Court Opinion

ID: 9652023
Source: CourtListenerOpinion
Date Created: 2023-08-23 17:10:43.349983+00
Date Added: 2024-06-11T18:12:46.197883
License: Public Domain

RICHARDSON, Judge
(dissenting).
The principal question which is presented by the evidence in this record, as I see it, is whether a bounty or grant was paid upon the production and exportation from Uruguay of the wool tops covered by the involved entries in the proceeds received by the exporter from the sale of his foreign exchange under the multiple exchange rate system in vogue in Uruguay at the time such merchandise was exported to this country. The majority have reached the conclusion that a bounty or grant was paid on the proceeds which the exporter received from the surrender of his foreign exchange to the extent that the rate of exchange applicable to this merchandise exceeded the “average exchange rate” of 1.86 pesos to the United States dollar. I cannot agree with this conclusion. In my opinion, the evidence of record does not es*617tablish the existence of a bounty or grant upon the exchange proceeds derived by the Uruguayan exporter of wool tops to this country.
In order that no inference be drawn from a reading of the majority opinion that the multiple exchange rate system in Uruguay was an invention of recent origin that was devised to catapult Uruguayan products abroad, it should be noted, at the outset, that Uruguay has had a multiple currency system since 1931,1 and that, as of the time that the involved merchandise was exported, Uruguay had not established an initial par value for its currency.2 This currency system antedated by two decades the advent of the wool tops importations here involved. Consequently, it can hardly be said that subsidization of the wool tops industry was an underlying motive for the creation by Uruguay of its multiple currency system. And, prior to 1953, this very currency system now under attack had been vigorously defended by the Treasury Department against a claim emanating from domestic wool manufacturers that the preferential exchange rate governing the exportation of wool tops from Uruguay was productive of a bounty.3 Our Tariff Commission reported, in 1948, that profits from Uruguay’s exchange control operations constituted an important source of Government revenue, amounting, in 1939, to 15 percent of Uruguay’s income.4 And the basis of the Treasury Department’s earlier defense of the Uruguayan multiple currency system was that its rates were manifestations of an internal revenue system.5 *I do not see in the evidence before us the emergence of any factors not previously considered by the Treasury Department, and sufficient to justify its change of position.
In giving support to the Treasury Department’s reversal of position, the majority have referred to the Uruguayan basic decree of September 25, 1947 (plaintiff’s collective exhibit 6), in noting its provision that “the Executive might grant preferential exchange treatment consisting of the establishment of exchange rates varying between 1.519 and 1.78 pesos per dollar ‘for industries which need it in order to place their products abroad.’ ” It will be seen, however, that the spread of export exchange rates encompassed within this decree had not varied from the spread of export rates which were in existence in Uruguay for several years prior to the promulgation of this decree.6 And the decree itself did not embrace any consideration of the wool tops industry because such industry was nonexistent in Uruguay at that time. At the time here involved, the spread of export exchange rates in the controlled segment of Uruguay’s multiple currency system ranged from 1.519 pesos to the dollar for unprocessed goods to 2.35 pesos to the dollar for processed goods. Wool tops, the merchandise with which we are here concerned, is a semi-processed article, the exportation of which was governed by the exchange rate of 2.15 pesos to the dollar. The wool tops rate represented a combination of the two basic export rates, namely, 76 percent at 2.35 pesos per dollar, and 24 percent at 1.519 pesos per dollar.
There also was a free exchange rate in Uruguay which, at the time in question, averaged around 3 pesos to the dollar. This rate also governed the exportation of some of Uruguay’s products. The ma*618jority have made a point of noting, although the decrees do not so indicate, that the wool tops exporters were permitted to retain 5 percent of their dollars which could be sold at the prevailing free rate. But what the majority have not indicated, and what is established in the evidence, is the fact that one of Uruguay’s chief meat industries, namely, the cattle industry, was conducted entirely at the free exchange rate level. Thus, the decree of April 15, 1953, pertaining to beef exports, states (plaintiff’s collective exhibit 5):
“Article 1. — Prices of all types of cattle which are marketed at the National Stockyards and in the ‘Frig-orifico Anglo de Fray Bentos’ are subject to the law of supply and demand.”
