Mr. JENKINS. I should like to know whether what we a now is in line with our policy with other countries, to sort of way?

In other words, will other countries give us the same consi Mr. HESTER. We are already getting it in this case, becaus already extends similar privileges.

Mr. JENKINS. You think, generally speaking, this would good thing?

Mr. HESTER. I think the facts speak for themselves. It d that a man should be permitted to do that in a case of that k Section 20 is on page 24 of the bill.

This section crystalizes into law the existing administrat tice with respect to the transfer of the right to withdraw im tered for warehouse. It provides that such transfer irrevocable in defined circumstances, and defines the custon of the transferee.

Provision is also made to cover the administrative practic mitting merchandise to be withdrawn for transfer to anothe warehouse at the same port.

Strange as it may seem, there is no provision of law toda expressly permits merchandise to be withdrawn for tra another bonded warehouse at the same port, and, of course simply in the interest of efficiency, to facilitate the expedit of customs facilities and remove any doubt as to the admin practice.

Mr. CROWTHER. Every once in a while you come here with dent purpose to crystallize into law by enacting statutory pr what has been done by regulation heretofore.

Mr. CROWTHER. You find that necessary once in a while. you try to do that with all regulations, to put all regulati law, the law would be like an encyclopedia.

Mr. HESTER. That is right; but when you get a bill changes in administrative provisions of the law which are ab necessary, then we take up doubtful cases and put them in at the same time, as we have done in the past.

Mr. THURSTON. Would this be an illustration, where the of liquor places it in a warehouse and his lease runs out, an did not have the right to move it some other place, they m crease the rent a hundred percent, and he would be obliged the rent because he could not take the property out of the war Mr. HESTER. That would be so on transfers within the port. Mr. THURSTON. This would give him the right to move th erty and not be subjected to excessive rent.

Mr. HESTER. That is right.

Section 21 is on page 25 of the bill.

Mr. JOHNSON. This provision will amend the law relating refund of duties on goods which have been released from custody.

There has long been a prohibition in the statute against after release from customs custody, except by way of a dra when the article is produced in the United States with the imported materials.

There are certain situations in which some relief should be granted within the limits of reason.

One case is where animals come into the country under bond, conditional upon their exportation, and have died.

The tariff law, in general, regards the destruction of merchandise as equivalent to exportation if it is done while the merchandise is still within the reach of customs officers, and this merchandise under bond is in that status because the importer has to export it. But he cannot do that because the animal has died.

With respect to some articles under temporary bond, there is a special provision in the statute relating to destruction.

Another situation is where, after merchandise has been released from customs custody, it is found to be prohibited from importation under some collateral statute, such as the Food and Drugs Act.

The courts have held in that case that the duties should be remitted. We wish to codify into law the court decisions so that the statutes will express the whole law and we will not have to go to different sources to find it.

Mr. CROWTHER. The synopsis states that the section restates the law; it is also modified and changed to some degree, is it not?

Mr. JOHNSON. It restates the law by including that part of the law embodied in court decisions and that part of the law embodied in unchallenged administrative practice, and that part embodied in existing statutes. It consolidates that and restates it.

Mr. HESTER. Section 22 is the next section. That appears on page 26 of the bill.

All that this section does is to cover a gap in existing law by making it a crime for any unauthorized person to put a customs seal, fastening, or mark on any warehouse or package containing merchandise or baggage, or willfully to assist or encourage another so to do.

It may appear paradoxical that there is not any law covering that today.

Here is an actual case. After a passenger disembarks, for instance, at New York, the customs authorities inspect his baggage and put a stamp on it to show that it can leave the pier, and then his baggage is moved, and the stamp falls off and somebody takes the stamp and puts it on his suitcase. An actual case arose like that.

This is in the interest of the prevention of smuggling.

Section 23 is on page 27 of the bill.

