New-York tribune., 1905-02-20
THE WHEAT DRAWBACK.
Il MiIer's Vie7c of the Recent Treas
ury Regulations.
To cae Editor of The Tribune.

To cie Editor of The Tribune.
Sir: The comments by the press on the recent de-
cision by Attorney General Moody as to the con-
struction TO be PLACED the Customs DRAWBACK
law (Section so of the Tariff of lS9O indicate
widespread msapprehenson as to the scope anu
effect of this decision There would also seem 10
be general misunderstanding as TO the opelauo"
of the drawback system. under which the duties
Maid on nnported materials are refunded when such
materials are used in the manufacture OF exported
articles.
The recent opinion by Attorney General Moody
instead of placing any construction on the
statute allowing a drawback of the duties paid on
imported materials used in the manufacture or
production of exported articles merely reafhrrs an
opinion rendered by Attorney General Griggs on
August TO- 1898. In this opinion it was held that
drawback could be allowed on foreign lead mixed
with domestic lead, even though the quantity OF
foreign material did not so appear in the finished
article that its quantity could be ascertained by
a chemical or mechanical analysis. The question
involved was as to whether the requirement of the
draw back law that the imported materials must so
appear in the finished article that the quantity or
measure thereof could be ascertained meant that
the imported material must appear in tangible
form distinct from the domestic material. or that
the quantity of imported material could appear"
through satisfactory evidence furnished by the man
ufacturer or exporter to the amount of imported
material used The Attorney General held that
where the exported article is made in part from
domestic materials drawback shall be allowed, pro-
vided the quantity of imported materials existing
in the completed article is shown to the satisfaction
of the officers by the manufacturers rec
ords and other evidence
Following this decision, the Treasury Department
has at various times during the last six years
issued regulations providing for the allowance of
drawback on imported materials mixed with do
mestio materials of the kind in the production
Of exported articles. Among other foreign materials
which drawback has been allowed under these
conditions are pig iron, sugar, WOOL oleostearne,
tallow. scrap iron and steel lead and wood pulp.
The effect Of the construction placed upon the law
by Attorney General Grggs was, therefore, to
broaden the scope of the drawback provision and
TO encourage the export trade in manufactured
articles made in part from imported materials
From the time of the Attorney Generals decision,
in August. 1895 up to November 1904, there was no
question that manufacturers and exporters were
entitled to refund of the duties paid imported
materials used, together with like domestic ma
terias. in the production of exported articles. It
was taken for granted that the Attorney Generals
opinion applied not only to lead, but to all other
foreign materials, and the manufacturing and ex-
porting interests OF the country We're carrying on
sequehIy great surprise TO these interests TO
learn that on an application being made to the
the allowance of drawback on exported flour made
In pa. part from foreign and in part from domestic
quired regulations and referred the matter to the
drawback could be allowed on flour manufactured
under those conditions. Since the validity of At
torney General Griggss opinion had not been Ques-
toned and as this opinion made no distinction be
tween imported wheat and other imported materials
such as had been held to be entitled drawback,
no reason could be seen for making exception in
the of foreign wheat.
As the object of the tariff is to protect the home
market, leaving our manufacturers free to compete
in neutral markets for the worlds trade the draw
back system is not only not antagonistic to the
tariff, but is absolutely essential any protective
tarin law. The basis of the drawback law is the
principle, recognized by all civilized nations
articles not intended for domestic consumption
should be free from taxation. This principle finds
expression in bonded warehouse system under
country and stored in bond. If these goods are
withdrawn for domestic consumption duties must
be paid but they can be withdrawn for export free
OF tax Another application of the same principle
of foreign goods in bonded cars across our terri
tory without payment Of duties. Provision is also
made by our internal revenue laws for the rems-
sion OF taxes imposed on domestic products in
tended for export.
AS our mills have a grinding capacity of nearly
double the total wheat crop it evidently TO the
advantage OF our mills and their workmen that they
should be enabled TO import freely the surplus
canadian wheat for use in manufacturing -four for
the export trade. So long this Canadian wheat
hour ground by Canadian mills or as grain to be
ground by foreign mills. In either the failure
or congress TO give millers a workable draw
pack law would be a direct announcement OF Cana
dlan and foreign millers at the expense of our
milling industry.
The free importation of Canadian wheat the flour
from which is exported cannot in any way iniIlre
the american wheat grower The failure to pernit
such free importation will seriously injure the mill
ing industry Will prevent the employees Of our mills
our railroads Of a large and important traffic in
transporting the exported -four to the seaboard
New-York, Feb. H. 1906 MILLER