The exchange rate governing the involved exportations was preceded by a number of fiscal events of international significance, the importance of which cannot be overlooked in the total appraisal of currency controls as a basis of subsidization of exports, if we are to put the Treasury Department’s criterion in proper perspective. One such event was the emergence, in 1945, of the International Monetary Fund, of which organization the United States and Uruguay were charter members.7 One of the principal purposes of the Fund is “To promote exchange stability, to maintain orderly exchange arrangements among members, and to avoid competitive exchange depreciation.” Thus, through participation in the Fund, Uruguay gained multilateral recognition and support for its currency system and practices from Fund members which, of course, included the United States. It is said that in the matter of foreign exchange controls “the Bretton Woods agreements have somewhat enlarged the field of recognition.” 8
In the light of this development, it is difficult to understand how the majority could brush aside United States participation in the Bretton Woods agreements as being irrelevant to this matter of subsidization through currency manipulation, and prefer to follow the holdings in the Woohvorth, Mueller, and Miller cases instead. The International Monetary Fund and the United States, acting through the Secretary of the Treasury and others constituting the National Advisory Council on International Monetary and Financial Problems, gave approval to Uruguay in no uncertain terms for the use of the multiple exchange rates governing its imports and exports.9 This attitude was not formulated in a vacuum. It was formulated with a conscious awareness of the impact of such currency reforms on all phases of American activities of an economic and fiscal nature involving intercourse with Uruguay in such matters.10 Indeed, the Treasury Department’s earlier defense of Uruguay’s currency system against the claim here made was based upon knowledge and information derived from United States participation in Fund activities and investigations of monetary activities of Fund members. The Woolworth, Mueller, and Miller cases, which have apparently influenced the majority opinion, are representative of an earlier era, and do not involve multiple exchange rate currency systems. These cases deal with dual rate currencies which at the concluding phase of an export transaction possessed but a single value. Unlike the currency system here involved, these systems were supported by only the unilateral action of the German Government and were regarded as being offensive to our antisubsidy tariff laws. These cases constitute an inappropriate standard by which we must resolve the issue before us in the instant case.
Another fiscal event which preceded the involved exportations was the devaluations of October 5, 1949. These devaluations directly influenced the rate which was later to govern the exporta*619tion of the involved wool tops. These adjustments in exchange rates are partially reflected in the decree of October 5, 1949, which was received in evidence in the instant case (plaintiff’s collective exhibit 5). They have been summarized in the Financial Statistics Report of the International Monetary Fund for the month of October 1949 as follows (p. 186):
“Prior to October 6, 1949 those export proceeds now sold at the rate of 1.78 had been sold at the rate of 1.519 or 1.70 pesos per U.S. dollar. Those exporters now eligible for pesos at the rate of 2.35 formerly sold their proceeds at rates of 1.70, 1.78, or 1.88 and those imports for which exchange is now available at 2.45 were formerly eligible, in most cases, for exchange at 1.90 pesos per dollar.”
The devaluations of October 5, 1949, did not originate with Uruguay. Uruguay, in its turn, reacted to the round of devaluations that was precipitated by the devaluation of the British pound sterling in September 1949 and the sweeping devaluation of the Argentine peso which followed.11 The United States recognized the necessity for Uruguay’s devaluations and approved of them.12 Prior to the October 5, 1949, devaluations, wool tops exports had been assigned preferential export rates of first 1.78 pesos per United States dollar on September 25, 1947, and then 1.88 pesos per dollar in September 1949, according to information compiled by our Tariff Commission from foreign service reports and statistics of the International Monetary Fund.13 Nevertheless, both sides concede the fact that, during this period, wool tops exports to the United States from Uruguay were negligible.
