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Washington, September 19, 1908.


SIR: Reading together in their proper order the several statements submitted by you, the following appear to be the facts upon which an opinion is sought:

First. Blending flour consists in selecting the kinds, qualities, and quantities of flours necessary to make the required blend, and in thoroughly mixing and aerating the same, which is purely a mechanical process and involves no chemical action.

Second. This is done by machinery especially manufactured for that purpose, and the labor is principally unskilled, but is performed under the direction of a skilled miller.

Third. Blended flours have different qualities and characteristics from and are better adapted to the uses for which intended than flours not blended. Their qualities and characteristics are the mean between the corresponding qualities and characteristics of the flours unblended. They remain wheat flour, having the same uses as unblended flours, but being better adapted to sound preservation for those uses in tropical climates.

Fourth. The blended flour produced by the Copeland-Raymond Company, to whom the drawback in question has been allowed, is produced from Manitoba hard spring wheat, containing a high percentage of gluten, blended with domestic flour of medium strength, of a high color and great keeping qualities, thus producing a flour having the proper proportion of gluten to obtain the best results in bread making and also superior keeping qualities, which are necessary for flour used in warm climates. It differs from the imported flour used in the blending, in color, texture, and keeping qualities, and in the quantity and quality of the gluten contained therein.

Fifth. The proportion of the imported flour used varies from 33 to 45 per cent, according to the varying requirements of the seasons and climatic conditions.

Sixth. The cost of blending is about 24 per cent of the value of the blended flour, which is exclusive of the packages in which the same is exported.

Seventh. Blended flours have a distinct commercial designation in the markets of this country, the imported flour being known in the trade and commerce of this country as spring-wheat flour, and the flour produced by blending being known and sold in the market as blended flour; but this term is applied commercially to all flour to the ultimate production of which spring and winter wheat, wherever grown, have contributed, whether through the blending of flours or through the blending of the grain prior to its manufacture into flour. The question for consideration is whether the Copeland-Raymond Company, when exporting the blended flour above described, is entitled to a drawback on the imported flour used in producing said


blended flour under section 30 of the tariff act of 1897, which reads as follows:

That where imported materials, on which duties have been paid, are used in the manufacture of articles manufactured or produced in the United States, there shall be allowed on the exportation of such articles a drawback equal in amount to the duties paid on the materials used, less one per centum of such duties

the only question now presented being whether or not the imported flour upon which a drawback is being allowed is used in the "manufacture" of an article "manufactured or produced in the United States," within the meaning of said act.

Numerous authorities have been called to my attention by those interested in the determination of this question, of which the following are the most important:

In Hartranft v. Wiegmann (121 U. S., 609), decided in 1887, the Supreme Court held that shells cleaned by acid and then ground on an emery wheel, and some of them afterwards etched by acid, and all intended to be sold for ornaments, as shells, were not dutiable at 35 per cent ad valorem as "manufactures of shells," but were exempt from duty as "shells of every description not manufactured." Congress, however, does not appear to have taken the view that such a treatment of shells was not a manufacture, as in paragraph 450 of the tariff act of 1897 it was provided that "shells engraved, cut, ornamented, or otherwise manufactured," should be assessed 35 per cent ad valorem, thus clearly indicating that engraving, cutting, and ornamenting shells is a manufacture within the meaning of that


In Dejonge v. Magone (159 U. S., 562) it was held that papers coated, colored, and embossed to imitate leather, and papers coated with flock, to imitate velvet, were not "manufactures of paper, or of which paper is a component material." This decision, however, turned very largely on what the court understood, from the classification of the several varieties of paper and the well-known signification of the word "paper" in commerce, Congress had in mind when the act was passed. This is apparent from the following language of the court:

But it is established by the evidence beyond dispute that at the time of the passage of the tariff act of 1883 "fancy papers" were largely dealt in in commerce and were well known in the commerce and trade of this country; that there were a great variety of fancy papers, and that such designation covered both the importations out of which this controversy arose. It is not reasonable to suppose that Congress assumed that the manipulation or treatment of particular paper in the completed condition in which produced at a paper mill, by mere surface coating, a process which did not change its form, but only increased the uses to which such paper might be put, had the result to cause the article to cease to be paper and to become a manufacture of paper, especially in view of the continued commercial designation of the article as a variety of paper and its sale and purchase in commerce as paper.

