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the Treasury gives its assent, upon the several points as to which you desire changes.

1. You said in your letter of November 21 °: “ It is now almost entirely the rule that the exporter has to appear personally before the American consul in order to get his invoice legalized. Could the rule be made the exception?"

I inclose herewith, marked "A," a proposed amendment of section 678 of our consular regulations, which I think accomplishes what you desire.

2. You say: "Would it be possible to have the invoice legalized, at the choice of the exporter, in the district where the goods have been bought or in the district where the importer lives?"

The proposed amendment of regulation 678, above referred to, also provides that the invoice may be legalized, at the choice of the exporter, in the district in which the goods were bought or in the district where they were manufactured. This I understand to be a substantial compliance with your wish.

3. You say: “ Could, under certain circumstances, the American consul in making his inquiries about the dutiable value be instructed to cooperate with competent German chambers of commerce?"

I inclose a proposed amendment of consular regulation No. 680, making it the duty of consular officers to confer with the German chambers of commerce and making it their duty also to report the communications which they may receive from such bodies, so that their views and action shall be before the appraising officers in this country. The proposed amended regulation 680 is marked "B."

4. You say: “ Could the special agents or commissioners sent by the United States to Germany (special Treasury experts and agents), in order to investigate in cases of special importance the market value, be notified to the German Government and in certain cases cooperate with the competent German chambers of commerce?"

I inclose a proposed instruction to the agent of our Treasury Department charged with such matters in Germany which I think will accomplish what you desire. It is marked “ C." 5. You say:

Could, in certain cases, in which the accuracy of the value declared by the importer had been rendered probable by certificates of German official chambers of commerce, the importer be allowed, if, nevertheless the American customs authorities do not accept his declaration, the possibility of defending himself in a more efficient way than he now can? Could the appraisers be instructed to give the motives of their decisions in all cases in which they decide against the certificate of these chambers of commerce?"

I inclose a proposed rule or order from the Secretary of the Treasury to the Board of General Appraisers, which requires them to make the hearing in such cases open and in the presence of the importer or his attorneys whenever the public interests will not be prejudiced thereby. It is believed that this will accomplish what you desire as fully as is practicable. It does not seem to be practicable to require a regular trial, as in a court of law, upon every case of appraisement. That would be something unknown to the administration of customs laws anywhere in the world and wholly incapable of practical operation. The whole theory under which our customs laws are administered is that the appraising officer shall reach a conclusion as to the value upon the best information that he can get. The rule now proposed goes as far in the direction of turning this ascertainment of value into a trial as our Treasury thinks it is possible to go. This proposed rule is marked “ D."

6. You say: "Could it be arranged that an additional duty be levied only in case the appraised value exceeds the declared value more than 10 per cent?”

This would require congressional action. I inclose, marked “ E," a proposed recommendation, from the Secretary of the Treasury to Congress, which applies the rule for which you ask to the extent of 5 per cent and as to the remaining 5 per cent gives the Secretary of the Treasury authority to waive or remit the additional duty upon a certificate that the undervaluation was the result of honest difference of opinion—that is to say, under the proposed rule the additional duty would be imposed only in case the appraised value exceeds the declared value more than 5 per cent and could then be remitted up to the point of a 10 per cent difference upon a certificate of good faith.

7. .You say: “ Could goods on consignment be treated like goods that have been sold as regards the reexamination of costs of production?"

You will recall that in an interview with Baron Bussche he indicated this was intended to call for an application of section 7 of the customs administration

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law which permits the owner or consignee of purchased merchandise at the time of entry an addition to the cost or value given in the invoice, so as to raise the invoice value to the actual market value or the wholesale price of such merchandise at the time of exportation to the United States. The second paragraph of the proposed recommendation by the Secretary of the Treasury, marked “ B,” contains a further recommendation for the necessary amendment of section 7 to comply with your wish regarding consigned goods.

I beg you to believe, my dear Baron, that in our treatment of all these subjects we have been actuated by a strong desire to comply with the wishes of your Government and to obviate any annoyances or hindrances to German producers and merchants in the conduct of their trade with the United States. We would greatly deplore any interference with that trade, and we are anxious to avoid, so far as it can possibly be done, every occasion for irritation on the part of the persons engaged in it. We sincerely hope that the trade between our countries may continue and increase upon both sides with mutual satisfaction and profit. Accept, etc.,

ELIHU Root.

A.

CONSULAR REGULATIONS.

Section 678. Invoices of merchandise purchased for export to the United States must be produced for certification to the consul of the district at which the merchandise was purchased, or in the district in which it was manufactured ; but as a rule a consular officer shall not require the personal attendance, at his office, of the shipper, purchaser, manufacturer, owner, or his agent, for the purpose of making declarations to invoices, but he shall certify invoices sent to him through the mails or by messenger. To conform to the statute which requires that merchandise shall be in voiced at the market value or wholesale pri of such merchandise as bought and sold in usual wholesale quantities at the time of exportation to the United States, in the principal markets of the country whence imported, consuls will certify to invoices, the additional cost of transportation from the place of manufacture to the place of shipment whenever the invoice is presented to be consulated in a country other than the one from which the merchandise is being directly exported to the United States.

