They began with an inquiry which was addressed to t Department as to the rate of duty being imposed on g description. The Treasury Department replied, giving mation, and then the domestic manufacturer returned plaint and a claim that the gloves were dutiable at 60 set forth the reasons for their contention.

The whole matter was then very carefully and exha viewed and the Treasury Department adhered to its p the proper rate of duty was 25 percent ad valorem. It pu ruling, with a notice to all interested persons, that if t manufacturer filed a protest, all importations thereafter b the United States, of merchandise of that description, at in the United States, or withdrawn from warehouse af after the date of this publication, would be subject to the sion of the customs court on the protest filed by the dom facurer.

That case has been disposed of since these figures wer The 30-day period after the liquidation of the first entry designated by the manufacturer expired without this having taken the opportunity to file his protest, which speak definitely, because the proceeding has not been completely-but in my opinion it was tantamount to a ment of the protest.

During the whole pendency of this matter, after the 30following the date of publication of the decision, each i that came into the country was subject to this continge for duties of almost 150 percent in excess of those he Treasury Department to be applicable, and believed by th to be properly payable.

Mr. JENKINS. Now will you tell us where the illustration to the 6,000 cases come in?

Mr. JOHNSON. The claim was denied by the Bureau lished September 17, 1935, and liquidations have not yet be ized.

Mr. DISNEY. How many importations were affected by protest; can you tell us?

Mr. JOHNSON. I cannot give you the definite statistics. Mr. DISNEY. Are such statistics available?

Mr. JOHNSON. Only by reference to the individual ports. Mr. DISNEY. What would be your estimate?

Mr. JOHNSON. On the basis of the information concer gloves that we have I would hesitate to say exactly, bu between two and there thousand importations came in an fore the suspension period began.

Mr. JENKINS. I do not see how a protest can come ou You say there are two kinds of gloves involved?

Mr. JOHNSON. The effect of this proceeding was to stop t tation of that character of gloves.

Mr. JENKINS. I do not see where these protests come in Let me take this case. You say there are two kinds of g carrying a 25 percent ad valorem duty and the other a 6 ad valorem duty. The manufacturer in the United Sta plains and says that on those gloves that are paying 25 p valorem duty there should be a duty charged of 60 perce

case goes into the court. The merchant that brings in these gloves. on which he has paid a 25 percent ad valorem duty would be charged a contingent rate of duty of the difference between 25 percent and 60 percent, if the courts decided that the 60-percent rate was applicable. But the court did not decide that he had to pay the 60-percent rate; the court decided in favor of the 25-percent rate. Then there would not be any complaint, would there?

Mr. JOHNSON. I do not understand what you mean there by complaint.

Mr. JENKINS. But the importers do complain, do they not? Mr. JOHNSON. The importers are complaining because they do not dare to make the importations on account of this contingent liability. Mr. JENKINS. Do they actually file a complaint?

Mr. JOHNSON. They complain because they are faced with a situation where, if they bring their goods in, they must place them on the market and dispose of them without knowing what their costs

are.

Mr. JENKINS. They take that risk, and after the court decides whether the import duty shall be 60 percent or 25 percent, or if it decides it shall be 60 percent, then they have to put up that difference; is that correct?

Mr. JOHNSON. If they dared to import them.

Mr. JENKINS. I do not think that Mr. Thurston, in his questions, had in mind that class of cases. At least, I did not have that in mind. That is a case where the importer makes a complaint because of a complaint of the producer here. But what proportion of your cases are those where the importer himself comes down and says, "Here, they are charging me 60 percent when the charge ought to be 25 percent"? In other words, where he initiates the whole proceeding himself.

Mr. JOHNSON. There are numerous cases of that kind.

Mr. JENKINS. Then let us not talk only about the case involving the American producer. Let us take as an illustration the case where the importer himself initiates the proceeding. How much of the time of Government officials of this country is taken up by these importers, most of whom are interested in the welfare of the foreign producer rather than the domestic producer or else they would not be importers? That is what I would like to find out.

