!
I
64
!
1
!
COURT DECISIONS.
1909, the construction of which constitutes the present subject of dis pute. That section was designed to establish a large measure of free trade between the United States and its oriental dependencies, and one of its principal objects, if not its controlling motive, was to provide a free market in the United States for all products the growth and manufacture of the Philippine Islands except rice, and sugar and tobacco in excess of the maximum quantities specitied.
For effective customs administration it was of course necessary to surround such a commercial concession with safeguards which would practically preclude a substitution of goods and reasonably secure the revenue of both countries against fraud or evasion. Accordingly admission free into either country of articles the growth or product or the growth, product, and manufacture of the other was conditioned upon their "direct shipment" from the country of origin to the country of destination. The term "direct shipment," considered by itself, is open, however, to several interpretations. It may mean that the goods must be carried from the Philippines to the United States or vice versa in a single vessel proceeding by the most direct route without stopping at way ports, or it may mean shipment in a single vessel following its usual and customary course, or it may mean that the goods must be originally destined for the United States or the Philip- pines, and that without mingling with the commerce of any other place they must come as directly from the country of origin to the country of destination as commercial limitations may permit. Which of these meanings should prevail as truly expressive of the legislative will depends on which of them best gives effect to the general policy of the Government and the main purpose of the law, and at the same time preserves the full intention of the condition. As it can not be assumed that the statute contemplated the infliction of a condition with which it was commercially impracticable to comply, the feasibility of the condition under one meaning or another naturally becomes a subject of inquiry, and that in its turo necessarily involves a consideration of the actual commercial method of carrying goods between the United States and the Philippines which confronted the lawmakers when the tariff act of 1909 was passed.
It is a matter of history that when Spain and Portugal shared the Indies between them Manila was the dominant and most important port in the Orient. In time, however, Great Britain gained a foot- hold in the Far East, the Suez Canal was constructed, new avenues for commerce were opened up, and Spain lost her trade ascendancy. In consequence Hongkong became a shipping terminal and ultimately the port of final destination for nearly all deep-water craft trading with the Orient. As a result Manila ceased to be a shipping center, Philippine goods had to be carried in British bottoms, and the trade of the islands with the outside world was forced through Hongkong,
COURT DECISIONS.
65
to which all minor ports of adjacent territory were made tributary by the diversion to that port of shipping facilities. In the very sanc year in which the act was passed the evidence discloses that for the six months ending December 31 vessels of the Pacific Mail Steamship Co, and of the Toyo Kisen Kaisha mude 25 trips from Hongkong to the United States, and during the same period only 7 trips from the Philippines to the same destination. In their time-tables these com- panies expressly direct attention to the fact that their vessels call at Manila only about once a month and that those not able to take advantage of the monthly trips should avail themselves of " half a dozen lines of steamers" the vessels of which make trips between Hing- kong and Manila every two or three days. From this alone it is apparent that vessels plying between the Orient and the United States favor Hongkong as a shipping point and that only occasional trips are made to Manila. Shipping out of the Philippines by way of Hong- kong was obliged by trade requirements, and of this fact Congress can not be assumed to have been ignorant, taking into account that shipping between the islands and the United States had been a subject of legislative investigation and consideration for more than seven years. (Act of March 8, 1902; act of April 15, 1904; act of April 30, 1906; act of April 29, 1908; Congressional Record of March 23, 1909.) In the light of these facts, holding in view the settled policy govern- ing our relations to the Philippines, considering the beneficent trend of all congressional legislation affecting them, and bearing in mind that transshipment at Hongkong of Philippine goods destined for the United States was a trade necessity, we think we would not be war- ranted in giving to the condition the interpretation contended for by the Government. To do so would be to hold that Congress intended to impose a condition which for lack of adequate shipping conveniences was commercially impracticable and therefore in effect frustrative of the primary and principal purpose of the law. Our opinion in this behalf is confirmed by the attitude of the courts as to transshipment and the effect thereof on importations and their directness. For a long time judicial tribunals bave appreciated that the exigencies of trans- portation frequently require that goods exported from other countries and destined for the United States shall be transshipped en route. consequence the courts have held almost uniformly that such transship- ment does not change the status of the goods as an importation from the country of original shipment if they have not mingled with the commerce of any other country and if the official invoices and bills of lading evidence that the United States was at the time of exportation intended to be their final destination. Millare. Millar (17 Fed. Cas.. 9546); Grant v. Peaslee (9 Fed. Cas., 1143). More than that, it has been judicially determined that notwithstanding such transshipment
88838-11--5
In
261