Marking Time: US Watch Movement Import Codes of 1936

Discussion in 'Wrist Watches' started by tick talk, Apr 25, 2020.

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  1. tick talk

    tick talk Registered User

    Sep 16, 2008
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    The mention of “US import codes” surely brings to mind the 3-letter inscriptions found on balance bridges (cocks) of vintage wrist and pocket watches for most vintage watch enthusiasts. Having recently gone down the rabbit hole of researching the code VXC, I was mildly surprised by the variety of opinions and paucity of facts on the origin and meaning of these ubiquitous marks. Permit me to share what Mr. Google and I found after a few days of collaboration.

    A overview of these markings can be found in the War Changes in Industry Report No. 20; Watches, published by the US Tariff Commission in 1947. This series of reports was commissioned to assess the status of key domestic industries and the probable effects of postwar foreign trade and competition.

    The report begins its review of the measures implemented for marking imported watch movements in the United States with the Tariff Act of 1930, also known as the Smoot-Hawley Tariff Act after its sponsors. This act required that movements be “indelibly stamped” with the country of manufacture, name of manufacturer or importer/assembler, number of jewels, and if “unadjusted”. This act did not create the import codes, however.

    The report leaps ahead to 1936, when a reciprocal trade agreement with Switzerland came into effect. This agreement saw the reduction of several tariffs applied to Swiss watches. In a declaration annexed to this agreement, the Swiss government agreed to mandate and supervise the marking of watches and movements exported to the United States to identify the importer. Here was the birth of the 3-letter codes!

    It takes further digging to understand what happened between the Tariff Act of 1930 and the Switzerland Trade Agreement of 1936 to make such marks necessary. The duties imposed by the Tariff Act created an unintended but understandable increase in smuggling of watches and parts. Although numerous, customs seizures did not mitigate the problem. US law required that seized property be sold at public auction, so the watches entered the domestic market regardless, to the detriment of both US and Swiss manufacturers.

    At first, the watch importers voluntarily accepted limited regulation under the 1934 Code of Fair Competition for the Assembled Watch Industry, which included identifying marks on movements (unspecified but likely those already mandated by Smoot-Hawley). The watch assembly industry developed in response to tariffs on complete watches and was comprised of companies which brought in watch movements at more favourable rates to be cased-up domestically for sale as complete watches. Their representative was the American Watch Assemblers’ Association, headquartered in New York City.

    This did not seem to have the desired effect and the US government was set to respond with formal legislation. The Watch-Smuggling Act was drafted as bill H. R. 9071 to deal with large scale criminal traffic in watches, watch movements, and parts. Under section 2 of this Act, watches would be required to have a “mark or symbol” assigned by the Treasury, identifying the licensed importer.

    The House Ways and Means Committee recommended passage of the bill in a report dated 9 August 1935, offering the following endorsement:
    These provisions will permit legitimate imports to be distinguished in the trade and by Government agents from watches, etc., that have been smuggled into the country, and will thus result in denying to smuggled watches, etc., access to legitimate channels of trade within this country which they now enjoy.

    While the Swiss government, through their industry representative the Chambre suisse de l’horlogerie, supported the marking requirements of the draft bill, they were concerned about other aspects. The American Watch Assemblers’ Association, representing about 100 firms with strong business and family ties to Swiss watch manufacturing, had, at Senate hearings into the Watch-Smuggling Act, strongly objected to its proposed administrative system of import licensing as being both ineffective and inefficient.

    Swiss representatives instead proposed their own system of control over the exportation of watches and watch movements. The Swiss originally suggested marking watches and movements with exporters’ symbols, however, the US responded in favour of identifying importers. The Swiss were ready to accept with one proviso. In a memorandum dated 22 October 1935, the US State Department Division of Trade Agreements reviewed the negotiations and observed; “…the Swiss would make their plan conditional upon our guarantee that the Watch Smuggling Bill would not be enacted into law.”

    Applying those provisions would, instead, occur within the 1936 trade agreement when this clause which came into effect on 1 May 1936:
    3. Watches and watch movements exported from Switzerland to the United States shall be permanently marked with a distinguishing mark distinct for each importer in the United States. Current lists of such marks, and the names and addresses of the persons to whom allocated, shall be furnished by the Swiss Government to the American Legation at Bern.

