tained this view but, upon application of the Government, granted a rehearing which is still pending. The purpose of Representative Smith's amendment, which would definitely define lumber as including timber, arises because of the trade agreement with Canada. In that agreement, the excise tax on lumber is reduced from $3 per thousand feet board measure, to $1.50 per thousand feet board measure. As the definition of lumber was in litigation at the time of the signing of the agreement, special provision was made for the further -consideration in the event of a decision unfavorable to the Government.

It was specifically provided in schedule 2 of the Canadian Trade Agreement that if timber is excluded from lumber under section 601 (c) (6), that such timber should be no longer subject to the trade agreement and that the duty provided in paragraph 401 should not be reduced from $1 to 50 cents per 1,000 feet board measure. Further provision was made, however, that a new duty could be enacted with the limitation that the total charges should not he greater than would have been the case if timber had continued to be subject to the excise tax as lumber (at $2 per 1,000 feet board measure). Representative Smith's amendment would anticipate a possible decision of the court unfavorable to the Government, and insure that the proper excise tax will continue to be collected on timber. It is made necessary because of the highly technical procedure in the customs court under which it is impossible to secure the proper consideration of the merits of the case.

The second of Representative Smith's amendments contemplates the fixing of board measure for the purpose of collecting an excise tax on the basis in use at the time the Canadian trade agreement was signed. When we negotiated the trade agreement with Canada, we reduced the excise tax, and tariff on lumber by 50 percent, the rate being reduced from a total of $4 to a total of $2 per thousand feet board measure. It was contemplated by both Canada and the United States that the lumber entered under the reduced rates would continue to be measured as lumber is always measured in the lumber trade. A clever importer, desirous of saving a few cents, noticed the limitation in paragraph 401 of the Tariff Act, denying the allowance of the deduction for planing, tonguing, and grooving. Paragraph 401 says that such deduction from board measure should not be allowed "for the purposes of this paragraph." These six words are superfluous. There is never an allowance for planing, tonguing, and grooving in the computing of board measure in the buying and selling of lumber in the United States and Canada. He took the case to court, however, and the court solely on the difference of the language in the two statutes held that deduction for planing, tonguing, and grooving was permissible in computing the excise tax, and that the net dimensions of the board after planing and dressing should be used in computing board measure. This is entirely out of line with the trade practice throughout the United States and Canada.

The only way a decision of the court can be corrected is by legislative action, such as is proposed in Representative Smith's bill, H. R. 7045. This proposal to return the measurement of lumber to the basis in use at the time the Canadian trade agreement was negotiated does not contravene that agreement. It merely seeks to maintain the status quo on which the agreement was negotiated. Furthermore, it does not seek to change the rate of duty but merely seeks to insure the collection of the full amount of excise tax payable. Further assurance that this proposal does not involve Canadian trade agreement rates, may be had from the decision of the court of customs and patent appeals in the case of the E. C. Miller Lumber Co. v. the United States (T. D. 48701), in which it was held that the measurement of lumber does not contemplate the rate of duty. The Canadian agreement binds the rate of the excise tax at $1.50 per thousand board feet. H. R. 7045 merely seeks to secure the collection of $1.50 for each 1,000 feet of lumber imported.

A third feature of Representative Smith's bill is the exemption from the excise tax of Northern white pine, Norway pine, and Western white spruce lumber. This proposal is in line with the action taken by the executive committee of the National Lumber Manufacturers Association at its meeting in Madison, Wis., in December 1936, in which the following resolution was passed: "The National Lumber Manufacturers Association will seek the continuance of the lumber excise tax; as stated in its original application on the Canadian trade agreement early in 1935, it has no objection to exemption from the tax of the three species there mentioned; namely, northern white and Norway pine and western white spruce."

It is also in conformity with the position taken by the association at the time the Canadian trade agreement was negotiated, that the association would not seek tariff protection on the species of lumber which are scarce in supply in the United States, but for which there is a substantial demand by American consumers. These three species, which it is proposed to exempt, fall within this class. The domestic supply of virgin northern white pine, Norway pine, and western white spruce, is practically exhausted, yet there is a substantial demand on the part of the American consumers for these woods, and it is necessary to import the needed supplies.

It is hoped that the Ways and Means Committee can favorably report H. R. 7045, or at least propose it as an amendment to House Joint Resolution 345, extending the excise tax. The proposed definitions will secure the proper collection of the excise tax on the species of lumber for which the American lumber industry needs protection. At the same time, it is proposed to exempt from the excise tax three species of lumber in which it is felt that protection cannot be justified.

