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“To levy an ad valorem duty on foreign valuation equably at the different ports is believed to be impossible. That the standard of value at any two ports is precisely the same at any given time is wholly improbable. The facilities afforded to frands upon the revenue are very great, and it is apprehended that such frauds have been and are habitually and extensively practiced. The statements annexed (marked O), to which I invite special attention, exhibit in a strong light the dangers to which this system is necessarily exposed.

“As the standard of value at every port must at last depend upon the average of the invoices that are passed there, every successful attempt at undervaluation renders more easy all tbat follow it. The consequences are, not only that the revenue suffers, that a certain sum is in effect annually given by the public among dishonest importers as a premium for their disbonesty, but that fair American importers may be gradually driven out of the business and their places supplied by unknown and unscrupulous foreign adventurers."

The adoption of specitic duties bas been uniformly favored by the executive offices of the Government, and has been specially recommended by a number of the Secretaries of the Treasury in recent years.

Secretary Bristow, in his annual report for 1876, in commenting upon the administration of ihe customs revenue, said :

“Avother remedy, and the most effective which could be adopted for correcting the evils of the appraisement system, is the substitution, so far as practicable, of specitic for ad valorem duties. This change would work a great reduction in the amount of labor requiring the knowledge of experts. The entire process of ascertaining duties would be more simple, certain, and safe. Opportunities for collusive undervaluation would be greatly lessened, and if errors were committed they could not, as to specific rates and amounts, be accounted for except upon the supposition of culpable negligence or actual fraud; whereas, in respect to ad valorein duties, an error of judgment may readily be assigned as a sufficient explanation.

"Such chavge, either with or without a decrease in the number of dutiable articles, would insure a very considerable reduction of the force at the chief ports, with a consequent diminution of expenses."

Secretary Sherman, in his report to Congress for 1878, made the following suggestions with respect to specific duties:

“While not recomiending a general revision of the tariff at the present time, it is deemed important that upon some articles the ad valorem duties now assessed should be converted into specific duties. As a rule, specitic duties are to be preferred to either ad valorem or compound rates, and in any future revision of the tariff it is hoped that Congress will give preference to this system of imposing duties as far as practicable. The argument in favor of specific duties applies with great force to kid gloves, concerning the value of which, wder the present ad valorem duties, serious differences of opinion have occurred between the importers and the Government duriug the past year, which bave led to protracted delays in the ascertainment of the dutiable value, and consequent injury to the mercantile community.

In his report on the collection of duties for 1885 the late Secretary Manning said:

“In a system of ad valorem rates there are two critical points: One is dutiable valne and the other is rate of duty. The present rate of duty on certain silk goods is 50 per cent, of the market value at the time of exportation in the principal mar. kets of the country, or what is equivalent to one-half of the importation. If the law were so administered by the Treasury Department that on the importation of one importer 50 per cent was levied, and on the importation of another importer 40 per cent., and on that of another importer 30 per cent., there would be a geveral outcry. So there would be if an importer at New York was required to pay only 30 per cent. and if of another at Buffalo was demanded 40 per cent., and of another at Chicago was required 50 per cent. But none the less illegal and intolerable result would follow if the dutiable value on one importation were fixed at $100, on auother, by the same vessel, at $80, and on another, by the same vessel, at $60, the merchandise in all of the three being similar. If importers can illegally control dutiable values, they can control the amount of duties paid on the merchandise, although the ad valorem rate may be fixed and uniform for every body and every port in the country.

“I do not make a recommendation to Congress for the restoration of the cold moiety system " and the statutory inducement to informers, or the law concerning intent and burdeu of proof, wbich existed from 1799 to 1874. And I do not so recommend for the reason that the purpose of the House and Senate, in respect to the simplification of the rates of duty and a prudent enlargement of the application of specitic rates, is necessarily unknown. Should some snch last named change be not made, I have little faith that the existing power of the Execntive and of the courts will be adequate to secure honest invoices and full appraisement."

