Cottman v. United States

CONCURRING OPINION

Lenroot, Judge:

I concur in the conclusion reached by the majority of the court and in all of the opinion except that portion relating to the cost of production of phosphate rock in Morocco. I agree that the record before us does not disclose proof of the statutory cost of production. Even assuming that there is sufficient evidence in the record from which an allowance for profit can be ascertained, in accordance with section 206 of the Antidumping Act of 1921, there is no evidence whatever in the record of the cost to the Government of Morocco, if any, of the phosphate rock nor of the amount of the general expenses incurred in producing it. I am therefore of the opinion that no cost of production, as required by the statute, is shown on the record.

However, as I construe the majority opinion, it holds that, even though the phosphate rock cost the Government of Morocco nothing, in such case the value of the rock must be included as an element of the cost of production; or, if not included, then there can be no cost of production found in accordance with section 206, supra.

The majority opinion states:

The Cherifien Government has taken possession of the rock phosphate mines of the country, declaring a governmental monopoly therein. Whether the lands and mines constituted a part of the public domain, or whether they were taken by the Goverment after payment to the owners thereof, does not appear. Certainly the product of these mines has a value, for it finds ready sale. The government, however, by its rights of sovereignty, and possessing the right of taxation with which it may maintain itself and acquire and hold these valuable deposits, claims that it should have the right to include these materials as costing nothing.
No individual could do business in this way. It is quite impossible to conceive of a situation where a private individual might obtain a monopolistic ownership and control of some natural product, without some expenditure of labor or money, which would constitute the cost, to him, of his product. When a government does this it does so because of sovereign power, its right to take private property, its maintenance of armies and executive establishments, its right to tax its people. No just comparison can be made between the cost of material to the individual, and to the government, in such cases. There was no cost of material shown by collective Exhibit 5, and this we hold must be done. If it be said that the cost of material is incapable of ascertainment under such conditions, then no cost of production can be shown, under this statute, because of the absence of this statutory element therein.

I can not agree that the foregoing is a correct statement of the law, and no authorities are cited to support it.

*363I am firmly of the opinion that if the phosphate rook in question before being mined costs the Government of Morocco nothing it does not form an element of the cost of production, and it is immaterial what its value was before being mined. Therefore, neither its value should be considered, nor should the fact that the phosphate rock costs the Government of Morocco nothing, if that were established, prevent a finding of its cost of production as provided by said section 206.

In my opinion, if the views of the majority above quoted be a correct statement of the law the flexible-tariff provisions embodied in section 336 of the Tariff Act of 1930, wherein the same phrase, “cost of materials,” is used, may be invoked to injure some industries in the United States, which would be directly contrary to the disclosed purposes of said Tariff Act of 1930.

Many governments of the world own and control materials exported to the United States which, in their raw or unmanufactured state, cost such governments nothing. Oil is an example; other commodities might be named. Assume that the Government of Morocco is the only foreign producer of phosphate rock; that such phosphate rock before being mined costs the Government of Morocco nothing, but that other statutory elements of costs of production amounted to $3 per ton; that the cost of producing phosphate rock in the United States, including all of the statutory elements, is $4.60 per ton, and that a tariff rate of $1 per ton is imposed by the tariff law upon phosphate rock. Under such a state of facts the phosphate rock imported from Morocco may entirely destroy the domestic industry. Thereupon an American producer makes application to the Tariff Commission for an investigation of the difference in cost of production of the domestic and foreign article with a view to securing an increase of 50 per centum in the tariff rate to equalize the difference in cost of production, such increase of 50 per centum bringing the rate to $1.50 per ton, which would equalize the difference in actual cost of production so that the American producer could compete with the imported phosphate rock. We will assume that the Tariff Commission finds that the actual cost of production in Morocco, excluding any allowance for cost of material, is $3 per ton, and that the domestic cost is $4.50 per ton. If the commission shall follow the rule declared in the majority opinion, hereinbefore quoted, it must find that no cost of production in Morocco can be ascertained without some allowance being made for the value of the material before being mined by the Government of Morocco. If such allowance be $1.50 or more per ton, then the American producer can receive no relief under the flexible tariff provisions of the tariff act; or, if the allowance be less than $1.50 per ton, said American producer will still be handicapped in competing with the Moroccan Government in our market by whatever allowance *364is made for the value of material. On the other hand, if the commission finds that no value of the material before mining can be ascertained, then, to follow the majority opinion herein, resort must be had to other provisions of said section 336, such as the weighted average of the invoice prices or values and/or the average wholesale selling price, which, if accepted by the commission as evidence of cost of production, would presumably result in a finding of a higher cost of production than would be found if the rule declared in the majority opinion had not been followed, which would operate to the injury of the American producer.

I have no doubt that Congress realized fully that the commission would at times find great difficulty in ascertaining the exact cost of production of an article or commodity, but I do not think that it could have intended that the phrase “cost of materials” should be so construed as to require that some amount be added therefor to the other statutory elements of cost of production when in fact the material cost the foreign producers nothing. It is clear to me that the rule laid down by the majority does add a new difficulty to those which inhere in the ascertainment of cost of production under said section 336 and that Congress never intended that resort should be had to the weighted average of invoice prices or values and/or the average wholesale selling price in any case where it is affirmatively shown that the material in question actually cost the foreign producers nothing and all of the other statutory elements of cost of production are readily ascertainable.

I have felt it necessary to dissent from the views of the majority with respect to the matters above stated for the reasons hereinbefore outlined. However, it is clear that appellant in this case has failed to make any showing with respect to the cost of the material to the foreign producer, if any, nor has he shown other statutory elements of cost of production, as hereinbefore discussed. Accordingly, on such a record the discussion in the majority opinion as to the absolute necessity for adding some amount as the cost of material, even though the material has actually cost the foreign producers nothing, is, in my opinion, obiter.