In Tidewater Oil Co. v. United States (171 U. S., 210) the facts. were that box shooks had been manufactured in Canada by planing boards and cutting them into required lengths and widths for making into boxes without further labor than nailing them together. They were then tied into bundles and imported and made into boxes or cases by nailing the proper parts together with nails manufactured in the United States out of imported steel rods. The drawback was claimed under section 3019, Revised Statutes, which provided thatThere shall be allowed on all articles wholly manufactured of materials imported on which duties have been paid when exported a drawback, etc.

The court interpolated the words "in the United States" after the word "manufactured," making it read:

There shall be allowed on all articles wholly manufactured in the United States of materials imported, etc.

and held that the putting together of the shooks by fitting, nailing, and trimming them was not an entire manufacture, and that consequently the boxes were not "wholly manufactured" within the United States required by the statute. The opinion in this case is an interesting one, and in the discussion of the general subject of what processes constitute a manufacture throws some light upon the question under consideration.

In United States v. Dudley (174 U. S., 670) the question was whether boards dressed on one side and tongued and grooved should be assessed with a tax of 25 per cent ad valorem as "manufactures of wood or of which wood is the component material of chief value," or be exempt as "sawed boards, plank, deals, and other lumber, rough or dressed." The court held that the boards were dressed lumber and not manufactures of lumber within the meaning of that provision.

The case of Anheuser-Busch Brewing Company Association v. United States (207 U. S., 556) is much relied on by those who oppose the drawback. In that case it appeared that the company had imported corks and had subjected them to a special and rather elaborate treatment, as a result of which they would not permit the escape of gas from the bottled beer or impart thereto the cork flavor. It was insisted by the company that when it shipped bottled beer corked with these corks it was entitled under the statute now in question to a drawback thereon. The court disallowed the claim, holding incidentally that the corks were not manufactured after their importation, but mainly resting the case on the opinion of the court in the case of Joseph Schlitz Brewing Company v. United States (181 U. S., 584), in which it was held that bottles and corks in which beer is bottled and exported for sale are not imported materials used in the manufacture' of such beer within the meaning of the drawback provisions of the customs revenue laws, although the beer be bottled and corked and subsequently heated for its better preservation." the opinion in the Schlitz case the court said:


The fact that the beer must be steamed after bottling to a point necessary to kill the germs of yeast, and for that purpose must be inclosed in some vessel to prevent the escape of the carbonic acid gas, only shows that the beer is bottled before it is finally manufactured and ready for the market. This process certainly does not convert a bottle from an incasement into an ingredient. In this particular beer does not materially differ from a hundred other articles which require to be incased for their proper preservation. Thus, champagne and other sparkling wines must be bottled while yet effervescing or they will lose the twang which gives them their principal value. The same remark may be made of Apollinaris and other effervescing water, though not manufactured, and of certain canned fruits and vegetables which are required to be incased while hot and still in the process of preservation.

This reasoning was equally conclusive of both the Schlitz and the Anheuser-Busch cases; and the opinion of the court in the latter case contains no intimation as to what the result would have been had the claimant imported corks and united them with other varieties of corks, if such a process were possible, and subjected the corks thus made to special treatment fitting them for certain uses, and had then exported the corks thus produced as corks and not as beer.

state of facts would have presented a case something similar to the question now under consideration; and it must be conceded that there is little in common between the facts in the Anheuser-Busch case and the facts here presented.

In The Brooklyn Cooperage Company v. City of New Orleans et al. (47 La. Ann., 1314) it was held that the putting together, by means of machinery, of staves, hoops, and heads, thus forming a barrel, does not constitute a manufacture of an article of wood. This case is similar in its facts to that of Tide Water Oil Company v. United States, supra, wherein it was held that the nailing of shooks together in the form of a box is not a whole manufacture of the box.

In The People ex rel. v. Roberts (145 N. Y., 375) the relator claimed that it was exempt from taxation because it was a manufacturing corporation. It appeared that the company took tea in the original state and mixed together various kinds, thus producing a compound which was called "combination tea, " and that it took coffee in the raw bean and roasted and ground it, and in some instances different kinds of coffee were mixed together, forming, as in the case of tea, a combination article. The court held that the handling of tea and coffee in that manner was not a manufacture in any legal sense, and that the relator was not a manufacturing corporation. It is apparent that if the roasting and grinding of coffee, and thus putting it in shape for use, is not a manufacture, then the grinding of corn into corn meal or of wheat into flour is not a manufacture. In fact, the same may be said of lumber when cut from the logs. The material is subjected to only a mechanical process and still remains wood, but in a different form; yet it is conceded by all authorities that it is a manufacture to make lumber from logs.