*

"The foilowing extracts from the report of Mr. Forward, made nearly half a century ago, aro instructive now, by way of showing his appreciation of the relation between ad valorem and specific rates, and the light in which foreign manufacturers sending their goods to this country on consignment were then regarded :

"With a view to guard the revenue against fraudulent undervaluations which can not be entirely prevented by the existing scheme of ad valorem duties, specific duties are proposed in nearly all cases when practicable. The operation of the system of specific duties may not be perfectly equal in all cases, in respect to the value of the articles included under it. But this inconvenience is more than compensated by the security of the revenue against evasions, and by the tendency of specific duties to exclude worthless and inferior articles, by which purchasers and consumers are often imposed on.'

"One advantage, and perhaps the chief advantage, of a specific over an ad valorem system is in the fact that, under the former, duties are levied by a positive test, which can be applied by our officers while the merchandise is in the possession of the Government, and according to a standard which is altogether national and domestic. That would be partially true of an ad valorem system levied upon 'home value,' but there are constitutional impediments in the way of such a system wbich appear to be insuperable. But under an ad valorem system the facts to which the ad valorem rate is to be applied must be gathered in places many thousand miles away, and under circumstances most unfavorable to the administration of justice."

The present Secretary of the Treasury, in that portion of his last annual report relating to the administration of the customs laws, used the following language:

“Whatever the rates of customs taxation may be, the laws for the collection of the same should be made as efficient as possible. In this the bona-fide importer, who wishes to gain only the legitimate profits of his business, the home manufacturer, and laborer are equally interested. They all bave a right to demand that the laws be so administered as to give them every possible protection in their business. The high ad valorem tariff of the last quarter of a century has been the fruitful canse of devices to gain improper advantage at the custom-house. It is, therefore, desirable that in revising and reducing rates of duty they should be made specific instead of ad valorem so far as the nature of the merchandise will admit. Theoretically considered, ad valorem are preferable to specific duties; but in practice, under such rates as we have had and must continue to have for years to come, the former are the too-easy source of deception and inequality at the custom-house. Congress has it in its power to change, from time to time, as may be advisable, specific rates so as to meet any permanent changes in values."

APPENDIX B.

Estimates of imports and duties by provisions of Senate substitute to H. R. 9051.

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A. Chemical products
B. Earthenware and glassware
C. Metals
D. Wood and wooden ware.
E. Sugar ....
F. Tobacco
G. Provisions, eto
H. Wines, liquors, etc
I. Cotton manufactures
J. Flax, hemp, and jute
K. Wool and manufactures of wool
L. Silk and silk goods
M. Books, papers, etc
N. Sundries
Articles, not enumerated-dutiable under sec. 2513 Revised Statutes:

Uumanufactured..

Manufactured.
Packages, crates, boxes, etc., designed to evade duty

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APPENDIX C.

ADDITIONS TO FREE LIST BY PROPOSED SENATE SUBSTITUTE.

Acorns, raw, dried or undried, but un- All other textile grasses or fibrous subground.

stances unmanufactured or undressed. Baryta, sulphate of, or barytes, unmanu- Floor matting, known as Chinese matting. factured.

Grease and oils, such as are commonly Bees-wax.

used in soap making or wire drawing, Books and pamphlets printed exclusively etc.

in languages other than English. Human hair, raw, uncleaned and not Braids, plaits, flats, laces, etc., for orna- drawn. menting hats, etc.

Mineral waters, not specially enumerated. Bristles, raw or unmanufactured.

Molasses, testing not above 56 degrees. Bulbs and bulbous roots, not edible. Olive oil, for manufacturing or mechanChicory root, raw, dried or undriod, but ical purposes. unground.

Nut oil, or oil of nuts. Coal, slack or cnlm.

Opium, crude or unmanufactured. Coal tar, crnde.

Opium, for smoking. Curling-stone handles.

Potash, crude carbonate. Currants, Zante or other, dried.

Potash, caustic or hydrate. Dandelion roots, raw, dried, or undried, Potash, nitrate of, or saltpeter. but unground.

Potash, sulphate of. Eggs' yolks.

Potash, chlorate of. Feathers and downs of all kinds, crude Rags, all not enumerated. and unmanufactured.

Hemp seed. Jute.

Rape seed. Jute ontts.

Sponges. Manilla.

Sand. Ramie.

Tar and pitch, of wood.

Turpentine, spirits of. Sunn.

Sisal grass.

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