Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-04-28
SOUND-VALUE BASE VITAL
In DETERMINING TARIFF
New Plan of Assessing AID Valorem Du.
ties Is Asked by American Producers.
Hoover Gives Study Impetus.

should. Of course, like to see less diff,
flcult method"
Mr. Frear: IF the American valuation
system was adopted you do not consider
the difiiculties Of administration insur.
mountable, do your"
Secretary Hoover: mo. I do no,
presume that anything is administra-
lively insurmountable."
U. S. Valuation System Adopted.
The tariff bill of 1922 as it passed tins
House adopted the American valuation
system. fixing valuation Of foreign arti'
cles at the price of similar or COM
parable" American articles In the whole.
sale American markets.
In 1920 imports of merchandise SUBJ
ject to ad valorem duties or compound
rates-that is. both specific and adj
valorem-comprised 80 per cent Of duti-
able imports, and Sc per cent OF Gus.
toms revenue was derived from such
imports: and ad valorem rates applied
to about 1900 items or articles. That
proportion holds good now.
A formidable campaign was inaugu'
rated by hundreds of American manu-
facturers asking for the adoption OF
the American valuation plan. An
ganized. 1t was urged that under the
present plan. the importer presented
with his entry at the custom house an
invoice certified by q consular officer,
with declaration by the exporter a.
to correctness, giving cost Of production
IL the merchandise was purchased, the
foreign market value and bill Of lading,
The customs officer or appraising of.
ficers did not have information beyond
what the manufacturer or importer
stated II was a matter of faith In
thu statements offered This was the
substance Of the argument made by
the promoters Of American valuation,
which was designed to correct these
evils.
In 1921 arguments against the Ameri.
can valuation plan were: It would
hamper and retard international trade
and commerce; that comparable" arti-
cles in the United States are too uns
certain and indefinite, In fact impos-
sible; that undervaluations are scarce;
that the proposed plan would throw tina
customs service of the United States
into confusion.
American Value Is Opposed.
The 1922 tariff bill passed the HOUSE
with the American valuation plan SUBJ
stituted for the foreign valuation plan.
Many American manufacturers, labor
organizations and others argued for
American valuation. Many importers
opposed it; but value" In the House bill
was the American value Of comparable
or similar articles.
The battle between the two groups
was renewed in the Senate. Extensive
hearings were held before the finance
committee; members of the Tariff Com
mission were divided; representatives Of
importing associations and agents OF
foreign manufacturers and producers
opposed the plan. When the bill emery
ed from the Senate committee, the
American valuation plan was discarded
and the old foreign valuation plan adj
hered to. Value" was defined as for
eign value" or export value; and il
neither can be obtained, then the
United States value" which is the
value In the principal markets of the
United States. Practically, foreign
value" or invoice value prevails in most
cases. The bill as 1t came from confer
erlce and became law provided for
foreign valuation, with domestic and
foreign cost of production as the meas
ure of the tariff. In case the flexible
tarin was put into effect.
A change In the present method Of
assessing ad valorem duties has been
revived in the hearings before the ways
and means committee undertaking a
''readjustment" of the tariff. This re-
vival of a change In assessing duties
has been sanctioned by President Hoo
yer In his recent message to Congress.
1t Is admitted by many that the 1921
American valuation plan has been re-
jected by the ways and means commit.
tee and in its place has been suggested
the domestic selling price of the i'm.
ported commodity with which the do.
mestic article completes. 1t Is expected
that this plan will permit customs as
SCISSORS to place fair value on foreign
competitive commodities without the
necessity of ascertaining foreign cost
Of production.
Arguments Are Outlined.
The main arguments against the
present foreign valuation plan are: 81
Foreign valuations give control of ad
valorem duties into the hands of for
eign manufacturers and producers.
(2) Foreign valuation results in under-
valuations and often great loss of GUS
toms revenue. go Foreign valuations
result in determinations against for
eign countries of highest cost of pro-
duction in the case Of similar compet-
ing commodities, and domestic valua-
ton will overcome that.
Another plan suggested Is that Of
assessing ad valOrem duties on the
landing value of imports" that is, the
value of the imported article when
landed in the port of entry. This plan
is embodied in Great Britain's act Of
safeguarding of industries" passed In
1921, which provides that "the value
shall be taken to be the price which
any importer would give for the goods
if they were delivered to him. freight
and insurance paid, in bond at the
port of importation, and duty shall be
paid on that value"
1t is clear that the point of real
competition between American and
foreign competitive merchandise is the
American market and the American
selling price of the two competing
articles There are many obstacles to
the plan of fixing tariff duties on the
difference between the foreign and
domestic cost of production. The tariff
commission admits this is impossible In
many instances. Some plan of assessing
ad valorem duties on the selling prics
of the foreign competing commodity In
the American markets will obviate the
necessity Of ascertaining foreign cost
of production. The American market
or selling price will be the only irnpor-
tant fact, and the only fact in which
American competitors in the American
markets are interested.
American manufacturers and pro-
ducers who are suffering from the fall
ure, under the present system, to bridge
the difference in foreign and domestic
cost of production are asking for some
new plan of assessing ad valorem duties,
whatever they may be. President Hoover
has given impetus to this request, and
urges Congress to provide for ''sounder
basis for valuation"
Single Rule in Africa