UNITED STATES V. J. ALLSTON NEWHALL & CO.
UNITED STATES v. J. ALLSTON NEWliALL & 00.
(Circuit Court, D. Massachnsetts.
CUSTOMS DUTIES-VALUATION OF FOREIGN COINS-BASIS-INTRIl'\SIC OR OHANGE VAI,UE.
In reducing foreign standard coins to United States currency for the assessment of duties, the basis in all cases is the value of the pure metal in such coins, and not their exchange ,value. This long-established rule 'was not changed by the proviso to section 25 of the tariff act of 1894 as to reliquidations, where it appeared that the value of the foreign money specified in an invoice had varied at the time of the invoice more than 10 per cent. from that proclaimed by the secretary of the treasury for that quarter; and a collector is not authorlz2d, because the commlar certificate accompanying an invoice shows the current exchange value of the money of the iI\voice to be more than 10 per cent. greater or less than the proclaimed value for the quarter, to depart from such proclaimed value, and adopt, for the purpose of assessing the duty, the exchange value shown by the certificate. The action of a collector in declining to accept the proclaimed value of a foreign standard coin, and in, adopting anotber standard, thereby in· creasing the amount of duty on imported merchandise,does not relate tOB disputed appraisement, but to the "amount of duties"; and, under Customs Administrative Act. June 10, 1890, §§ 14, 15, is reviewable, on the protest of the importer, by the board of general appraisers and the circuit court.
SAME-REVIEW OF AC'rfoN OF COLLECTOR.
This was a petition by the United States for a review of the decision of the board of general appraisers sustaining the protest of J. Allston Newhall & Co. as to the assessment of duties by the collector of Boston on certain imported merchandise. Boyd B. Jones, for the UnhedStates. J. 1'. TUcker and Benj. N. Johnson, for respondents.
COL-rr, Circuit Judge. This is a petition f()r a review of the decision ()f the board of general appraisers upon a protest ()f the importers relating to the amount of duties growing out of the conversion to American money of the silver rupee, in the case of an invoice of 25 bales of tanned sheepskins imported into the port of Boston from Madras, India. In reducing, the appraised value of the merchandise to American money, the collector adopted the rate of $.285 per rupee, which was the exchange rate as certified in the consular certificate accompanying the invoice. At the date of the consul's certificate, the value of the rupee, for the purpose of liquidating duties, as ,estimated by the director of the mint and proclaimed by the secretary Of the The board of general appraisers reversed the treasury, was decision of the collector, and directed him to reliquidate the duties on the basis of the proclaimed value. The question presented is whether, under the law, in reducing foreign standard coin to United States currency, the value shall ,be that of the pure metal of such coin, as proclaimed by the secretary of the treasury, or shall be its exchange value.
91 FEDERAL REPORTER.
In the table of estimate of the value of foreign standard coins issued by the director of the mint for the quarter beginning January 1, 1896, we find:
"Country. India. Value in terms of U. S. gold dollar.
Monetary unit. Rupee. Coins. Gold: mohur. Silver: rupee and divisions."
Accompanying this table the secretary of the treasury issued the fol· lowing:
"Washington, D. C., January 1, 1896. "The foregoing estimate, by the director of the mint, of the value of foreign coins, I hereby proclaim to be the value of such coins In terms of the money of account of the United States, to be followed In estimating the value of all foreign merchandise exported to the United States on 0'11 after January 1, 1896, expressed In any of such metallic currencies."
Attached to the invoice was this consular certificate dated January 11, 1896:
"Certified that the demand rate of exchange on London this day Is l i t 31/ 32 per rupee, and that the New York demand rate of exchange on London as quoted by Reuter on 10 inst. is 4.89 per pound sterling; the value, therefore. In American gold, of the goods referred to in certified Invoice No. 17, is as follows: Rs. 12076.9.0 at 111 81/ 32-£700.17.10. £702.17.10 at 4.89 -$3,437.15."
