The Owosso times. (Owosso, Mich.) 1897-1926, 1898-10-14
LACE UNDERVALUED.
DIFFICULTIES ENCOUNTERED IN REV.
ENUE COLLECTION.

Against the Invoicing of Imports at Less
Than Market Values.
In directing the collector of the port
OF New York to take an appeal from
the reappraisement recently made by
General Appraiser Sharretts of laces and
embroideries imported from st. Gall.
Switzerland, the treasury department is
undoubtedly actuated by a desire to
reach final conclusion based upon the
oroadest and most careYui consideration
of all the facts. It is matter of the ut
most Importance to honest importers as
well as to the United States government
that fair and just basis of valuation
should prevail in applying the customs
duties to imported goods. If certain
class of goods are brought to this coun-
try from ST. Gall, Switzerland, on in
voices which understate actual values,
the federal government is not only de.
frauded of its rightful duties, but the
importers who pay duties on the same
class of goods at full valuation are made
the victims of an unfair and ruinous
competition.
The complaints of undervaluations Of
laces and embroideries from st. Gall
were OF such character that the au-
thorities in Washington deemed it neces-
sary to make careful investigation
with view of correcting whatever
evils might be found to exist. Within
the past six or eight months some of the
most experienced and trustworthy
agents of the treasury department have
been engaged in experimenting the alert
work of the local customs officials at
the port of New York. There have been
a succession of searching inquiries re-
garding the methods of importing goods
from st. Gall, Switzerland. These i'm
portations constitute so important an
industry that some time ago a CORE
spondent in st. Gall wrote to an official
in Washington that this government
was closing thousands of dollars annu-
ally in consequence Of gross underval-
uations."
With an apparent desire to cause as
little inconvenience and annoyance as
possible to the importers the officials Of
the United States appraisers depart
ment at the port of New York proceed,
ed quietly and cautiously in their work
of investigation. They found ample evil
dence at the outset that the federal
treasury was not getting its fair share
of revenues from the st. Gall importa-
tions. To certain extent this fact was
due to faulty methods which had de-
veloped in the course Of several years,
but in some cases there were clear indi-
cations of deliberate undervaluations Of
goods 1t cid not take long for the GUS
toms officers to ascertain that a large
proportion Of the laces and embroideries
sent to this market from st. Gall was
sent on what is known as "the consign-
ed plan"-that is the manufacturers in
St Gall consigned their shipments di-
rect to resident partners in New York
or to confidential agents.
In the absence Of legitimate bill Of
sale the shippers were in each instance
free to put in their invoices any valua-
tion that suited their purpose. Some Of
these invoices have played an importans
part in the subsequent Investigations,
and If in recent months some importers
have been heard to complain of too
much "official interference with their
private affairs" the responsibility must
surely rest upon the makers of such in
voices as place valuation upon goods
10 to 90 per cent less than the rated
market price of the same goods.
In endeavoring to establish proper
basis of valuation for st. Gall goods the
New York government appraiser tried
to find out as nearly as possible the cost
Of production of the goods. He natural
ly reasoned that with the cost of pro-
duction as known quantity there
ought not to be much difficulty in
reaching basis for uniform and fair
valuation of3iie imported goods for GUS
toms purposes. Many of the manufac-
turers and their agents, however, OBJ
jected to going deeply into the question
of cost of production on the ground that
to testify freely on that point would be
to disclose the secrets Of their bust
ness. )"
A large amount of testimony regard
ing the cost of production and the mar
ket valuation of st. Gall embroideries
and laces has been taken by United
States customs officials both at home
and abroad, and while the exact in
formation sought has not always been
forthcoming there have been significant
disclosures of the existence and extent
of the differentiation evil. Some wit
nesses admitted with startling frankness
that they invoiced their goods as low as
they did because others did it" Most
of these invoices were at least 80 per
cent lower than the appraiser thought
they should be. Because of the fact that
so many of the manufacturers and i'm
porters of st. Gall goods had long been
in the habit of entering their importa
tions at figures below the actual market
values the efforts of the New York APP
praiser to increase valuations met with
stubborn resistance.
Some Of the importers alleged that
their peculiar methods of valuation had
the sanction of long customs usage at
this port. They were told that under
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