Very truly yours,

NATIONAL LUMBER MANUFACTURERS ASSOCIATION,
HENRY BAHR.

The CHAIRMAN. The next witness is Mr. Eli Frank, Jr. Will you state your full name to the reporter, and whom you represent?

STATEMENT OF ELI FRANK, JR., BALTIMORE, MD., REPRESENTING NATIONAL CUSTOMS SERVICE ASSOCIATION

Mr. FRANK. Mr. Chairman, my name is Eli Frank, Jr., my address is 111 North Charles Street, Baltimore, Md., and I am representing the National Customs Service Association.

Mr. Chairman, unfortunately, due to having a national hook-up in typewriting, the memorandum which I desired to submit to the committee is not in type ready for filing, and I would like to have the privilege of filing the memorandum when it is properly corrected, together with a comparative statement showing the changes in the bill as they would appear, with our suggested changes.

The National Customs Service Association respectfully submits, for the consideration of this honorable committee, the following proposed changes in sections 8 and 31 of this bill, which relate to customs officers and employees. As more particularly set forth hereafter, certain of the language contained in these two sections in its present form could be interpreted to mean something not within the contemplation of Congress. It is for the purpose of eliminating these possibilities of unanticipated interpretations that the following proposed changes in language are respectfully suggested.

First, I would like to refer to section 8, on page 10 of the bill. The only two sections with which we want to deal are sections 8 and 31, as they are the only sections which affect the interests of customs employees.

Section 8 appears on page 10 of the bill and on page 15 of the comparative print.

The intent of section 8 apparently is twofold: First, to extend the provisions of the Customs Overtime Act to cover cases where customs employees are required to perform services at night, or on Sundays or holidays not specifically covered by the existing overtime law, but which are for the benefit and profit of private interests. Second, to clarify the existing law so as definitely to present a statutory basis for the present administrative practice of not requiring

payment of overtime compensation to customs officers at border ports, who are working in shifts, and who therefore work a full week, but at other than regular hours, and who do not at present participate in overtime compensation.

In its present form, section 8 will not effectuate the desired result. For this reason, the following changes are respectfully suggested: First, strike out lines 23, 24, and 25 on page 10, and lines 1 and 2 on page 11.

The language of this proposed amendment to section 451 of the Tariff Act of 1930 is such that it might eliminate payment by private interests of overtime compensation for services performed at their request and for their pecuniary benefit by customs officers and employees at other than regular hours. This result could be brought about in two different ways.

(a) The language itself is so broad that it might readily be misinterpreted. The interpretation to be given to the words "Customs officers or employees on regular duty are available" would be left to the individual collector of customs. If any such collector should rule that by detailing day employees to night service when request for such services is made, that such detail is regular duty, the Government would be losing the time of the employee, the employee would lose his overtime compensation, and the person requesting the extra service would be getting such service without paying therefor. (b) The application of this language would lead to intolerable discrimination, and thereby result in elimination of such overtime compensation. Let us, for example, suppose that there are two inspectors assigned to an international ferry across a river on the Canadian border on regular duty after 5 p. m. to protect the customs revenue. Since they are regularly assigned on a night platoon or shift they do not collect overtime compensation. A call is received for an officer to board a vessel at a point several miles away. If the collector were to order one of these officers to perform this additional duty, such service would, under the present law, be a reimbursible charge; but under the language used in lines 23, 24, and 25 on page 10, and lines 1 and 2 on page 11, one of these men who is "available" would be required to leave his post to perform the requested service without extra compensation. Five minutes later, a call is received for a similar service to be performed several miles away in another direction. Since the one man regularly assigned cannot leave his post at the ferry landing, and since the other man is away on duty, no officer on regular duty would be available and consequently the collector would find it necessary to assign an officer not on regular duty to perform this second requested service. A charge would be made for the second service performed, and the officer assigned to perform the service would be entitled to overtime compensation.

Here we have a situation where two officers are performing identical services for the benefit of private interests. One person getting special service is paying therefor and one is not. This situation would be so clearly discriminatory that the party compelled to pay for a service given gratuitously by law to a business competitor, would undoubtedly seek redress in the courts. Since we may safely assume that it is not the congressional intent to discriminate between private interests, the deletions referred to should be made.

If the payment of such overtime compensation by private interests were eliminated under the present language of the proposed amendment as set forth above, the Government would be subjected to an additional expense in order to perform overtime services, the compensation for which is now paid by the private interests benefited thereby.