    This agreement apparently had the desired effect on smuggling, as described in the 1937 Annual Report of the Secretary of the Treasury:
    In distinct contrast to recent years, no substantial seizures of smuggled watch movements were made. This is attributable to the efficiency of the system of marking watches instituted by the Swiss Government authorities in connection with the reciprocal trade agreement with that country…

    The 1947 War Changes in Industry Report No. 20 identified “the Swiss Watch Chamber” (la Chambre suisse de l’horlogerie) as the organization designated by the Swiss Government to assign importers’ symbols and subsequently register them with the United States Treasury.

    The report also commented on the treatment of Swiss watches imported from third countries (which also explains the dubious quality of some of the marks found on otherwise genuine watches):
    Customs authorities permit importers to make the necessary markings on watch movements in the custom-houses. The methods of engraving generally employed by importers on such occasions result in many movements being damaged in the marking process. Small particles of metal often get into the movement; and often balance staffs and winding stems are broken.

    Ranfft’s website lists 348 US import codes, drawn from Kathleen Pritchard’s Swiss Timepiece Makers 1775 to 1975. Pritchard appears to have developed her list, at least partially, from observations of individual watches as often only the brand is listed, which led to early assumptions these were manufacturer’s codes.

    The number of codes would have accumulated over time as new companies entered the business. VXC, unlisted by Ranfft, can be found on some Vacheron & Constantin timepieces before 1938 when Edmond E. Robert of New York was their American agent and importer. I’m sure there are others; OXW on Omega, for example. The same importer may also have handled brands from several different manufacturers and their code would have been applied to all, such as HOX on Patek Philippe and IWC.

    As to when the requirement for import codes on watch movements ended; I have no definitive answer but can relate the following chronology. In 1954, President Eisenhower triggered the escape clause of the 1936 Trade Agreement and raised tariff rates on Swiss watches, citing injury to the domestic watch industry. Lyndon Johnson reapplied the previous lower rates in 1967 when it was found that import relief did not stop the decline of domestic watch production. Johnson’s proclamation also removed the escape clause so that future amendments would require bilateral negotiations. Additional trade concessions followed when watches became scheduled under the General Agreement on Tariffs and Trade, resulting in a 50% reduction in tariffs on imported watches by 1 January 1972.

    With the lack of domestic industry and reduction of tariffs, the purpose of import codes to counter smuggling would appear to have evaporated. Recalling that the agreement for import codes was an addendum and not integral to the 1936 Trade Agreement, there may exist a document which had the effect of cancelling the program, or maybe not. I am still looking…

    I hope this review answers most questions relating to the origin of US import codes for Swiss watch movements. I have been stymied in attempts to locate online copies of the original lists of importers, and their assigned codes, as provided by la Chambre suisse de l’horlogerie to the US Treasury Department. I would appreciate hearing from anyone who has knowledge.

    Tick Talk (c) 25 April 2020

    Smuggled Watch Sale 1934 copy.png
     
  2. 4thdimension

    4thdimension Registered User

    Oct 18, 2001
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    Great write up! The timeline fits with what I have noted servicing watches over the years- the mid-thirties onset of the codes to the decline in their use in the 60’s. I’m still unclear as to whether a code for say Benrus (AXA) would be used by multiple importers if that were the case? Another thing I’ve noticed over the years is that there are many watches, even those of very recognized brands, that have the company name and jewel count crudely scrawled on them. It is apparent this was hastily applied to satisfy some import requirement but it isn’t always easy to convince a customer of this. At any rate, you provided a terrific document which, I think, should be in the Bulletin. -Cort
     
  3. tick talk

    tick talk Registered User

    Sep 16, 2008
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    Thanks for your support, it was a fun project. The codes are unique to the importer, not the brand. If you reframed your question ever slightly to "a code for the importer of Benrus (AXA)" it may be clearer. Multiple brands may carry the same import code, but only if they were imported by the same company assigned that code.
     
  4. 4thdimension

    4thdimension Registered User

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    I see. So only one importer could contract to import a particular brand? And I suppose if that importer went bust and another importer began importing that brand then a different code would be used. -Cort
     

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