Part 66

In the Collector’s office at the Customs House, the broker’s estimates of value and duty are reviewed for any errors. Then the invoice is transmitted to the appraiser’s office, where it is assigned to the expert who will examine this particular merchandise.

The Collector notifies the Customs inspector at the pier that he is to send a 10 per cent sampling of the imported merchandise to the Appraiser’s Stores to be physically examined by the specialist in that field. The specialist examines the samples of merchandise to see that they are correctly identified by the importer. Then he determines whether the broker’s estimates of value and duty are correct.

If the broker entered the merchandise at $100 a unit and the examiner believes that the appraised value should be $125 a unit, then the examiner makes the change. His report is then forwarded to the office of the Collector for final action, and normally the Collector accepts the examiner’s judgment.

The Collector then notifies the broker or the importer of the action that has been taken. The importer and broker may accept the ruling or they may take issue. If they disagree, they may appeal to the United States Customs Court. If either the importer or the government is dissatisfied with the lower court’s decision, an appeal may be taken to the U.S. Court of Customs and Patent Appeals. Usually the decision of the Appeals Court is accepted as being final, but either of the parties may carry the appeal further, to the Supreme Court.

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It seems odd that piracy should be a concern of Customs in the 1960s, as it was in the days of Jean and Pierre Laffite. But piracy still exists in modern dress and is a troublesome problem. The only practical difference between the modern pirates and the cutlass-carrying freebooters of the past is that the pirates’ methods have changed.

There was the case that might be called “The Pirates of Taiwan”--a case which created an incident of international embarrassment between the governments of the United States and Formosa (Taiwan) and a potential threat to the U.S. book publishing industry.

The “pirates” of Taiwan were the owners of small printing shops who engaged in the business of publishing--without the consent of the authors or the original publishers--almost every book of any merit printed in the English language.

With fantastically cheap labor, cheap paper, and a photo-offset printing process, the publishers in Taiwan reproduced such extensive works as the Encyclopaedia Britannica, dictionaries, sets of medical and scientific works, volumes of the classics, standard reference books, best-selling novels and popular non-fiction. The books were carbon copies of the originals, even to the U.S. copyright numbers and the phrase “Manufactured in the United States.” Nothing was changed in the pirating process, not even the typographical errors. From a casual examination, there was nothing to indicate that the books had not been published in Philadelphia, Boston, or New York.

The pirating problem became acute in 1959 when the Chinese publishers arranged contacts with sales agents in the United States, men and women usually located on or near a campus of a university or college. These agents solicited orders primarily from professors and teachers, librarians, researchers, and students. A standard set of the Encyclopaedia Britannica--normally costing about $400--was offered for less than $50. The $35 Columbia Encyclopedia was listed at $7.13. Gray’s Anatomy, a standard work for all medical students and normally costing $17.50, could be purchased for $2.50. Allen Drury’s best-selling novel of political life in Washington, Advise and Consent, cost $5.75 in American bookstores--but was advertised by the Chinese publishers at $1.25.

In some instances, the Chinese publishers obtained lists of likely customers and solicited them by mail. The prospects usually were men, women and organizations with modest incomes who were forced to operate on a very limited budget. And here they were being offered the opportunity to obtain expensive volumes of literary works--which they had long dreamed of owning--for only a fraction of the price being charged throughout the United States.

The books were shipped from Taiwan in individual packages. Even when the packages were opened for inspection by a Customs examiner, there was nothing to arouse suspicion of any irregularity. The first hint which Customs had of fraud was when a complaint was lodged in 1959 by the American Book Publishers Council and the American Textbook Publishers Institute.

The book publishers appealed for help to the State Department, the Customs Bureau, Congress and even to the White House. The sales of pirated books in the United States had become a multi-million-dollar business which threatened to destroy the American book market.

In theory, at least, the publishers could have protected themselves from the sales of pirated books in the United States by registering each title with the Customs Bureau and paying a fee of $75. The registration would have banned any import of a similar title without the publisher’s consent.

Such a procedure would have been prohibitive in its cost because each title produced is regarded by law as a different product. A single publisher might well have had to register as many as 2,000 titles annually to obtain total protection--at a cost of more than $150,000 in fees and incidental expenses. This cost would have been in addition to the $300,000 paid to copyright the works, at $150 per title.

