Evening star., 1915-05-27
SUPREME COURTS
RULING IS AWAITED
Treasury to Withhold Refund
of Customs Revenues Un-
der 5 Per Cent Clause.
CUSTOMS APPEALS COURT
UPHOLDS TARIFF PROVISION
Decides It Applies to Goods Import
ed From All Countries Having
Favored Nation" Treaties.


Not until the Supreme Court of the
United States has had opportunity to con-
firm or reverse the Interpretation of the
United States Court Of Customs Appeals
OF the so-called 5 per cent clause of
the tariff law will a refund of customs
revenues collected at variance with
this Interpretation be made by the
Treasury Department.
The clause provides for a reduction
Of duties Of 5 per cent on goods i'm
ported in American ships. The Gus
.e4pms court, upholding the clause. in
A2reted 1t, in a decision given yester
. OkAs applying to all goods imported
in vesaels of those nations with which
the United States has favored nation
treaties.
Approximately s15,o00,000 in duties
already collected would have to be re-
funded IL the decision is sustained by
the Supreme Court. TO which it will be
appealed. Favored nation" treaties
exist with the principal countries of
the world. The result of the decision
Is practically to reduce the entire Gus
toms revenues by per cent.
Judge De vries Dissents.
In a dissenting opinion Judge De
Vries pointed out that the majority de-
cision means that goods imported in
about $500 foreign vessels of favored
nation countries shall receive this re-
duction in customs duties. Five per
cent of the estimated customs revenues
for the present fiscal year would ex-
ceed $ll.oOoO00, and in years to come
this total would grow to even greater
proportions. Moreover, it was pointed
out that the decision. if 1T stands the
test in the Supreme Court, is retro
active to the extent that IT applies to
lmportatIonS into the United States
since approval of the Underwood-S Sim
mons law more than two years ago. in
cluding goods entered in bond and sub
sequently withdrawn without payment
Of this rebate.
Government officials realize that the
decision may have a profound effect
upon the fiscal policy of the United
States. At present the actual working
balance in the Treasury Is under $15.-
100000, though possibly $40,000,000 is
available to be added to this if neces-
sary. With an announced deficit in the
postal revenues. and no increases in in
ternal revenues or customs receipts
now in sight, talk Of the necessity for
an issue of Panama canal bonds was
revived in view of the prospect of re-
duced customs revenues and the nee
essity of refunding millions already
collected. The payment of some $780,
100000 into the Treasury due from the
income tax, however, is counted on to
delay any such emergency for several
months.
As to Goods From Cuba.
The decision Of the customs court in
part sustained the ruling Of the board
Of general appraisers and in part re-
versed that body. In addition to its
findings regarding goods from abroad.
the court held that merchandise from
Cuba Is entitled to a reduction of 20
per cent ad valorem. provided by
the Cuban preferential treaty with the
United States. and to the further dis
count of per cent from that amount.
The government, importers and
American and foreign shipowners were
parties to the suit The government
held that the clause applied to goods
imported in ships of favored nations
as well those flying the American
nag. therefore that the section must
be held entirely imperative unless the
favored nation treaties were abroGat
ed. The importers were interested par
ttcularly In the granting of the re-
bate. Former Attorney General Nc
Reynolds held the clause imperative
because of the conflict with existing
treaties, and in conformity with this
opinion the rebate has never been paid
In any case. although importers ac-
cepted the assessed duties in many in
stances under protest.
Claimed Treaties Imperative.
The main plea before the court on
the part of American shipowners was
that the favored nation treaties were,
In fact. imperative. In this connection
the majority decision said:
by no department of the govern
ment have these provisions ever been
repudiated or denounced as unconsti-
tutionaI or denied force and effect an
20
ascertain. On the contrary, they have,
during all the time since their nego-,
tfation. been recognized. respected and
enforced To now hold them invalid.
for any reason. In view of these cir
cumstances, would. in any event, be
to assume q grave responsibility, and
TO defeat them In the face of the con-
tsntion OF the Department of State,
the Treasury and Department of Jus
doe would be little less than usurpa-
don Fortunately. the duty of re-
pudiating them can by no stretch of
authority rest with US. for the very
IN turn recognizes their existence and
binding force and declares In effect
that they shall not thereby be abro-
RAtod nor in any manner affected or
impaired II 10 a matter of some graft
doation TO know that tho executive de-
pAftments of our government unoom-
p.cmisingly insist that our treaties
EAAN Be observed BY US"
Contention Of Judge Do vrieA
In hfs dissenting opinion, Judge De
vfas0 aid the majority opinion Of the
WAy0 and means committee OF the
HDuss which framed the Underwood
0nmons Law indicated that there are
- isaSt $500 treaty-nation vessels in
0a American foreign trade.
n u certain. said Judge De vr1es
>cAas there arc not over nifty American
oz yeAfu, necessarily few under this
tntsfpretatton, register under our nag
Immediately give an equal bounty to
$500 other vesselA II so. where was
the favor TO our shipsr'
DISCUSS TRAFFIC RUIEa