According to this certificate, the value of the silver rupee, in terms of the gold dollar of the United States, is .285. In expressing in United States money the value of foreign standard coins, it has always been the sound policy of the government to take the intrinsic or pure metal value of such coins. Both the importer and government recognized that it was important to have a fixed and permanent value, though such value might be only approximately true, rather than a fluctuating value, based upon financial quotations in gazettes, trade conditions, or rates of exchange, which would necessarily result in uncertainty, confusion, and interminable litigation. The first tariff act was enacted July 4, 1789 (1 Stat. 24). On July 31, 1789 (1 Stat. 29), an act was passed to regulate the collection of duties, and section 18 provided that the pound sterling of Great Britain and the coins of other countries designated shall be estimated at the rates specified, "and all other denominations of money in value as near as may be to the said rates." The 'acts of August 4, 1790 (1 Stat. 167), and of March 2, 1799 (1 Stat. 627), contained similar provisions. The latter act (section 61) declares:
"And all other denominations of money, In value, as nearly as may be to the said rates, or the Intrinsic value thereof, compared with money of the United States."
It also contained the following proviso:
j'Provided, that it shall be lawful for the president of the United States, to cause to be established fit and proper regulations for estimating the duties on goods, wares and merchandise imported Into the United States, In respect
to which the original cost shall be exhibited In a depreciated currency, Iss ned and circulated under authority of any foreign government."
From 1799 to 1873 there were various acts specifying the value of additional foreign coins, or changing the rate previously established. Previous to 1873 there were three methods of estimating foreign curstandard coins, rencies for assessment of duties: (1) For most specified rates prescribed by statute; (2) for coins not specifically enumerated in the statute, valuations "as near as may be" to the specified rates or "intrinsic value"; (3) for depreciated currencies issued and circulated under the authority of foreign governments, such valuations as the president might establish by regulations. By the act of March 3, 1873 (17 Stat. 602; Rev. St. § 3564), instead of separate enactments for each coin, there was substituted a general law, as follows:
"That the value of foreign coin as expressed in the money of account of the United States shall be that of the pure metal of such coin of standard value; and the values of the standard coins In circulation of the various nations of the world shall be estimated annually by the director of the mint, and be proclaimed on the first day of January by the secretary of the treasury."
This act was amended October 1, 1890 (26 Stat. 624), by requiring the estimate by the director of the mint and the proclamation by the secre· tary to be made quarterly instead of annually. Under this act, the value of foreign standard coins "shall be that of the pure metal," and such value as estimated by the director of the mint, and proclaimed by the secretary of the treasury, has the force of a statute. Collector v. Richards, 23 Wall. 246; Cramer v. A.rthur, 102 U. S. 612; Hadden v. Merritt, 115 U. S. 25, 5 Sup. Ct. 1169; U. S. v. Klingenberg, 153 U. S. 93, '14 Sup. Ct. 790. In Collector v. Richards (pages 257, 259), Mr. Justice Bradley, speaking for the court, said:
"The plain meaning of this language [of act of 1873] Is that the value of foreign coins, In United States money, shall be measured by the amount of pure metal contained therein when of standard value; that is, when of the weight and fineness required by the laws and regulations of the country where they are produced. * * * The true method of comparing their money of account with ours, when both are based on actual coin, is to compare the standard coins of the two countries In a perfect state, and to ascertain the actual amount of pure metal In each. This is the result at which congress seems to have arrived, and, as we think, wisely."
In Cramer v. A.rthur (pages 619, 620), the same eminent judge said, in the opinion of the court:
"The plaintiff seeks to go behind this valuation, and to show that, at the time of the purchase of the goods, the value of the silver florin in Vienna, as quoted in the papers, and as exhibited by the actual rate of exchange, was less than 47 601100 eents, namely, 4546/100 cents, and that the value of the paper florin was 43'111100 cents. This, we think, the plaintiff cannot be allowed to do. The proclamation of the secretary and the certificate of the consul must be regarded as conclusive. In the estimation of the value of foreign moneys for the purpose of assessing duties, there must be an end to controversy somewhere. 'When congress fixes the value by a general statute, parties must abide by that. When it fixes the value through the agency of official Instrumentalities, devised for the purpose of making a nearer approximation to the actual state of things, they must abide by the values so ·,ascertained. If the currency is a standard one, based on coin, the secretary's
,91 FlllDlllRAL RlllPORTlll1C
proclamatIon fixes It; If It Is a: depreCiatedcurrency,the·partles may have the benefit of a consular certificate. To go behind thl!se, and allow an exam,InatioiJl by affidavits in every case,- would put the assessment of duties at sea. n 'Would create utter confuslonalld uncertainty. $ $ · It Is of the utmost .Con$eijtie)).ce to the govermnent, lind It is, on the whole,. most ·beneficlal to importers,. that the value of fo,elgn, moneys should be officIally ascertained, and that they should be fixed a method or rule."
