larly to the fact that not a single one of them has been sustained by the courts.

Mr. CROWTHER. I wondered if there had been any unfair action on the part of our own producers in taking the steps that they did. Mr. SPINGARN. The fact that none of the protests to date have been sustained by the courts would seem to make a prima-facie case on that point.

You see, paradoxically, the weaker the case is, the longer the suspension of liquidation can be protracted. Because a weak case will undoubtedly be overruled by the lower court and thus give an opportunity for appeal to the higher court with a further prolongment of the suspension of liquidation.

The present amendment will not in any way preclude the domestic manufacturer, wholesaler, or producer from carrying his protest from the Secretary's decision as to classification or duty rate to the customs courts. All it will do is eliminate as far as possible the protracted period of suspension of liquidation during which importers do not know what duties they are going to have to pay.

The amendment incorporated in section 15 of the present bill provides that the decision of the Secretary of the Treasury, adverse to the complainant, will remain in effect; that is, that imports may be imported or withdrawn from warehouse at the existing duty rate until the first decision of the customs courts, whether it be the lower or the upper court, adverse to the Secretary's decision. If the customs court hands down a decision adverse to the Secretary's decision, that would make, of course, a prima-facie case for the merits of the domestic manufacturer's, wholesaler's, or producer's position. And then prospectively, and prospectively only, the higher duty rates come into effect, but they will not be retroactive, as they are at present, for periods running up to 32 years, during which the liquidation of all entries of merchandise involved in any such protest is suspended. In other words, the results of a successful domestic protest will apply only to importations subsequent to a judicial ruling sustaining the protest and not, as at present, to importations made in some cases several years prior to such a ruling. The provisions of section 15 of this bill will apply only to complaints filed with the Treasury after the effective date of the bill which is 30 days after its enactment. The present domestic protest provisions of the 1930 act will apply to complaints previously filed. Section 15 also provides for the termination of pending complaints-they are called complaints when made to the Secretary, protests when made to the courts-but at the same time affords to any complainant who is still interested in any such complaint an opportunity to continue it in force. This provision is desirable because there are at least 5 complaints pending in the Department under the existing provisions of law which have not progressed beyond the inquiry stage although filed several years ago. The CHAIRMAN. Proceed, Mr. Hester.

Mr. HESTER. Section 16 appears on page 20 of the bill.

Mr. CROWTHER. Mr. Chairman, I should like to ask Mr. Hester a question in connection with Mr. Spingarn's statement. Included in this section are the words, "of a class or kind", which it seems to me are very much broader than the language in 516 (b) of the Tariff

Act of 1930 or that section of the Reciprocal Trade Act "shall not apply to any article with respect to the imp which a United States Foreign Trade Agreement concluded."

This says "any article of a class or kind." It seems to considerably broadened. Is that correct?

Mr. SPINGARN. No, sir; that simply codifies the present tion of the Foreign Trade Agreement Act.

Mr. CROWTHER. You do not think that it broadens it? Mr. SPINGARN. It does not.

Mr. CROWTHER. You include other articles of a similar perhaps are not altogether similar, but are of a kind that classified; is that correct?

Mr. SPINGARN. It is not intended here to broaden th respect.

Mr. WOODRUFF. This amendment is offered with the idea the law more in harmony with the construction of the p by the Department; is that right?

Mr. SPINGARN. It would remove a possible ambiguity provision to which Dr. Crowther refers.

Mr. WOODRUFF. In other words, under the present law made certain constructions and you have put those into effec regulations, as I understand; you have been following that p Mr. SPINGARN. That is correct.

Mr. WOODRUFF. If under the present law you would so it as to liberalize the section under which you are operatin instance, if we were to adopt this particular proposal, w enable the Department still further to liberalize the inter of the law? You have already done that, apparently, u present law.

Mr. SPINGARN. It will simply crystallize into law out construction of the existing law and hence put it on an imp legal basis.

