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AD VALOREM DUTIES,

EXTRACT FROM MR. WEBSTER'S SPEECH ON THE TARIFF OF 1846.

IN SENATE, JULY 25.

Mr. President: I now proceed to that branch of possible. Standing here in his place Mr. Buchan the subject to which I propose first to call the at- an said :

tention of the Senate. The proposition of this “I am (said Mr. B.) not only opposed to any uni(bill is to collect all duties and customs by an uni- form scale of ad valorem, but to any and all ad valoversal ad valorem assessment—not an equal as- rem duties whatever, except where, from the nasessment, it is true, but still a system of ad valo- lure of the article imported, it is not possible to rem duties, entirely. Now that has not been the subject it to a specific duty. Our own severe expepractice of the Government, at any time since its rience has taught us a lesson on this subject which organization. In every administration, from that we ought not soon to forget. I cannot refrain from of Washington down, a contrary system has al- adverting to some of my reasons for this opinion. ways prevailed. And the desire of those who frauds upon the revenue, while it has driven the

"Our ad valorem system bas produced great (have successfully formed and administered the regular American merchant from the business of (laws in this respect, has been, uniformly, to car. importing, and placed it almost exclusively in the ry the principles of specific duties as far and as hands of the agents of British manufacturers. The fast as circumstances allowed. That I take to American importer produces his invoice to the col-?

have been the policy of the Government from lector, containing the actual price at which the im(the first; and it has been the sentiment of all ports were collected abroad, and he pays the fair connected with the Government, so far as I know. aud regular duty upon this invoice. Not so the I ought, perhaps, to make an exception in the voice, reduces the

price of the articles which he incase of Mr. Clay. I said here, the other day, that tends to import into our country to the lowest pos(I had never heard a public man advocate a system sible standard which he thinks will enable them to of ad valorem duties. The newspapers say (per- pass through the Custom-House without being seized haps correctly,) that I was mistaken; that Mr. for fraud. And the business has been hitherto manClay had made remarks favorable to that idea, aged with so much ingenuity as generally to es. in 1842. I was not in the Senate at that time, and cape detection. The consequence is, that the BritI did not know that such such sentiments had ish agent passes the goods of his employer through

the Custom-House, on the payment of a much lower ever been expressed by him; and if they are duty than the fair American merchant is compelled correctly reported, I am very sorry that such to pay. In this manner he is undersold in the marsentiments were expressed by him.

ket by the foreigner, and thus is driven from the Mr. CRITTENDEN here said, will the Senator competition, while the public revenue is fraudupardon me while I interrupt him for a moment, lently reduced. in order to offer an explanation : Mr. Clay's re

Again; ad valorem duties deprive the American marks had reference solely to home valuation.

manufacturer of nearly all the benefits of incidental Mr. WEBSTER proceeded. Ah! that explains protection where it is most required. When the

business of the country is depressed, as it is Sthe whole matter, and it is a great relief to my at present, and when the price of foreign articles mind. I am very much obliged to the honorable sinks to far less than their cost, your duty sinks in Senator. Mr. Clay's proposition, then, was, “ If the same proportion, and you are also deprived of) you will bring the article here, and value it here, revenue at the time when it is most needed. Sindependent of the foreign invoice, why then I “Our own experience, therefore, ought to have will take that system of valuation." Well, that convinced us that, whenever it is possible, from and this are wide as the Poles apart. That qual- the nature of the article, we ought to substitute speification of the principle makes it sensible, at the same upon the same articles, notwithstanding Sleast, and far less objectionable, as a revenue the constant fluctuations in prices. They afford å measure. A home valuation, by judges of our steady revenue to the country, and an equally own appointment here, is one thing; but a valu- steady incidental protection. When commodities Sation founded on foreign invoices and the state are usually sold by weight or by measure, you may ments of foreign costs, and on foreign oaths, is always subject them to a specific duty; and this another and quite a different thing. I am glad to ought always to be done. Stind, therefore, that Mr. Clay's authority stands

"Let us, then, abandon the idea of a uniform horexactly where it should stand on such a ques. duties be high or low, let us return to the ancient

izontal scale of ad valorem duties; and whether the tion as this in strict conformity with his know. practice of the Government. Let us adopt wise Sledge, his experience, and his character.