This case of The People v. Roberts does not appear to have been uniformly followed, even in the State of New York, as in The People ex rel. Devoe v. Roberts (51 App. Div., 77, 1900) the mixing of paint was held to be a manufacture; and in The People ex rel. Waterman v. Morgan (48 App. Div., 393) it was held that the mere assembling and fitting together of gold pens and holders which were made by others and purchased by the Watermans and assembled by them was a manufacture entitling the corporation to exemption from taxation on its capital stock under the same statute.

In Murphy v. Arnson (96 U. S., 131) it was held that a substance which was obtained by the chemical action of benzole and nitric acid. upon each other and then refined and cleaned by distillation was a manufacture from these substances.

The material distinction between the facts in that case and those herein presented is, that in the process there involved there was chemical action, and the resulting article was wholly different from and in fact possessed none of the properties of either of the substances from which it was made. The word "blend" is hardly appropriate to describe the union between those two substances, as that word implies a mechanical mixture.

In Meyer v. United States (124 Fed., 296), District Judge Townsend held that hemstitched cotton lawns made by subjecting cotton cloth to the processes of turning over the edges, drawing certain threads, and other manipulation, but not appropriated by these processes to any particular ultimate use, were advanced beyond the

condition of "cotton cloth," and were dutiable as "manufactures of cotton."

The above-cited cases involve about all the principles which have been considered by the courts in determining what constitutes a manufacture.

In applying these decisions it must be kept in mind that each case presented a peculiar state of facts, and especially that those facts were applied to peculiar statutes, and that in no case did the court intend to lay down a general and inflexible definition of the word "manufacture," which should govern under all conditions and in all cases. For illustration, in United States v. Dudley, supra, the question was whether boards dressed on one side and tongued and grooved fell within the classification "manufactures of wood or of which wood is a component material of chief value" or "sawed boards, plank, deals, and other lumber, rough or dressed." Since dressed lumber was within the express terms of the second clause, such lumber could not be taken as a manufacture of wood within the meaning of the first clause; and the court held that merely tongueing and grooving the lumber, therefore, did not convert it into such a finished product as to constitute a manufacture of wood within the meaning of that statute, but that it still fell within the classification of dressed lumber. It is apparent that this decision furnishes no criterion as to what the court would hold were a case presented wherein rough lumber had been imported into the United States and had been dressed and tongued and grooved, and thus prepared for use as ceiling, flooring, and numberless other uses to which such lumber can be put, and by this means had been fitted for foreign markets, when otherwise it could not have been sold in such markets, and when exported a drawback had been demanded thereon. Or, an illustration more apt to the question under consideration: Suppose lumber be imported and then dressed and veneered with domestic walnut lumber, or by machinery dressed and joined with another class of common lumber, as is often done for the manufacture of doors and other articles, and as a result of such combination and alteration of the original materials the product can be sold in a foreign market, can it be doubted that Congress intended that a drawback should be allowed in such a case, or that such veneered lumber is a manufacture or product within the meaning of this statute, and could the case of United States v. Dudley be considered as an authority against such a view?

It is insisted that the principle that a governmental grant of a privilege or benefit, where doubt as to its meaning exists, is to be construed in favor of the Government, should be here applied. This principle has been repeatedly recognized by the United States Supreme Court: Hannibal, etc., Railroad Co. v. Packet Co. (125 U. S., 260, 271); United States v. Allen (163 U. S., 499, 504); Swan & Finch Co. v. United States (190 U. S., 143, 147); Cornell v. Coyne (192 U. S., 418, 431).

The cases of United States v. Allen, and Swan & Finch Co. v. United States, each involved a claim for a drawback; and in the first case it was held that the provision of the tariff act of 1883, whereby a drawback was allowed on imported coal used for fuel on vessels engaged in the coasting trade of the United States, was repealed by implication by the tariff act of 1890; and in the second case it was held that the placing on board a vessel bound for foreign ports,

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