The Washington times., 1915-05-27
TREASURY HIT HARD
BY TARIFF RULING
Rebate Under rs Per Cent
Clause Means Heavy Drain
on Money Chest.

The United States Treasury, already
racing heavy deficit at the end of the
fiscal hs.l year. is today subject to an ad-
s1a1lonai sao oon drain of from $15.000,600 to
100000 under a decision announced by
me tne Court of Customs Appeals uphold
wood tariff law.
rms clause gave to imports received
n American bottoms a preferential duty
Snstomt SS,ss6mnt 9f S,b0I per cent The Court Of
validity Of this clause, but it declares
also that the 5 per cent? rebate shall
ne accorded shipments received in the
sships of nations with which the United
S'ates mas favored nation treaties.
As these favored nation" treaties
exist between the United States and
factically all of the important coun-
tes Snid or the world the decision. II up
neiu py the supreme Court Of the
United states. means that the rates Of
tne Underwood tariff law are lowered
substantially per cent.
Entitled To Rebate.
Tho case will go to the Supreme Court
Tor nnal opinion. If upheld. the deci-
si4p OF the Customs Court of Appeals
VIII be retroactive to the extent that all
shipments, coming within its provisions,
setent Of tbe snie ne
tarin law will be entitled to the 5 per
cent duty rebate. 1t is estimated that
slS.oC,oOO would have to be returned un-
Ger this construction.
In addition, the decision will apply to
all future imports, and it Is estimated
the loss each fiscal year in revenue will
be at least $10.000,OO0
Ihe 0 per cent clause was inserted in
Inc underwood bill to encourage an
american merchant marine. At the time
or the passage of the law, however, no
inishing Of the customs duties of the
United States, was contemplated, and
the Treasury was in a healthy con-
Plea BY Ship Owners.
The principal plea before the court
by American ship owners was that the
favored nation treaties were In fact in
operative: The majority decision of the
Custom Court says on this point:
BY no department of the Government
have these provisions ever been repudi-
ated or denounced as unconstitutional or
denied force and effect as executory
merely, SO far as we can ascertain.
On the contrary they have, during all
the time since their negotiation. Eeen
recognized, respected and enforced. To
now hold them invalid, for any reason. in
view of these circumstances, would in
any event be to assume grave re-
sponsibility and to defeat them in the
face of the contention of the Department
Of Justice would be little less than
usurpation.
fortunately the duty Of repudating
them can by no stretch of authority rest
with us. for the very statute which we
are now constituting. in turn, recognizes
thoir existence and binding force. and
declares In effect that they shall not
thereby be abrogated nor in any man.
ner AFFECTED or impaired.
1T Is a matter of some qualification
To know that the executive departments
OF our Government uncompromisingly
1nsist that our treaties shall be observed
BY Us"
Fifty American Vessels.
Judge De Vries. in his dissenting
opinion, says:
1T Is certain that there are not over
nfty American vessels. Did Congress.
in order to benefit these fifty vessels
and such as might in the course of
years, necessarily few under this in
terpretation, register under our flag,
Immediately give an equal bounty to
$500 other vessels? If so, where was
the favor to our ships?"
The court also held that merchandise
from Cuba is entitled to a reduction OF
20 per cent ad valorem, as 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 ship owners were
held that the clause applied to goods i'm
ported In ships of favored nations as
we'll as those flying the American flag
therefore that the section must be hello
entirely imperative unless the favored
nation treaties were abrogaed
Former Attorney General McReynolds
held the clause imperative because OF
the conflict with existing treaties, and
in conformity with his opinion the re.
bate has never been paid in any case