Democratic Northwest. [volume] (Napoleon, Ohio) 1869-1894, 1893-05-18
SPECIFIC DUTIES.
THEY SERVE THE PURPOSE OF DIS
HONEST IMPORTERS.

The Charge That Ad vaiorem Duties Are
More Favorable to FrauG Is Dispr0ved
by HIstory-why the Poor Pay n Dispro-
portionate Share Of the Taxes
The manufacturers and importers, as a
rule. prefer specific to ad valorem duties
manufacturer because a certain duty
per yard or pound increases the rate Of
protection as prices decline from the in
PRODUCTION of better machinery; import
ers because specific duties tend to steady
prices. Both Of these reasons (they are
only one) are arguments against specific
duties Whatever may be in the inter
ests of manufacturers and importers. the
people at large want prices to decline
here when they do abroad. That is why
they voted for tariff reform.
But importers make another claim
against ad valorem duties which II true
is deserving of some consideration. They
say that there is more undervaluation
and fraud when duties are levied accord
ing to value and not by piece or measure.
They claim that dishonest importers who
will juggle figures, distort facts and
bribe customs officials will have an ad-
vantage under ad valorem duties over
the honest importer.
That both kinds Of duties lead to fraud
Is evident to all who understand them
and human nature. That more fraud is
perpetrated under I'D valorem duties Is
disproved by history and facts. Henry
Clay, who strongly favored ad valorem
duties and who produced arguments en-
tirely overlooked by his Republican sue
cessors and ~orshipers, said in 1S42:
"What has been the fact from the orr
gin Of the government until now9 The
articles from which the greatest amount
of revenue has been drawn, such as wool
ens, linens, silks, cottons, worsteds and
few others, have oil been taxed on the ad
valorem principle. and there has been no
difficulty in the operation. / believe,
upon the whole, that it is the best mode.
! believe that il we adopt fixed rate ad
valorem wherever it can be done the rev.
enue will be subjected to fewer frauds
than the injustice and frauds incident to
specific duties"
Facts Eince 1S42 have not reversed
Clay's argument.
The Hon. John Dewitt Warner says in
American Industries:
"Take the treasury cases and 60 over
them, and one at once sees that it is not
in reference to ad valorem duties that
the inspectors are occupied in our court
dockets, filed with Investigations Of
schemes to defraud the government, but
that it is in the cases which arise under
specific duties that this trouble arises
a. minor but important consideration is
this--to watch for and detect the COM
paratively ordinary methods Of evasion
by undervaluation in an ad vslorem sys-
tenn. Government officials of fair abil-
ity and reasonable experience-such as
are secured by the salaries that our gov
ernment can pay-are competent. But,
on the other hand, to track and unearth
the frauds perpetrated under the specific
system requires the service Of brains
combined with means and experience"
Mr.. Warner even comes to the conclu-
sion that in many cases where specific
duties have been tackled onto ad valorem
ones it has been done not to promote
honesty, but "by deliberate manipula-
tions of the tariff schedules, in order to
facilitate this, that or the other fraud
upon the revenue" Undoubtedly many
if not most importers who advocate spe.
cifc duties have in view some particular
device by which they expect to enrich
themselves at the expense Of the govern
ment and of the people, for the consumer
pays the esame price for smuggled or part
ly smuggled goods as for those on which
legal duties have been paid. Mr.. Warner
illustrates many ways in which specific
duties serve the purpose Of dishonest i'm
porters and compel poor people, who use
lower priced articles, to pay dispropor-
tionate share of taxes, but he cites no
case more fagrantly unjust than the fol-
lowing from The Dry Goods Economist
Of April 81, an organ Of manufacturers
and importers, which advocates specific
duties first, last and always. It occurs
in letter from special correspondent
in Chemnitz, Germany, who has decided
opinions Of his own. In fact, he almost
reads the riot act to his employers:
ANY graduated or classified schedule
of duties opens and paves the way for
the grossest frauds. Such tariff is not
in the interest Of any one except the dis.
honest importer or foreign manufacturer,
1t drives honest dealers out of the market
and defrauds the government of much
revenue.
"Let us sec how the hosiery schedule
of the Mckinley tariff has worked: A
dishonest buyer comes to Chemnitz and
purchases hosiery Of not overscrupu-
lous house, say 1000 dozen of 81 grade
and 1000 dozen at $3.50, both lots being
in the second classification, and paying
duty of 80 cents per dozen and 80 per
cent ad valorem. The buyer, however,
instructs the manufacturer to invoice
the first 1000 dozen at say SO cents per
dozen, adding the Al cents per dozen to
the other 1000 dozen, bringing the price
Of the second lot up to $l.91 per dozen,
the manufacturer receiving exactly the
price asked, which satisfies himself and
his conscience But how does the pur-
chaser come out by the transactionp If
the goods were invoiced honestly:
p, 900 dozen at 81 would cost. $1,000
1000 dozen at $3.50 would cost. $500
n.,k, fc Il aE1 Qn,nop Z
7
Total. ACKNOWLEDGEMENTS. $4,25O
"But by the process of juggling prices:
"1 600 dozen at 50 cents would cost.......$ 500
1000 dozen at $1.9l would cost. ........... 1910
Duty, cost Of first 1000, 20 cents per dozen
| and 20 per cent .......................... 3l9
Duty, cost of second 1000. 30 cents per
dozen and 30 per cent. ................... 1913 |
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Tnfal 90 Qo1 |