Mr. JOHNSON. The importers' proceeding there is somewhat comparable to the objection of an income taxpayer. His remedy is provided, just as there is a remedy provided for a taxpayer against an overassessment of his income tax. I think those two situations are quite comparable.

Mr. JENKINS. You have not yet told us this: Do you deal primarily with importers? You said that you have had only 30 complaints from producers in the United States. Let us just dismiss those 30 complaints. That seems a small number. How many have you had from importers, with whom you deal every day-thousands of these importers? How much of your time do they take up in the filing of complaints, and what is the nature of those complaints? You see, we people who live inland do not know very much about this importation business. I would like to know the relative amount of trouble that you have from the American producer and the American importer.

Mr. JOHNSON. The relative trouble, I think, rests largely in the suspension of liquidations. The importer's protest does not stay customs business. We proceed with our liquidations. We close our transactions. The importer files his protest. It is reviewed by the collector, and if the collector adheres to his original decision, the matter goes on to the court, and it comes back into administrative hands only if the importer's contention is sustained.

In the case of the domestic manufacturer's protest, thousands of entries are affected and they can not be disposed of by the customs officers; they must be held in abeyance, in suspension, pending a decision that comes down, on an average, as Mr. Spingarn says, in about a year and a half.

Mr. JENKINS. What is the reason that it takes a year and a half or 2 or 3 years to decide a simple little case like that?

Mr. JOHNSON. It is a question of delay. There are many opportunities open to the domestic manufacturers to delay proceedings; it is obviously in their interest to do so. They do not need a favorable decision, as long as there is this contingent liability in effect. The earlier the decision is rendered, on the basis of our experience under the 1930 act, the less effective is their proceeding.

Mr. JENKINS. I cannot see why you have to worry so much about the American producer. Up to date you have had only 30 complaints from them. Even if every one of them involved a million complaints, yet you say that there never has been but 1 or 2 of the 30 that has been sustained.

It seems to me that most of this trouble comes from the importers and not from the American producer. If I am wrong about that, I would like to have you tell me why.

Mr. JOHNSON. Of course, there are not millions of cases that are involved in each complaint, but if there were, it would be absolutely impossible to continue the customs business. There are enoughthousands, in some cases, and in other cases, comparatively few.

Mr. JENKINS. Mr. Johnson, I do not want to hurt your feelings at all, but I am not interested in that part of it at all. I would like to have you keep your mind on these importers, for the moment, and tell us how much trouble they make for you. Let us forget about the American producer for the moment.

Mr. JOHNSON. On an importer's protest, we close out the transaction.

Mr. THURSTON. Ninety-nine percent of your time in the Customs Service is taken up with importers and perhaps 1 percent with American producers, is that right?

Mr. JOHNSON. I think that is a very fair estimate. Our business is primarily with the importing public.

Mr. COOPER. Let me see if I understand the situation correctly as presented here. In the case that has been cited, you have a certain cotton glove that is classified as a woven glove. The rate of duty on an item of that classification is 25 percent ad valorem?

Mr. JOHNSON. Yes, sir.

Mr. COOPER. The question is raised as to the proper classification of that glove. And the contention is made that it is a knitted glove, not a woven glove. The knitted glove carries an advalorem duty of 60 percent?

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Mr. JOHNSON. Yes, sir.

Mr. COOPER. Is that correct?

Mr. JOHNSON. Yes, sir.

Mr. COOPER. Now, that presents a question of fact to be determined, whether it is actually a woven or a knitted glove; is that true?

Mr. JOHNSON. The question involved in that particular case depended upon the interpretation of the statutory language. There was a question of law involved as well as a question of fact.

Mr. COOPER. What question of law was involved?

Mr. JOHNSON. The interpretation of paragraph 915 of the Tariff Act of 1930.

Mr. COOPER. The law levied an ad-valorem duty of 25 percent on woven gloves, did it not?

Mr. JOHNSON. Yes, sir.

Mr. COOPER. And 60-percent ad-valorem duty on knitted gloves? Mr. JOHNSON. Yes, sir.

