Mr. HESTER. I think, Mr. Dingell, that is a question for your parliamentarian and the members of your committee to decide rather than the Treasury Department.

Mr. DINGELL. I imagine possibly some of the experts here could inform us whether reinterpretations have been made by the Secretary of the Treasury in similar instances, or whether there have been reversals of previous interpretations, when such instances were brought to the attention of the Secretary of the Treasury, and when they proved their case that the existing rulings are contrary to the intent and purpose of Congress.

You certainly can give me that information, whether there have been any reversals or reinterpretations in the past, and if there have been I am certain that there would be a positive answer that this would not need any legislative correction, because personally I think we might be led into the consideration of a complete new tariff bill.

Mr. HESTER. If you will permit me there, I would like to ascertain more about it and discuss it with the officials of the Treasury Department and submit some information to you on that, but not at this time.

Mr. MARSHALL. May we also have the privilege to see the information submitted, in that connection?

Mr. COOPER. I am not prepared to say about that; I do not know what it would be.

Mr. Buck. The gentleman has the privilege of consulting with the Treasury officials without our authorization, has he not?

Mr. COOPER. Certainly.

Mr. MARSHALL. I think the commissioner will be willing to give me everything they have.

Mr. Buck. We have heretofore made suggestions to witnesses, in fact, have asked them whether they have taken up their suggested amendments with the Treasury officials.

Mr. COOPER. Undoubtedly, it is entirely proper for you to do that. But my understanding was you asked the question whether certain information presented to the committee, which, I assume, would be in executive session, would be made public. I could not pass upon that until I see the nature of it.

Mr. MARSHALL. I think they will be glad to furnish it to us.

Mr. DINGELL. I presume if there is a ruling of any kind made by the Treasury Department, or a reversal, certainly your association will be notified, because they would be affected by such a ruling. Mr. MARSHALL. Well, that has not been the practice.

Mr. REED. How long have you been secretary of the National Wool Growers' Association?

Mr. MARSHALL. Since 1920.

Mr. REED. When they are promulgating these rules and regulations, do they not give you notice, or call you in?

Mr. MARSHALL. No, sir.

Mr. REED. How many members are in your association?

Mr. MARSHALL. Our organization primarily consists of 12 affiliated State associations. They have a combined membership of between six and seven thousand wool growers.

Mr. REED. How much wool do they produce?

Mr. MARSHALL. The bona-fide members of the association through that arrangement produce at least 25 percent of the wool grown, or around 100,000,000 pounds.

Mr. REED. Do you not think when a question of this kind comes up in connection with administration, which affects one of our domestic industries, where the protection of the revenue is concerned, that it would be rather helpful when these rulings are bing promulgated that they should call you in and at least talk with you about them? Mr. MARSHALL. I think we should have been notified. Mr. REED. You are quite positive you never were?

Mr. MARSHALL. I am quite positive. Prior to going with the National Wool Growers' Association, I was in the Government's service.

Mr. REED. This particular regulation was issued in 1932?
Mr. MARSHALL. You mean the one that was recently read?
Mr. REED. Yes. Was that issued in 1932?

Mr. HIGMAN. The regulation I read was article 499 (d), of the Customs Regulations of 1931, signed by the Secretary on January 6, 1932.

Mr. REED. Was a part of that regulation changed to some extent? Mr. HIGMAN. That regulation

Mr. COOPER (interposing). He stated this entire regulation was brought forward from 1923.

Mr. REED. That is what I understood.

Mr. HESTER. It is in book form, and most of the people who do customs business with the Government have copies of the book.

Mr. REED. That may be, but they were not called in before the rules were promulgated.

Mr. HESTER. When Congress desires an agency of the Government to consult with industry in connection with rules and regulations, they require that to be done in a statute. Take, for instance, the F. A. A. Act in connection with the issuance of permits.

Mr. REED. I personally think it is high time that we took some steps to give our local industries a little chance for their life.

I do not think we should pass a statute establishing a certain condition and certain principles for the protection of our industries, to obtain revenue, and then proceed to carry that into effect by regulations unknown to the industry and unknown to Congress.

Mr. DINGELL. On the other hand, is it not logical to assume that the Association of Wool Growers has a legal staff and a research organization who prepare data for them, and that they should know what affects them? Here is a provision that is 15 year old, published in book form, and yet they did not know until today that it affects them.

Mr. COOPER. It is in a published book, available to the public. Mr. REED. But not published until these rules have been promulgated.

Mr. DINGELL. I assume it might be a possible reflection on their own staff.