discriminations; and, whenever this can be done, Sir, in the same year, (1842) the present Secre- impose specific duties." tary of State, in a speech in the Senate, reasoned Now let me say, sir, that it is proper for us, be

in the strongest language upon the entire neces- fore we go on this new and untried system, to (sity, the absolute necessity, of carrying the prin- consider the opinions of practiced and experi. ciple of specification in laying duties as far as'enced men who have gone before us. On the

66

ors:

28th of February, 1817, the House of Represen- And here is the circular which, in consequence tatives, on motion of Mr. Ingham of Pennsylva- of that, Mr. Crawford addressed to the collectnia, came to this resolution: “February 28, 1817.

(Circular. 1 On motion by Mr. Ingham

“TREASURY DEPARTMENT, 25th May, 1818. Resolved, That the Secretary of the Treasury be SIR: As the revenue of the United States is now (directed to report to Congress, at the next session, exclusively derived from imports and tonnage, and such measures as may be necessary for the more from the sale of the public sands, it is extremely effectual execution of the laws for the collection of important to render both systems as perfect as the the duties on imported goods, wares and merchan- nature of human institutions will permit. dise.

The certainty with which SPECIFIC duties are colIn answer to this, Mr. Crawford, the then Sec- lected give them a decided advantage over duties {retary of the Treasury, after having recom- that the most important change which can be made in

laid upon the VALUE of the article. It is probable mended various new provisions for the preven- the system will be the substitution of SPECIFIC for ad) tion of fraud, said :

valorem duties upon all articles susceptible of that) “Whatever may be the reliance which ought to change. be placed in the efficacy of the foregoing provis

Sensible of the importance of this change, the Jions, it is certainly prudent to diminish, as far as House of Representatives, at the close of the last practicable, the lištof articles paying ad valorem du- session, adopted a resolution directing the SecretaSties.

ry of the Treasury to report, &c. “The best examination which circumstances In complying with this resolution, I must avail have permitted, has resulted in the conviction that myself of the experience which you have acquired (the following list of articles, now paying ad valo- in the discharge of your official duties. rem duties, may be subjected to specific duties." To place this Department, as well as the House Then follows the list, amounting to seventy: propriety of making the change upon such articles

of Representatives, in a situation to judge of the one in all. Here, then, in answer to the call of as you may suppose to be susceptible of it, I will the House, as to what measures ought to be thank you to present them in the form of the state. adopted by Congress for the greater security of ment annexed (not preserved to this communicathe public revenue, Mr. Crawford, at the end of tion, showing the original cost of the article, the a series of suggestions, amounting I think to expense of freight, commissions, and insurance, twenty-two, adds: “After all, the true course is the rate of ad valorem duty now paid, and its to go, as far as possible, on the line of specific du- amount in the form of a specific duty,

and the specifie! ties.” At the next session of Congress, having duty proposed to be laid upon it.

c. received the foregoing intimation of Mr. Craw

[Signed.]

WM. H. CRAWFORD. ford's opinion, Mr. Ingham moved another reso P. S. Is it practicable to subject cloths of wool, lution, as follows:

cotton, or flax, &c. &c. to specific duties, by com

“April, 20th, 1818. bining the number of threads, in a given extent, “On motion by Mr. Ingham

with the weight of the cloth? It is asserted by Resolved, That the Secretary of the Treasury be some of the English manufacturers to be entirely? Sdirected to report to Congress, at their next ses practicable by the aid of magnifying glasses conSsion what farther improvement it may be practica- structed for that object. ble to make in the tariff of duties upon imported

[Circular.] goods, wares, and merchandise, by charging spe TREASURY DEPARTMENT, Nov. 11th, 1817. cific duties upon articles which are now charged Sir: The House of Representatives having, by) with duties ad valorem.

resolution, required the Secretary of the Treasury TREASURY DEPARTMENT, Feb. 8th, 1819.

