present them in the form of the statement annexed [not preserved] to
this communication, showing the original cost of the article, the expense
of freight, commissions, and insurance, the rate of ad valorem duty,
now paid, and its amount in the form of a specific duty, and the specific
duty proposed to be laid upon il.
" I am, respectfully, &c.,
" WM. II. CRAWFORD.
" P. S. Is it practicable to subject cloths of wool, cotton, or flax, &c.,
to specific duties, by combining the number of threads in a given extent
with the weight of the cloth ? It is asserted by some of the English
manufacturers to be entirely practicable by the aid of magnifying-
glasses constructed for that object."
THE TARIFF. 175
At the following session of Congress, Mr. Crawford commu
nicated the results of his inquiry, in the following letter to the
Speaker of the House of Representatives.
" Treasury Department, February 8th, 1819.
" SIR, In obedience to a resolution of the House of Representa
tives of the 20th of April, 1818, directing the Secretary of the Treas
ury to report to Congress, at its next session, what further improve
ment it may be practicable to make in the tariff of duties upon imported
goods, wares, and merchandise, by charging specific duties upon articles
which are now charged with duties ad valorem^ I have the honor to
submit the enclosed list of articles, exhibiting the original cost, the
freight,- insurance, and commissions; where it has been practicable ; the
present ad valorem duty reduced to a specific form ; and the specific
duty which it is conceived may be imposed upon them, respectively,
consistent with the public interest.
" It is probable that this list may be considerably extended, should the
subject receive no final disposition during the present session.
" I have the honor to be your most obedient servant,
" WM. H. CRAWFORD.
" To the Honorable the SPEAKER of the House of Representatives."
The articles in this list amount to one hundred and fifty-five
Now, Sir, what is the great fact that makes ad valorem duties
unsafe as a general principle of finance ? I must confess my
utter consternation when I heard, the other day, the honorable
chairman of the Committee of Finance f say, that he did not
believe that a case of fraudulent under-valuation had ever been
made out! Why, it is the notoriety of a thousand such cases,
occurring every year in this government, and in all governments
where the system of ad valorem duties in any degree prevails,
and^the value is ascertained upon the invoices or proof from
abroad ; itjs the notoriety of a thousand such cases of fraud,
that has led to the adoption of this general rule, and raised it
even into a principle, as I. have shown. My friend from Maine $
must have satisfied the honorable chairman and the Senate,
as well as every body else, of the number and the notoriety
of the cases of fraudulent under-valuation, because he enumer
ated instances, and hundreds of instances, in which goods have
* State Papers, Finance, Vol. III. pp. 415, 416.
f Mr. Lewis. % Mr. Evans.
176 THE TARIFF.
been seized and forfeited for under-valuation. The cases arc
numberless ; and, Sir, since this subject has come up, and since
persons out doors have heard the declaration of the honorable
chairman, my desk has been laboring under the weight of facts
communicated from various portions of the commercial com
munity. I will state only a few, out of many. Here is one,
and here is the proof:
" A merchant orders goods to be shipped from France and entered at
New Orleans for the Western trade, with the understanding that he is
to have them at the foreign cost, with the duties and charges added.
A shipment was made and forwarded to the purchaser,
amounting to 6,829.93 francs.
At the same time the invoice forwarded with the goods
to New Orleans was, 5,258.00 francs.
Difference, 1,571.93 francs.
Or, $316.94 out of $ 1,300.94.
" The goods were valued, therefore, in the entry, at $ 316.94 less
than they were to the purchaser, and the purchaser was actually charged
for the duty on this $316.94 as paid to the government, amounting to
$95.10. Both the government and the purchaser were, therefore,
cheated out of that sum.
" This transaction occurred in the spring of 1846, and I send you a
copy of the correspondence in which these facts are stated, and not
denied ; but the French house attempts a roundabout justification for
putting the foreign cost to the purchasers at a greater amount than the
This transaction occurred this very year. And here, Sir, is
another, communicated by a most highly respectable merchant
of my acquaintance.
"Boston, July I7th, 1846.
" DEAR SIR, I am informed that a respectable house in this city
received an invoice of European goods from a foreign house, the amount
of which was about $ 2,000, and that, after entering the goods at the
custom-house by the invoices, they received another invoice valuing tbe
same goods at about $ 8,000, with a letter stating that the first invoice
was to levy duties by, and the second to sell by.
" The consignee here, who is als o an importer, not being willing to be
a party to tbe fraud, deposited both invoices at the custom-house, where
they were yesterday.
THE TARIFF. 177
" I have no doubt of the authority from which I received this informa
tion, but I do not wish to be quoted for it.
" I have thought you might be pleased to know this fact, as the fraud
is so great, and the perpetrator beyond the reach of any penal statutes
of this country.
" Your most obedient servant,
" Hon. DANIEL WEBSTER, Washington.
" P. S. I hear that Mr. Lamson is the consignee."