As a result of the October 1949 de-preciations in Uruguay, the wool tops export rate was changed from 1.88 pesos per dollar to 2.35 pesos per dollar. The period between this rate adjustment and the exportation of the involved merchandise witnessed only an appreciation of the wool tops rate as against the dollar. But the fact remains that it was only natural and logical for the October 1949 devaluations in Uruguay to result in the placement of wool tops in the highest exchange rate stratum of Uruguay’s controlled export rates, in view of this commodity’s location at the apex of that structure in the pre-October 1949 era. But, curiously enough, while the Treasury Department has recognized the almost universal need for currency devaluation among trading nations in the wake of the pound sterling devaluation of September 1949, nevertheless, the Treasury Department has, in the case of Uruguay, calculated the “benchmark” for the rate governing that country’s wool tops exports at a lower level in Uruguay’s multiple exchange rate structure than that to which this commodity was ássigned before the October 1949 depreciations.
This brings me to a consideration of the Treasury Department’s calculation of the “benchmark,” or formulation of the weighted average ' of 1.86 pesos to the dollar, which is all that stands between that Department’s earlier decision negating the existence of a subsidy in Uruguay’s wool tops rate, and its later decision finding one. In my opinion, the “benchmark” theory is an arbitrary method that was used by the Treasury Department to put a value on Uruguayan currency, albeit for but a single commodity, under circumstances where that Department was of the opinion that Uruguay had' no parity for its currency, and possessed no feasible basis for the establishment of one.14 And as this theory was applied to the Uruguayan currency system, it possessed certain apparent fallacies.
While it may have been expedient for the Treasury Department to have utilized, *620the total Uruguayan import-export figures for 1951 together with the exchange rates in use in Uruguay in 1953, in the absence of available import-export totals for the current year, in order to ascertain the “average rate” at which it was proper for the dollar proceeds from the involved merchandise to be converted into Uruguayan pesos, such use, would, nevertheless, in the absence of more current export-import figures, have to be made at the risk and expense of accuracy, even assuming that the exchange rates remained constant during both periods. It is not unlikely that the commodity classifications within even these static rates might shift from year to year, so that the average level at which the export-import trade was conducted in 1953 might not be at the same level at which such trade was conducted in 1951. As such, the so-called “average rate” in the current year (1953) would be at variance with the “average rate” for the test year (1951). It has not been shown in the record before us that this was not the case for the year in which the involved merchandise was imported. Taking into consideration the rather flexible nature of the multiple exchange rate system under review, the ascertainment of such data for the current year would appear to be essential before any meaningful “average rate” could be arrived at. Particularly so, in view of the fact that commodity classification shifts as opposed to exchange rate adjustments are often deemed to be desirable among nations that employ multiple currency structures.15
The “benchmark” theory has other limitations. In order to ascertain what is tantamount to the “par value” of a particular foreign currency under this theory, the exporting country whose currency is under review is required or expected to be atuned only to the pulse of its past economic activity. This would seem to run counter to normal monetary practice which tends to estimate the value of a currency in terms of present or anticipated economic, political, and social conditions of a given country.
Furthermore, the application of this theory is vulnerable to the argument that the various rates imployed in the multiple exchange rate system seemingly have no correlation to each other. A closer examination of the preamble to the Uruguayan decree of September 25, 1947 (plaintiff’s collective exhibit 6), leads to the conclusion that the rates were fixed for various commodities, each with a view toward its particular importance to the national economy in an international setting. But inherent in the application of the “benchmark” theory is the divorcing of the exchange rates from the conditions which give them birth and meaning, for the single purpose of relating one rate over against another rate to find an “average rate.”
The comparison of one distress rate with another one for the purpose of establishing the parity of a currency is bound to lead to consequences which are unfair, unjust, and inequitable. Indeed, some of the lawmakers who were most concerned at the outset with prospects for levying countervailing duties on importations of wool tops from Argentina and Uruguay were inclined to question the propriety of this “benchmark” theory.16 And judicial support for such theory ought not be maintained in the face of Treasury action which resulted in the utilization of this theory for the imposition of a countervailing duty against importations of wool tops from Uruguay, but not as against Argentinian wool tops importations of that period. And this, notwithstanding the fact that it was the Argentinian wool tops importations into this country in large quantities which first gave rise