B.

CONSULAR REGULATIONS.

650. When the invoice and declaration are received by the consul, it is his duty to examine carefully each item and satisfy himself that it is true and correct. In aid of this examination it shall be the duty of such consular officer to confer with otlicial chambers of commerce and other trade organizations in bis district, and he shall report any and all written communications from such commercial bodies and trade organizations that may be submitted to him in writing, together with all schedules of prices furnished him officially for that purpose, and the consul is authorized, in his discretion, to call for the bills of sale of merchandise purchased for export to the United States; to inquire into the cost of production of merchandise not obtained by purchase; to demand samples; and, if the conditions require it, to examine the entire consignment. Whenever an invoice is offered for certification which covers consolidated shipments consisting of the productions of different manufacturers, the consul may demand the submission of the manufacturers' bills relating thereto. Even when the merchandise his been purchased for export and the invoice sets out truly the price paid, the consul should ascertain whether the price represents the market value of the goods.

C.

In conducting investigations for purposes of discovering market value or cost of manufacture of merchandise produced within your district, you are directed to confer with chambers of commerce and other trade organizations and to report to this department all information you derive from these sources, together with price lists submitted and approved by such organizations,

D.

You are hereby directed that in reappraisement cases pending before a board of three the hearing shall be open and in the presence of the importer or his attorney whenever in the judgment of the board the public interest will not be prejudiced thereby.

E.

I beg to recommend the following amendments and modifications of the customs administrative act of June 10, 1890 :

1. That section 7 of the customs administrative act of June 10, 1890, be so amended as to permit at the time entry is made such addition to the cost or value given in the invoice of consigned merchandise as in the opinion of the consignee or his agent may raise the same to the actual market value or wholesale price thereof the same as is by said act permissible of merchandise actually purchased.

2. I further recommend that section 7 be so amended as to impose no additional duty for undervaluation unless such undervaluation shall equal 5 per centum of the market value of the merchandise, and that the Secretary of the Treasury be authorized to remit all additional duty whenever the undervaluation is less than 10 per centum of the value of the imported merchandise, provided the Board of General Appraisers shall certify that in its opinion the undervaluation is the result of good faith, differences of opinion, or error.

The German Ambassador to the Secretary of State.

IMPERIAL GERMAN EMBASSY,

Washington, February 18, 1906. MR. SECRETARY: As the American Government has not found it possible to arrive at a decision on my memorandum of November 4,4 the German Government, fully recognizing the difficulties of the American Government in dealing with the question, is ready to fulfill the desire which has been expressed to me by the President and by yourself, and recommended by me to my Government. The German Government is willing to grant to the United States for a certain period those reduced customs duties which have been fixed by the treaties concluded in 1904 and 1905 between Germany on one side and Belgium, Italy, AustriaHungary, Russia, Roumania, Switzerland, and Servia on the other side. To-day a bill will be introduced in the Reichstag with a view to authorize the Federal . Council (Bundesrath) to grant to the United States of America until 30th of June, 1907, these reduced duties. In making this concession the German Government expects that Germany will enjoy, after March 1, 1906, the reduced duties of Section III of the Dingley tariff, as heretofore.

May I ask you, Mr. Secretary, to favor me with a written confirmation of this at your earliest convenience, and also to state that the President will issue a proclamation with regard to Section III in due time.

The negotiations in the Reichstag will begin on Tuesday next.

The German Government further hopes that the existing severity and rigidness of the American customs administration will be lessened and that during the time granted the negotiations which have been entered into will continue, and finally lead to a conclusion satisfactory to both parties. Believe me, Mr. Secretary, yours, most sincerely,

STERNBURG.

The Secretary of State to the German Ambassador.

DEPARTMENT OF STATE,

Washington, February 19, 1906. EXCELLENCY: I have the honor to acknowledge the receipt of your note of February 18, advising me that the German Government is willing to grant to the United States for a certain period those reduced customs duties which have

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been fixed by the treaties of 1904 and 1905 between Germany, Belgium, Italy, Austria-Hungary, Russia, Roumania, Switzerland, and Servia, and that a bill is about to be introduced in the Reichstag with a view to authorize the Bundesrath to grant these reduced duties to the United States until June 30, 1907.

I beg to say that upon the accomplishment of the purpose thus stated, by the assurance to the United States of such reduced duties until the 30th of June, 1907, the President will promptly issue the necessary proclamation for assuring to Germany the reduced duties of section 3 of the Dingley tariff, as heretofore.

