The Washington herald., 1921-10-07
AMERICAN VALUATION
AVTTAL CHANGE IN TARIFF
Difficulties and Advantages to Be Considered
In Discarding Basic Tariff System
s. OF One Hundred Years.
tny The wa.Al.ston Herald Economi-D

IitfAiu E<cnn0mintl
will tend to increase the level Of du.
ties Unless Congress should proper
tionately reduce the rates TO be as
sessed. This being the natural con-
sequence Of figuring the duty on
basis Of the higher level Of American
values as compared with foreign val
ues.
The argument Is made that the
inducements to lower prices by
American manufacturers would be
iessened, and that only domestic
competition with our producers
would keep our prices down. Fear
of foreign competition would tend
to be lessened because of the cor
responding higher duty. The mere
changing of the valuation from for
eign to American would raise the
amount of tariff to be paid II the
rate is unchanged.
The argument in favor Of it's
adoption to equalize exchange DIFF
ferences is that II would give st
least temporary remedy for the
differences in exchange between the
United States and different foreign
countries since the value OF the
goods would be determined by
prices in this country rather than
wide variety OF prices in other
countries. Just how fsr-reaching
this effect would serve 10 stabilize
exchange between the countries Is
not known. since we have never in
our history tried such a plan.
At the present time our customs
organizations consists of 6,6S5 en-
ployes scattered among 264 ports
of entry and located in various
foreign countries. Out OF the total
employees about $50 are engaged in
appraising and classifying impor-
tations. There are six foreign
agents engaged IN studying prices
garded as wholly Inadequate
force. There are great difficulties
in securing facts concerning for
eign values as emphasized by tes-
timony showing that the German
chambers Of commerce have been
considering the problem OF how 10
avoid giving full Information con-
cerning wholesale prices for eNport.
while some authorities believe
there are great difficulties in So
curing the American equivalents I"
exported goods on which TO sstah
lish a price. this is not mentioned
as the chief difftculty IN making
the change.
The problem OF adopting this ba
sis of valuation is chiefly in Sc
curing an adequate fund of infor-
nation for the appraisers, to enable
them to begin on a new basis with
out a serious delay at the time OF
making the change. over 100000
900 worth Of merchandise comes in
by parcels post, and at present the
examiners depend largely upon the
declarations which accompany the
goods. Under the new system
these would be worthless. and some
method Of establishing the Ameri-
can value would have TO be adopted.
Opposition has come from AmerI-
can business concerns who buy in
foreign markets, since they claim
they would have no basis upon
which TO determine costs without
knowing the basis of American
valuation. They claim they could not
determine the cost of imported mer-
chandise so as to sell goods in ad-
vance of delivery, and that the
rates provided in the bill. when
applied under American valuation.
would cause large increases which
the consumer must bear. Other
merchants and importers favor the
change, SO that the testimony from
this source is largely balanced.
Summarizing the testimony, the
points in favor OF the exchange ap-
pear to be that il will avoid many
of the difficulties which have here
tofore been seriously reducing the
returns from duties. On the other
hand. il will bring an entirely new
problem before our customs dutie,
organization and perhaps involv
some delay and enlargement In ouI
staff of American appraisers. Since
the actual duty that will result
from a certain rate in the ad va
loren list cannot be previously de-
termined. il will likely mean that
the tariff must be revised and ad-
justed at an earlier date than would
be needed under the old system of
foreign valuation.