to public clamor for the imposition of countervailing duties to offset the multiple exchange rate prae-*621tices which supported these importations ;17 and notwithstanding the further fact that the October 1949 devaluations which preceded the Uruguayan wool tops importations were, in large measure, initiated by widespread multiple currency changes adopted by Argentina, who, not being a member of the International Monetary Fund, was subject to no external surveillance or control in its currency practices as was Uruguay. Uruguay, at least, gained “most favored nation” treatment and bilateral recognition of its multiple currency system in the reciprocal trade agreement which it concluded with the United States on July 21, 1942.18 And in the face of this preferential treatment of Argentina, it is a small wonder why we should find numbered among the plaintiff’s claims in the instant case a claim of violation of this “most favored nation” clause with respect to countervailing duties.
Finally, on the matter of the “benchmark” theory, I cannot perceive how an accurate analysis of the Uruguayan monetary system could be made, or a meaningful approximation of the parity of Uruguayan currency be achieved, without a consideration of the fluctuating free exchange rate more extensive and thorough in scope than that which the Treasury Department undertook in the application of this theory. “The free market rates will, to some extent, influence the proclaimed rates prevailing in the exchange control segment of the national economy, and will generally press toward greater flexibility of the system.”19 I am not convinced that the parity of Uruguayan currency operated at or below the levels of the controlled segment of the monetary system. There is some doubt in my mind as to the “reality” of the controlled exchange rates in terms of the par value of the currency, in view of the fact that currency controls were introduced into Uruguay for the express purpose of raising revenue for the Government, among other reasons, and in view of the fact that the existence of the fluctuating free rate antedated the advent of currency controls in Uru-quay in 1931, and has been utilized in commodity transactions in varying degrees even since the inception of currency controls.20 And under the International Monetary Fund operations currency controls, such as those employed in Uruguay, are regarded as being only “transitory expediencies.”
The steady movement toward the emergence of the free rate as a currency basis has been manifest in the multiple currency practices of some of Uruguay’s neighbors in Latin America. For example, in Brazil, the free market which was originally used for certain invisible transactions was broadened in 1953 to include various trade transactions.21 Ecuador transferred some exports and imports under its multiple rate system to the free rate.22 And, in Peru, the official rate was abolished on November 12, 1949, foreign exchange control was removed, residents were given all monetary liberties, and the fluctuating free rate became the currency basis.23
This trend in the use of the free rate strengthens the prospects for the expansion of the role of the free rate in currency matters in Uruguay upon the gradual relaxation of currency controls in that country. Already it will be noted that under the fluctuating free rate there is a unification of both the buying and selling rates. Moreover, the Uruguayan Government has itself exhibited confidence in the free market rates through governmental intervention from time to time to stabilize the rates.24 And it will be observed that the fluctuating free *622rate has remained consistently at a more depreciated level than any of the rates in the controlled segment of Uruguay’s monetary structure. Consequently, the arguments which favor the application of the “benchmark” theory in the ascertainment of the parity of Uruguay’s currency are not persuasive in the face of circumstances which strongly indicate at least on the export side that the exporter of merchandise from Uruguay would normally receive more pesos for his foreign exchange in a free and unrestricted market than he could possibly obtain in a controlled exchange market. This is due to the fact that the raising of revenue for governmental use was one of the chief functions of the exchange system in Uruguay as of the time the involved merchandise was exported. The spread of rates on the export side of the exchange was systematically established at less depreciated rates than were the rates maintained on the import side of the exchange, with both sets of rates being less depreciated than were the unified free market rates, thus enabling Uruguay, as the Government’s witness, Mr. Wagner, puts it, to buy “foreign exchange cheap” and to sell “it dear.”
In the matter of export subsidies, it does not appear that Uruguay was as subtle or as cryptic in the manner or method of their bestowal as is implicit in the use of preferential export exchange rates. In no uncertain language, Uruguay bestowed by decree both direct and indirect subsidies on its exports whenever in the opinion of the Government such action was warranted in order to stimulate the exportation of designated commodities. The decree of January 24, 1951, pertaining to the exportation of frozen mutton to Greece, states (plaintiff’s collective exhibit 5):
