Customs revenue

“ THOUGHTS ARISING OUT OF A GREAT CONTROVERSY DURING recent years a considerable share of the thoughts of men has been devoted to the consideration of one part of our fiscal policy,—that part which is concerned with Customs duties. In public and in private, on hundreds of platforms and in thousands of homes, the ancient issue has been debated between those who hold that Customs duties should be imposed for revenue purposes only and those who contend that Customs duties may be used as instruments with which to direct wisely the agricultural, industrial and commercial development of a nation. ”

“ And for the next 124 years—until the income tax amendment to the Constitution was adopted in 1913—the Federal government’s primary source of revenue was to be the money collected by Customs on merchandise and materials brought into the United States from abroad. ”

“ The revenue is almost entirely derived from customs, paid both on imports and exports. There being a lack of capital and enterprise, the excessive customs dues produce a very depressed condition of trade. ”

“ The revenue of the customs, instead of suffering, profits from such drawbacks, by that part of the duty which is retained. If the whole duties had been retained, the foreign goods upon which they are paid could seldom have been exported, nor consequently imported, for want of a market. ”

“ This was of course meant to be prohibitive of foreign importations, and was practicable because the countries within the Empire could supply every commodity in the world. It was argued that to encourage foreign importations merely meant to pit cheap labour against the price for labour within the Empire. Besides the customs duties, the revenue was almost entirely made up of income tax and succession duties. ”

“ Granted that a certain number of millions have to be raised by Customs duties, he sees before him some five to six hundred millions of foreign imports on which to raise them, and so his first and very natural reflection is, that by distributing duties pretty equally over this vast mass of imported commodities he could raise a very large revenue without greatly enhancing the price of anything. ”

“ With the exception of a dozen or two articles customs-taxed for simple revenue, Great Britain in this period has kept her ports absolutely open to imports from all the world, and of course to all imports from the United States, which has tended to swell the volume of imports into that country, and the volume of foreign bills drawn on them, particularly of United States bills; while the United States during the same time has excluded imports by customs-taxes designed for that very purpose, to the number of over 4000, and in many cases to a height of tax involving prohibition of import. ”

“ But in a great number of cases the imposition of a duty causes only a partial displacement of the foreign supply, and hence brings some revenue from that which remains. This circumstance strengthens the hold of the protective system, especially in countries where customs duties are an important source of revenue, the combination of fiscal convenience and of protection to home industry being a highly attractive one. ”

“ Customs to be given up, nor to be materially diminished, unless some substitute, less objectionable, be suggested. But it is against every restrictive regulation of trade not essential to the revenue—against all duties merely protective from foreign competition—and against the excess of such duties as are partly for the purpose of revenue and partly for that of protection, that the prayer of the present petition is respectfully submitted to the wisdom of Parliament. ”

“ Pursuant to regulations prescribed by the Commissioner of Customs with the approval of the Secretary of the Treasury, the baggage and effects of alien officers and employees of international organizations, or of aliens designated by foreign governments to serve as their representatives in or to such organizations, or of the families, suites, and servants of such officers, employees, or representatives shall be admitted (when imported in connection with the arrival of the owner) free of customs duties and free of internal-revenue taxes imposed upon or by reason of importation. ”

“ They rank among the most ancient, as they continue to prevail as one of the most common modes, in all countries, of levying revenue for public purposes. In an insular country like the United Kingdom customs duties came in process of time to be levied only or chiefly in the seaports, and thus applied only to the foreign commerce, where they may be brought under the control of fair and reasonable principles of taxation. ”

“ These different articles afford, perhaps, at present, the greater part of the revenue which is drawn from the duties of customs. The taxes which at present subsist upon foreign manufactures, if you except those upon the few contained in the foregoing enumeration, have the greater part of them been imposed for the purpose, not of revenue, but of monopoly, or to give our own merchants an advantage in the home market. ”

“ And along with this vast aggrandizement of manufacturing industry and commerce, there has been a steady increase of both imports and exports, as well as of revenue from customs. The increase in imports has consisted of articles of luxury and raw materials for manufacture. And, as if to leave nothing wanting in the demonstration, the increase of exports has constantly included more and more of the products of agriculture. ”

“ If the same trade had been done, the revenue from customs since 1895, on those articles which have been placed on the free list, would have amounted to more than £500,000, but I do not believe that if those duties had been in force they would have received an additional half-million from customs into the Treasury, I believe the more money people have to spend, the more they enjoy themselves, and the more luxuries they use, and the revenue is stimulated thereby. ”

“ Resort is made to tariffs, or duties on imports, partly to secure revenue, partly to affect the course of industry within a country. Strictly speaking, these two objects are inconsistent with each other; since a customs duty, in so far as it causes a domestic industry rather than a foreign to supply the market, ceases to be a source of revenue. ”

“ Therefore, less went to the farmers for their wheat per bushel or centner. The masses of the people lose the immense losses of that depreciated money. And during these very years also the Government put customs-taxes to a then unheard-of height on imports from abroad, not primarily for the sake of the revenue to come from the taxes, but chiefly with a view to keep certain foreign goods out of the country altogether, in order that some citizens might be able to sell their own product to the rest at artificially enhanced prices. ”

“ Customs duties the chief revenue of the ColoniesCommercial federation on the basis of free trade within the Empire is out of the question in the immediate future for the obvious reason that most of our Colonies raise the greater part of their revenues from customs duties, that British goods form a large proportion of their imports, and that it would take time for the Colonial Governments to substitute other sources of revenue which they now derive from duties on British goods. ”

