CO129-383 - Public Offices - 1911 — Page 264

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transboarding of the cigars at Hongkong interrupted their "direct shipment" from Manila to the United States and that they were there- fore not entitled to free entry, ordered a reliquidation, and imposed on the merchandise duties amounting in the aggregate to some $19,000, under the provisions of paragraph 224 of the tariff act of August 5, 1909, which reads as follows:

224. Cigars, cigarettes, cheroots of all kinds, four dollars and fifty cents per pound and twenty-five per centura ad valorem, and paper eigars and cigarettes, including wrappers, shall be subject to the same duties as are herein imposed upon cigars.

The importers protested against the reliquidation and the duties imposed and claimed that the cigars were entitled to free entry under the provisions of section 5 of the act, the relevant parts of which are as follows:

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SEC. 5. That there shall be levied, collected, and paid upon all articles coming into the United States from the Philippine Islands the rates of duty which are required to be levied, collected, and paid upon like articles imported from foreign countries: Provided, That * * * all articles the growth or product of or manufactured in the Philippine Islands front materials the growth or product of the Philippine Islands or of the United States, or of both, from the Philippine Islands shall hereafter be admitted free of duty, except *

coming into the United States cigare ju excese of one hundred and fifty million cigars, which quantities shall be ascertained by the Secretary of the Treasury under such rules and regulations as he shall prescribe.

* And provided further, That the free admission, herein provided, of such articles, the growth, product, or manufacture of the United States, into the Philippine Islands, or of the growth, produci, or manufacture, sa hereinbe- fore defined, of the Philippine Islands into the United States, shall be conditioned upon the direct shipment thereof from the country of origin to the country of destination: Provided, That direct shipment shall include shipments in hond through foreign territory contiguous to the United States,

The Board of General Appraisers sustained the protest and the Government appealed.

It seems to be conceded that the cigars were manufactured from tobacco the growth and product of the Philippine Islands within the meaning of the statute; that the limit of 150,000,000 cigars entitled to exemption from duty in any one fiscal year was not exceeded by the importation; and that shipment from origin to destination was accom- plished as hereinbefore recited. There being no dispute as to the facts of the case, the question to be determined on appeal is purely one of law, namely, What construction shall be put upon the provision for "direct shipment," which is expressly made a condition for the admission free of goods coming from the Philippines to the United States?

The Government insists that no dutiable merchandise imported from the Philippines is entitled to free entry unless transported therefrom to the United States in a single bottom and that once such merchandise has passed beyond the maritime jurisdiction of the islands any trans-

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fer of it from one vessel to another is violative of the statutory condi- tion and precludes its admission without payment of the usual duties. On the other hand, the importers claim that goods the product, growth, and manufacture of the Philippines are exempt from duty if their shipment is made on a through bill of lading and if as a matter of fact they come to the United States without entering into the commerce of any other country,

The language of the statutory provision is fairly susceptible of either interpretation, and it is therefore not only permissible but necessary to consider the history of the legislation and to inquire into the con- ditions and the circumstances inducing its enactment in order to arrive at a satisfactory conclusion touching its true purpose and intention.

The United States acquired the Philippines by cession from the Kingdom of Spain, and their acquisition was in a measure one of the unavoidable results of the Spanish-American War. The treaty between the high-contracting parties did not vest the peoples of the islands with the rights and privileges of American citizenship, and that of course left their future well-being largely dependent on whether they should be considered as utter strangers to the American household or as wards of the Nation for whose happiness and pros- perity the Government was at least morally responsible. The orig- imal instructions of the President to the Philippine Commission and the organic act for the government of the islands argue strongly that the political welfare and material progress of the Filipino people were inatters of real and serious concern to the American Govern- ment. Indeed, both act and instructions indicate that from the out- set the United States regarded the inhabitants of its newly acquired territory as something more than mere aliens, and that in dealing with them it elected to pursue a policy which was highly altruistic and benevolent.

The establishment of civil government in the islands, the concession of a large measure of political autonomy to the peoples thereof, and the beneficent intent of legislation affecting their business interests. are all convincing evidences that a kindly purpose rather than a selfish one was to distinguish our sovereign relations with the Philippines. In this spirit was passed the act of March 8, 1902, which admitted to the United States articles the growth and product of the Philippine Islands at 75 per cent of the duty imposed on foreign imports of the same character and which directed that all the duties collected thereon be covered into the Philippine treasury. That act was intended to stimulate the business of the islands and to provide revenue for their government. Unfortunately, time and experience proved that it was not effective for either purpose, and that fact as shown by public documents having been officially called to the attention of Congress brought about the enactment of section 5 of the tariff act of August 5,