Mr. WOODRUFF. In other words, this is for the purpose it out of the courts entirely; getting it away from the p of being taken into the courts, because of your present con: is that right? You say that it will make your position imp What else do you mean if you do not mean that it will re from any possibility of meeting a challenge as to the me Congress under your present construction of this section of Mr. SPINGARN. It is simply in accordance with the constr this provision.

Mr. WOODRUFF. But that has already been done, has it nois the common practice in the Department, is it not?

Mr. SPINGARN. Of course, it is necessary administratively strue any statute that is enacted by Congress.

Mr. WOODRUFF. I understand that. Has the Treasury ment's construction of this particular section ever been ch in the courts!

Mr. SPINGARN. Mr. Johnson, who is chief counsel of the of Customs, informs me that neither in nor out of court h been any objection to that construction.

Mr. WOODRUFF. Neither in nor out?
Mr. SPINGARN. That is correct.

CUSTOMS ADMINISTRATIVE BILL

101

Mr. WOODRUFF. Then it has all the effect at the present time of permanent law, so far as your experience goes, has it not? Mr. SPINGARN. It would have; that is true.

Mr. WOODRUFF. Then I see no particular reason for the section being in here.

Mr. SPINGARN. Here is the situation: The Foreign Trade Agreement Act at present contains a provision excluding the provisions of section 516 (b), insofar as the articles which are the subject of foreign-trade agreements are concerned. You cannot therefore protest the classification or duty rates on them under existing law.

The present bill would materially amend-in fact, completely revise section 516 (b) of the 1930 Tariff Act. We do not wish any implication to arise from this proposed amendment that it would impair the status of the present exclusion of section 516 (b) from articles with respect to which there is a foreign-trade agreement.

Mr. WOODRUFF. Then the purpose of this proposed amendment is to bring it more in harmony with the other amendment that you propose; is that it?

Mr. SPINGARN. Yes; to make it clear that the existing status, with respect to articles which are the subject of foreign-trade agreements, is continued; that is, they will not be subject to protest under section 516 (b).

Mr. THURSTON. Have you any tables or data to show the average number of complaints made by American manufacturers or producers with respect to the rates that are assessed against imported articles? Mr. SPINGARN. I have just placed those in the record. I shall be glad to give them to you again, briefly.

Mr. THURSTON. Yes.

Mr. SPINGARN. There have been 30 complaints, under the 1930 act, to the Secretary of the Treasury. Of those, he agreed with two. He disagreed with 28. Of those 28, 3 were abandoned by the American producers and 5 are still pending in the Bureau. Twenty were carried to the courts. Of these, 16 have been overruled or dismissed and 4 were still pending in October 1936. Not one has been sustained.

Mr. THURSTON. Now, let us reverse it. How many complaints have been filed by importers-how many appeals have been taken by importers from the construction placed upon the tariff rates by your branch of the Government?

Mr. SPINGARN. Mr. Johnson says that there are about 160,000 protests pending for hearing in the customs court.

Mr. THURSTON. In other words, American manufacturers have complained about 30 times, and the persons who are seeking to bring foreign products into our country have complained many thousands of times?

Mr. SPINGARN. Of course, the figures are not in any way comparable. Moreover, the provision would not in any way impair the right of the American manufacturer to protest. It is simply this protracted period of suspension of liquidation that would be eliminated.

Mr. THURSTON. I just had in mind your statement, on page 5 of your synopsis, under section 15, where you say that "this will curb the use of the law by domestic interests to harass importers." I just wanted to know who was responsible for that particular lang

uage, taking it for granted, as a basis of this section, th interests are harassing importers, especially in view of th domestic interests have complained only about 30 times porters have complained many thousands of times.

Mr. SPINGARN. I think the facts speak for themselves; the 30 complaints that have been filed under the 1930 a not one single case has been sustained by the courts.

Mr. THURSTON. What is the basis for the contention that have been harassing the importers, when they have filed th complaints against your Department and our own people filed just a few?

Mr. JOHNSON. May I answer that?

