General Seafoods Corporation has been furnished with a copy of the minutes of the hearing and with a copy of the brief filed at the hearing by ex-Senator Hastings.5 An examination of this material discloses that the attacks made upon Treasury Decision 49682 fall into three general catagories:

(a) Arguments ad invidiam against General Seafoods Corporation, the State Department, and the Treasury Department;

(b) Attacks on the amendments embodied in Treasury Decision 49682 on the ground that they contravene public policy; and

(c) Attacks on said amendments on the ground they are illegal.

With respect to the attacks in category (a) above, it is not proposed to reply to them in this memorandum. The most shocking of them was the one simultaneously suggested and disavowed in a little duet on the floor of the House of Representatives by ex-Governor Brewster and Congressman Hinshaw to the effect that ex-Ambassador Joseph E. Davies, now an official of the State Department motivated by his wife's stockholdings in General Foods Corporation, the parent of General Seafoods Corporation, had procured the intercession of the State Department with the Treasury Department on behalf of General Seafoods Corporation. This "juicy bit" was, of course, picked up by many newspapers, a result that could scarcely have been unanticipated by the speakers. Of the same stripe is the assertion of ex-Governor Brewster that a representative of General Seafoods

*

* *

Corporation "* * went up there and negotiated this deal in secrecy. Then he was able to persuade the State Department to ask the Customs to change their rulings * 18 Equally deplorable, although from a less responsible source, was the statement of Patrick McHugh, representing the Atlantic Fishermen's Union, that the proposed Newfoundland operation of General Seafoods Corporation might perhaps "be aimed at evading possible prosecution_under the Sherman and Clayton laws." Ex-Senator Hastings, 10 ex-Governor Brewster,11 Congressman McCormack, 12 and Mr. McHugh 13 all attacked the ruling on the ground that it was made without any public notice and hearing, thereby implying that the Treasury Department had granted to General Seafoods Corporation some special indulgence with respect to procedure. As Acting Secretary of the Treasury Bell pointed out in his letter dated February 12, 1940, to the chairman of the House Ways and Means Committee,14 "it has long been the practice of the Bureau of Customs to furnish American businessmen and others, upon their request, with advisory advance rulings as to the tariff classications of imported merchandise." It would seem that, if that fact were not known to the gentlemen, it is one which they could have ascertained with a minimum of effort.

The attacks in categories (b) and (c) above are taken up below in II and III, respectively.

II. ARGUMENTS BASED ON

CONSIDERATIONS OF ALLEGED PUBLIC POLICY ARE

IMPROPERLY ADDRESSED TO THE TREASURY DEPARTMENT

By far the greater portion of the attack consisted of the earnest representations by certain competitors of General Seafoods Corporation and others engaged or interested, in one way or another, in fishing, to the effect that the amendments embodied in Treasury Decision 49682 would ruin the American fishing industry. Under our form of government, that is, of course, an argument which should be addressed to the legislative branch rather than to the executive branch. The Treasury Department is an executive department charged with enforcing and, as an incident to such enforcement, with interpreting certain laws enacted by Congress. With the policy of the laws which it is called upon to execute, the Treasury Department is permitted to have no concern. This does not mean, however, that there is no place where the protestants may be heard on this argument and may obtain relief if they are entitled to it. There is such a place. It is the Ways and Means Committee of the House of Representatives, of which, it is noted, two of the protestants 15 are members; this is so because the law which the Treasury

4 The minutes of the hearing are cited herein as "Rec.".

5 Said brief is cited herein as "Hast. Br.".

6 86 Congressional Record 1672 (No. 24, February 6, 1940). Ex-Governor Brewster's entire speech of February 6, 1940, in the House of Representatives was made a part of the record on the hearing. See Rec., p. 60. 7 In the case of at least two newspapers, the Calais (Maine) Advertiser of February 14, 1940, and the Guilford (Maine) Register of February 15, 1940, the material was printed under a subtitle reading "From the Office of Congressman Ralph O. Brewster."

8 86 Congressional Record 1670-71 (No. 24, February 6, 1940).

