There is one other subject that I want to be heard on, and that is the question of skipping the circuit courts in these cases. Originally, as the committee knows, we did not have the circuit court of appeals, and cases were tried in the circuit court, and the next move was to the Supreme Court. Now we have the circuit court of appeals. These cases are not jury trials; they are reclassifications, and there are a lot of questions. The evidence is important to show process of manufacture and things of that kind, but the law questions turn frequently upon the evidence. Of course we might say that there was a contest as to the process of manufacture, but ordinarily the evidence is not very much in dispute, although it is important to put the evidence in.

It takes much time to get these cases through the Board of General Appraisers and then to the circuit court, and then the case is there tried again; the evidence is all brought in, and then it goes to the circuit court of appeals. I am very well aware that there is going to be some opposition to this skipping of the circuit court, because the original intent of the act was that the Board of General Appraisers should not be a court. Of course a great many tribunals that are not courts determine questions. They may say that it is incongruous to operate from a tribunal, skipping a court, and going up to the circuit court of appeals with the trial de novo.

Mr. UNDERWOOD. Do you want to skip the circuit court of appeals? Secretary SHAW. No; I want to skip the circuit court and go direct to the circuit court of appeals, and have the Board of General Appraisers take all the testimony. Let the circuit court of appeals send the case back for additional testimony, if anything more is needed; then let the case be presented either on abstract of evidence, as we do in equity cases

Mr. UNDERWOOD. Can that obtain unless you create the Board of General Appraisers a court? Can you make an appeal from the Board directly to the circuit court of appeals?

Secretary SHAW. I think it can be done; I think there is nothing that stands in the way of that. In other words, you have a courtI don't see why an appellate court may not be given original jurisdiction.

Mr. UNDERWOOD. The Board of General Appraisers are exercising an executive function. Can we appeal from the executive side of the Government directly to a certain court? Will not the case have to be carried into the lower courts first and then appealed?

Secretary SHAW. Is it not possible to make in this instance the circuit court of appeals the nisi prius court? You give them nisi prius jurisdiction, so that in that way you skip

Mr. UNDERWOOD. Then you will have to institute your case originally in the circuit court of appeals. You can not take it up there and bar the appeal.

Secretary SHAW. Institute your case in the circuit court of appeals and try it there on evidence taken before the Board of General Appraisers, and submit it upon the abstract, as we do in our equity cases

now.

Mr. CLARK. Did we not pass some kind of a law about that in the last Congress?

Secretary SHAW. I think you did-no; it was not the last Congress, but two years ago, if my recollection is right. I think that is so,

because I tried to crowd it through the Senate, but Senators Aldrich, Platt, of Connecticut, and Allison said that they would go down to New York and give this some actual study on the ground and be ready at the next term, but they have not had time to do that. It went over. The CHAIRMAN. What proportion of these cases go to the court of appeals?

Mr. FISHER. Last year 389 appeals were taken and 49,000 protests decided.

The CHAIRMAN. They do not all go to the circuit court. What proportion of the cases go to the circuit court of appeals?

Mr. FISHER. I think there were 75 appeals from the circuit court to the circuit court of appeals and 389 appeals taken to the circuit

court.

The CHAIRMAN. How many cases were determined in the circuit court?

Mr. DE VRIES. I can give you that exactly. In 1905 there were 513 appeals taken from the Board of General Appraisers to the United States circuit court. They covered 200 different issues, and of those there were about 75 taken from the circuit court to the United States circuit court of appeals.

STATEMENT OF HON. ISRAEL F. FISHER, MEMBER OF THE BOARD OF GENERAL APPRAISERS, NEW YORK CITY.

[For other statement of Mr. Fisher see page 46.]

Mr. FISHER. The bill which the Board would like to present its views on is House bill No. 7113, introduced by Mr. Payne.

This bill seeks to embody three or four sections of the customs administrative act. The Merchants' Association suggested. certain amendments, which were submitted at a full meeting of the Board, and we have endeavored in a bill which we have prepared, by amending the bill which Mr. Payne has introduced, to cover so much of those recommendations as meets with the views of the Board of General Appraisers, and the bill so amended will be presented to the chairman."