“Article 1. — There is hereby fixed a rate of 1.78 pesos per dollar, or the equivalents thereof in other currencies, plus a premium of 0.12 peso, which will be paid and settled directly by the Bank of the Republic, chargeable to the ‘Foreign Exchange Benefits’ [‘Beneficios de Cambio’] Account, in order to finance exports of frozen mutton.”
The decree of February 18,1953, pertaining to the exportation of footwear and hides and skins, states (plaintiff’s collective exhibit 5):
“Article 1. — There is continued, during the course of the current year, the premium of .25 peso per dollar, or the equivalents thereof in other currencies, established by decree of February 20, 1952, for exports of national tanned cattle hides and sheepskins, finished; national tanned cattle hides without color, paint and luster finish; national tanned, dyed cattle hides without paint and luster finish; and footwear made with national leather.
“This treatment will be enjoyed by all transactions reported to the Controller of Exports and Imports in the period from January 1 through December 31, 1953, provided that the corresponding foreign exchange is sold within that time limit.”
And the decree of April 15, 1953, previously referred to herein in connection with the establishment of free market prices for cattle, states (plaintiff’s collective exhibit 5):
“Article 2 — An additional [premium of] 100.00 pesos (one hundred pesos) per ton is fixed for all frozen beef and 30.00 pesos (thirty pesos) per ton for all chilled beef exported to the United Kingdom.
“Article S. — At the time of the actual negotiation [sale] of the foreign exchange from exports made under the provisions of the foregoing article, the Bank of the Republic shall pay the respective additional premiums, the amount of which it will advance on account of the sale of the foreign exchange [proper] turned over [to it], by way of the corresponding settlement.”
The foregoing constitute examples of Uruguay’s direct export sibsidies.
Examples of Uruguay’s indirect export subsidies are to be found in the following *623excerpts from its laws and decrees pertaining to wool exports. Law No. 11,823 of May 16, 1952, states (plaintiff’s collective exhibit 5):
“Article 1. — Wool in the grease and [or] washed wool reported in sworn declarations filed with the Controller of Exports and Imports from May 9 until July 31,1952 * will be exempted from all taxes, duties and charges [imposts] on the marketing and exportation thereof except those intended for the Rural Pension and Retirement Fund (Law No. 11,617 of October 20, 1950), the Compensation Fund for Workers in Consignment Stores and Warehouses for Wool, Hides, [skins] and Related Products (Law No. 11,537 of October 6, 1950) and the taxes [charges] provided by Laws No. 11,199 of December 27, 1948 (Sheep Mange) and No. 11,453 of July 3, 1950 (Honorary Ovine [Sheep] Improvement Commission).”
And the decree of May 27, 1952, states (plaintiff’s collective exhibit 5):
“Article 2.- — Exports of washed wool shall be benefited by the same tax abatement [‘desgravación’] as wool in the grease, to the extent necessary to complete the amount of that exemption, according to the proportion of wool in the grease to washed wool.
“Article 3.- — -For purposes of repayment of such abatement as may be granted for exports of washed wool, the Bank of the Republic will proceed to make delivery, to the respective exporters, of the corresponding amount against the debit of the ‘Exchange Differences’ Fund.”
Uruguay has, with commendable candor, made full disclosure of such export subsidies to the International Monetary Fund from time to time.25 And if any of the subsidies described in the foregoing laws and decrees had, in fact, governed the exportation of the involved merchandise, we would, of course, be obliged to regard them as bounties or grants under settled principles of law. Nicholas & Co. v. United States, 249 U.S. 34, 39 S.Ct. 218, 63 L.Ed. 461; Downs v. United States, 187 U.S. 496, 23 S.Ct. 222, 47 L.Ed. 275. But no reason has been shown in the proofs before us why the Uruguayan exchange rates themselves, particularly the rates for wool tops exports, should be regarded as carriers of subsidies.
In my opinion, the evidence militates against the existence of a subsidy in the export exchange rate assigned to Uruguayan wool tops. There is no evidence of price discrimination or price slashing such as one might expect to find in a bounty-fed transaction. The Uruguayan exporter was unable to sell wool tops for exportation at prices below those which his Government regarded as being fair market prices. Thus, we find that, in nearly every instance with respect to the involved importations, the invoice prices —prices on which the exchange regulations operated — were above the values as found by the appraiser, resulting in the reduction of values for duty purposes. It is apparent that this factor, apart from any other, did not subserve the interests of subsidization. It did, however, subserve the interests of the Uruguayan Government in providing a broader exchange base from which to derive maximum revenues.
