National Affairs: Thief Catch Thief

No little has the public heard of tourists returning from abroad who fail to declare the full value of their purchases, hoping to cheat the Government of its legal customs dues. Next to nothing has the public heard of the Government mulcting tourists of from 30% to 40% more in tariff duties than is legally collectible. Recently persons not so ignorant of the law as the average tourist began to make in- quiries. Last week, Customs officials publicly admitted that tourists have for years paid millions of dollars more in tariff duties than the law authorizes. "Ah," said cynics, "the shoes of dishonesty fit many feet."

The crux of the matter is that the law requires tourists to declare "the full foreign value" of merchandise bought abroad. Tourists ordinarily know but one foreign value—the price they paid—and almost invariably set down and pay duty on the retail price. Yet the law defines the full foreign value as "the market value or the price . . . in the usual wholesale quanti- ties." Every businessman knows that the average retail price is about 50% greater than the wholesale price, yet tourists commonly pay duty on the former.

It is the privilege of tourists to have their imports valued on the wholesale price. The reasons why they ordinarily do not are: 1) Ignorance, which the Government has not tried to dispel; 2) The fact that to have goods so valued it is necessary to have them sent to the appraisers' stores. This involves delay of several days. In addition the tourist must bear the risk of any damage that may befall his belongings in being dragged to and from the appraisers' stores.

Customs officials justify their collection of duty on declarations by saying that tourists (although generally ignorant of the fact) prefer to pay the extra duty rather than bear the delay. They also say that it would take so long to value tourists' purchases properly that it would be impossible to handle the large influx of tourists which occurs toward the end of every summer. About one-third of all returning tourists pay duty. How much excess duty they pay can only be conjectured—the guess of customs officials was $2,000,000 a year.

Last week, aroused by the public's discovery, officials began to seek to relieve the injustice. Commissioner of Customs F. X. A. Eble visited Manhattan, suggested that duties lower than the regular rate be charged tourists; e.g., that if a man brought in $125 worth of foreign goods, he be allowed his usual $100 exemption and then be taxed, say, 25% ($6.25) instead of, say, 90% ($22.50). The objections to this proposal are that $125 worth of goods at wholesale rates are worth $80 or $85 and should not be taxed at all; that such an arbitrary scaling down of duties is probably illegal.