I will say that this morning this bill as amended was shown to Mr. Smith, counsel for the Merchants' Association, and that the amendment covering section 7 meets with his approval. The only other questions we desire to discuss to-day are the amendments to sections 14 and 15 of the customs administrative act, which relate to the taking of testimony before the Board and appeals to the circuit court of appeals. The practice that now exists before the Board is to bring a single witness--a bookkeeper or a stock clerk of the importer. He merely testifies that the sample which he produces is a correct sample of the merchandise in dispute, and the importer's counsel then rests. Having proven no more than this, the Government, through its counsel, finding that there is no fact to controvert, of course offers no testimony. Because of the failure of the importer to establish his claim the protest is accordingly overruled, the importer takes an appeal, and then the real litigation commences. Witnesses are produced and a full case made out, and the Board is reversed.

a For copy of H. R. 7113 see p. 101.

For copy of bill with proposed amendments see p. 103. 702A-A C L-06-5

The same testimony produced before the Board might result in a similar verdict. The protests meanwhile multiply, covered by the point at issue, and two or three thousand protests will be piled up before final determination. Now, the attorney for the Government, whose sole duty is to try customs cases and who knows the subject, has had no opportunity to present the Government's side of the case, and many suits are lost because of this bad practice. All cases on appeal go to the district attorney, and with the best facilities at his hand he gets witnesses, but the benefits of the system built up by the Treasury counsel, which puts him in touch with all the important details of trade testimony and of evidence on the files of the Board by tradespeople in many other similar litigations is lost.

Mr. UNDERWOOD. On your Board you have some eminent lawyers. Have you considered the question as to whether an appeal would lie directly from your Board to the courts?

Mr. FISHER. The Supreme Court of the United States has declared us a quasi-judicial court.

Mr. UNDERWOOD. You may be a quasi judicial board without being a judicial body. The question is whether you are exercising an executive function or a judicial one.

Mr. FISHER. I think it is a judicial function. The Treasury Department practically is the defendant in every case.

Mr. UNDERWOOD. Have you looked into that question? Have you any authorities on that branch of it?

Mr. FISHER. I have never looked into it myself, but I would say that incidentally it has been discussed by Judge Summerville and other members of the Board who have sat on the supreme court benches of other States, and all agree that it is a correct and proper practice.

Mr. UNDERWOOD. If your Board is a judicial tribunal I can see how we can make an appeal lie; but if it is an executive Board an appeal would not lie directly.

Mr. SHAW. That gets to that point where this Board has to be determined a court, not a question of function. Of course its functions are judicial. So are mine. I perform many judicial functions, yet notwithstanding that I am not a court. The Senate will never put this bill through upon the theory that the Board of General Áppraisers is a court. The only way it can be done will be to give the circuit court of appeals original jurisdiction to try the case nisi prius, on evidence taken before the Board in the form of depositions.

Mr. FISHER. These questions are practically before Congress, so far as they cover the Interstate Commerce Commission, whether appeal shall lie or not. It is for Congress to It is for Congress to say whether any appeals shall be allowed.

Mr. UNDERWOOD. The question in my mind is whether we have a right to authorize the direct appeal. I doubt it very seriously.

Mr. FISCHER. I think you have the right, as you even have the same right to cut off any appeal if you wish. You could make the decision of the collector or Secretary of the Treasury final if you desired.

The CHAIRMAN. This is substantially the same bill that the committee reported and that passed the House at the last Congress.

Mr. FISCHER. Yes; excepting for a few amendments suggested by the merchants' association, which the Board thinks are advisable.

The CHAIRMAN. As the bill now is it is substantially the same?
Mr. FISCHER. Yes, sir.

The CHAIRMAN. Other amendments have been suggested; they are here, and the committee will consider them.

Mr. FISCHER. I wish to say one word to Mr. Underwood. I wish to show how the present practice works so far as the decisions of the court operate under the present practice. Recently there arose before the Board a question as to the dutiable character of silk yarns. An appeal was taken to the circuit court, where the Board's decision was affirmed. Subsequently, on appeal to the circuit court of appeals, the lower court and the Board were reversed, the merchandise being held to be dutiable as cotton yarn by similitude, and without testiinony to show what the proper rate of duty would be for such yarns under the cotton schedule, the court pro forma sustained the importer's claim. Now, it seems that as a cotton yarn the rate for the sizes of yarn before the court should have been twenty times greater than was found. If cases were remitted back to the Board it could fix the rate after following the rule of law laid down by the higher court and errors of this character avoided.

