United States v. George Bush Co

• Decision Date: 20 May 1940
• Docket Number: No. 613,613
• Citation: 84 L.Ed. 1259,60 S.Ct. 944,310 U.S. 371
• Parties: UNITED STATES v. GEORGE S. BUSH & CO., Inc
• Court: U.S. Supreme Court

310 U.S. 371

60 S.Ct. 944

84 L.Ed. 1259

UNITED STATES

v GEORGE S. BUSH & CO., Inc.

No. 613.

Argued April 23, 24, 1940.

Decided May 20, 1940.

Messrs. Robert H. Jackson, Atty. Gen., and Warner W. Gardner, of Washington, D.C., for petitioner.

[Argument of Counsel from page 372 intentionally omitted] Mr. George R. Tuttle, of San Francisco, Cal., for respondent.

[Argument of Counsel from pages 373-374 intentionally omitted] Mr. Justice DOUGLAS delivered the opinion of the Court.

The Court of Customs and Patent Appeals held invalid the Proclamation made by the President of the United States on May 1, 1934, No. 2081, 48 Stat.1739, increasing the duty on canned clams imported from Japan. 104 F.2d 368. We granted certiorari because of the importance of that deci- sion to the administration of the flexible tariff provisions of the Tariff Act of 1930, 46 Stat. 590, 19 U.S.C.A. § 1001 et seq. 309 U.S. 643, 60 S.Ct. 514, 84 L.Ed. —-.

In compliance with § 336(a) of that Act, 19 U.S.C.A. § 1336(a), the Tariff Commission, in response to an application for an increased duty on canned clams, instituted an investigation in June 1932, gave public notice of the hearing, held the hearing in October 1932 and gave interested parties an opportunity to be present, to produce evidence, and to be heard. As a result of that investigation the Commission found that the statutory duty of 35% ad valorem on the foreign dutiable value¹ did not equalize the difference in the costs of production of the domestic article and the Japanese article. On such a finding the Commission was authorized by § 336(a) to recommend to the President an increase or decrease in the statutory rate but not in excess of 50 per cent; or in case the differences could not be equalized in that manner, it was empowered by § 336(b) to specify such ad valorem rate of duty based upon the American selling price² of the domestic article as it found necessary to equalize such differences. In the latter event, however, the statutory rate could not be increased. The Commission found that the rate of duty on foreign value which would be necessary to equalize the difference in costs exceeded the then existing statutory rate by more that 50 per cent. Accordingly it proceeded under § 336(b) to specify an ad valorem rate based on American selling price, and recommended to the President an increase in the duty, to be effected by assessing the rate of 35 per cent ad valorem on the American selling price.

It is provided in § 336(c) that the President 'shall by proclamation approve the rates of duty and changes in classification and in basis of value specified in any report of the commission under this section, if in his judgment such rates of duty and changes are shown by such investigation of the commission to be necessary to equalize such differences in costs of production.' The Proclamation referred to the report and findings of the Commission and concluded that the change in duty recommended was 'in the judgment of the President' necessary for that purpose. After the President issued his Proclamation, respondent imported some canned clams and they were appraised on the basis of the American selling price. It was on an appeal for reappraisement pursuant to § 501 that the Proclamation was held invalid by the Court of Customs and Patent Appeals. Its invalidity, according to that court, flowed from the basis on which the Commission computed the Japanese cost of production. By § 336(e)(2) the Commission was authorized, when the cost of production of a foreign article was not 'readily ascertainable', to accept as evidence thereof the 'weighted average of the invoice prices or values for a representative period.' The Commission took the weighted average of such prices for the period from December 1, 1930 to September 30, 1932. Those prices were in Japanese yen. Sec. 336 contains no provision for conversion of currency. But the Commission in order to compare those prices with domestic costs converted them into United States dollars, at the average rate of exchange for 1932. That period was selected because Japan went off the gold standard in December 1931 and the value of the yen in terms of United States dollars declined steadily from that date to November 1932.³

The Court of Customs and Patent Appeals held that it was error to convert invoice prices for one period into United States dollars at the average rate of exchange for another period. In its view the phrase 'weighted average of the invoice prices of values for a representative period' contained in § 336(e)(2) must be construed as though it read, 'weighted average of the invoice prices or values in United States currency for a representative period.' The government, however, urges that if the Commission were forced to take the conversion rate for the earlier period, to which it had to resort in order to obtain the invoice prices, it would use a rate which had merely an historical interest and which did not reflect the conditions which made desirable an increase in duties, viz. the depreciation in the value of the yen.

The determination of foreign exchange value was prescribed, in the procedure outlined by Congress, neither for the action of the Commission nor for that of the President.⁴ There is no express provision in the Act that the rate of exchange must be taken for the same period as the invoice prices. To imply it would be to add what Congress has omitted and doubtless omitted in view of the very nature of the problem. The matter was left at large. The President's method of solving the problem was open to scrutiny neither by the Court of Customs and Patent Appeals nor by us. Whatever may be the scope of appellate jurisdiction conferred by § 501 of the Tariff Act of 1930,⁵ it certainly does not permit judicial examination of the judgment of the President that the rates of duty recommended by the Commission are necessary to equalize the differences in the domestic and foreign costs of production.

The powers which Congress has entrusted to the President under the Act of 1930 do not essentially differ in kind from those which have been granted him under the tariff acts for well over a century. See Norwegian Nitrogen Products Co. v. United States, 288 U.S....