to refer to Congress, at the next session, such meaSir: In obedience to a resolution of the House of sures as may be necessary for the more effectual exRepresentatives of the 20th of April, 1818, directing "cution of the laws or the collection of the duties

the Secretary of the Treasury to report to Con- on goods, wares and merchandise, I have to regress at its next session what farther improvement quest that you will inform me whether, in the dis-> Sit may be practicable to make in the tariff duties charge of your official duties, any important des Supon imported goods, wares and merchandise, by fects

have been detected

in the existing provisions. charging specific duties upon articles which are

As it is is only by experience that any system of now charged with duties ad valorem,' I have the revenue can be brought to approximate to a state honor to submit the enclosed list of articles, exhibit- of perfection, it is important to collect into a gening the original cost, the freight, insurance and com- eral mass the practical experience of the intelligent missions, where it has been practicable; the present officers employed in superintending the immediate)

ad valorem duty reduced to a specific form; and execution of the system. Sthe specific duty which it is conceived may be im

You will therefore have the goodness, in pointing) posed upon them, respectively, consistent with the out existing defects,

to present to the Departmeni Spublic interest.

the provisions best calculated, in your opinion, tos It is probable that this list may be considerably effect the object contemplated by the National Legextended, should the subject receive no final dispo-islature. sition during the present session.

An early attention to this subject is requested. I have the honor to be

I am, respectfully, &c.
Your most obedient servant,

[Signed.] WM. H. CRAWFORD, &c.” WM. H. CRAWFORD. Now, sir, what is the great fact that makes ad The Hon. the Speaker of the H. of Reps." valorem duties unsafe as a general principle of fi.)

These articles amount to 155 in number. (See nance? I must confess my utter consternation, State Papers, Finance vol. 3, pages 415–16, &c.] the other day, when I heard the honorable chair

Following the suggestion in Mr. Crawford's man of the Committee of Finance (Mr. LEWIS) Sletter, that there might be a propriety in increas- say, that he did not believe that a case of fraudu. Sing the list of specific duties, this resolution of the lent under-valuation had ever been made out !-) House, as you sce, sir, calls for farther informa- Why it is the notoriety of a thousand such cases) tion, and expression of opinion, on that point.-- Joccurring every year in this Government, and in)

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all Governments where the system of ad valorem the habit of making importations of certain ar. duties in any degree prevails, and the value is ticles from the North. "In these articles they

ascertained upon the invoices or proof from found themselves constantly undersold by the abroad, it is the notoriety of a thousand such dealers in New York, They could not undercases of fraud that has led to the adoption of this stand the reason of this for a long time, but last) general rule, and raised it even into a principle, spring the secret came to light. They had oras I have mentioned. My honorable friend from dered a small amount of hardware to be sent to Maine (Mr. EvANS) must have satisfied the hon-them, and in due time the goods came, and two orable chairman and the Senate, as well as every invoices came with them. In one invoice the body else, of the number and the notoriety of the cost was stated at 958 thalers, in the other at 1,402. cases of fraudulent under-valuation, because he And the letter accompanying these invoices says: enumerated instances, and hundreds of instances, You find herewith duplicate invoices of the Sin which goods were seized and forfeited for un- greatest part of your order, &c. The original 1 der-valuation. I know no limit to that list of send by Havre packet. You also find herewith an >cases; and, sir, since this subject has come up, invoice made up in the manner like (that which] the and since persons out of doors have heard the most importers of your country require-perhaps to declaration of the honorable chairman, my desk save some duty.' Shas been laboring under the weight of cases and Now, sir, these original invoices, the false and facts communicated from various portions of the the true, and the original letter which I have commercial community. I will state only a read, are now in my hand, and any gentleman few, out of hundreds. Here is one, and here is who may feel disposed, may look at them. Of the proof :

course, Messrs. Gray & Co. carried both invoices “A merchant orders goods to be shipped from to the Custom-House, because they were honoraFrance and entered at New

Orleans, for the West- ble merchants, and the duties were assessed on ern trade, with the understanding that he is to have the higher invoice. And by this time these gen

them at the foreign cost, with the duties and tlemen were no longer at a loss to account for charges added.

the low price at which this description of mershipment was made with and forwarded to the chandise had been selling in the city of New

purchaser, amounting to..........6,829.93 francs. York. At the same time the invoice forwarded with the goods to New Orleans

But now, sir, take not a single case, but the re.5,258.00 francs.

sults of long experience. I am about to read a?

letter, not addressed to me, but placed in my Difference..

