Nicholas Co v. United States Alex Shaw Co v. Same

• Decision Date: 03 March 1919
• Docket Number: Nos. 62,63,s. 62
• Citation: 249 U.S. 34,63 L.Ed. 461,39 S.Ct. 218
• Parties: G. S. NICHOLAS & CO. et al. v. UNITED STATES. ALEX. D. SHAW & CO. et al. v. SAME
• Court: U.S. Supreme Court

249 U.S. 34

39 S.Ct. 218

63 L.Ed. 461

G. S. NICHOLAS & CO. et al.

v UNITED STATES.

ALEX. D. SHAW & CO. et al.

v. SAME.

Nos. 62, 63.

Argued Jan. 14, 1919.

Decided March 3, 1919.

Mr. W. P. Preble, of New York City, for Alex. D. Shaw & Co. and others.

Mr. Albert H. Washburn, of New York City, for G. S. Nicholas & Co. and others.

Mr. Assistant Attorney General Hanson, for the United States.

Mr. Justice McKENNA delivered the opinion of the Court.

Writs of certiorari to review a judgment of the Court of Customs Appeals, affirming a decision by the Board of General Appraisers, which overruled the protests of petitioners against the action of collectors of customs at Boston and New York assessing additional or countervailing duties on whisky and gin imported from Great Britain. 7 Ct. Cust. Appeals, 97.

Paragraph E of section 4 of the Tariff Act of 1913 (38 Stat. 114 [Comp. St. § 5296]) reads as follows:

'E. That whenever any country, dependency, colony, province or other political subdivision of government shall pay or bestow, directly or indirectly, any bounty or grant upon the exportation of any article or merchandise from such country, dependency, colony, province or other political subdivision of government, and such article of merchandise is dutiable under the provisions of this act, then upon the importation of any such article or merchandise into the United States, whether the same shall be imported directly from the country of production or otherwise, and whether such article or merchandise is imported in the same condition as when exported from the country of production or has been changed in condition by manufacture or otherwise, there shall be levied and paid, in all such cases, in addition to the duties otherwise imposed by this act, an additional duty equal to the net amount of such bounty or grant, however the same be paid or bestowed. The net amount of all such bounties or grants shall be from time to time ascertained, determined, and declared by the Secretary of the Treasury, who shall make all needful regulations for the identification of such articles and merchandise and for the assessment and collection of such additional duties.'

The question in the case is the legality of the counter vailing duty. It was determined and declared to be necessary under paragraph E by reason of the allowance under the British legislation of three pence upon plain British spirits and five pence upon British compounded spirits. 23 & 24 Vict. c. 129.

The case is not of broad compass. The act of Parliament referred to above levies a duty upon every gallon of spirits of a certain strength which after certain designated dates were or should be distilled within the United Kingdom, or which, having been distilled therein, were on the designated dates in the stock or possession of any distiller or in any duty-free warehouse, and which after the named dates should be taken out for consumption within the United Kingdom.

It is provided that 'in consideration of the loss and hindrance caused by excise regulation in the distillation and rectification of spirits in the United Kingdom' there shall be paid 'to any distiller or proprietor of such spirits on the exportation thereof from a duty-free warehouse or on depositing the same in a customs warehouse * * * the allowance of two pence per gallon * * * and to any licensed rectifier who * * * has or shall have deposited in a customs warehouse spirits distilled and rectified in the United Kingdom the following allowances: * * * Three pence per gallon, and on spirits of the nature of spirits of wine an allowance of two pence per gallon. * * *'

Subsequent acts of Parliament repeat the provisions for allowance upon exported spirits, adding some details, and are replete with the regulations and provisions which the legislators thought or experience had demonstrated were necessary. And there is quite an enumeration of warehouses and their purposes which, however necessary from the standpoint of the law, happily is not necessary to our consideration of the questions in the case, although counsel describe them and use them in display of the options which it is contended the law gives to a distiller—that is, to export, warehouse, or sell the spirits or use them under conditions which would or would not result in an allowance. We do not find it necessary to go into such confusing considerations. The question in the case is more direct, and is whether the three pence and five pence paid no account of export from the United Kingdom is the bestowal 'directly or indirectly' of a 'bounty or grant upon the exportation of any article or merchandise from such country,' to use the words of paragraph E.

Looking only at the paragraph and judging from the first impressions of its words, the problem presented would seem to be without difficulty. There is paid to an exporter of spirits from the United Kingdom the sum of three or five pence a gallon, as the case may be, and the instant conclusion is that the sale of spirits to other countries is relieved from a burden that their sale in the United Kingdom must bear. There is a benefit, therefore, in exportation, an inducement to seek the foreign market. And thus it would seem, if we regard the substance of things, that the condition of the application of paragraph E obtains.

Counsel, however, resist this view in somewhat lengthy and minute arguments, only the basic propositions of which we can give. They dwell especially upon the purpose of the British act and the differences, not only actual, as they contend, but recognized in the administrative and legislative parlance of this country, between the words 'allowance,' 'bounty,' 'drawback' and 'grant.' In support of the first contention—that is, the purpose of the British act—it is urged that the allowance provided for is not a 'bounty' upon exportation, but 'compensation' to the distiller and rectifier for costs due to excise restrictions. In other words, that the allowance is not a premium on exportation, but the remission...