from their natural state by cleaving,
splitting, cutting, or other process, whether in their natural form or
broken, and bort; any of the foregoing not set, and diamond dust, 10 per
centum ad valorem; pearls and parts thereof, drilled or undrilled, but
not set or strung; diamonds, coral, rubies, cameos, and other precious
stones and semi-precious stones, cut but not set, and suitable for use
in the manufacture of jewelry, 20 per centum ad valorem; imitation
precious stones, including pearls and parts thereof, for use in the
manufacture of jewelry, doublets, artificial, or so-called synthetic or
reconstructed, pearls and parts thereof, rubies, or other precious
stones, 20 per centum ad valorem."

It will be noticed that the chief changes over the previous law are
first that which imposes a 10% duty on rough precious stones, which were
formerly free of duty, and second the advance in the duty on cut
diamonds and other cut stones from the former 10% to the present 20%.

This increase in the tariff was regarded as unwise by many conservative
importers, as the temptation to defraud the government is made much
greater than before. The change was even feared by honest dealers who
were afraid that they could not successfully compete with dishonest
importers who might smuggle gems into the country. In spite of a rather
determined opposition the change was made and our most representative
dealers have been making the best of the situation and have been doing
all that they could to help prevent smuggling or at least reduce it to a
minimum. Through their knowledge of the movements of diamond stocks and
of prices they are able to detect any unduly large supply or any
unwarranted lowness of price and thus to assist the government agents by
directing investigation towards any dealer who seems to be enjoying
immunity from the tariff.

The question of the status of Japanese cultured pearls has been settled
as follows. Paragraph 357 (quoted above) is ruled to cover them and they
are thus subject to a 20% ad valorem tax.

Carbonadoes--miners' diamonds--are free of duty, under paragraph 474.
Crude minerals are also free of duty, paragraph 549. Paragraph 607
declares "Specimens of natural history and mineralogy" are free.

In case the owner is not prepared to pay the tax on imported merchandise
the government holds the goods for a period of three years pending such
payments.

In case an importer shows that imported merchandise was pu