..1,571.93 francs. hands, from a gentleman well known, I presume, Or, $316 94 out of $1,300 94.

The goods were valued therefore, in the entry, at to both the Senators of New York, and to other $316 94 less than they were to the purchaser, and members. This letter, I think, will startle the the purchaser was actually charged for the duty on honorable chairman. It must open to his mind this

$316 94 as paid to the Government, amounting quite a new view of things. to $95 10. Bòth the Government and the purchuser were, therefore, cheated out of that sum.

“TROY, July 14, 1846. This transaction occurred in the Spring of 1946, your wish, I avail myself of this opportunity to give

LE GRAND CANNON, Esq. Sir: Agreeably.to and I send you a copy of the correspondence in which these facts are stated, and not denied ; but manufacturing business, hoping it may tend to an

you the benefit of my experience in mercantile and the French house attempts a round-about justifica- improvemenu of the bill, now pending in the Sention for putting the foreign cost to the purchasers ate, for the collection of duties. at a greater amount than the entry invoice. J. D.” of Congress will have the same views of the prob

I hope Members This transaction occurred this very year. And able results which I anticipate , which are, that the here, sir, is another, communicated by a most system of ad valorem duties does give the foreign highly respectable merchant of my acquaintance. importer and manufacturer a very undue advantage Hear the letter:

over the American importer. This will be apparent “Boston, July 17th, 1846. from my own experience, which I give you anDEAR SIR: I am informed that a respectable nexed. My brother and myself were brought up house in this city received an invoice of European in the town of Manchester, and well acquainted goods from a foreign house, the amount of which with the manufacturers and manufacturing. At the was about $2,000, and that after entering the goods age of twenty years it appeared very evident to? at the Custom-House by the invoices, they received me that we could finish goods and import goods another invoice valuing the same goods at about into New York about ten per cent. lower than the

$8,000, with a letter, stating that the first invoice American merchant; and with this conviction 1 was to levy duties by, and the second to sell by. agreed to come out to New-York and dispose of

The consignee here, who is also an importer, not the goods, and leave my brother to finish and for. being willing to be a party to the fraud, deposited ward the goods. both invoices at the Custom-House, where they “ The result was equal to our expectations. We were yesterday.

imported our goods ten per cent. cheaper than our I have no doubt of the authority from which I re- competitors, and by the ad valorem duties we paid ceived this information, but I do not wish to be nearly five per ceni. less duties; so that, in twentyquoted for it.

two years, we made nearly a million of dollars, I have thought that you might be pleased to know while nearly all the American merchants failed this fact, as the fraud is so great, and the perpetra- Now, I reason, what has been will be ; and should Stor beyond the reach of any penal statues of this the present tariff bill pass, it will give the foreign country. Your most obedient servant,

manufacturer a decided advantage, and tend to re

duce the rate of duties lower than is anticipated.-Hon. D. WEBSTER, Washington.

And I cannot avoid expressing my decided opinP. S. I hear that Mr. Lamson is the consignee." ion in favor of specific duties, as then the foreign Sir, one case more. A highly respectable firm manufacturer would pay the same duties as the in Boston (Messsrs. George H. Gray & Co.) have American importer. been dealers many years in hardware, and in

Signed, BENJ. MARSHALL.".

Can any man gainsay the truth of all this? Is("little Congress," to which the honorable memthere a merchant, foreign or American, in the ber from Connecticut (Mr. NILES) referred some United States who will express any contrariety days ago_some subordinate officers about the of opinion? Is there a man, high or low, who de Custom-House, influenced by I know not what nies it? I know of none; I have heard of none. considerations—who may be found ready to susSir, it has been the experience of this Govern- tain such a system. That I do not deny. But I ment, always, that the ad valorem system is open say that no respectable importing merchant can Sto innumerable frauds. What is the case with be found between Penobscot and Richmond, who >England ? In her new notions, favorably to free will give his opinion in favor of it, if he is an honStrade, has she rushed madly into a scheme of ad est man, and one who gets his living by importa Svalorem duties? Sir, a system of ad valorem du-tion himself. Well, then, how are we decide :Sties is not free trade, but fraudulent trade. Has Against the authority of our own experience England countenanced this? Not at all; not at Against the authority of these thousands of substan. Sall. Sir, on the contrary, on every occasion of a tiated facts? Against these cases now blushing revision of the taritt of England, a constant effort with recent fraudi Against the example, not only Shas been made, and progress attained in every of the English Government, but against that of all Scase, to augment the number of specific duties, the continental Governments--for the Zollverein