“ We raise about £20,000,000 of our annual revenue by means of customs' duties on the foreign commodities which we import, and this fact is sometimes adduced by the advocates for protection, without any explanation, leaving their readers to infer that ours is not, as it really is, a free-trade tariff. ”

“ If, as no doubt, you will in future confine your imports to the amount of your exports of native products, and all your revenue is to be, as it is now, raised by taxes or duties on your imports, I ask you who pays the expense, and who, in fact, enables you to go on with your Government at all, and prevents its wheels from stopping? ”

“ The state of the revenues was such that we could dispense with any import duties upon coffee, tea, hides, and the lower grades of sugar and molasses. That the large advantage resulting to the countries producing and exporting these articles by placing them on the free list entitled us to expect a fair return in the way of customs concessions upon articles exported by us to them was so obvious that to have gratuitously abandoned this opportunity to enlarge our trade would have been an unpardonable error. ”

“ That foreign imports, and even domestic exports, should contribute some quota to the public revenue is in itself a reasonable proposition. The custom-house, which has to register goods coming in and going out, and to exercise an official regulation in the ports, should defray at the least its own expense, like any other necessary mercantile function. ”

“ On the other hand, there are imports so entirely of foreign origin, and so free from considerations of competition with domestic industry, that a large revenue may be raised upon them in the custom-house, without disturbing the freedom or equity of international trade. ”

“ The Measures of Customs outwards may be such, as after reasonable profit to the Exporter will leave such of our own Commodities as are necessary to Forreigners somewhat cheaper unto them then they can be had from elsewhere. ”

“ In these two articles of the Confederation, the words imports, exports, and imposts are used with exclusive reference to foreign trade, because they have regard only to the treaty-making power of the federation.
As soon as peace was restored by the success of the Revolution, and commerce began to revive, it became obvious that the most eligible mode of raising revenue for the support of the General Government and the payment of its debts was by duties on foreign merchandise imported into the country. The Congress accordingly recommended the States to levy a duty of five per cent. ”

“ Materials necessary for the manufactures and agriculture of the country shall be taxed as low as possible. (b) It shall be the same with the necessities of life. (c) Luxuries shall be subjected to the highest duties. Unless there are imperative reasons to the contrary, these principles shall be observed also in the conclusion of treaties of commerce with foreign powers. 2. The duties on exports shall also be as low as possible. 3. The customs legislation shall include suitable provisions for the continuance of commercial and market intercourse across the frontier. ”

“ It is not on the person from whom we buy, but on all those who buy from us, that a portion of our custom-duties spontaneously falls. It is the foreign consumer of our exported commodities, who is obliged to pay a higher price for them because we maintain revenue duties on foreign goods. ”

“ Customs or tariff duties are taxes which have to be paid on a large class of goods imported into this country from foreign countries. These charges are collected by Government collectors, stationed in all our principal seaport cities, who inspect all incoming vessels and determine the amount to be paid, according to the rate determined by Congress. ”

“ The remaining revenue, on the consumption of foreign articles, is paid chiefly by those who can afford to add foreign luxuries to domestic comforts. Being collected on our seaboard and frontiers only, and incorporated with the transactions of our mercantile citizens, it may be the pleasure and the pride of an American to ask, what farmer, what mechanic, what laborer, ever sees a tax-gatherer of the United States? These contributions enable us to support the current expenses of the Government; to fulfil contracts with foreign nations; to extinguish the native right of soil within our limits ”

“ As a result the customs taxes were high, so high in many cases as to prohibit honest importation, lessen the income to the public treasury and make smuggling a highly profitable and not disgraceful business. ”

“ Devoid of national power, we could not prohibit the extravagance of our importations, nor could we derive a revenue from their excess. Devoid of national importance, we could not procure for our exports a tolerable sale at foreign markets. ”

“ A tax on imports, on the other hand, being a tax on consumption, which is in proportion to the ability of the consumers, whencesoever derived, was free from that inequality.
7. If revenue be the sole object of a legitimate impost, and the encouragement of domestic articles be not within the power of regulating trade, it would follow that no monopolizing or unequal regulations of foreign nations could be counteracted ”

“ The reasons assigned by the Secretary for this new and heavy tax on our citizens are, that as the greater part of our duties on imports are collected on goods coming from Great Britain and her colonies, and as those duties will cease with the revival of the non-importation, it becomes necessary, in order to prevent a defalcation in the revenue, to tax the production of other countries much beyond the present rate. ”

“ If changes are judiciously made, and the duties so reduced as to bring the imports more within the reach of the great body of consumers, (who are now either excluded from the market, or forced to purchase their supplies from the illicit trader,) I am inclined to believe that the whole expenses of the Republic may be provided for by the produce of the Customs alone. Under all the disadvantages of the present system, they have yielded, in ten months, 7,043,238 dollars, and I have estimated their produce for the ensuing year at eight millions. ”

“ Taxes on foreign trade are of two kinds—taxes on imports, and on exports. On the first aspect of the matter it would seem that both these taxes are paid by the consumers of the commodity; that taxes on exports consequently fall entirely on foreigners, taxes on imports wholly on the home consumer. ”

“ In these ports merchants can exhibit samples; they can mix, grade and alter commodities for domestic or export use; and can otherwise meet the trade conditions of different countries. Growing out of this will be a stimulus to exporting business. Firms can hold goods for an indefinite period without the payment of customs taxes, often equal to the cost of the article itself. ”