In'Radden v. Merritt the' court (115 U. So 27, 5 Sup. Ot.1170) said: "Tlie of foreIgn coins,as ascertaIned by the estImate of the director of the mInt and proclaimed bynthesecretary of the ,treasury, is conclusive uponcustc:U:lHJ.Quse officers and ImpOl'ters. $ $ $ There is no value, and can be none, In such coIns, except as, ,t1;tus ascertaIned." Ffomthe origin of the government down to the passage of section ·25 of the tariff act of Aligust 27, 1894 (28 Stat. 552), the value of foreign standard coins, for the purpose of liquidating duties, was based upon their intrinsic or pure meta:1va}ue, as expressed in the money of account' of the United States. ,', The method adopted previous to 1873 was py \"pecial enactment fixing'the value as to certain speoified coins, and by treasury regulations as to nonenumerated coins to ascertain and since 1873 by estimate of "as nearas may be" the the 'director'of the mint, and pioclaimed by the secretary of the treaswas in the case of a depreciated currency ury. The only of any foreign government, which, issued andeirculatea under, by theacfof 1799 (now section 2903 of the Reyised Statutes), was subject' to ,regullltions establishea. by the president. . As ,to ,depreciated currency, itwas early directed by the president that the consular certificate's of vaIue annexed, to the invoices should govern.. Section 25 of the tariff act of 1894 reads as follows: .
"That the valjle of foreign coin as expfessed in the money of account of the UnitedStati!s'shallbe that of the pure metlii of such, coiIi of standard value; and the values of the standard coins In cIrculation of the, varIous nations of the;worId :shallbe,estlmatedquarterlY1:lY ,the director of the Wint, and be procll;l;lmedj>y of thE! treasury atter the passage ,act,and,thlf:r.eafter quarterly on tne fIfst day of April, July, of anq in, fta<1J:1. year. And the valuessp Pfoclaimed shall, be followea. in ,I.:he,val-pe, of aU foreign merclllj.ndlse exported to the United States ap.d the date of the condurIng tbe,qua,rtef for WhI,e!:. the value lEI sular certl1icatJoQ,Rf any invoIce sl;lall, tor the purposes of this sllctIon, be conof exportation: provided, that :the, secretary of the treasury sider,ed the may order the rellquldation,of any e,mry, at.a different value, wpenever satisfactory evidence shall be produced to him showing that the value in United Ple foreign money specified. i:ll the invoice, was, at, the date States, of certification, at least 10 per centum more or less, than the value proclaimed, . during the quarter In which the consular certification occurred."
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. This, section,untilwereach,the provisor is substantially a re-enactmentol the 'pre"rl'Oua law.;; _ 'The contention of tM'government rests upon word I'value" in the W9yi§Q is not limited to the value ,"ot tlMipure Jl1.etal,", but to .oth£lrmethods of valnation never before ,adopted .with reaped' to 'specified foreign st'andard coiirs.,To'Mopt this construction is 'to hold that congress intended to departffpfutlle:long-established to introducea new and un· certain,hiodeo(v:aluationin cases coming within the terms of the proviso. The that the body of the section ,provides one way, and one WillY oaly,for estimating foreign' standard coins,'
while the proviso covers other ways in conflict with former well-set· tIed principles. Certainly the court should not adopt such a construe· tion, if it be at all doubtful. To hold that, where the value of the foreign coin during the quarter varies less than 10 per centum from the value proclaimed, the pure metal value is to govern, and that when it exceeds 10 per centum the secretary of the treasury may adopt any standard of valuation he sees fit, based upon rate of exchange, trade conditions, or financial repocts, WOllid result in the introduction of those elements of uncertainty and confusion which the law has aimed espe· cially to prevent. The purpose of the proviso, in our opinion, was not to change the principle in estimating the value of foreign coins, but rather to permit of a different estimate on the same principle, if it should appear at any time during the quarter that the proclaimed value was to a considerable degree at variance with the actual fact existing at the time of any given importation. While the standard of. valuation should be fixed and based on intrinsic value, the whole legislation on this subject shows an effort on the part of congress to provide speedier means for correcting the valuation when it is shown to be wrong. Until 1873 any change in the valuation of specified foreign standard coin required a special enactment. By the statute of 1873 the proclaimed estimate must be made annually. By the statute of 1890 it must be promulgated quarterly. l'he proviso, in section 25 of the act of 1894, was simply another step in the same direction, and was intended to permit a new estimate of valuation at any time during the quarter where there was found to be an error of at least 10 per centum. This is the natural construction and evident intent of the whole section, and is in harmony with previous legislation. The proviso must be considered in connection with