12 Rec., p. 11.

13 Rec., p. 88.

14 Published in 86 Congressional Record 2237 (No. 29, February 13, 1940).

15 Congressmen Treadway and McCormack,

Department has interpreted in Treasury Decision 49682 is a tariff provision, and that committee has the duty of weighing arguments for and against changes in the tariff laws. The straightforward way for the protestants to obtain a hearing on their "public policy" argument is by a bill to amend the tariff act, introduced in the House of Representatives, and referred to its Way and Means Committee.

III. TREASURY DECISION 49,682 EMBODIES A LEGALLY PROPER INTERPRETATION OF THE TARIFF ACT OF 1930

There is relatively little in the record of the hearing which can be properly classified as legal argument; in other words, there is relatively little in the record which was properly addressed to the attention of the Treasury Department or of which it could properly take cognizance. The burden on the legal argument was carried by ex-Senator Hastings, counsel for Booth Fisheries Corporation, one of General Seafoods Corporation's largest competitors. 16 The essence of the Senator's legal argument may be summarized thus: The ruling embodied in Treasury Decision 49682, which will permit the entry duty free of fish dressed, filleted, quick-frozen, dried, salted, or cured at a shore station of an American fishery on the treaty coast of Newfoundland, notwithstanding aliens are employed in such shore station and elsewhere in such American fishery, is erroneous as a matter of law, because it was not the intent of Congress that any product shall be admitted free of duty under paragraph 1730 (a) of the Tariff Act of 1930, if aliens shall have been employed in its production.

It is, of course, an argument that can be made only by one who ignores or is entirely unversed in the history of the North Atlantic fishery. As was bound to be inevitable under such circumstances, the working out of the argument in the brief filed by ex-Senator Hastings involved the commission of many incidental errors, of which only the more conspicuous are noted here:

(a) That the second proviso in paragraph 1730 (a) of the Tariff Act of 1930, instead of relating to the opening statement of paragraph 1730 (a) itself, "relates only" 17 to paragraph 720 of section 1001 of the act, a paragraph which, in the version of the act printed in the United States Code Annotated, precedes the allegedly modifying proviso by something over 300 pages;

18

(b) That the second proviso affects only fish taken within the Newfoundland 3-mile limit; 19

(c) That the second proviso does not authorize the preparing or preserving of fish on land, but only on board ship; 20

(d) That the expression "shore station" has no meaning in the fishing industry vocabulary; 21

(e) That the expression "prepared or preserved," as used in the second proviso, was not intended to include freezing.22

It would serve no useful purpose to reproduce here the historical and legal data bearing on this question and set out at some length in our original memorandum on file with the Commissioner of Customs.23 This is particularly true because the legal and historical answer to the Senator's argument is set forth conclusively and with admirable brevity in the above-mentioned letter of Acting Secretary of the Treasury Bell, dated February 12, 1940, to the chairman of the House Ways and Means Committee.24

With respect to the employment of Newfoundlanders and other aliens in the American fisheries, it cannot be too strongly emphasized that it has been continuous throughout the history of this country, and that it has never prevented the duty-free entry to this country of the products of the American fisheries employing them. Furthermore, the volume of that employment has always been sub

16 Ex-Senator Hastings stated that he represented other factors in the industry in addition to Booth Fisheries Corporation (Rec., p. 41), but he did not identify them either in his oral argument or in the brief he filed. 17 Hast. Br., p. 13.

18 19 U. S. C. A. 387 (sec. 1001, par. 720); 19 U. S. C. A. 692 (sec. 1201, par. 1730 [a]). 19 Hast. Br., pp. 11-13.

20 Hast. Br., pp. 13, 24-29. This position seems to have struck even the writers of the brief as pretty dubious, for, at page 26, in the course of their discussion on the point, they include a statement to the effect that the Treaty of 1818 "was probably [intended] to grant a right to land on the shore and dry and cure fish." Apparently unhappy over this admission, they take some of the curse off it by immediately adding: "It is not necessary to say this but we understand that such has long been the accepted meaning of this part of the Convention."

21 Hast. Br., p. 14.

22 Hast. Br., pp. 37-40.

23 G. S. C. Memo., pp. 40-118. Copies were furnished promptly, within the limits of the available supply, to all interested parties who requested them from General Seafoods Corporation; no requests were received from any of the protestants prior to the hearing.

