opportunities for illegitimate profits afforded by our ad valorem tariff legislation. And thus it is that in regard to all articles whatsoever to which our ad valorem legislation applies the constant and inevitable tendency is toward the concentration of business in the hands of the undervaluer, and the gradual elimination of an honest importer from all share in competition.

It is a fact perfectly well known to persons familiar with our foreign trade that there are markets in Europe, and important markets, where it is impossible for an American purchaser to buy otherwise than in dollars and cents, for the goods to be delivered at the American destination through some agent of the manufacturer resident in the United States. The seller will refuse to name prices in his own currency, and the purchaser never sees the foreign invoice. He only sees the invoice, of course, in American currency, which is furnished him by the agent in America when delivering the goods. And why this is so is no secret at all. Also it is perfectly well known that there are in Europe markets which, as far as the United States is concerned, the undervaluing exporter has made absolutely his own to the exclusion of honest competition.

I would like to present a few extracts here taken from a publication called the Dry Goods, for February, 1906, to show the effort that is being made on the part of German importers and I may say that the investigation of the Boston committee in 1886 shows conclusively that the German exporters and consignors of goods are the men who constantly undervalue their exports and, as I understand it, the demand for these changes in the customs administrative laws comes principally from these German exporters. I have not heard of any from the English or the French. I would like to have some of these extracts included.

The CHAIRMAN. Very well, you may mark what you want included. Following is the extract referred to:

[Dry Goods, February, 1906.]

IS THIS A CONSPIRACY?

Dry Goods is in a position to vouch for the accuracy of this move on the part of a large class of European manufacturers, whose product is used by the middle and lower classes and now paying almost prohibitive duties.

Can it be that our Government turns its attention more and more to harass the importer? Surely this is a bad, very bad, condition of things. It is a revelation, and we do not hesitate in pronouncing it highly discreditable, a shameful juggling with the people's rights and privileges.

Shame, everlasting shame, to a "free" government employing spies and detectives to carry on its business!

We reproduce the circular sent to us, that our readers may judge for themselves how degrading this Pecksniffian business is.

We write in reference to the new rates which have been this day established by the American consulate, and make you the proposal simply to ignore these advanced (so-called open) market prices. The whole mercantile body should. without hesitation, continue to invoice at the old rates.

If you voluntarily agree to these new rates you must expect that one day exports to America will be made impossible. Now is the time for you all to conduct yourselves as men, ready to enter the fight for our industry and our interests so that our competitors, who will not let themselves be trifled with, may not be victorious in the field.

Where is the industry which is so oppressed in every respect as ours is, particularly as to extortions and maneuvers of the American custom-house?

It is high time to put an early stop to this economic policy, and if you will follow us we will show you the right way to maintain our rights.

We urgently advise you not to invoice at higher rates than before, for if a number of exporters do this, a new so-called market value is created, and whoever invoices lower does so in vain, for he is then met with the usual salutation: "Yes, your competitors invoice higher than you and that establishes the market value for us appraisers."

Mr. MCPHERSON. Now, it may be that it is a little hard to hold the importer exactly to the value. Perhaps there should be some leeway given to him, and it is a question of how much. The old law allowed 10 per cent, but that is generally conceded to be too much. Whether 5 per cent provided for in the bill is more than he ought to have is a question which I believe the committee ought to very seriously con

sider.

The CHAIRMAN. My own opinion is that any per cent should not be allowed, that they are systematically undervalued up to the limit; and that was one reason why we amended the law and struck out the 10 per cent. They asked for 5 per cent; the committee made it nothing. Now they come in with a recommendation from the Government and the Executive-a part of the German arrangement recently made to make it 5 per cent, and discretionary with the Secretary up to 10 per cent.

Mr. MCPHERSON. That will be getting back pretty nearly to the old condition if the 10 per cent is allowed.

The CHAIRMAN. Well, it is discretionary with the Secretary; and they probably would not claim that much.

Mr. MCPHERSON. I want to show that even under the present conditions the reappraisements at the port of Boston last year-I don't know whether any figures have been submitted in regard to thatthat the increases of the merchants themselves exceed the increases made by the appraising officers. During the last year ending February 1, 1906, the reappraisement amounted in increases to $366,913. The advances by the importers themselves were $307,439.31. We have no desire whatever to hamper the honest importer in transacting his business of bringing his goods into the American market; but we do seriously object to anything which will make it easier

The CHAIRMAN. What do you say about open hearings?

Mr. MCPHERSON. Well, I did intend to say something about that; but inasmuch as the matter has been thoroughly covered by the gen

eral appraisers and the Secretary of the Treasury, I don't think there is anything that I can say.

The CHAIRMAN. Do you agree with them on that?

Mr. MCPHERSON. The wool association is against open hearings most decidedly, because they feel it would be exceedingly difficult for the Government to get any witnesses to testify if the secrets of their business in this country and their actions abroad were to become the property of others.