It appears that Uruguay’s wool tops prices were world' prices, that is, they were the same both for home consumption and for export, whether to the United States or to any other foreign country. The exchange rate for wool tops was the same whether the tops moved abroad to the United States or to any other country. But even if it could be said that Uruguay’s world prices were below the prices of wool tops in the American market, still this factor in and of itself would not be alarming under *624the facts before us. Of course, the Government places much reliance upon price disparity between Uruguayan wool tops prices and the prices for domestic tops of the same period in support of the premise that Uruguayan wool tops ex-portations were subsidized. But the dangers of reliance upon price disparity, assuming without deciding that such was the case here, has been called to our attention and epitomized in the majority report of the Tariff Commission for the period under review, which reads:
“The apparel wools offered for sale, both in foreign and domestic markets, vary greatly with respect to many qualities, such as diameter and length of fiber, color, luster, elasticity and suppleness. Wools are prepared for market with various degrees of care and preliminary processing. Prices are quoted sometimes in terms of wool in the grease and sometimes in terms of clean fiber content; moreover, wool is not always delivered in the state of preparation on which the quotation is made. For example, wool may be sold in the grease but on a basis of its clean-fiber content, the ‘shrinkage’ allowance being arrived at by buyer and seller in a variety of ways.
“There is a wide variation in the purchase arrangements which domestic buyers employ in acquiring wool. These depend principally on the types of wools bought, their countries of origin, and the scale of operations of the wool buyer. There is also widespread variation in the lag between the time a domestic mill commits itself to the price it will pay for the wool it uses and the time it will actually receive the wool; by the time the wool is received, prices may have changed appreciably. A further complicating consideration is that price commitments may be in terms of foreign currencies that fluctuate considerably in relation to the United States dollar. The prices at which much foreign wool is imported directly by American mills are not publicly reported. Also, there is considerable difficulty in making proper price allowances for differences in the preparation of foreign and domestic wools.
“From these factors, as well as a multiplicity of others, it is apparent that even the most commonly used comparative price quotations (which at best are based on averages of constantly changing volumes of sale) for domestic and foreign wools do not provide a sufficient guide for the buying operations of domestic users of wool. * * *”26
Under the evidence before us, price disparity, if any there be, could well be attributable to the dissimilarity of the commodities which resulted in the downgrading of the Uruguayan product as being inferior by our standards of production. Indeed, even the Government’s own witness suggested as much. Consequently, under such circumstances, it would be unreasonable to expect Uruguayan wool tops to command as high a price in our markets as our domestic tops.
Furthermore, we cannot overlook the distortion of the wool tops picture for the period under review which, in my opinion, was brought about through the interposition of American private capital. As I have earlier pointed out, wool tops exports from Uruguay consistently enjoyed a preference in the scale of rates both before and after the devaluations of October 1949. But it was only subsequent to the October 1949 devaluations in Uruguay that wool tops began to and did move to this country in large quantities from Uruguay. And it is also apparent from the evidence that, during this period, there also was a coincidence of timing between the influx of wool tops to this country in large quantities, and the intervention of American private *625capital not only in the distribution of Uruguayan wool tops, but in their production as well.27 Certainly, the movement of tops to our markets from Uruguay was influenced to some extent, for whatever reasons, by such capital. This is clearly evident in the testimony offered by witnesses of both parties herein. Under such circumstances, the responsibility for this movement of wool tops cannot properly be attributed to or laid at the doorstep of Uruguay and its multiple exchange rate structure. While the heavy movement of wool tops to the United States after 1949 deserves our most careful scrutiny with respect to the ascertainment of the cause therefor, nevertheless, I cannot envisage the subsidization of that commodity as being the procuring cause of such phenomenon, in the face of facts and evidence which, to my satisfaction, dictate otherwise.
