611.943 Gloves/25
The Secretary of State to President Roosevelt
My Dear Mr. President: I return herewith the report of the United States Tariff Commission on its investigation of wool knit gloves and mittens, under the provisions of Section 336 of the Tariff Act of 1930, which you referred to me on February 12, 1936, for recommendation.
On the basis of its investigation, the Commission finds that the existing rate of duty on knit gloves and knit mittens, finished or unfinished, wholly or in chief value of wool and valued at not more than $1.75 per dozen pairs, does not equalize the difference in costs of production, as defined in Section 336, of the domestic articles and the like or similar foreign articles produced in the principal competing country, Japan. The Commission finds that within the limits permitted by law, the duty necessary to equalize such costs can be achieved only by shifting from foreign value to American selling price. It accordingly recommends that the rates of duty upon this class of wool knit gloves and mittens be increased to forty cents per pound and 35 percent ad valorem based upon the American selling price as defined in Section 402 (g) of the Tariff Act of 1930, of knit gloves and knit mittens, finished or unfinished, wholly or in chief value of wool, manufactured or produced in the United States. The effect of this action would be to increase the existing rate of duty very substantially, roughly an increase from 70 to 150 percent ad valorem.
In anticipation of the nature of the finding which would be indicated by the Commission’s investigation, and in view of the expressed desire of the Japanese Government to be afforded an opportunity for its exporters voluntarily to control exports to the United States of commodities in which the United States would be forced to take restrictive action in the absence of such control, the Executive Committee on Commercial Policy recommended that the Japanese Government be approached to discover whether that Government or the Japanese exporters could undertake to control exports of wool knit gloves to this country so as to remove the excessive threat to the domestic industry offered by the large imports of recent months.
Negotiations have accordingly been conducted to this end. I have to inform you, however, that the Japanese Government has found itself unable to agree to the most liberal terms which this Government feels to be consistent with the welfare of the domestic industry. The [Page 850] Executive Committee on Commercial Policy believes that in view of the fact that now is the time when orders for these gloves are customarily placed, these negotiations cannot be further prolonged and indeed a prolongation would appear to offer no chance of a satisfactory agreement. It therefore recommends that the findings of the Tariff Commission be approved as promptly as possible.
The method of American valuation recommended in the report of the Tariff Commission is an extreme measure which almost amounts to an embargo with regard to the specific goods to which it is made applicable. In my judgment, therefore, it should not be used except where the matter is most urgent and no alternative possible. I do not wish, therefore, in any sense to commit myself to this use of American valuation as a permanent or frequently employed policy with respect to any set of conditions.
The present instance, however, seems to present such immediate conditions of exigency as to call for affirmative action, especially in view of the present indisposition or inability of the Japanese industry to undertake any reasonable voluntary adjustment of their exports of wool-knit gloves to this country. This unusual and extreme step may be necessary to induce Japanese industry to deal more effectively with such situations as this. I, therefore, concur in the recommendation of the Tariff Commission.35 I sincerely trust, however, that this method of valuation can be avoided in dealing with all other situations.
Faithfully yours,
- The President issued a proclamation dated February 21; 49 Stat. 3497.↩