24 Published in 86 Congressional Record 2237 (No. 29, February 13, 1940).

stantial. In the days when there was a large American fleet on the Grand Banks taking, salting, and curing cod in the summer and taking and freezing herring in the winter, it was not uncommon for schooners to sail from Gloucester with skeleton crews and stop in Nova Scotia and Newfoundland to pick up the bulk of their fishermen. The Newfoundlanders themselves believed that foreign crews were so important to the American fishing fleet that inability to use them would cripple the fleet. Hence, when the Newfoundlanders sought, despite the treaty of 1818, to keep the American fleet out of the Newfoundland coastal waters, one of the contentions they raised was that, under that treaty, American vessels could not fish there unless all of the members of their crews were inhabitants of the United States. That specific question was question two in the Hague arbitration, decided in 1910. The award made it plain that aliens could be so employed without endangering the rights of the American fishing fleet under the treaty.25

While the American fishing fleet no longer takes any substantial quantity of fish on the Grand Banks or prepares or preserves the same ashore along the treaty coast, some idea of the high proportion of Newfoundlanders employed by the American fishery in the old salt-fish days may be inferred from the proportion of aliens employed in recent years in treaty-coast operations by American fisheries, which operations, although greatly diminished, still persist. The United States Tariff Commission made an examination in 1933 which showed that there were then a few American vessels operating on the treaty coast and catching fish which were dressed, split, and preserved at shore stations on the mainland. Two vessels were used in these fisheries, their total complement of crew carried from the United States being 16 men. At 1 fishery there were 15 shore stations employing 30 treaty-coast inhabitants. In both fisheries, the fish were taken primarily with small boats owned by treaty-coast inhabitants. The total number of these small foreign craft was 135, and the total complement of men, all of whom were treaty-coast inhabitants, was 270. In the 1933, operation, therefore, the proportion of United States residents (of whom a substantial proportion probably were not citizens) to treaty-coast inhabitants (none of whom were citizens of the United States) was 16 to 300.26 There is nothing to indicate that the 1933 operation differed in its essential elements from the summer fishery that had been conducted by American vessels on the treaty coast for 150 years, although it was, of course, minute in size compared to the operation conducted there up to the end of the last war.

The winter herring-fishing industry has not been conducted for many years; but, so long as cod and other ground fish were taken by hook and line, millions of pounds of herring were caught annually on the treaty coast by the American fishery and frozen on shore. The frozen herring were always admitted to the United States free of duty. The smaller fish were used for bait and the larger for food.

IV. CONCLUSION

Treasury Decision 49682, as was pointed out by Acting Secretary of the Treasury Bell in his above-mentioned letter of February 12, 1940,27 involves nothing new. It merely puts into article 489 of the Customs Regulations in express form the words necessary to make it entirely consistent with the language used by Congress in paragraph 1730 (a) of the Tariff Act of 1930, taking that language, as Congress must have used it, in the full light of the history of the North Atlantic fishery, an enterprise that was nearly 300 years old when Congress passed its first tariff act.28

Congress has never yet denied to United States citizens who were willing to devote American fishing vessels and other capital to the fishing industry the -benefit of the extraterritorial rights secured by the treaty of 1818, which rights Congress could, of course, immediately and utterly destroy by placing a duty on fish prepared or preserved on the treaty coast. On the contrary, Congress has consistently assured the duty-free entry of such fish, and it is certain that Congress will not lightly reverse that ancient policy. It is submitted that the Treasury Department, unless and until Congress expressly and unequivacally takes that radical step, should continue to give effect to a Congressional intent that has not altered in 150 years.

25 North Atlantic Coast Fisheries Arbitration (Government Printing Office, Washington, 1912), vol. 1, pp. 88-89. For the strenuous and conclusive argument of the United States in favor of the employment of foreigners, see vol. 6, pp. 45-53, and vol. 8, pp. 87-96.

26 United States Tariff Commission Report to the United States Senate on Employment of Nonresident Fishermen in the United States Fisheries (Government Printing Office, Washington, 1935), report No. 99, second series, pp. 13-15. It will be noted that this report makes frequent use of the expression "shore station" to designate the facilities employed on shore for preparing or preserving the catch. 27 Published in 86 Congressional Record 2237 (No. 29, February 13, 1940).