Second, strike out everything from and including the word "for" on line 16, page 10, to and including the word "available" where it first appears on line 18, and also strike out the word "available" where it next appears on line 18. This language is unnecessary and should be stricken out for the same reasons as are advanced above for eliminating the same thought when negatively expressed.

In connection with the negative form in which it is put later on in the bill, the elimination which we are now proposing has exactly the same reason in its favor. This eliminates the positive requirement, whereas we originally discussed the negative requirement.

Third, insert the words "a sufficient number of" after the word "assign" on line 18, page 10.

The wording of lines 18 and 19 on page 10

the collector shall assign customs officers or employees in accordance with the request

seems to place a limitation upon the discretion of the collector in assigning a sufficient number of officers to protect the revenue. Since this limitation of discretion is clearly not contemplated, it would seem that the addition of the words "a sufficient number of" would remedy this defect.

For instance, suppose the master of a boat requires the collector to supply two men to watch, supervise, and inspect baggage. Under the language now in the bill he can supply, in accordance with the request, 2 men only, although there might be five hatches, eight runways, and six gangways, and he might feel that 20 men were necessary for the proper protection of the revenue.

Mr. DINGELL. Would not that be a reflection upon the collector of customs, who has to protect the revenues of the Government, if he were asked to send a sufficient number of men to supervise the unloading of a vessel in New York Harbor, or in Detroit or in San Francisco?

We will say there is a big liner, and he would send two men there. Would not the collector of that port be subject to removal for such an asinine thing as that?

Mr. FRANK. No collector would do that; but the language of the bill provides that he would send men in accordance with the request. If the master of a big liner asked for only 2 men, he might send 20, but the liner would only have to pay for 2, and our suggestion is that he is entitled to send a sufficient number of men.

Mr. DINGELL. In other words, that the collector should have discretion.

Mr. FRANK. Certainly.

Mr. DINGELL. Regardless of the request, to send what he believed to be a sufficient number to protect the revenues of the Government.

Mr. FRANK. That is the very purpose of our suggestion.

Mr. DINGELL. I wanted to get that straight.

Mr. FRANK. I thank you for helping me develop it.

Our next suggestion is this: Strike out on line 14, page 10, the clause, "the owner or consignee of any merchandise" and substitute therefor the following:

by or on behalf of owners or consignees of merchandise or baggage.

Also, we want to add at the end of section 8 these words:

and such section 451 is further amended by adding at the end thereof the following:

"The authority to regulate hours now vested in the collectors of customs by the last proviso of section 5 of the act of February 13, 1911, as amended, shall not include the authority to make assignments to regular duty on Sundays or holidays, either by day or at night, in compliance with such requests, in the place of assignments to regular duty on other days or nights."

The clause beginning on line 13, page 10, of the bill

or by or on behalf of the common carrier or the owner or consignee of any merchandise

would probably be interpreted as not broad enough to include cases where merchandise or baggage is brought in by other than the owner or consignee thereof or through the use of facilities of other than a common carrier. It will be noted that the second change suggested in this portion of this memorandum would apply to facilities not generally embraced within the definition of common carrier. These facilities could not operate on Sundays or holidays either by day or by night, unless brought within the phraseology of this clause. For this reason we are suggesting that the words be changed so as to allow a request to be made by or on behalf of owners or consignees and on their behalf even when such owners, such consignees, and their merchandise or baggage are not definitely known at the time request must be made. The words "or baggage" are added because throughout the Tariff Act of 1930 a distinction seems to have been made between merchandise and baggage and there is no intention in this section not to cover both.

The authority to regulate hours to conform to customary private working hours of the port, if other than from 8 a. m. to 5 p. m. was placed in the act of February 7, 1920, which was in the nature of an amendment to the act of February 13, 1911. This proviso was placed in the act for the purpose of giving to the Collector of Customs at New Orleans the authority to regulate the working hours of customs officers to agree with the prevailing hours of working vessels of 7 a. m. to 4 p. m. at that port, and for no other reason. That is referred to in the hearings before the Committee on Commerce, United States Senate, Sixty-seventh Congress, entitled "Overtime Pay of Customs and Immigration Employees", on page 17.

That concludes our suggestions with reference to section 8.

I have now to make some suggestions with reference to section 31, which is found on page 38 of the bill and on page 51 of the comparative print.

First, on page 39, line 5, strike out the phrase, "and fix their compensation", and insert said phrase on line 4 after the word "duties." Substitute a semicolon for the comma after the word "law" at the end of line 4.

The phrase "and fix their compensation" appeared in its present position in the act approved March 4, 1923 (U. S. C. 1934 ed. title 19, sec. 6). Since the passage of this act the Bacharach Act was