I now understand that one of the chief objections that will be urged by the merchants' association and the bar is that the circuit court of appeals do not give sufficient time to consideration of these questions. I believe the rule now is to allow a half hour on a side. Of course it is not for us to criticise the courts; the courts make their own rules. It is important, however, that sufficient time be allotted to these cases. A decision on a question of tariff construction does not settle the one case before the court only, but involves the operation of that paragraph during the entire life of the tariff. I am satisfied that if Congress will take away the right of review by a single judge of a decision made by three general appraisers who have given time, care, and attention to the controversy, the circuit court of appeals would allow more time to counsel on either side to present their case. While counsel and the gentlemen representing the association are opposing this matter because they think it inimical to their interests, it seems to me it will be for their best interests in the end.

Mr. HILL. That is section 15 under the bill that we passed last year; it was reported to the committee last year, went to the Senate, and no other action was taken.

Mr. FISHER. It died in the Senate without action. There are a few typographical errors in the bill that I want to have corrected.

The CHAIRMAN. Will you please leave a copy with the clerk? a Mr. FISHER. I want to say one word on the 5 per cent allowances. The merchants' association's suggestions, unintentionally, I think, leave the matter in very bad shape. They provide for a 5 per cent allowance between the entered and appraised value; as their proposal reads it would amount to this: Suppose after a hearing of the Board on a reappraisement case they should find that the goods are undervalued 55 per cent; according to the reading of the amendment, that will lop off 5 per cent and put them down to a 50 per cent basis. My amendment provides that when the whole increased valuation does not exceed 5 per cent, the penalty shall be remitted if the general appraiser or Board of General Appraisers shall certify that the in

crease is due to trade conditions only and is not an intentional undervaluation. This will protect the honest merchant and punish the

other class.

STATEMENT OF HON. MARION DE VRIES, PRESIDENT OF THE BOARD OF GENERAL APPRAISERS, NEW YORK CITY.

Mr. DE VRIES. I wanted to say a word, Mr. Chairman, about the licensing of customs brokers, at the request of the Secretary. Of course the Board has no opinion upon the licensing of brokers at custom-houses, because their appearance does not directly concern us; but we have some concern upon the subject of licensing when it concerns appearances before the Board of General Appraisers. We feel that there ought to be some limitation upon the right to appear as counsel before the general appraisers, and practice before them. I want to give you one or two illustrations for example. The other day an attorney who is admitted to practice in the courts, and who appears frequently in cases before the Board of General Appraisers, was found in our sample room in possession of certain samples, mopping them on the floor before they were exhibited to witnesses called to give information as to the value of those goods, and after being mopped upon the floor he showed them to witnesses for the purpose of examination and establishing that the goods were a job lot. In such cases as that the Board of General Appraisers has absolutely no control over the broker or counsel. We have no right to disbar that man from appearing before the Board, no power to prevent his appearance there in any case. So far as the Board of General Appraisers is concerned, I think I can say that they are of the opinion that some limitation upon the rights of attorneys to appear before them ought to be made, and made by law.

Mr. MCCLEARY. That would be in the interest of honest brokers, would it not?

Mr. DE VRIES. Yes, sir. I do not think that any brokers here would oppose a limitation of that kind, so far as the Board itself is concerned.

Now, there is a reason for House bill 7113, which cuts out the cir-. cuit courts in appeals from the Board of General Appraisers and causes them to go direct to the circuit courts of appeals, and that is to expedite the final decision of customs cases. At the commencement of the administration of Secretary Shaw the average time consumed in an appeal from the Board's decision to final decision in the circuit courts of appeal was four years and six months. In appeals from the decisions of the Board to final decision in the United States circuit courts it took, on an average, two years and six months for the final determination of the issue.

Since the administration of Secretary Shaw, and by reason of calling the referee's calendar, that time has been cut down so that it now takes, on an average, one year and three months to prosecute an appeal from the decision of the Board to final decision by the United States circuit courts and two years and six months to prosecute such an appeal from the decision of the Board, on an average, to final determination in the United States circuit courts of appeals. The statute provides that customs cases shall be given preference. That is a part of the administrative law, and indicates the intention