and reduce the number of ad valorem duties. A carries its specific duties much farther even than Sgentleman in the other House (Mr. SEAMAN) has England ? Against all this, what have we? Staken pains--which I have taken, also, though I what have we? Why, we have the recommepd. believe not quite so thoroughly as he has to go ation of the President of the United States and (through the items of the British tariff

, and see the Secretary of the Treasury-highly respectawhat proportion of duties in that tariff are ad va-ble persons ; respectable in private life; res(lorem and what are specific. Now, sir, the result pectable, and I may say eminent, in some walks

of that examination shows, that at this day, in of public life ; but I must add, neither of them (this British taritt, out of six hundred articles, five trained in the knowledge of commerce; neither (hundred are subject to specific duties. Every of them having had habits of intercourse with (thing that from its nature could be made speci- practical men of the cities, or men of mercantile (tic, is made specific. Nothing is placed in the business. And yet here, in the first year of their (list of ad valorem duties but such as seem to be administration, fresh to the duties thrown upon incapable of assessment in any other form.-them, they come out with a recommendation of Well, sir, how do we stand, then ? We have the a vast change; they propose a new system, ad. experience of our own Government; we have verse to all our own experience, hostile to every the judgment of those most distinguished in the thing that we have ever learned, different from (administration of our affairs; we have the pro the experience of every other country on the duction of proof, on this most important point, in face of the earth, and which stands solely on the hundreds and hundreds of instances, of the dan. responsibility of their own individual opinions ! ger of the ad valorem mode of assessing duties.— I do not think that this is a fair balance of auWhat is produced in its favor ? Every importer thority; and since nobody here will uphold it, of the United States, without exception is against since nobody here will defend it, it is fair enough it. Sir, the Administratration has not a mercan- for me to say, with entire respect to the head of tile friend from here to Penobscot, so far as ap- the Government and the Department of the pears, that will come forward and give his opin. Treasury, that the preponderance of authority is ion in favor of this system. I undertake to say qu overwhelming the other way. there is not one. There may be members of the

VALUE OF FOREIGN COINS IN THE UNITED STATES.

AN ACT TO ESTABLISH THE VALUE OF

CERTAIN FOREIGN COINS AND MONEYS OF AC

COUNT, AND TO AMEND EXISTING LAWS.

Be it enacted by the Senate and House of Representatives of the United States of America, in Con gress assembled, That, in all computation at the Custom-House, the foreign coins and money of account (herein specified, shall be estimated as follows, to wit :The specie dollar of Sweden and Norway, at $ 1.06.0 The lira of the Lombardo Venetian kingdom The specie dollar of Denmark, at......... 1.05.0 and the lira of Tuscany, at...

01.6.0 The thaler of Prussia and of the northern The franc of France and Belgium, and the States of Germany, at. 0.69.0 lira of Sardinia, at.....

0.18.00 The florin of the southern States of Germany, The pound of the British provinces of Nova at

0.40.0 Scotia, New Brunswick, Newfoundland, The florin of the Austrian Empire and of the

and Canada, at.......

4.00.0 city of Augsburg, at..

0.48.5 And all laws inconsistent with this act, are hereThe Ducat of Naples, at..

0.80.0 by repealed. The ounce of Sicily, at..

2.40.9

THE TARIFF OF 1846

A BILL REDUCING THE DUTY ON IMPORTS, AND FOR OTHER PURPOSES.

PASSED JULY 29, 1846.

orem.

orem.