Mr. REED. I still believe the Congress represents the people of the United States and not the importers.

Mr. MARSHALL. I would like to say that the wool growers do not actually employ legal help.

Mr. McCORMACK. Who was Secretary of the Treasury when the first promulgation was made in 1920?

Mr. HESTER. I believe Mr. Mellon was Secretary of the Treasury. Mr. McCORMACK. Who was Secretary when these other promulgations took place?

147979-37-17

Mr. HESTER. I think that was Mr. Mills.

(The following amendments and statements in support of such amendments were submitted by Mr. Marshall:)

AMENDMENT PROPOSED ON H. R. 6738 BY F. R. MARSHALL, WITNESS FOR NATIONAL WOOL GROWERS ASSOCIATION, SALT LAKE CITY, UTAH

To strike out, commencing at page 32, line 9, after the semicolon and commencing with the words "but such" down to "enumerated articles" in line 21 and to substitute therefor the following:

"All products of wools which are admissible free of duty under this paragraph for the uses enumerated, when diverted to be used for use in the manufacture of any article not so enumerated shall be subject to the same duty as would have been required to be paid if such product had been imported in the same form as when diverted to other use."

STATEMENT TO SUPPORT AMENDMENT PROPOSED ON BEHALF OF THE NATIONAL WOOL GROWERS' ASSOCIATION

The language which we propose to delete, if retained in the bill, would, in our opinion, authorize the Secretary of the Treasury to decide as to whether products of imported carpet wools used for purposes not exempted from duty under the law should be free or dutiable. We raise the question as to the propriety or desirabily of delegation of such power by the Congress.

The language proposed to be substituted is similar to, but not identical with, a statement included in the testimony for the Treasury Department by Mr. Johnson before this committee on May 26.

Duty on noils.-We have been unable to obtain data relating to the amount of carpet wool noils that have been diverted into dutiable classifications for clothing use in any recent year.

The report of the Treasury Department states that the language of the bill which proposes the legalizing of a duty of 14 cents per pound on carpet wool noils diverted from their supposed use, "Authorizes continuance of administrative practice of assessing a special duty of 14 cents per pound on noils diverted from carpet manufacture."

Wool growers, until this hearing opened, were under the impression that carpet wool noils, when diverted to clothing uses, were paying the rate of duty prescribed in paragraph 1105 of the act of 1930.

We are of the opinion that a lesser rate than the one prescribed in paragraph 1105 is not legal even though it has been assessed for several years by administrative ruling.

We ask that the Congress should not sanction and establish what has been done improperly and in contravention of the law.

We acknowledge that as wool growers we have been remiss in not taking action under section 516 to obtain the protection to which we were entitled and to secure to the Government the full amount of revenue which we believe the act of 1930 contemplated should be collected upon noils of foreign origin diverted for use under dutiable classifications.

Mr. COOPER. The next witness is Mr. C. J. Fawcett.

Will you give your name to the reporter, and state whom you represent?

STATEMENT OF CHARLES J. FAWCETT, GENERAL MANAGER, NATIONAL WOOL MARKETING CORPORATION, 281 SUMMER STREET, BOSTON, MASS.

Mr. FAWCETT. Mr. Chairman, my name is C. J. Fawcett; I am general manager of the National Wool Marketing Corporation, 281 Summer Street, Boston, Mass.

It has been my duty to sell wool of practically every type grown in the United States during a period of 15 years.

Mr. Chairman and members of the committee, the organization which I serve as general manager is a national cooperative wool selling

agency serving 25 separate State wool-marketing associations. The State organizations we serve have a total membership of about 35,000 wool growers. In addition to serving as sales agent we represent our membership in matters pertaining to the welfare of the wool-growing industry at large. We feel that we would fall far short of our duty to our wool growers if we did not register our protest and raise our voice in opposition to certain provisions contained in section 27 of House bill no. 6738 which you are now considering, which stands as a proposed amendment to paragraph 1101 of the Tariff Act of 1930, commonly known as the carpet wool schedule.

Without needlessly going into a scientific differentiation between clothing and carpet wools, suffice it to say that the purpose of the original act was to provide protection for our domestic-grown wools, of which a very large proportion falls into the clothing division. It was also the purpose of the act to admit certain foreign wools commonly known as carpet wool free of duty, if used on floor coverings, and certain other products carefully enumerated in the first paragraph of the act. This amendment, if it should become a law, would, in our opinion, destroy a portion of the protection for our domestic wool that was clearly provided by the framers of the Tariff Act of 1930.

