The republic. [volume] (Washington [D.C.]) 1849-1853, 1850-09-27
Important Letter from the Secretary OF the
Treasury.

Important Letter from the Secretary or tn.
Treasury.
! TREASURY DEPARrMENT, Sept. %, 1850.
SR: In compliance with the resolution Of the
Senate, "that the Secretary of the Treasury be re-
! 'quested to report what have been the measures
adopted to prevent frauds upon the revenue, since
the passage Of the Of 1916, and what has been
the result" have the honor to state, that the
measures which have been adopted by this Depart
ment to prevent frauds upon the revenue, under
the present tariff act, may be found in the circular
instructions that issued to collectors and other
officers of the customs before the act into ope-
ration, viz November II g. and 2S, 1916, and those
issued since the lst December, 1876. Upon refer
ence to these circulars, it will be perceived that
unusual apprehension felt that under the
| change from specific duties to duties levied upon
the foreign value of imported merchandise there
would be great temptation to the commission of
frauds by differentiation in invoices and entries;
and in the circular of the 2sth November 1886 the
| officers OF the customs advised that il was
60 the determination of the department to exercise
its whole power, under the law, to guard the
enue of the Government against fraud and un-
| dervaluation in invoices and entries, and to
maintain the business of importing in the hands
9 of the honest merchant and fair trader" The
goods imported, when there was reason to be-
| lieve that there was fraud or undervaluation,
to exact penalties, and to make seizures in
cases authorized by law; and in the circulars of
the th and Goth November, 1876, their special at
tention was called to the provisions contained in
the I'd section OF the Civil and Diplomatic Appro-
praton act of the 10th August, lS4o requiring that
sin appraislng all goods any port of the United
States heretofore subjected 10 specific duties but
upon which ad valorem duties are imposed by the
afnfN Ialtr rataT. ak.n - "A.
invoices and values of similar goods imported in
the last fiscal year, under such general and uni
form regulations for the prevention of fraud or
differentiation, as shall be prescribed by the Sec
retary OF the Treasury"
Notwithstanding the instructions contained in
these circulars, issued in advance of the operation
Of the act which commenced lst December, lS46,
it became necessary to issue another sTo collect
ors, appraisers and other officers OF the customs, /"
on the 9TH July, 1871, with rules and regulations
in regard to appraisemcnts, in which Mr. Secretary
Walker stated that ''this course rendered ne
cessary by recent attempts upon the part of mer-
chant appraisers, in few of the ports of the Uni
! ted States, 10 establish for themselves certain
regulations in regard to apprasements wholly in
consistent with law and Instruction." IL is stated
! that "in some OF the ports these appraisers es
| innate the value of the goods as at the date o
| the purchase, however remote or distant and in
other ports they take the value at the date Of ship
ment TO the United States. The last is the true
construction of the law, long since declared by
this Department, and adopted generally through
out the Union. The provlso OF the 9th section OF
the act Of the both Of August 1912, is clear and
emphatic upon this subject and prescribes the
date in reference TO which the value ia TO be cst-
mated, as The period Of eEportdtion 10 the United
States, and all words preceding in that section,
under the settled rule of interpreting statutes,
/ must be made to conform TO the succeeding Ian
| guage of the proyiso. This would be the rule
even II there wac an absolute conflict between the
words OF the proviso and OF any preceding part OF
the section-for the language of The proyiso helm
will Of
| prevail. Were il otherwise, the law would pre-.
scribe two kinds Of market values; the one in the
first part of the 10th section being the date of the
purchase, and the other, in the prOviso being the
date Of shipment. The most enormous frauds
alec, would be the consequence of such construc.
ton. Simulated, fictitious, and ante dated pur.
chases 10 suit the period of lowest price, would
prevail extensively, 20 the great Jury Of the air
trader and OF the revenue. In truth, under such
system the whole importing business would soon
be thrown into the hands Of the dishonest and
fraudulent, who would be willing 70 produce ante.
dated or fictitious foreign sales, and that most
useful and meritorious citizen the honest and fair
trader, would be thrown entirely out Of the mar.
ket. Ii IL known at present-at the commence
ment OF this proposed system-that even where
the purchases not deemed by the parties fraud
ulent, the designing TO import into the United
States gocs ~ some prior purchascr who has pur-
chased not for importation into the United States
at some prior date when the gOods were much
lower IN value, and imports the goods in the ma me
OF the hrst purchaser, cousentng 70 give a certain
profit price ON the delivery here and thus de.
pnves the revenue Of the difference in value and
obtains a most unjust advantage over the fair
trader, who will resort 10 no such artiices. II
is the duty Of this Department to declare thai
such practice is a fraud upon the revenue and
subjects the goods 20 seizure and confscation
and the parties committing the fraud to all tn,
penalties prescribed by law; and the utmost vigi-
/ lance Is enjoined upon collectors, appraisers
and all other officers OF the customs in taking ali
proper measures to detect and punish all who arc
] engaged in such fraudulent practices"
| Notwithstanding this emphatic and just condem-
nation OF the fraudulent practices here described
and the efforts made protect the fair trader the
result has shown that they have not been efIectus
| The temptation proved too great and fraudulent
! invoices continued To multiply.
On the 7th of August, lS4s, Mr.. Secretary Walker
instructed the officers Of the customs that "forced
sales Of goods in the foreign markets at reduced
| prices, under crtrnord rdinary and peculiar circum.
stances, cannot be taken ne the true mar value
| Of such goods"
And on the 26th December, ls4s, nc found Il ne
ccssary TO repeat much that he had previously said
and extend his instructions, in consequence Of dif
fcrcnces Of practice existing in the several ports
relative TO the appraiscment Of merchandise" In
this circular Mr.. Walker says that "the interests
! Of the country, and Of fair and honorable mer.
chants, require that this department should, by
every means in its power, secure not only the
! revenue against loss, but should maintain such
merchants, in their business, against sales Of i'm
ported articles at diminished rates, arising from
fraud or undervaluation l."
| Whenever II Is found necessary by the regular
| appraisers, or merchant appraisers, TO guart
against fraud or undcrvaluation, they will carry
into effect the provisional Of the ID section Of tho
act Of the 10th August, 1876, enforced by circu
lar instructions of the llth and 26th November
1896 The last fiscal year designated in this sec
ton was The last fiscal year preceding tho enact
| ment Of that law, which the fscal year end
ing the Both June, 1896 60 which reference is re-
quired by the Law 10 values and invoices Of similar
goods, when necessary 10 prevent fraud or under.
! valuation"
In presenting 20 the Senate "whst have been tn,
measures adopted 10 prevent frauds upon the rev.
epue siroc the passage Of the tariff act of the 30tt
/ July, 1896" il has been considered due 10 Mr.
Secretary Walker. that the measures which origi
mated with himself should be made prominent; al
the instructions issued by him continue in full fore,
at the present time, and govern the officers Of IN,
| customs in tho execution OF the revenue aws
In this connection the special notice Of the Senate
is invited 10 important question which is likely
to call for the early interpositon of Congress- a,
well TO guard the revenue as TO protect the homes