In evidence before us also are decrees and customs information exchange bulletins pertaining to the multiple exchange rate currency systems of Argentina, Brazil, and Spain in effect during the period in question, none of which have been regarded by the Treasury Department as being bounty-fed insofar as exchange rates are concerned (plaintiff’s collective exhibits 8, 9,12, and 13; plaintiff’s exhibits 10 and 11). By comparison, Uruguay’s exchange rates are no less innocuous than the rates depicted in these other multiple currency structures. But, for some unknown reason, Argentina, whose unilateral currency practices stood squarely behind the initial heavy influx of wool tops into this country, has escaped the condemnation of its currency system which has been visited upon its neighbor, Uruguay, by our Treasury Department. And Spain, like Argentina, was not at the time in question a member of the International Monetary Fund, in consequence of which its currency manipulations were also not subject to multilateral inquiry. Yet, that country too has enjoyed a measure of immunity from Treasury Department displeasure over its currency manipulations. On October 21, 1948, the Secretary of the Treasury issued T.D. 52074, which imposed a countervailing duty of 25 cents a pound on almond nuts exported from Spain to offset a direct subsidy of that amount that was found to have been paid by the Spanish Government upon the exportation of almonds to the United States in 1948. Spain then instituted, in November 1948, a multiple exchange rate system under which its official rate was pegged at 10 pesetas to the dollar while the exchange rate for almond exports was fixed 'at 19.75 pesetas per dollar.28 In the face of this multiple exchange rate system, the Treasury Department concluded that a subsidy no longer supported almond exports to the United States and, accordingly, issued T.D. 52604 on November 15, 1950, revoking the countervailing duty levied on almond imports from Spain, retroactive to November 25, 1948. It is not surprising to learn, however, that it has been argued that the preferential rate assigned to almonds by the Spanish Government under its multiple exchange rate system represented a disguised subsidy equal to the direct bounty which had theretofore been paid by the Spanish Government on the exportation of almonds to the United States.29 In any event, the change in position of the Treasury Department on the matter of multiple currency controls as a basis for export subsidies cannot be supported on the record, in the instant case, on so precarious a premise as its “benchmark” theory.
On the basis of the evidence, I do not think that the selection of exchange rates by Uruguay at varying levels to govern the exportation of its commodities constitutes a subsidization of certain commodities. The degree of encouragement fostered by such selection under a monetary structure which had no par value *626for its currency, and no feasible basis for the establishment of one, is, in my opinion, reflective only of that country’s estimate of the relative values which such commodities bore to its national economy. The circumstances attendant upon the instant case which impel me to such conclusion are, namely, (1) the multilateral support of Uruguay's currency system and approval of exchange rate adjustments made therein by the United States and other nations; (2) the time-honored use by Uruguay of multiple exchange rates for internal revenue purposes, among others, long before the advent and development of the wool tops industry in Uruguay; (3) the questionable character of the controlled segment of Uruguay’s currency structure as being its currency basis in view of the transitory nature of such controls; (4) certain palpable fallacies inherent in the theory employed by the Treasury Department to approximate the worth of Uruguayan currency; (5) the utilization by Uruguay of other methods to bestow direct and indirect subsidies upon certain of its exports; (6) the downgrading in quality of Uruguayan wool tops in relation to domestic wool tops as being indicative of the comparative prices and values; (7) the uniformity of prices at which Uruguayan wool tops were offered for sale in markets abroad, whether in the United States, or elsewhere; (8) the emergence of American private capital as a factor in the stimulation of Uruguayan wool tops exports to the United States in large volume; and (9) the ameliorative and assimilable nature of Uruguay’s multiple currency structure in comparison to the unilateral and somewhat clandestine multiple currency structures of other nations not regarded by the Treasury Department as being bounty-fed. For these reasons, I find that no bounty or grant was paid or bestowed upon the exportation from Uruguay of the involved merchandise, and that, accordingly, the imposition of countervailing duties under the entries covered by the instant protest was not warranted.