When Customs agents opened an investigation they discovered that in the first half of February, 1960, sales of pirated books at Iowa State University alone totalled more than $1,200. It was obvious that American publishers and authors were literally being robbed of millions of dollars. Not only were the books being mailed to the United States in large quantities, but a great many sales were being made on Formosa to military personnel, to students, and to tourists who could not pass up such a bargain in literature.

Action was taken by Customs to halt the importation of the books through seizure at the ports of entry. Then the U.S. Ambassador to Nationalist China, Everett F. Drumright, took up the problem with Foreign Minister S. K. Huang in Taipei, seeking a ban on the export of the books.

The problem was not one presenting an easy solution because the laws of Taiwan technically tolerated such piracy. Many members of Chiang Kai-shek’s government were not entirely sympathetic to shutting off this lucrative trade which brought dollars into the treasury. There was the fact, too, that lack of any copyright agreement gave Chinese students access to cheap editions of technical books and famous works of literature.

However, an arrangement was worked out on the diplomatic level for a ban on the wholesale export of pirated books from Taiwan. The American publishers agreed to make available certain of their works to Chinese students. This agreement brought a halt to much of the illicit traffic, but the problem of pirated books continues to be troublesome.

Competition for world trade has also brought some sharp practices in which foreign manufacturers copy American-made automobile parts, tools, and other merchandise and then ship them into the United States. The articles are identical in appearance to the American-made product down to such small details as the American manufacturer’s registered trademark. But the price--and quality--are far below the American level.

The piracy in the field of trademarks is a continuing problem for Customs. There are approximately 5,000 trademarks registered with the Customs Bureau, including those registered by foreign firms. And each manufacturer guards his trademark jealously.

Many foreign trademark owners, for the protection of their representatives in this country, will not permit more than one of their trademarked articles to be imported into the United States by a tourist. Many tourists will go abroad and purchase an unusual bargain in a camera, perfume or some other item. They are dismayed when they return to this country to find that Customs will not permit them to keep more than one of the articles.

In these cases, Customs is following the letter of the law in preventing more than one article from being imported bearing the restricted trademark. It is only the trademark which Customs is interested in protecting. If the importer of the articles should obliterate or remove the trademark from the items he is carrying, Customs inspectors would have no objections to allowing them into the country.

The trademark prohibitions sometimes create unique problems. One of these developed when a Mexican cattle raiser shipped a herd of cattle to the Mexican border and was preparing to bring them into the United States at Nogales, Arizona. Before the cattle could cross the border an American cattle raiser rushed to Nogales and demanded that Customs halt the importation of the Mexican cattle. He argued that he was the owner of the cattle brand seared into the hides of the Mexican cattle and that any importation bearing this brand would be a violation of the trademark laws.

An investigation by Customs officers revealed that the American cattle owner was entirely correct. By chance, the Mexican cattle raiser had the same cattle brand as the American rancher. The American’s cattle brand was registered with the Customs Bureau, and his cattle brand was entitled to the same protection given to the trademarks of manufacturers. Eventually, the protesting American and the baffled Mexican got together and the American gave his consent for the importation of the cattle.

One section of the trademark law prohibits the importation of any articles which are marked in a manner to indicate a false country of origin. It also bans imports which are marked with false descriptions. To enforce this section of the law, Customs officers must police millions of imports to weed out the products of foreign manufacturers who engage in some shady and sharp practices.

In recent months there arrived from Japan a large shipment of boys’ baseball bats which were boldly marked with large letters burned into the wood, “American Model.” At the end of the bat in extremely small letters was stamped the word “Japan.” The Customs Service felt that the purchaser of these bats could only assume, by looking at them and seeing “American Model” in large letters, that they had been made in the United States. It ruled that before the bats could be entered, the word “Japan” would have to be stamped onto the bats in close proximity to the words “American Model,” to remove the taint of deception.

Another manufacturer shipped into the country flatware made of iron with a chrome plating. It was marked with the word “stainless,” implying that it was stainless steel. The courts and the Federal Trade Commission have held that the world “stainless,” when used in describing manufactured articles, has a very specific meaning: that the product has a great deal of resistance to normal corrosive elements and to wear and tear that other metals normally do not have. And to describe an article as stainless steel, it must be an alloy of steel mixed with chromium in approved percentages.