Importers should not feel, however, that the whole of these paragraphs has been turned against them, for there is one provision more favorable than the similar one in the old law, that relating to the time within which a protest must be filed. This period has been extended from fifteen days to thirty days after the final liquidation of the entry: and it should be noted that the iniquitous" protest fee need not be paid for thirty days more, a total of sixty days within which the importer may decide whether he desires to litigate with the Government or not. This period should easily suffice for all bona fide cases.

Paragraph O has been amended to meet a court decision to the effect that collectors and appraisers were not entitled to examine importers and other persons regarding merchandise not directly before them for consideration and action. The new law provides that the officers may make such inquiries respecting goods "then under consideration or previously imported within one year." This change is clearly in line with the policy of strengthening the powers of the government wherever experience has shown such action to be necessary. There is also a slight amendment to make certain that the testimony of persons taken by the collector or appraiser in advance of the formal hearing shall be given consideration in subsequent proceedings. While this was probably the intent of the old law, the language was not entirely free from ambiguity. The provision is especially useful in obtaining the evidence of masters and crews of vessels or other persons, whose later attendance at any given place in this country is difficult to obtain.

The next paragraph (P) specifies the penalties for a refusal to attend when summoned, or to answer the authorized interrogatories.

The changes here are two. The first substitutes a fine upon the recalcitrant witness varying from $20 to $500, for the former flat amount of $100. The second, more important, provides for the recovery by the government of the value of the merchandise in question from the witness if he is the owner, importer or consignee. The old law had provided only for forfeiture in such cases, and had not authorized a suit for value in instances where the merchandise might escape forfeiture by having actually entered into consumption.

Slight alterations in language appear in paragraph Q, making clear the intent of Congress that the Secretary of the Treasury and the Board of General Appraisers are to have joint control over the publication of the decisions of the Board, either in full or by means of abstracts. A more significant change, however, is found in a new phrase requiring the Board to insert in its decisions "a statement of facts upon which the decision is based." This amendment will not affect classification cases at all, as the present practice of the Board is to include such a statement; but it will make a vital change (and greatly for the better in the opinion of the writer) in all re-appraisement cases. Heretofore, the General Appraisers, in reporting such cases, have not stated the facts which led to their decisions. consequence the decisions were almost never of benefit in assisting either the local appraisers or the importers in arriving at correct values for later importations of similar merchandise.

In

Another amendment, somewhat similar to that found in paragraph P, appears in paragraph T, whereby the burden of proof is thrown upon the defendant in suits for value, just as the burden is already upon him in forfeiture cases. The only difference between the two types of proceedings is that in one the merchandise is

actually seized, whereas in the other it has escaped seizure by having entered into consumption. As recovery by the government in each class of case is predicated upon fraud, it seems entirely proper that the defendant who has been astute enough to get his goods away from the clutches of the Customs officers should not thereby be placed in any better position than a brother importer who has not had that good fortune.

Paragraph U is one of the new provisions, originating in the House bill, that caused much adverse comment both in this country and abroad. In its original form it authorized the Secretary of the Treasury to exclude from entry merchandise sold or shipped by foreigners who declined to submit their books pertaining to values or classifications to a duly accredited officer of this country. The Senate struck out the paragraph (which was wholly new) in its entirety. In conference a substitute was adopted authorizing the Secretary to levy an additional duty of 15 per cent upon all such merchandise, with a proviso, however, that such additional duties shall not be imposed upon merchandise from foreign countries where there exists legal machinery for punishing false swearing upon invoices or statements of costs in connection with the consular certification thereof. As thus enacted the paragraph gives the Secretary a power (altho not a very extensive one) which he will certainly need if the ad valorem system is not to break down of its own weight. It will also tend to hasten the day when adequate penalties for perjury committed abroad with reference to exported merchandise can be inflicted upon the guilty parties. At the present time there are very few countries where such is the case (possibly one or two in all).

Paragraph V, as framed in the House, provided for the same penalty of exclusion for the merchandise of

importers in this country who refused to open their books. This also was stricken out by the Senate, and finally modified in conference to a penalty of 15 per cent to be imposed at the discretion of the Secretary.

To conclude, the new law is clearly designed to protect the government and assist its officers in collecting the revenues justly due. The burdens imposed upon the honest importer who desires to comply with both the spirit and the letter of the law have not been greatly increased. It is true that he must make a statistical list of his imports, but the forms will be prepared for him by the Department, and the task should prove little if at all more exacting than the present requirement that every invoice shall contain an accurate detailed description of the merchandise covered. True, also, he will have to take far greater pains to make sure that his entries are made and verified by a person with actual personal knowledge of the facts therein recited. Under the old system, such entries were ordinarily made by a subordinate who, to quote the report of the Appraisement Commission "supports the integrity of the invoice by his declaration to the best of his knowledge and belief, without having the faintest semblance of knowledge or the frailest foundation for belief." This situation cannot exist under the new law unless both the principal and his agent are prepared to assume severe liabilities in case improper entries are made. Drastic provisions and heavy burdens, however, are prepared for the dishonest importer, who will be made to feel much more keenly than has heretofore been the case that the law is meant to be obeyed and not to be trifled with.

JAMES F. CURTIS.

BOSTON, MASS.

THE INCOME TAX OF 1913

SUMMARY

The constitutional amendment of 1913 and the new income tax, 46. - I. The "normal" and "additional" taxes; the minimum exempt; the scale of progression, 47. — Dividends exempt from the normal tax, 49. II. Limited application of stoppage at the source; its possible advantages and disadvantages, 50. How applied as regards salaries and other single payments, 52. As regards interest on bonds, 55. "Fixed and determinable incomes," 56. III. How minimum exemption is secured, 58. - IV. Return of income required; yet possible exceptions, 61. V. The "additional" progressive tax, 65. VI. Conclusion, 66.

AMONG the notable events of the year 1913, one of the most important in its influence upon the national finances and constitutional development of the United States is the adoption of an amendment to the Federal Constitution giving Congress the power "to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states and without regard to any census or enumeration.' The mere fact that an amendment of any kind has been adopted is notable, this being the first occasion on which the Constitution had undergone any change since the period of the Civil War, and the first amendment adopted in peaceful and normal times since the early days of the Republic.

It is a little remarkable, altho perhaps not altogether accidental, that the adoption of this amendment should coincide with the return to power of the political party whose attempt to levy an income tax in 1894 was frustrated by the decision of the Supreme Court in that year. Then as now an income tax was a component part of the program of fiscal and commercial reform to which that