reliquidation of January 3, 1907, was any longer effective to stay the running of the statute of limitations as to reliquidation. Section 21 of the act of June 24, 1874, reads as follows:

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Whenever duties upon any imported goods, wares and merchandise shall have been liquidated and paid, and such goods, wares and merchandise delivered to the owner, importer, agent or consignee, such statement of duties shall, after the expiration of one year from time of entry, in the absence of fraud, and in the absence of protest by the importer, owner, agent or consignee, be final and conclusive upon all parties.

In the case of United States v. Leng (18 Fed. Rep., 15) the words of this statute, "in the absence of protest," were construed to mean "the absence of any existing protest pending and in force at the expiration of the year or at the date of the proposed reliquidation; that is, a protest upon which proceedings are then pending, or which may serve as the basis of some future appeal to the Secretary, or of some suit in the courts."

In that case the first reliquidation had taken place and a subsequent reliquidation was attempted after the lapse of a year from the time, and it was said:

After the Secretary's first decision, and the reliquidation made under it, in accordance with the defendant's protest and appeal, no further protest or appeal, either to the Secretary or to the courts, was taken, or could be legally taken, by the defendant, because that decision had sustained all the defendant's claim as set forth in his protest; and by section 2931 that decision incontestably became "final and conclusive" upon him. The former protest was, therefore, wholly spent; so that at the expiration of the year from the date of entry, there was no protest which had any vitality, or which could by any possibility become the basis of any further proceedings. It had been completely disposed of by the Secretary's decision and order sustaining it, and by the reliquidation under that order, and the settlement and payment made in accordance with it.

The case of Kendall v. Lyman (161 Fed. Rep., 652) appears to be in conflict with this reasoning, but we think the case of United States v. Leng states the better rule. Referring to Kendall v. Lyman, the Circuit Court of Appeals for the Third Circuit, in Klumpp v. Thomas (162 Fed. Rep., 853), says:

Assuming, for argument's sake, that such statute applies where protests are filed, though the contrary has been held in Kendall v. Lyman (161 Fed. Rep., 652), it is clear to us that no limitation would run while a protest was pending and undecided. Statutes of limitation are statutes of repose, and are based on the likelihood that inaction for a protracted period would not occur unless a settlement had been made. But where litigation is going on, where the parties are using legal proceedings to effect a settlement, it would be at variance with the principles underlying limitations to hold that such statutes were then running. Hence the doctrine that the bringing of a suit suspends the running of a statute. "Fraud, or the pendency of a protest which tends to retard the proceeding, extends the time." United States v. Fox (D. C., 53 Fed. Rep., 536).

Applying this rule to the case in hand, there would be authority for saying that so long as the protest No. 5682 was in force the

statute of limitations would not run against the right to reliquidate. But when that became satisfied by the first reliquidation, if we should treat such reliquidation as an original settlement, there would be no authority for extending the time for nearly two years to permit of a second reliquidation

It follows that the decision of the Board of General Appraisers should be affirmed. It is so ordered.

UNITED STATES v. MEADOWS (No. 598).1

COMPONENT OF CHIEF VALUE IN COTTON AND LEATHER SLIPPERS.

The merchandise consisted of slippers made of cotton and leather, the parts of the slippers composed of each of the two materials being made separately for use in producing the completed article. In determining the component of chief value in merchandise of this kind inquiry will be made in each case as it presents itself to discover at what stage the several parts were completed for use in being put together as a completed whole; that stage will be "its condition as found in the article." Here the expense of sewing the pieces of cotton cloth together, in preparation for uniting them with the leather parts, enters into the value of the cotton so employed. According to the evidence cotton was the component of chief value in these slippers and they are dutiable under paragraph 324, tariff act of 1909.-Seeberger v. Hardy (150 U. S., 420).

United States Court of Customs Appeals, May 29, 1911.

APPEAL from Board of United States General Appraisers, G. A. 7168 (T. D. 31297). [Reversed.]

