Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1918-01-22
THE FREE PORT PLAN
All of Its Advantages Can Be Secured by Extension
and Simplifcation of the Drawback Pro-
visions of the Tariff Law
By GEORGE W. DOUGLASS

TUE suggestion of the establishment of
l. free ports in America for the develop
ment OF manufacture for eXport-there is a
hearing on the subject in Philadelphia today
has appealed to the imagination of the
ineXpert ever since it was first made. We
have been told for years that the only thing
needed 10 enable American manufacturers
TO compete successfully in the markets OF
the world with the manufacturers of other
nations the establishment in the coast
cities of an area in which foreign raw ma
terials might he entered free OF duty, be
manufactured into finished product and sent
abroad.
"T.ool, at Hamburg 80 the enthusiasts have
exclaimed, "and see how the free port there
has benefited Germany
Yes, look at Hamburg, and what do You
discover? When the free zone was estah-
lished IL was hoped that great manufactur-
ing center would be created which would
send its products into all parts Of the world.
But nothing Of the kind has happened. Ihe
only industry in the Hamburg free area that
has thrved is that Of shipbuilding ana re-
pairing The only figures Obtainabe SHOW
the activities before the war; but then there
were $4,000 worlimen employed In the free
port and 12, 900 We're engaged III shlpbulldlnS
In one form or another The other industries
had increased much more slowly in the free
area than in the rest of the city The manu-
facturer who wished to sell part of his prod
net abroad and part in Germany was hahdl-
capped by having his factory in the free port
for when he sent his goods through the gates
of the free zone to be sold III Germany ne
had 10 nay on them the full duty on manu-
factured goods whereas his competitor IN
another part of the city who had to pay
duty on his raw material alone coulu under-
sell the man who theoretically was enJoylns
advantages denied him. The only industries
besides shipbuildng in the free zone are
those engaged wholly in export or those
which happened to be located there before
the zone was established
Boston Turned Down the Plan
These facts have been disclosed by Amer-
cau investigators who wished TO know the
truth When tic Boston Port Commission
was created Few years. ago 10 develop tllal
porr the head of the commission Went 10
uan,blrg 70 study the situation. The Bos-
tonians dreamed OF making their city a
second Hamburg. But the commissioner re-
trained from recommending an appeal TO
Congress that an area be set apart INTO whlch
goods might be admitted free OF duty Tor the
use of manufacturers engaged In the export
trade.
irving T. Bush, of New York. who organ
lied and built the greatest system OF terminal
waterfront wa. s.ehouses in America Is on
record as opposed to the free port system as
unsuited 10 the American needs Nhat
America needs, in his opinion, ana III the
oninion of others who have studied the sub
iect with any thoroughuess. Is silnplltca-
tiou Of the drawback ploNlslohS VI the Idll'L
law -.,.. ,
These provisions have unfortunately been
drawn by men who were suspicious OF the
honesty of American manufactures While
uroyIding that the duty on all the raw mate
iials used in exported goods should DE re-
funded, they provide also that the manntac-
turer should point out to the customs Official
90 that ne could see them all the foreign raw
| material in a giyenNarticle. This is physl-
| caIly Impossible, especially when the FOR
| eiEn material is part of an amalgam or
| n,ixture@ For example, who can tell in a
given chemical compound where the domestic
| product is and where the foreign ingredients
| are In the case % shoes, the manufacturers
| have used an imported product In such a
| ,yav that it could not be found without
| tearing the shoe 70 pieces.
Drawback Would Open "Free Port" in
| Every City
| Still further. the regulations under which
| the drawback has been paid are 50 conpli-
| Gated that unless the amount or foreign
| material used is very great and unless the
| duty paid was very high no manufacturer
| would attempt 70 get his money back 1t cost
| more time and trouble than 1t was worth
A free port has no advantage TO oftei
which cannot be enjoyed more fully by every
part OF the country, provided an Intelligent