New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-09-04
Evil Of differentiation
Arguments in Favor Of Fordney Bill
Plan of Assessing Duties

Arguments IN Favor OF Fordney Bill
Plan of Assessing Duties
To the Editor of The Tribune.
Sirs The fact that the United States
government is losing from SO ,00o, 900
to $4o,000,oo0 year in revenue. be-
cause Of the differentiation Of imports,
seems to be one Of the biggest argu-
ments yet advanced for the adoption
| OF the American valuation plan Of
assessing duties. When I say the
government is losing such large sum,
do not speak offhand, but quote from
the sworn testimony of Leslie NJ. Shaw.
d former secretary of the Treasury,
| who says: "Undervaluation is esti-
mated to cost the government, and
that is no guess, from $10,oo0,o00 to
| s40,00o,000 q year."
Two members of the tariff commits
sion also point out the great evil of
undervaluations, as practiced under
the present law. In the course of his
testimony before the Senate Finance
Committee, Thmas O. Marvin, VICE
chairman of the commission, said:
~ was talking with a man from
New Hampshire the other day. who
had recently received from a manu-
facturer, maker of women's suits,
a price on Irish tweeds. That WAS
| to be SO. He ordered one of those
suits, received the bill for $40, and
~atA
marked For custom purposes only
/ in which the bill was made out for
So. If in a small transaction like
that an inducement TO undervalue
the import is yielded to, it is not diff
fcult to realize how much under
valuation there is when the invoice
may invoice thousands of dollars !
have seen many letters from foreign
manufacturers, saying, Our price
will be so and SO, but for custom
purposes we will send you dupli-
cate invoice giving the foreign price
at much reduced figure There is
unquestionably, considerable under
valuation. Duties based ON foreign
values will never produce the full
amount Of duty that the rates are
supposed to produce. BY change
to American valuation, there will be
eliminated this differentiation"
William Burgess, the other member
of the tariff commission, testified as
follows:
"The government is losing a large
amount of revenue from the fact
that many manufacturers (foreign)
and groups of manufacturers feel
that they are complying with the
letter of our law if they can in any
way establish foreign market
value, regardless of the actual sell
ing price or cost of production. Such
manufacturers invoice their goods at
or below the cost of production, and
paying duty upon that low valuation
reap enormous profits from the sales
made in this country. There are
foreign goods to-day coming into
this market, which, when sold on
| the American market, show profit
/, running from 100 to 800 per cent of
their factory cost. One case have
in mind came under my notice within
the year showed profit of 1.75o
per cent, the actual goods costing "a
cents abroad and selling Tor $4.20
here"
If the government was ever in need
OF all rightful revenue it is to-day and
if this evil of differentiation can be
corrected by the pending tariff bill,
why shouldn't it be done even though
it might tend to reduce the profits of
the importers from 800 and 400 per
cent to fairer percentage?
F. D. DODGE.
New York. Aug. 81, 1921.