D. Frank Lloyd, Assistant Attorney General (Martin T. Baldwin on the brief), for the United States.

B. A. Levett for the appellee.

Before MONTGOMERY, SMITH, BARBER, DE VRIES, and MARTIN, Judges.

BARBER, Judge, delivered the opinion of the court:

The importation in this case consists of slippers composed of cotton and leather. They were assessed for duty at the rate of 50 per cent ad valorem under the provision for articles of wearing apparel of which cotton is the component material of chief value in paragraph 324 of the tariff act of August 5, 1909.

The appellees claim duty should have been taken at the rate of 10 per cent ad valorem under paragraph 450 of the same act as shoes in chief value of leather made from hides of cattle of the bovine species.

The United States does not claim that the provisions of paragraph 450 are inapplicable if it be held that paragraph 324 does not apply, and it is therefore only necessary to insert here paragraph 324 and that part of paragraph 481 which defines the words "com

Reported in T. D. 31665 (20 Treas. Dec., 1197).

ponent material of chief value" found in paragraph 324. They are as follows:

324. Clothing, ready-made, and articles of wearing apparel of every description, composed of cotton or other vegetable fiber, or of which cotton or other vegetable fiber is the component material of chief value, made up or manufactured, wholly or in part, by the tailor, seamstress, or manufacturer, and not otherwise provided for in this section, fifty per centum ad valorem. 481. *

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And the words "component material of chief value," wherever used in this section, shall be held to mean that component material which shall exceed in value any other single component material of the article; and the value of each component material shall be determined by the ascertained value of such material in its condition as found in the article.

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The only question in the case is whether the cotton or the leather of which these slippers are made is the component material of chief value.

The facts are undisputed and are as follows: The soles and heels of the slippers are made chiefly of leather from the hides of cattle of the bovine species, while the uppers are made of cotton. In the process of making the slippers the cotton cloth, which afterwards forms the uppers, is first cut to shape ready to be put into the slipper. It is conceded that the cost of this operation should be applied to the cotton. The leather composing the sole and heel undergoes cutting to shape and certain other minor operations to bring it into condition ready to be put into the slipper, and it is conceded that the cost of these operations should be applied to the leather. After the pieces of cloth have been cut to shape to form the uppers and before being united to the soles they are sewed together with cotton thread. To do this sewing, including the thread used therefor, costs 9 pence per dozen pairs, which, if added to the cost of the cotton composing the uppers, renders the cotton the component material of chief value. If it is not so added, the leather is the component material of chief value. Restated, and including the respective items of cost, the essential facts are as follows: The conceded value of the cotton in the slippers is 3 shillings and 11 pence per dozen pairs; the conceded value of the leather is 4 shillings and 7 pence per dozen pairs. If the 9 pence, which is the cost of the thread and work necessary to sew the uppers together, be considered as a part of the value of the cotton, then the cotton is the component material of chief value; otherwise not. The real question, therefore, is whether the 9 pence per dozen pairs is a part of the value of the cotton in its condition as found in the slippers or whether it is a part of the expense of manufacturing the slippers and so not be considered in determining the value of the cotton therein.

It is agreed that the cost of attaching the heel and sole to the upper is an expense incident to the manufacture of the slippers and applies to both the cotton and the leather. It is therefore to be disregarded in arriving at the value of the respective component materials of the slippers.

It appears from the record that upon the first consideration of this case the Board of General Appraisers unanimously sustained the protest and reversed the action of the collector. Thereafter a rehearing was granted upon the request of the United States, whereupon a majority of the board adhered to its previous decision, while a minority favored sustaining the collector's action. Able and exhaustive opinions, presenting fully the respective views of the majority and minority members of the board, are contained in the record.

The question involved is not entirely free from difficulty and is said to be of considerable importance in customs practice.