Mr. HILL. You are particularly interested in wools?

Mr. MCPHERSON. Woolens and wool goods.

Mr. HILL. I want to ask you this question: "What would be the comparative merits of these two propositions, neither of which I might agree with. Allow a 10 per cent less tariff, or 5 and 5, optional in regard to penalties, for undervaluation?"

Mr. MCPHERSON. That question involves the change of the wool schedule; also if you reduce

Mr. HILL. An undervaluation involves a change in the wool schedule so far as the practical effect is concerned? That is what I wanted to know, if you have any matured judgment on that question.

Mr. MCPHERSON. I think the wool manufacturer feels that he has no more ad valorem protection to-day than the cotton manufacturer or any other manufacturer.

Mr. HILL. I want to get at the comparative effects of the two propositions.

Mr. MCPHERSON. I have not discussed that matter with any members of the association, and I don't know that I am qualified to speak offhand in regard to technical trade matters.

Bills under consideration.

PAYNE BILL.

[H. R. 7113, Fifty-ninth Congress, first session.]

A BILL To amend an act entitled "An act to simplify the laws in relation to the collection of the revenues," approved June tenth, eighteen hundred and ninety, as amended by the act entitled "An act to provide revenue for the Government and to encourage the industries of the United States," approved July twenty-fourth, eighteen hundred and ninety-seven.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That sections seven, fourteen, and fifteen of the act entitled "An act to simplify the laws in relation to the collection of the revenues," approved June tenth, eighteen hundred and ninety, as amended by the act entitled "An act to provide revenue for the Government and to encourage the industries of the United States," approved July twentyfourth, eighteen hundred and ninety-seven, be, and the same are hereby, amended so as to read as follows:

"SEC. 7. That the owner, consignee, or agent of any imported merchandise which has been actually purchased may, at the time when he shall make and verify his written entry of such merchandise, but not afterwards, make such addition in the entry to the cost or value given in the invoice or pro forma invoice, or statement in form of an invoice, which he shall produce with his entry, as in his opinion may raise the same to the actual market value or wholesale price of such merchandise at the time of exportation to the United States in the principal markets of the country from which the same has been imported, but no such addition shall be made upon entry to the invoice value of any imported merchandise obtained otherwise than by actual purchase; and the collector within whose district any merchandise may be imported or entered,

whether the same has been actually purchased or procured otherwise than by purchase, shall cause the actual market value or wholesale price of such merchandise to be appraised; and if the appraised value of any article of imported merchandise subject to an ad valorem duty, or to a duty based upon or regulated in any manner by the value thereof, shall exceed the value declared in the entry, there shall be levied, collected, and paid, in addition to the duties imposed by law on such merchandise, an additional duty of one per centum of the total appraised value thereof for each one per centum that such appraised value exceeds the value declared in the entry, but the additional duties shall only apply to the particular article or articles in each invoice that are sc undervalued, and shall be limited to one hundred per centum of the appraised value of such article or articles. Such additional duties shall not be construed to be penal, and shall not be remitted nor payment thereof in any way avoided, except in cases arising from a manifest clerical error; nor shall they be refunded in case of exportation of the merchandise or on any other account, nor shall they be subject to the benefit of drawback: Provided, That if the appraised value of any merchandise shall exceed the value declared in the entry by more than one hundred per centum, except when arising from a manifest clerical error, such entry shall be held to be presumptively fraudulent, and the collector of customs shall seize such merchandise and proceed as in case of forfeiture for violation of the customs laws, and in any legal proceeding that may result from such seizure the undervaluation as shown by the appraisal shall be presumptive evidence of fraud, and the burden of proof shall be on the claimant to rebut the same and forfeiture shall be adjudged, unless he shall rebut such presumption of fraudulent intent by sufficient evidence. The forfeiture provided for in this section shall apply to the whole of the merchandise or the value thereof in the case or package containing the particular article or articles in each invoice which are undervalued: Provided further, That all additional duties, penalties, or forfeitures applicable to merchandise entered by a duly certified invoice shall be alike applicable to merchandise entered by a pro forma invoice, or statement in the form of an invoice, and no forfeiture or disability of any kind incurred under the provisions of this section shall be remitted or mitigated by the Secretary of the Treasury. The duty shall not, however, be assessed in any case upon an amount less than the invoice or entered value."