Mr. THURSTON. I will be glad to have someone answer Mr. JOHNSON. If a domestic manufacturer protests un 516 (b), the protest results in the suspension of liquidati erates entirely throughout the United States, at all port and it may affect, say, 6,000 entries. That would be eq 6,000 importers' protests, although there is only 1 pending.

Mr. THURSTON. But this is just one individual that complaint. I just wondered who of your group was resp this language and could sustain it when you have only a Americans complaining to you about saving their markets industries whereas foreign interests have made thousand plaints. I just wondered who could explain the basi language as you have used in this synopsis. Obviously, be done.

Mr. JOHNSON. That statement rests upon figures which put into the record.

Mr. THURSTON. But you have disproven them by your guage, when you say that there have been only about 30. who have complained while thousands of importers have co

Mr. JOHNSON. One American manufacturer's protest ma to suspend the liquidation of hundreds or thousands of im of merchandise, whereas an importer's protest relates to importation.

Mr. THURSTON. That may be true.

Mr. JOHNSON. Now, to go over into the importers' side issue alone, as I recall it, was raised in 24,000 protests al at the same time. That one question involved 24,000 imp If that had ben the subject of an American manufacturer the figures might be comparative.

Mr. THURSTON. Have you any idea of the thousands of factories that are producing goods which are affected by laws?

Mr. JOHNSON. There are many, of course.

Mr. THURSTON. There are many, many thousands. among that great number, only about 30 have made comp you about your construction of these import duties.

Mr. JOHNSON. There have been 30 complaints, of which been sustained by the courts.

Mr. THURSTON. And we have thousands and thousands of large, medium, and small, making products which come int

tition with foreign-produced articles. And only 30 of them have made complaints.

Mr. JOHNSON. I wonder if I have expressed clearly the broad scope and effect of each single complaint.

Mr. THURSTON. I think I understand that. Nevertheless, it seems to me that this is an amazing piece of information that you gentlemen here bring to us, that only 30 American producers, throughout the whole country, have complained, when there have been, as you state, thousands of appeals and protests and cases in litigation that the foreign importers have presented to you or have taken into our courts. And yet here, with the high wage level that we have in our country and with all of our efforts to protect our markets and our factories and our workers, we have only had such a small number of complaints from our people, as compared with the thousands from those who are trying to tear down the effect of our protective-tariff system.

Mr. JOHNSON. One of the difficulties under the present law is that a single person can obstruct the business of hundreds of others through the operation of section 516 (b).

Mr. THURSTON. Well, a case that is brought in a lower court ultimately may come to our Supreme Court; brought by one business concern, it might affect the business of everyone in that line of endeavor, might it not?

Mr. JOHNSON. I do not recall a case that would hang a contingent liability over so many heads, as one of these cases does.

Mr. THURSTON. The Schechter case probably affected many thousand different lines of endeavor. In a general way that would be comparable to one business organization filing a complaint with your branch of the Government.

Mr. JOHNSON. Well, that is entirely out of my line. I am sorry, I cannot compare them.

Mr. THURSTON. I am not trying to deal with the legal implications involved in the decisions, but just the effect of them. I could not help being surprised at this language which, it seems to me, rather impugns the motives of our domestic interests in this country, alleging that they are harassing the dear importers.

Mr. JENKINS. Can you illustrate how one of these complaints could affect so many thousand cases? Could you give us a practical illustration?

Mr. DISNEY. In line with that question, why not give us a concrete instance of a particular case where a complaint has been filed and what was involved?

Mr. JENKINS. That is exactly what I meant by my question.

Mr. JOHNSON. Mr. Spingarn's illustration was an actual case which arose in the department. The tariff law provides a rate of duty of 25 percent ad valorem on gloves of a certain description; on cotton gloves, similar in appearance, but of a different description, in the tariff act, the rate of duty is 60 percent, or almost 150 percent greater than the 25-percent rate of duty.

Some domestic glove interests brought a proceeding under section 516 (b) of the present tariff act challenging the correctness of the Treasury practice in imposing a rate of duty of 25 percent ad valorem on duties described in their complaint, cotton gloves.