Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-04-28
BY EDWARD NELSON DINGLEY.

BY EDWARD NELSON DINGLEY.
TN his message to the extra session
Of Congress, President Hoover
said:
i Furthermore, considerable weak
ness on the administrative side of
The tariff has developed, especially in
The valuations for assessments of duty.
There are cases of undervaluationS
that are diff1cult to discover without
access to the books Of foreign manu-
facturers, which they are reluctant to
offer. This has become also a great
source of friction abroad There is in
creasing shipment Of goods on consign-
ment, particularly by foreign shippers
to concerns that they control in the
United States. and this practice makes
valuations difficult to determine. be-
leve 1t is desirable to furnish to the
Treasury sounder basis for valuation
in these and other cases"
There are, and always have been.
two methods of collecting duties on
importS-speciflc and ad valorem. Spe-
cific is so much on each article, by the
pound or bushel, ETC.: ad valorem is
so much percentage on the valuation
of the imported article. Some duties
are compound-that Is, both specific
and ad valorem.
Foreign Valuation Substituted.
The first tariff of 1889 provided that
ad valorem duties should be assessed
in accordance with 1.-The value thereof
at the time and place of importation. f"
This system of American valuation con-
tinued until l795, when foreign valua-
ton was substituted without any pub
lie explanation. This foreign valuation
was foreign cost. plus packing, trans
portation and commission charges. In
1917 a supplementary act was passed
providing that ad valorem duties shall
be calculated upon the net cost Of the
article at the place whence imported,
exclusive of packages, commissions,
charges and transportation, export
duty, etc" Obviously this reduced the
foreign valuation, and reduced the
duty.
This law resulted In such frauds and
undervaluations that Congress passed
a law providing that 1.-The owner or con-
signee of goods subject to ad valorem
duties must produce the original invoice
thereof and swear it exhibits the true
value of such goods, In their actual
state of manufacture at the place from
which the same were imported"
During the debate on the tariff Of
1888, Henry Clay offered an amendment
that after 1912 ad valorem duties should
be assessed ION valuation made at the
port in which the goods were first i'm
ported" The amendment was adopted.
However, the tariff of 1912 retained for
eign valuation with a proviso that the
Secretary Of the Treasury might recon-
mend changes under certain conditions
Competition Made Severe.
In his message to Congress in 1850,
President Fillmore recommended the
adoption Of specific duties altogether as
a method of preventing undervaluations.
He repeated this recommendation in
1852.
Every tariff law since the Civil War
adhered to the foreign valuation system,
except that the tariff of 1897 contained
a provision authorizing appraisers ito
take into consideration the wholesale
price at which such or similar merchan-
disc Is sold or offered for sale In the
United States"
Economic and currency disturbances
in Europe following the World War, and
the consequent low valuation of mer-
chandiSe imported, due to low wages
and low cost Of production, stimulated
European exports to the United States,
and made severe foreign competition in
the American markets. This revived
the agitation for change In the meth
cd of assessing ad valorem duties.
Summoned before the House ways
and means committee, May 3, 1921,
Secretary Of Commerce Hoover stated
that, under the circumstances, he
thought the American valuation plan
should be tried The following con-
versation took place:
Mr. Tilson: I'm the meanwhile what
Is going to happen to some of our in
dustries that are now facing this very
abnormal competition of which you
speak? Unless we do something by way
Of American valuation to take care OF
this depreciation in the foreign cur
rencies, what IS going to happen tc
some of our industries, many Of them
long established. that are now facing
this German competitions"
Secretary Hoover: II am thoroughly
imbued with the notion that we must
have protection Of very large order
We must have such protection as will
enable our people to weather through
this period and to hold their own aft
erward."
Mr.. Tilson: Gould any reasonable
duties be made that would meet this
extreme condition; and in addition tC
substantial duties must we not do some
thing else? I mean, In addition to
duties based on foreign valuations, must
we not, either by American valuations
or by handling the question in some
other way, meet this question or suffer
the consequences"
Secretary Hoover: IT intended to con-
vey that meaning a moment ago wher
I said that could see no alternative al
present except American valuations.