The purpose of this section is to amend the law relating to reports by customs field officers of violations of law to provide that such reports shall be made to the United States attorney only if action by him will be required, and to eliminate a requirement that such reports be made to the solicitor of the Treasury, an office which has been abolished.

At the present time the Secretary of the Treasury has authority, administratively, through a summary forfeiture proceeding, to make forfeitures of goods valued at less than a thousand dollars, where the appraised value of the merchandise is less than a thousand dollars, but if it is over a thousand dollars the only way the Government çan forfeit it is through a libel proceeding in a United States court.

The law now requires all reports of seizures to be sent to the United States attorney. That is useless, and it means a great waste of time in referring these cases involving amounts under a thousand dollars, which do not come into the courts.

The purpose of this is to eliminate the requirement that cases which do not in any event go to the United States attorney should be reported there in the first instance.

The second provision is to make the law consistent with Executive Order 6166, of June 10, 1933, which abolished the office of Solicitor of the Treasury.

Mr. THOMPSON. With reference to this Executive order abolishing the office of Solicitor of the Treasury, was there any office that took its place any other position created?

Mr. HESTER. Not at that time. The Revenue Act of 1934 established the office of General Counsel, but the requirement is still on the books, that these reports be referred to the Solicitor's office.

Section 24 is on page 27 of the bill, and that is designed to take care of this situation.

You will recall that in the liquor-tax-administration bill which was before this committee you had a provision inserted there-an amendment to that bill by Mr. Reed-requiring all forfeited liquors to be destroyed if they could not be disposed of, if they could not be used by the Government or given to charitable organizations.

That provision was finally enacted into law in the F. A. A. Act. The only purpose of this provision is to make the customs laws consistent with laws like that.

Mr. COOPER. This only relates to liquors?

Mr. HESTER. No; this would relate to gold, to silver, or to anything that is not covered at the present time.

Mr. JOHNSON. The present law requires sale by auction; and in addition to the laws Mr. Hester has referred to, there is another that authorizes the Government to use forfeited vehicles.

That is another exception to be covered by the amendment.

Mr. CROWTHER. Would it include smuggled goods, like watches? Mr. JOHNSON. After their forfeiture, the goods must be sold unless the Government can use them.

Mr. COOPER. Let us have a clear understanding of this. Is the purpose of this provision to provide for the destruction of forfeited goods?

Mr. JOHNSON. The only purpose of the provision, Mr. Cooper, is to amend existing law, which in terms requires all forfeited merchandise to be sold, to agree with other statutes that preclude the goods from being sold. It does not provide any new method of disposition whatsoever.

Mr. COOPER. I other words, it provides for the destruction of all forfeited goods that are provided for destruction by other laws? Mr. JOHNSON. Yes, sir.

Mr. HESTER. The next section is section 25, on page 28 of the bill. This provision changes the law relating to the disposition of the proceeds form the sale of customs seizures and eliminates any basis for a claim that any part of such proceeds is available to cover duties on the seized goods, which can be collected from the importer.

In other words, when the goods are forfeited to the United States. the duties are still due from the importer, and we want to make it perfectly clear.

There is some ambiguity about it now, as to whether or not, after these goods have been forfeited to the United States, the Government can sell them and proceed to collect duties on that forfeited merchandise.

Claimants contend that the proceeds from the sale of merchandise under the statute must be applied to the payment of the customs duties.

Mr. COOPER. In other words, it is an action in personam instead of an action in rem.

Mr. HESTER. That is right. The claimant is personally liable for the duties.

Mr. COOPER. It is now nearly 12 o'clock, and Members have been notified that it is desired that they be on the floor promptly at 12 o'clock; so, Mr. Chairman, I move that the committee adjourn until 10 o'clock tomorrow morning.

Mr. THOMPSON (presiding). (After putting the question.) The committee will stand adjourned until 10 o'clock tomorrow morning. (Thereupon the committee adjourned to meet tomorrow, Wednesday, May 26, 1937, at 10 a. m.)