The times., 1897-07-04
.A PREMIUM ON SMUGGLING
High Duties Tempt UnserupulOus
and Injure Honest Traders.
THE TARIFF on DIAMONDS
The senate Comes to the Conclusion
that by Reducing the Tariff Ii
VIII Increase the Reven ue-Soine
Interesting Satisfies Bearing
Upon the Question.

The Senate Committee on Finance has
been compelled to scrutinize every para
graph in its bill for the purposes Of so ar
ranging it that il will bring in the highest
possible amount OF revenue, and with all
this painstaking care it is very doubtful
if the bill viii do what the cOmmittee
hopes In looking about for some item that
could be Used to squeeze out little more
revenue, the committee has alighted upon
cut and polished diamonds ana nave come
to the conclusion that they can on this
one item add something like million dol
lars 10 the revenues OF the Government.
Strange "a 1T may seem, TINS Is To be
done 10y reducing the duty from the 20
per cent OF existing law ana . per cent
OF the House bill, 10 10 per cent which the
committee is prepared to show IS the
ma aXimum revenue producing rate Oh lhiS
item. The item went through the senate
all right, and the committee feels that II
has done good thing in tnus unearthing
another cooling million of dollars
Diamonds have always teeh the subject
OF a good deal OF buncoube in Congressional
speeches The rate was increased 70 20
per cent in the Senate, when the wilson
bill went through, with the understanding
that it should he reduced, and tic confer
ence committee reauly agreed 10 the It
ductiou Of the 10 per cent OF the House
bill, but, unfortunately, the conference re-
suited in final gulping Of thc Senate OIL
ana the high rate Of the Senate measure
STAYED ia o Jhe great loss OF the I redslry
in the matter Of revenue owing 10 The
ease with which these articles may he
smuggIed, the high rates are conducive
To smuggling. ana Tor thIce years Tie busl-
ness has flouushcd as never before
The statistics OF the department prove
this for in s93 under the 10 per cent
] rate OF the Mckinley law there was col
; lected almost a million and half Of
dollars on diamonds valued at almost
! 5000, 900, while last year under the
/ - per ceut rate Of the Wilson law the
/ total value OF the diamonds imported
/ amounted TO only TWO and thTee-qnarter
millions and the duty To but a trlile
less THAN ST0O, GOO. For the first month
+ IN this calendar year the duties are esti-
mated to reach only $50, 900 and "n TINS
] basis the revenue ior the year VIII aSgie-
gate only a quarter OF 4 million dollars
4 tiom It's revenue producing capacity
solely, it looks as If ii Z lower tate OF duty
/ was the better thing. The Treasury flS
uIes show that there fas always leen a
failure TO collect tEe duty on diamonds
/ when the rate went up, thereby driving
( h5ues- men out ui q { business and giving
smuggIers the opportunity 10 thrive at
the expense of the government and its
/ revenues Tie walker tariff which is
pointed TO by democrats as model, fixed
| the rate on gems at / q Ter cent. ard in
| 1861, as a war measure only, the rate
was fixed at . per cent. In 1894 II was
/ raised to 10 per cent, and remained at
that rate until the present law went into
/ effect.
| ILcle are some interesting facts in the
statistics Of this trade The diamond
workers of the United states have never
exceeded at any one time over 45O. Their
number AT the present time, owing to the
activity Of the sInuggler, is not over 225,
| Forty of this number have petitioned for
| the 10 PEI cent duty, believing that it
| will give them more work, and OF TIE
| the remainder of the total, trade Statls-
ties show that not more than twenty-five
are American citizens. As compared he
tween S93, with a 10 per cent rate, nd
1896, with u 20 per cent rate, there qas
been loss u the Government in reE'nue
FOL that one year, OF S7S2,OO0, which,
divided among the 225 diamond cutters.
| largely temporary residents of the UnIIed
states, makes the annual loss 10 the Gov
eminent through the loss of revenue Tor
maintaining this industry on the present
basis, So, 475 fol each cutter, a pretty stiff
amount to pay, especially when 1t is
readily seen that the cutters did not get
the money, but that 1t went into the
pockets Of the smuggleTs and the Gov
eminent was defrauded by just that
amount There is no shrinkage in the
supply of diamonds in the domestic market;
the S12,00O,0O0 yearly less in imports
of cut diamonds has simply meant the
smuggling of that amount of these precious
stones into this country.
Diamondis sold abroad for impoI ia ticn
into theUnted Stateshave tObe registered,
under the law, with the consulate at the
port from which they are shipped. Snug
glers do not register their purchases for
they do not send them over in care OF the
transportation lines. These registrations
fell from over $6 zoe, 900 in S94 to $S10,-
900 in 1S96, and to 1855 900 for the six
months ending December, 1896, which
should be, by far, the largest half OF
the year. The consul general at London
reported TO this Government that honest
merchants mad been forced oat of business.
Seeking, therefore, to raise as much
revenue AS possible, the committee says il
, believes the top notch of revenue is reached
with a @ per cent duty, and that protec
ton amply sufficient is given to the
| workers in tile industry at that figure Ii
not infrequently happens that the duty o
10 per cent on a single gem the size OF )
: pea amounts to $500, and this is easily
appreciated when it is stated that the
whole Importation of the best year Ill his
tory an be put in Il box ten inches square
On this small package the duty at 10 pei
ccut would be million AMI half dollars
which the committee say, would he col
lcoteti for the reason that honest men coul'
afford to import them at that figure, ans
would not come into competition with The
smugslcr, who pays nothing.
In discussing this rate, upon which The
committee finally agreed, a prominent
member pointed ou! the fact that on on
fine rough diamond weighing only sly
carats, the cost of cutting, which woult
be in this country $1,000. the duty at 1,
per cent would amount to more than sever
and might exceed ten times the total labO
| cost of cutting and polishing. There is III
| duty on diamonds in Canada, and his fac
has made that country distributing poin
! from which sto..es ave SIN, tH't = an
country. The long line of frontier, un
| protected at many points, is made availa bl
by the smugglers for the carrying on o
their illegitimate traffic. The member