Upon the first reading of the proposed amendment, it might appear to be only in the interest of clarification and simplification of the original act, but a careful analysis, in addition to some knowledge as to the operation and application of the act now in force, leads to the firm conviction that the proposed amendment is far-reaching in its effect and application. It would, in our opinion, permit the use for clothing purposes, upon the payment of a small duty or no duty at all, of certain by-products from carpet wools in direct competition with certain types and grades of domestic clothing wool which the original act sought to protect and for which the original act now provides protection.

With your permission, I would like to introduce exhibit 1, and pass it up to you gentlemen, members of the committee, to show what this bill does to we wool growers.

This exhibit 1 consists of a BA or Montevideo no. 5.

This type of wool, since the act of 1930, comes in as carpet wool.
I also have some noils from that wool of comparable grade.
I want to ask you if you can tell them apart.

Exhibit A is a manufactured noil made from Iceland wool, which is a type of carpet wool. This noil, if imported and used for clothing purposes under the present act, would carry a 23-cent per pound duty, as provided in paragraph 1105 of the act of 1930. Under the provision of the proposed amendment, line 19 on page 32, this duty would be reduced to 14 cents, if the article is made from the same wool by domestic manufacturing processes or manipulation.

This proposed amendment permits the use of all the other byproducts named in paragraph 1105 of the original act to be used for clothing purposes without any duty at all.

This wool that I now show you comes in direct competition with our popular grades that are so popular all over the Corn Belt and in the territory of the States from which we expect our wool to come. Mr. CROWTHER. How much carpet wool is raised in the United States?

Mr. FAWCETT. About 3,000,000 pounds.

Mr. CROWTHER. In what part of the country?

Mr. FAWCETT. Principally in Arizona, among the Navajo Indians. Mr. CROWTHER. Three million out of four hundred million pounds? Mr. FAWCETT. Three million out of three hundred and fifty million pounds.

Mr. CROWTHER. That is not a sufficient supply for the carpet manufacturers?

Mr. FAWCETT. We are not objecting to the importation of wool for that purpose.

Here is a sample of Montevideo 5, which, ever since 1932, has been permitted to be used as carpet wool, free of duty, and here is a noil made therefrom [indicating].

Here is a sample of domestic 40, and the noil made therefrom [indicating]. Can you tell them apart? I am frank to say it would be difficult for me to tell them apart.

As I said, these noils, when they are imported and used for clothing purposes, carry a duty of 23 cents a pound, and this manufactured noil, which is a type of carpet wool, is made from Iceland wool. If this proposed amendment is adopted, the duty on this wool would be reduced to 14 cents. This wool comes from several popular breeds of sheep.

Mr. CROWTHER. They are about the same type of fiber?

Mr. FAWCETT. They are similar, and of similar value. The term "made noils" is a product of the combs.

I want to present you another sample as exhibit B. This is a manufactured noil made from domestic wool of 44's grade. The wool in this exhibit B is made from pure carpet wool from Icelandic wool, and it carries a duty under the proposed amendment of 14 cents. The two articles in exhibit A and exhibit B are very similar in type, structure and value, with the exception that exhibit A contains a percentage of kemp not found in the domestic-made noil. Both of these articles are particularly adapted to the manufacture of coarse, heavy overcoatings that are now so popular, as well as imitation Scotch tweeds and sportswear. It will thus be seen that the proposed amendment in effect reduces the protection on the made noil from domestic wool to the extent of 9 cents per pound.

The exhibit A noil, made from carpet wool, is simply one particular type that could evidently be duplicated in the manufacture of a large number of different kinds of foreign carpet wool admitted free under the original act of 1930, if used for floor coverings.

Exhibit B is a type of noil that is made by the combing process of domestic wools that are produced by such domestic breeds of sheep as Oxford down, Lincoln, Cotswold, Columbia, Romeny, all of which are popular breeds with our Western wool growers and particularly adapted to certain portions of that section of our country.

This proposal to take away a portion of our protection comes at a time when the sheep and wool-growing industry of the United States, particularly in the territory section of the country, is struggling hard to again get on its feet financially. The severe drought, coupled with the grasshopper plague that has prevailed in a large area of the woolgrowing section of the United States, has all but wiped out a very substantial portion of our wool growers. I refuse to believe it to be the wish of this legislative body to take away any portion of the protection now afforded the domestic wool grower.

Thus it will be seen that if such wool as I now produce as exhibit C, called White Joria, an east Indian carpet wool, which, in its unman