I hope that the communication which I had the honor of addressing to you Friday, the 16th instant, enumerating certain proposed changes in the customs administrative law and regulations, will be regarded by your Government as evidence of the President's strong desire to relieve our customs adıninistration from everything which seems to German exporters to have any feature of se verity. I hope also that during the period wlich, under the proposed action of the German Government, will continue until the 30th of June, 1907, a satisfac. tory way will be found to establish a permanent basis for the mutual trade of both countries upon terms satisfactory to both. I am sure that there could not be a more sincere and kindly purpose or more reasonable and open-minded views than have actuated the representatives of both countries in the treatment of this subject, and I feel great confidence that a continuance of the same attitude on both sides will lead to a conclusion in conformity with the strong desire for real friendship between the German and American peoples which we both entertain. Accept, etc.,

ELIHU ROOT.

The Secretary of State to the German Ambassador.

FEBRUARY 21, 1906. MY DEAR BARON: The President authorizes me to say that the regulation marked “C” in the memorandum handed me by you to-day can be modified in accordance with your suggestion by inserting the word “first," so that it will read:

“In conducting investigations for purposes of discovering market value or cost of manufacture of merchandise produced within your district, you are directed to confer, first, with chambers of commerce and other trade organizations and to report to this Department all information you derived from these sources, together with price lists submitted and approved by such organizations."

The other memorandum relating to inclusion of the first general appraiser in the provision relating to open hearings has been sent to the Secretary of the Treasury for an expression of opinion by him, and I hope to be able to advise you regarding that to-morrow. Always faithfully, yours,

ELIHU Root.

The Secretary of State to the German Ambassador.

FEBRUARY 23, 1906. MY DEAR BARON : Regarding the inclusion of the first general appraiser in the provision authorizing open hearing in reappra isement cases, the Secretary of the Treasury says that it can be done if you are specially urgent for it, but he thinks that I ought to say to you that he does not consider it probable that the first general appraiser will consider it practicable to give hearings which will be in the nature of court proceedings, and that he does not think the authority conferred in the new rule would be very much exercised by the first general appraiser; that is to say, he thinks that, if the authority were given, the appraiser would quite uniformly rule that the public interests would be prejudiced by the open hearing.

Referring to your letter of February 22, I have asked the Secretary of the Treasury to favor me with an expression of his views upon the questions which you ask, and I will communicate with you immediately upon hearing from him. Very sincerely, yours,

ELIHU Roor,

The German Ambassador to the Secretary of State.

IMPERIAL GERMAN EMBASSY,

Washington, February 24, 1906. DEAR MR. SECRETARY: In reply to your letter of the 23d instant permit me to say that our people interested in the matter think that the possibility of open hearings before the first general appraiser is essential. They also believe that the first general appraiser will not uniformly rule that the public interests would be prejudiced by the open hearing if he is left entire discretion in this respect. I therefore would be greatly obliged to you if you would have the proposed modification inserted. Believe me, Mr. Secretary, very sincerely, yours,

STERNBURG.

The German Ambassador to the Secretary of State.

IMPERIAL GERMAN EMBASSY,

Washington, February 26, 1906. DEAR MR. SECRETARY: Permit me, in connection with my statements of this morning, to inclose a memorandum explaining the status of our new customs law. Could I ask you to be so kind as to send me a short notice of the date on which the proclamation of the President regarding section 3 of the Dingley tariff will be issued ? Believe me, Mr. Secretary, most sincerely, yours,

STERNBURG.

(Inclosure-Memorandum.]

The bill has come before the Bundesrath, and will immediately be submitted to the Emperor for signature. In the meantime the Bundesrath has made use of the power conferred upon this body and decided on Saturday last to grant, until further notice, to the products of the United States the rates of the German conventional tariff, without setting a term within the fixed time. As soon as the act has received the signature of His Majesty it will be published, together with the resolution of the Bundesrath.

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No. 3205.) Law concerning the commercial relations with the United States

of America, of February 26, 1906.

[Translation. ]

We, William, by God's grace German Emperor, King of Prussia, etc., hereby decree in the name of the Empire, after the consent has been given of the Bundesrath and the Reichstag, and for the time aftér February 28, 1906, the following:

The Bundesrath is hereby empowered to extend to the products of the United States of America up to June 30, 1907, those tariff rates which are granted to the following countries by the following-mentioned treaties:

Supplemental treaty to the commercial and tariff convention with Belgium of December 6, 891, dated June 22, 1904. (Imperial Law Bulletin, 1905, p. 599.)

Suppemental treaty to the commercial, tariff, and shipping convention with Italy of December 6, 1891, dated December 3, 1904. (Imperial Law Bulletin, 905, p. 413.)

Supplemental treaty to the commercial and tariff convention with AustriaHungary of December 6, 1891, dated January 25, 1905.

Supplemental treaty to the commercial and shipping convention with Russia of February 10, 1894, dated July 28, 1904. (Imperial Law Bulletin, 1905, p. 35.)

Supplemental treaty to the commercial, tariff, and shipping convention with Roumania of October 21, 1893, dated October 8, 1904. (Imperial Law Bulletin, 1905, p. 253.)

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