. Tariff Commission Report on Economic Controls and Commercial Policy in Uruguay (1948).

. International Monetary Fund Report (1952-1953); National Advisory Council Report (1952-1954), p. 16, H.Doc. 490, 83d Cong., 2d sess.

. House Ways & Means Comm. Hearings, H.R. 1535, 82d Cong., 1st sess., pp. 685-691.

. U.S. Tariff Comm., Economic Controls and Commercial Policy in Uruguay (1948), p. 8.

. House Ways & Means Comm. Hearings, H.R. 1535, p. 690, 82d Cong., 1st sess.; Senate Finance Comm. Hearings, H.R. 5505, p. 270, 82d Cong., 2d sess.

. IMF Financial Statistics (1947-48), pp. 106-107.

. 60 Stat. 1401.

. Nussbaum, Money In The Law (1950), p. 475.

. H.Doc. 611, 81st Cong., 2d sess., p. 17.

. See Executive Order No. 10033, Feb. 8, 1949,14 F.R. 561.

. IMF Report (1950), pp. 28, 46-48.

. NAC 2d Special Report, H.Doc. 611, 81st Cong., 2d sess., p. 17.

. Senate Finance Comm. Hearings, H.R. 5505, 82d Cong., 2d sess., p. 263.

. NAC Report (1952-54) H.Doc. 490, 83d Cong., 2d sess., p. 16.

. Behrman & Schmidt, International Economics (1957), p. 308.

. Senate Finance Comm. Hearings, H.R.. 5505, pp. 18-25, 251-253, 82d Cong., 2d sess.; Senate Finance Comm. Hearings of Feb. 17,1959, 86th Cong., 1st sess., pp. 5-38.

. Senate Finance Comm. Hearings, H.R. 5505, 82d Cong., 2d sess., pp. 18-24.

. 56 Stat. 1624, 1630; T.D. 50786.

. Nussbaum, Money In The Law (1950), p. 455.

. T.D. 52291.

. NAC Report (1952-54) H.Doc. 490, p. 15.

. NAC Report (1951-52) H.Doc. 523, p. 24.

. Pick, Currency Yearbook (1959), p. 277.

. IMF Report on Exchange Restrictions (1950), p. 118.

 Time limit extended to March 31, 1953 by laws of August 11, October 9, and De-comber 2, 1952.

. IMF Report on Exchange Restrictions (1951), p. 151.

. U.S. Tariff Comm., Report on Wool, Wool Tops, and Carbonized Wool (Feb. 1954), pp. 17-18.

. Senate Finance Comm. Hearings, H.R. 5505, 82d Cong., 2d sess., pp. 209-212.

. C.I.E. — 471/49, Dec. 9, 1949.

. House Ways & Means Comm. Hearings, H.R. 1535, 82d Cong., 1st sess., pp. 575-576.