Be it enacted by the Senate and House of Represen-stores on the second day of December next, shall) tatives of the United States of America in Congress be subject to no other duty upon the entry thereof) assembled. That from and after the first day of Decem- than if the same were imported respectively after ber next, in lieu of the duties heretofore imposed that day. by law on the articles hereinafter mentioned, and SEC. 7. And he it farther enacted, That the on such as may now be exempt from duty, Lhere shall twelfth section of the act entitled, “An act to probe levied, collected, and paid, on the goods, wares, vide revenue from imports, and to change and mod

and merchandise herein enumerated and provided ify existing laws imposing duties on imports, and for, imported from foreign countries, the following for other purposes," approved August thirty, eight-> rates of duty-that is to say :

een hundred and forty-two, shall be, and the same On goods, wares and merchandise mentioned in is hereby, so far modified, that all good imported schedule A, a duty of one hundred per centum ad from this side the Cape of Good Hope or Cape valorein.

Horn may remain in the public stores for the space? On goods, wares, and merchandise mentioned in of one year iustead of the term of sixty days preschedule I, a duty of forty per cent.

scribed in the said section; and that all goods imOn goods, wares, and merchandise mentioned in ported from beyond the Cape of Good Hope or) schedule B, a duty of thirty per centum ad valorem. Cape Horn may remain in the public stores one year

On goods, wares, and merchandise, mentioned in instead of the term of ninety days prescribed in schedule C, a duty of twenty-five per centum ad the said section. valorem.

SEC 8. And be it farther enacted, That it shall be On goods, wares, and merchandise mentioned in lawful for the owner, consignee, or agent of im. schedule D, a duty of twenty per centum ad val- ports which have been actually purchased, on entry)

of the same, to make such addition in the entry to On goods, wares, and merchandise mentioned in the cost or value given in the invoice, as in his opinschedule E, a duty of fifteen per centum ad val- ion may raise the same to the true market value of

such imports in the principal markets of the coun. On goods, wares, and merchandise mentioned in try, whence the importation shall have been made, schedule F, a duty of ten per centum ad valorem. or in which the goods imported shall have been

On goods, wares, and merchandise mentioned in originally manufacuured or produced, as the case) schedule G, a duty of five per centum ad valorem. may be; and to add thereto all costs and charges

SEC. 2. And be it farther enacted, That from and which, under existing laws, would form part of the) after the first day of December next, the goods, true value at the port where the same may be enwares, and merchandise mentioned in schedule H tered, upon which the duties should be assessed.shall be exempt from duty.

And it shall be the duty of the collector within Sec. 3. And be it farther enacted, That, from and whose district the same may be imported or enterafter the first day of December next, there shall be led to cause the dutiable value of such imports 10? levied, collected, and paid on all goods, wares, and be appraised, estimated, and ascertained in accord-> merchandise imported from foreign countries, and ance with the provisions of existing laws; and it) not specially provided for in this act, a duty of the appraised value thereof shall exceed by ten per twenty per centum ad valorem.

centum or more the value so declared on the entry, Sec. 4.. And be it farther enacted, That in all ca. then, in addition to the duties imposed by law on ses in which the invoice or entry shall not contain the same, there shall be levied, collected and paid, the weight or quantity, or measure of goods, a duty of twenty per centum ad valorem, on such wares, or merchandise now weighed or measured appraised value. Provided nevertheless, That under) or guaged, the same shall be weighed, guaged, or no circumstances shall the duty be assessed upon) measured at th expense of the owner or con- an amount less than the in ice ue; any law signee.

Congress to the contrary notwithstanding. Sec. 5. And be it farther enacted, That from and SEC. 10. And be it farther enacted, That the depafter the first day of December next, in lieu of the uties of any collector, naval officer or surveyor, bounty heretofore authorized by law to be paid on and the clerks employed by any collector, naval of-? the exportation of pickled fish of the fisheries officer, surveyor, or appraiser, who are not by exthe United States, there shall be allowed, on the isting laws required to be sworn, shall, before en exportation thereof, if cured with foreign salt, a tering upon their respective duties, or, if already) drawback equal in amount to the duty paid on the employed, before continuing in the discharges salt, and no more, to be ascertained under such thereof, take and subscribe an oath or affirmation regulations as may be prescribed by the Secretary faithfully and diligently to perform such duties, and of the Treasury:

to use their best endeavors to prevent and detect Sec. 6. And be it farther enacted, That all goods, frauds upon the revenue of the United States; wares, and merchandise imported after the pass which oath or affirmation shall be administered by age of this act, and which may be in the public the collector of the port or district where the said

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