Hampton Co v. United States, 242

Decision Date09 April 1928
Docket NumberNo. 242,242
Citation48 S.Ct. 348,276 U.S. 394,72 L.Ed. 624
PartiesJ. W. HAMPTON, Jr., & CO. v. UNITED STATES
CourtU.S. Supreme Court

Mr. Walter E. Hampton, of New York City, for petitioner.

[Argument of Counsel from pages 395-397 intentionally omitted] The Attorney General and Mr. W. D. Mitchell, Sol. Gen., of Washington, D. C., for the United States.

[Argument of Counsel from pages 398-400 intentionally omitted] Mr. Chief Justice TAFT delivered the opinion of the Court.

J. W. Hampton, Jr., & Co. made an importation into New York of barium dioxide which the collector of customs assessed at the dutiable rate of six cents per pound. This was two cents per pound more than that fixed by statute. Paragraph 12, c. 256, 42 Stat. 858, 860 (19 USCA § 121, par. 12). The rate was raised by the collector by virtue of the proclamation of the President, 45 Treas. Dec. 669, T. D. 40216, issued under, and by authority of, section 315 of title 3 of the Tariff Act of September 21, 1922 (c. 356, 42 Stat. 858, 941 (19 USCA §§ 154-159)), which is the so-called flexible tariff provision. Protest was made and an appeal was taken under section 514, part 3, title 4 (chapter 356, 42 Stat. 969-970 (19 USCA § 398)). The case came on for hearing before the United States Customs Court, 49 Treas. Dec. 593, T. D. 41478. A majority held the act constitutional. Thereafter the case was appealed to the United States Court of Customs Appeals. On the 16th day of October, 1926, the Attorney General certified that in his opinion the case was of such importance as to render expedient its review by this Court. Thereafter the judgment of the United States Customs Court, was affirmed. 14 Ct. Cust. App. 350. On a petition to this Court for certiorari, filed May 10, 1927, the writ was granted June 6, 1927. 274 U. S. 735, 47 S. Ct. 769, 71 L. Ed. 1336. The pertinent parts of section 315 of title 6 of the Tariff Act (chapter 356, 42 Stat. 858, 941, U. S. C. tit. 19, §§ 154, 156 (19 USCA §§ 154, 156)) are as follows:

'Section 315(a). That in order to regulate the foreign commerce of the United States and to put into force and effect the policy of the Congress by this act intended, whenever the President, upon investigation of the differences in costs of production of articles wholly or in part the growth or product of the United States and of like or similar articles wholly or in part the growth or product of competing foreign countries, shall find it thereby shown that the duties fixed in this act do not equalize the said differences in costs of production in the United States and the principal competing country he shall, by such investigation, ascertain said differences and determine and proclaim the changes in classifications or increases or decreases in any rate of duty provided in this act shown by said ascertained differences in such costs of production necessary to equalize the same. Thirty days after the date of such proclamation or proclamations such changes in classification shall take effect, and such increased or decreased duties shall be levied, collected, and paid on such articles when imported from any foreign country into the United States or into any of its possessions (except the Philippine Islands, the Virgin Islands, and the islands of Guam and Tutuila): Provided, That the total increase or decrease of such rates of duty shall not exceed 50 per centum of the rates specified in title 1 of this act, or in any amendatory act. * * *

'(c) That in ascertaining the differences in costs of production, under the provisions of subsidivisions (a) and (b) of this section, the President, in so far as he finds it practicable, shall take into consideration (1) the differ- ences in conditions in production, including wages, costs of material, and other items in costs of production of such or similar articles in the United States and in competing foreign countries; (2) the differences in the wholesale selling prices of domestic and foreign articles in the principal markets of the United States; (3) advantages granted to a foreign producer by a foreign government, or by a person, partnership, corporation, or association in a foreign country; and (4) any other advantages or disadvantages in competition.