the body of the section and the to which it relates. Under a familiar principle of statutory construction, a proviso is to be strictly construed, and it "takes no case out of the enacting clause which does not fall fairly within its terms." U. So v. Dickson, 15 Pet. 141, 165. This proviso has reference to the subject-matter treated in the body of the section, and any broad construction of the w(\rd "value," which should enlarge its scope as therein defined, would be doing violence to every sound rule of statutory construction, and is contrary to the general context of the proviso itself, taken as a whole and in connection with what pre: cedes. It would introduce confusion and inconsistency into a statute which is otherwise plain and intelligible. . In this case the value of the rupee, as estimated by the director of the mint proclaimed by the secretary of the treasury, was fixed at $.233 for the quarter beginning .January 1, 1896. The date of the consular certificate attached to the invoice was January 11, 1896, and the value of the rupee in exchange, as therein certified,· was equal to $.285. This represents an appreciation of 23 per cent. over the proclaimed value, and theref.ore comes within the terms of the provisio; and the collector was right in the action he took if the word "value" in the proviso should be construed to mean value in exchange, or any other standard of value except that "of the pure metal." Wehold that the proviso must be limited. to the subject-rnlltter treated in the body of the section, and therefore that it is only 'applicable to those cases
where "satisfactory evidence" is produced that the value of the pure metal of such foreign coin has either appreciated or declined 10 per cent. Ils compared with its proclaimed value. As there is no evidence on this point in this case, the proclaimed value must stand, and the collector should have liquidated the duties on that basis. We understand, from the brief of counsel and the later instructions of the treasury department, that the government relies mainly on the proviso in section 25 for justification of the collector's action. In two letters,however, to the collector, bearing date, respectively, May 12, and June 17, 1896, in reply to an inquiry for instructions, the secretary of the treasury says that the rupee must be regarded as a depreciated currency, upon the ground, apparently, that its nominal value, as he states, is $.444, and that, therefore, entries of merchandise covered by invoices made out in such currency should be liquidated at the value .certified by the consul. There seems to be nothing in the facts of the case which warTant the treatment of the silver rupee at the time of this importation as a depreciated currency, under the law. The provision respecting depreciated currency first appears in the proviso of the sixty-first section of the act of 1799. "This proviso has always continued in force, and now constitutes section 2903 of the Revised Statutes." Cramer v. Arthur, 102 U. S. 612, 617. Speaking of this proviso, Mr. Justice Bradley said (page 618), in that case:
"It was passed at a time when the nations of Europe were at war and the United States were neutral. In England and France, and perhaps other countries, specie payments had been suspended, and currencies based on government credit had been adopted.. The law seems to have had in view artificial money of this kind; a depreciated currency, not based on specie, but still 'issued and circulated under authority of the government.' "
The president, acting through the secretary of the treasury, has established regulations on the subject. The treasury regulations (Ed. 1874, art. 993, as amended by circular, S. S. 1870) were as follows:
"First. Where the standard value of a foreign currency has been proclaimed by the secretary of the treasury in the manner provided by law, or, not baving been so proclaimed, bas been fixed by special enactment, that value is to be taken in all cases in estimating customs duties, unless collectors have been otherwise instructed, or unless a depreciation of the value of the foreign cnrrency expressed In an Invoice from the standard of that currency shall be -shown by consular certificate thereto attached. Secondly. Where the standard value of a foreign currency has not been proclaimed by the secretary of the treasury, In the manner provided by law, an Invoice expressed in such currency must be accompanied by a consular certificate, showing its vahie In standard gold dollars of the United States."
In 1891 the provision was amended as to depreciated currency (S. S. 11,661) so as to read:
"If that currency be depreciated, each copy of the invoice should be accom'panied by a consular certificate (Form No. 144) stating the precentage of depreciation of the currency actually paid as compared with the corresponding standard coin currency, and the value in such standard' coin .' currency of the total amount of the depreciated currency pald for the merchandise mentioned In the Invoice."
Form No. 144 is as follows:
"I, - - , consul of the U. S. of America, do hereby certify that the true value of the currency of the - - of - - , in which currency the annexed