Mr. COOPER. After all, it came down to a question of whether the glove was woven or knitted, did it not?

Mr. JOHNSON. This particular glove was partly woven and partly knitted and the question was which component was the chief value and whether that was the material question.

Mr. COOPER. It is quite common knowledge, is it not, that the question of proper classification is frequently raised on imported articles?

Mr. JOHNSON. Very frequently.

Mr. COOPER. That constitutes perhaps the major part of the work of the Customs Court and the Court of Customs and Patent Ap peals, does it not?

Mr. JOHNSON. Yes, sir.

Mr. COOPER. And that is the question of the proper classification of merchandise; because merchandise of one classification carries one rate of duty and of another classification a different rate of duty; is that correct?

Mr. JOHNSON. Yes, sir.

Mr. COOPER. As I understand, the question presented here is whether or not when a classification is made by the Customs authorities and sustained by the Treasury Department and then a protest filed and proceedings instituted in the courts, with a view of changing that classification and getting it determined on a different basis, there is a long period of delay during which time a great degree of uncertainty exists as to what classification will prevail, in the final analysis?

Mr. JOHNSON. Yes, sir.

Mr. COOPER. Or at the end of the proceedings?

Mr. JOHNSON. Yes, sir.

Mr. COOPER. It is one thing for us to consider whether or not the proper rates are levied by law; it is quite a different thing for us to consider whether or not the present machinery of collecting customs duties is availed of to the extent of unduly harassing and burdening people engaged in that business.

Mr. JOHNSON. Yes, sir.

Mr. COOPER. Now, the question here presented is with reference to the procedure, is it not?

Mr. JOHNSON. Yes, sir.

Mr. COOPER. Now, what is the definite treatment that is here proposed on that point?

Mr. JOHNSON. We propose to retain the right of the domestic manufacturer, producer, or wholesaler to question the proper tariff classification of competitive merchandise, but to eliminate the long period of uncertainty.

Mr. COOPER. It strikes me that is only fair and proper; because it is one thing to levy a rate of duty on a protective basis, but it is quite a different thing to allow a situation to exist whereby people may avail themselves of the machinery now provided by law to defeat the very purpose of the Tariff Act, and that is, in effect, what is happening the way things are now, is that correct?

Mr. JOHNSON. I think the figures speak for themselves on that. Mr. CROWTHER. I asked Mr. Spingarn about that very point, if there had been any attempt to take undue advantage of this, and he said that he hesitated to say that that has been done. It may be that the law, as it is written, does provide that opportunity, but what I wanted to find out was whether the American producers were in any way using this in an unfair way. Mr. Spingarn stated that he hesitated to say so.

I do not see why we should be so much concerned about it, anyway, because 516 (b) suspends its operation with relation to all articles that are made the subject of a trade agreement. By the time we have three or four more trade agreements, that are now pending, nearly every article in the tariff bill will be covered, without any question, especially with the broadening effect of this language where you say "any articles of any class or kind." That certainly is going to broaden the sweep of that, so that it will take in even more things than it does now.

I do not see what we are so disturbed about, if they are not making use of this purposely to delay importations and to impose a burden upon the importer.

You say that your purpose is to retain to the American producer that opportunity to make a protest. But the present law takes that away from him with regard to all of the important commodities with respect to which trade agreements have been entered into. Under the Reciprocal Trade Act its action is suspended with regard to almost every article, and with every new agreement that is made other articles will be included, and they will be automatically estopped from taking any action on those articles under the Reciprocal Trade Agreement Act, which suspends the operation of section 516 (b).

Personally, I do not see any great objection to this. If its purpose is to shorten the term during which the uncertainty exists, I think it is perfectly fair. I do not think there is anything unfair about it, myself.

I think, with the rest of my colleagues, perhaps on both sides of the House, that it was a little unfortunate that this language was used; that is, "This will curb the use of the law by domestic interests to harass importers." I do not think that is a fact, really. I do not think there has been evidence here to substantiate that, to show that that has been done. There might have been individual cases. But it seems to me that the person in this country that has been harassed is