'Investigations to assist the President in ascertaining differences in costs of production under this section shall be made by the United States Tariff Commission, and no proclamation shall be issued under this section until such investigation shall have been made. The commission shall give reasonable public notice of its hearings and shall give reasonable opportunity to parties interested to be present, to produce evidence, and to be heard. The commission is authorized to adopt such reasonable procedure, rules, and regulations as it may deem necessary.

'The President, proceeding as hereinbefore provided for in proclaiming rates of duty, shall, when he determines that it is shown that the differences in costs of production have changed or no longer exist which led to such proclamation, accordingly as so shown, modify or terminate the same. Nothing in this section shall be construed to authorize a transfer of an article from the dutiable list to the free list or from the free list to the dutiable list, nor a change in form of duty. Whenever it is provided in any paragraph of title 1 of this act, that the duty or duties shall not exceed a specified ad valorem rate upon the articles provided for in such paragraph, no rate determined under the provision of this section upon such articles shall exceed the maximum ad valorem rate so specified.'

The President issued his proclamation May 19, 1924 (43 Stat. 1951). After reciting part of the foregoing from section 315, the proclamation continued as follows:

'Whereas, under and by virtue of said section of said act, the United States Tariff Commission has made an investigation to assist the President in ascertaining the differences in costs of production of and of all other facts and conditions enumerated in said section with respect to * * * barium dioxide, * * *

'Whereas in the course of said investigation a hearing was held, of which reasonable public notice was given and at which parties interested were given a reasonable opportunity to be present, to produce evidence, and to be heard;

'And whereas the President upon said investigation * * * has thereby found that the said principal competing country is Germany and that the duty fixed in said title and act does not equalize the differences in costs of production in the United States and in * * * Germany, and has ascertained and determined the increased rate of duty necessary to equalize the same.

'Now, therefore, I, Calvin Coolidge, President of the United States of America, do hereby determine and proclaim that the increase in rate of duty provided in said act shown by said ascertained differences in said costs of production necessary to equalize the same is as follows:

"An increase in said duty on barium dioxide (within the limit of total increase provided for in said act) from 4 cents per pound to 6 cents per pound.

"In witness whereof, I have hereunto set my hand and caused the seal of the United States to be affixed.

"Done at the city of Washington this nineteenth day of May in the year of our Lord one thousand nine hundred and twenty-four, and of the Independence of the United States of America the one hundred and forty-eighth.

"Calvin Coolidge.

"By the President: Charles E. Hughes, Secretary of State."

The issue here is as to the constitutionality of section 315, upon which depends the authority for the proclamation of the President and for two of the six cents per pound duty collected from the petitioner. The contention of the taxpayers is twofold-first, they argue that the section is invalid in that it is a delegation to the President of the legislative power, which by article 1, § 1 of the Constitution, is vested in Congress, the power being that declared in section 8 of article 1, that the Congress shall have power to lay and collect taxes, duties, imposts and excises. Their second objection is that, as section 315 was enacted with the avowed intent and for the purpose of protecting the industries of the United States, it is invalid because the Constitution gives power to lay such taxes only for revenue.

First. It seems clear what Congress intended by section 315. Its plan was to secure by law the imposition of customs duties on articles of imported merchandise which should equal the difference between the cost of producing in a foreign country the articles in question and laying them down for sale in the United States, and the cost of producing and selling like or similar articles in the United States, so that the duties not only secure revenue, but at the same time enable domestic producers to compete on terms of equality with foreign producers in the markets of the United States. It may be that it is difficult to fix with exactness this difference, but the difference which is sought in the statute is perfectly clear and perfectly intelligible. Because of the difficulty in practically determining what that difference is, Congress seems to have doubted that the information in its possession was such as to enable it to make the adjustment accurately, and also to have apprehended that with changing conditions the difference might vary in such a way that some readjustments would be necessary to give effect to the principle on which the statute proceeds. To avoid such difficulties, Congress adopted in section 315 the method of describing with clearness what its policy and plan was and then authorizing a member of the executive branch to carry out its policy and plan and to find the changing difference from time to time and to make the adjustments necessary to conform the duties to the standard underlying that policy and plan. As it was a matter of great importance, it concluded to give by statute to the President, the...

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