Both sides rely upon the case of Seeberger v. Hardy (150 U. S., 420) as authority, and we proceed to its consideration. The articles there involved were opera glasses composed of glass lenses in a metal frame with a covering of shell, and the question arose whether the component material of chief value was metal, shell, or glass, and therefore under which of the applicable paragraphs of the tariff act of March 3, 1883, they should be assessed for duty. The question before the Supreme Court involved the construction by it of the following clause, which by the provisions of the act of 1883 was made a part of Revised Statutes, section 2499:

SEC. 2499. *

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And on all articles manufactured from two or more materials the duty shall be assessed at the highest rates at which the component material of chief value may be chargeable. If two or more rates of duty should be applicable to any imported article, it shall be classified for duty under the highest of such

The court below had charged the jury that to determine the question as to which of these different materials-manufactures of metal, manufactures of shell, or manufactures of glass-was the component material of chief value, "they must ascertain what were their values at the time they were in such condition that nothing remained to be done upon them except putting them together to make the perfected glasses," and the correctness of this instruction was reviewed by the Supreme Court. We quote from the opinion in that case sufficiently to show the facts and the holding of the court:

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These cases turn upon the question of whether in estimating the value of the component materials of which a certain manufactured article is made, the value of the materials shall be taken in the raw and unmanufactured condition in which the manufacturer receives them, and before their respective values have been enhanced by work expended upon them, or in the condition that nothing remains to be done upon them by the manufacturer except putting them together to make the completed glass. * The manufacturer bought the metal in the shape of ingots, the shell in the natural form of mother-of-pearl, and the glasses in the rough state in which they leave the cast. In neither case did the defendant introduce any testimony. Nothing, therefore, appears in the record as to the value of the materials when purchased appropriate to each opera glass. It is evident that the question involved is one of considerable importance, as in some articles, the raw material is the main We think cost, and in others, the labor. that the value of the

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materials should be taken at the time they are put together to form the completed glass. There are grave difficulties in making the estimation at any other time. Whether, for instance, the shell shall be taken in its rough and uncleansed state as it comes from the animal, or after it has been cleaned and polished. Shall the glass be taken in its polished or unpolished state? Shall the value of the metal be taken immediately after it is smelted or in a more advanced state of manufacture? The position of the Government seems to be that the value of the component materials should be taken as they go into the hands of the manufacturer. But one manufacturer may buy them in their rough state, another in their polished state, and another in their final state, ready to be put together in the form of glass. The value of the raw material, as is shown in this case with respect to the shell and copper, may be subject to violent fluctuations. One manufacturer may have bought them at a high price, another at a low price, both being held a considerable time in stock. What price shall govern? Thus, in appraising the value of a piece of furniture made of wood and silk plush, it would be obviously inequitable to take the value of the lumber as it comes from the tree, and the silk from the worm or the spinner. The true rule would seem to be to take each of them as they go into the furniture.

In the opinion the Supreme Court also referred to the fact that in the act of 1890 Congress had provided that "the value of each component material shall be determined by the ascertained value of such material in its condition as found in the article," which it will be noted is identical in language with that part of paragraph 481 here under consideration, regarding which the court said in effect that this statutory provision was designed to settle the question that the labor put upon the raw material should be included in determining the value of the component material and that it "was merely declaratory of the law."

It will be observed that although the court in this case clearly declared that the value of the materials should be determined as of the time when they had reached such a condition that nothing remained to be done upon them by the manufacturer except putting them together, there still remains open in each case that may arise the determination of the question as to whether or not that stage has or has not been reached, and this is the precise issue here.

A similar question was passed upon in United States v. Hoeninghaus (137 Fed. Rep., 478). The Circuit Court of Appeals for the Second Circuit held that the cost of warping silk yarn, which was the last process to which the silk was subjected before weaving it with cotton filling to make cloth composed of silk and cotton, was a part of the value of the silk as a component material of the cloth. In its opinion the court there in substance said that it appeared in Seeberger v. Schlesinger (152 U. S., 581) that the shells which were a part of the shell opera glasses under consideration in Seeberger v. Hardy, supra, had been brought to the proper polish before they were united with the tubes that contained the lenses and which when united produced the opera glasses, and they likened the warping of the silk to the polishing of the shells as being in each case the last treatment or manipulation that the component material received to bring it to proper shape to form a part of the completed article.