"SEC. 14. That the decision of the collector as to the rate and amount of duties chargeable upon imported merchandise, including all dutiable costs and charges, and as to all fees and exactions of whatever character, except duties on tonnage, shall be final and conclusive against all persons interested therein, unless the owner, importer, consignee, or agent of such merchandise, or the person paying such fees, charges, and exactions other than duties, shall, within ten days after but not before such ascertainment and liquidation of duties, as well in cases of merchandise entered in bond as for consumption, or within ten days after the payment of such fees, charges, and exactions, if dissatisfied with such decision, give notice in writing to the collector, setting forth therein distinctly and specifically, and in respect to each entry or payment, the reasons for his objections thereto, and if the merchandise is entered for consumption shall pay the full amount of the duties and charges ascertained to be due thereon. Upon such notice and payment the collector shall transmit the invoice and all the papers and exhibits connected therewith to the board of three general appraisers which shall be on duty at the port of New York, or to a board of three general appraisers who may be designated by the Secretary of the Treasury for such duty at that port or at any other port, which board shall examine and decide the case thus submitted, and their decision, or that of a majority of them, shall be final and conclusive upon all persons interested therein, and the record shall be transmitted to the proper collector or person acting as such, who shall liquidate the entry accordingly, except in cases where an application shall be filed in the circuit court of appeals within the time and in the manner provided for in section fifteen of this act: Provided, however, That the board of three general appraisers, or a majority of them, who decided the case may, upon motion of either party, within thirty days from the date of the receipt of their decision by the collector, grant a rehearing of said case when, in their opinion, the ends of justice may require it. Said board shall have power to establish from time to time such reasonable rules of practice as may be deemed necessary for the conduct of their proceedings not inconsistent with law.

"SEC. 15. That if the owner, importer, consignee, or agent of any imported merchandise, or the collector or the Secretary of the Treasury, shall be dissatisfied with the decision of the board of general appraisers, as provided for

in section fourteen of this act, as to the construction of the law and the facts respecting the classification of such merchandise and the rate of duty imposed thereon under such classification, they, or either of them, may, within thirty days next after such decision, and not afterwards, apply to the circuit court of appeals of the United States within the circuit in which the matter arises for a review of the questions of law and fact involved in such decision. Such application shall be made by filing in the office of the clerk of said circuit court of appeals a concise statement of the errors of law and fact complained of, and a copy of such statement shall be served on the collector or on the importer, owner, consignee, or agent, as the case may be. Thereupon the court shall order the board of appraisers to return to said circuit court of appeals the record and the evidence taken by them, together with the certified statement of the facts involved in the case and their decisions thereon; and all the evidence taken by and before said appraisers shall be competent evidence before said circuit court of appeals. The said circuit court of appeals is further vested with the power, on the hearing of any appeal taken from the decision of a board of three general appraisers, to order said board to take additional testimony as to any particular fact or issue in dispute, and return the same to said court as soon as convenient, whenever the said court shall be of opinion that the ends of justice will be best subserved by this course of procedure. In other respects the parties litigant shall be required to introduce all of their evidence before the said board of general appraisers prior to its decision of the case. Such further evidence, with the aforesaid returns, shall constitute the record upon which said circuit court of appeals shall give priority to and proceed to hear and determine the questions of law and fact involved in such decision respecting the classification of such merchandise and the rate of duty imposed thereon under such classification, and the decision of such court shall be final, and the proper collector, or person acting as such, shall liquidate the entry accordingly unless said decision is reviewed by the Supreme Court of the United States in any of the ways provided by the act approved March third, eighteen hundred and ninety-one, entitled 'An act to establish circuit courts of appeals, and to define and regulate in certain cases the jurisdiction of the courts of the United States, and for other purposes.' Said Supreme Court shall have jurisdiction and power to review such decision, and shall give priority to such cases, and may affirm, modify, or reverse such decision of such circuit court of appeals, and remand the case with such orders as may seem to it proper in the premises, which shall be executed accordingly. All final judgments, when in favor of the importer, shall be satisfied and paid by the Secretary of the Treasury from the permanent indefinite appropriation provided for in section twenty-three of this act. For the purposes of this section the circuit courts of appeals of the United States shall be deemed always open, and said circuit courts of appeals, respectively, may establish, and from time to time alter, rules and regulations not inconsistent herewith for the procedure in such cases as they shall deem proper."

SEC. 2. That nothing herein contained shall be construed to repeal or modify the provisions of section thirty-four of said tariff act of July twenty-fourth, eighteen hundred and ninety-seven, as to rights accrued or suits or proceedings commenced and now pending in any of the circuit courts or other courts of the United States as provided for in said section.

SEC. 3. That this act shall take effect on and from sixty days from its passage.

BOARD OF GENERAL APPRAISERS BILL.

[H. R. 7113, Fifty-ninth Congress, first session.]

A BILL To amend an act entitled "An act to simplify the laws in relation to the collection of the revenues," approved June 10, 1890, as amended by the act entitled "An act to provide revenue for the Government and to encourage the industries of the United States," approved July 24,

1897.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That sections seven, fourteen, and fifteen of the act entitled "An act to simplify the laws in relation to the collection of the revenues," approved June tenth, eighteen hundred and ninety, as amended by the act entitled "An act to provide revenue for the Government and to encourage the industries of the United States," approved July twenty-fourth, eighteen