Sir, one case more. A highly respectable firm in Boston,
Messrs. George H. Gray & Co., have for many years been deal
ers in hardware, and in the habit of making importations of cer
tain articles from the North of Europe. In these articles they
found themselves constantly undersold by the dealers in New
York. They could not understand the reason of this for a long
time, but last spring the secret came to light. They had ordered
a small amount of hardware to be sent to them, and in due time
the goods came, and two invoices came with them. In one in
voice the cost was stated at nine hundred and fifty-eight tha-
lers, in the other at one thousand four hundred and two. And
the letter accompanying these invoices says : " You find herewith
duplicate invoices of the greatest part of your order, &c. The
original I send by Havre packet. You also find herewith an in
voice made up in the manner like [that which] the most import
ers of your country require, perhaps to save some duty"
Now, Sir, these original invoices, the false and the true, and
the original letter which I have read, are now in my hand, and
any gentleman who feels disposed may look at them. Of
course, Messrs. Gray & Co. carried both invoices to the custom
house, because they are honorable merchants, and the duties
were assessed on the higher invoice. And these gentlemen
were no longer at a loss to account for the low price at which
this description of merchandise had been selling in the city of
But now, Sir, take, not a single case, but the results of long
experience. I am about to read a letter, not addressed to me,
but placed in my hands, from a gentleman well known, I pre
sume, to both the Senators of New York, and to other members,
This letter, I think, will startle the honorable chairman. It must
open to his rnind quite a new view of things.
178 THE TARIFF.
" Troy, July 14th, 1846.
" LE GRAND CANNON, ESQ. :
" Sir, Agreeably to your wish, I avail myself of this opportunity to
give you the benefit of my experience in mercantile and manufacturing
business, hoping it may tend to an improvement of the bill, now pend
ing in the Senate, for the collection of duties. I hope members of Con
gress will have the same views of the probable results which I antici
pate ; which are, that the system of ad valorem duties does give the
foreign importer and manufacturer a very undue advantage over the
American importer. This will be apparent from my own experience,
which I give you annexed.
" My brother and myself were brought up in the town of Manches
ter, and are well acquainted with the manufacturers and manufacturing.
At the age of twenty years it appeared very evident to me that we could
finish goods and import goods into New York about ten per cent, lower
than the American merchant;. and, with this conviction, I agreed to
come out to New York and dispose of the goods,, and leave my brother
to finish and forward the goods. The result was equal to our expecta
tions. We imported our goods ten per cent, cheaper than our competi
tors, and by the ad valorem duties we paid nearly five per cent, less
duties ; so that, in twenty-two years, we made nearly a million dollars,
whilst nearly all the American merchants failed.
" Now, I reason, what has been will be ; and should the present tariff
bill pass, it will give the foreign manufacturer a decided advantage, and
tend to reduce the rate of duties lower than is anticipated. And I can
not avoid expressing my decided opinion in favor of specific duties, as
then the foreign manufacturer would pajLthe same duties as the Ameri
" BENJ. MARSHALL."
Can any man gainsay the truth of this ? Is there a merchant,
foreign or American, in the United States, who will express any
contrariety of opinion ? Is there a man, high or low, who de
nies it? I know of none; I have heard of none. Sir, it has
been the experience of this government, always, that the ad
valorem system is open to innumerable frauds. What is the
case with England ? In her notions favorable to free trade, has
she rushed madly into a scheme of ad valorem duties ? Sir, a
system of ad valorem duties is not free trade, /but fraudulent
trade. Has England countenanced this? Not at all; on the
contrary, on every occasion of a revision of the tariff of Eng
land, a constant effort has been made, and progress attained in
THE TARIFF. 179
every case, to augment the number of specific duties, and reduce
the number of ad valorem duties. A gentleman in the other
house* has taken pains, which I have also done, though I be
lieve not quite so thoroughly as he has, to go through the items
of the British tariff, and see what proportion of duties in that
tariff are ad valorem and what are specific. Now, Sir, the result
of that examination shows, that at this day, in this British tariff,
out of seven hundred and fourteen articles, six hundred and
eight are subject to specific duties. Every duty that from its
nature could be made specific is made specific. Nothing is
placed in the list of ad valorem articles but such as seem to be
incapable of assessment in any other form.
Well, Sir, how do we stand then? We have the experience
of our own government; we have the judgment of those most-
distinguished in the administration of our affairs ; we have the
production of proof, on this most important point, in hundreds
and hundreds of instances, of the danger of the ad valorem mode
of assessing duties. What is produced in its favor? Every
importer of the United States, without exception, is against it.
Sir, the administration has not a mercantile friend from here to
Penotiscot, so far as appears, that will come forward and give
his opinion in favor of this system. I undertake to say there is
not one. There may be members of the " little Congress," to
which the honorable member from Connecticut f referred some
days ago, some subordinate officers about the custom-house,
influenced by I know not what considerations,-who may be found
ready to sustain such a system. That I do not deny. But I
say that no importing merchant can be found between Penobscot
and Richmond, who will give his opinion in favor of it, if he is
an honest man, and one who gets his living by importation him
self. Well, then, how are we to decide? Against our own
experience? Against these thousands of substantiated facts?
Against these cases now blushing with recent fraud? Against
the example, not only of the English government, but against
that of all the Continental governments? for the Zoll Verein
carries its specific duties much further even than England.
Against all this what have we? Why, we have the recom
mendation of the President of the United States and the Secre-
* Mr. Seaman. f Mr. Niles.
180 THE TARIFF.
tary of the Treasury ; highly respectable persons ; respectable in
private life, respectable, and I may say eminent, in some walks
of public life; but, I must add, neither of them trained in the
knowledge of commerce, neither of them having had habits of
intercourse with practical men of the cities, or men of mercan
tile business. And yet here, in the first year of their adminis
tration, fresh to the duties thrown upon them, they come out
with a recommendation of a vast change ; they propose a new
system, adverse to all our own experience, hostile to every thing
that we have ever learned, different from the experience of every
other country on the face of the earth, and which stands solely
on the responsibility of their own individual opinions! I do
not think that this is a fair balance of authority; and since
nobody here will uphold it, since nobody here will defend it,
it is fair enough for me to say, with entire respect to the head
of the government and the Department of the Treasury, that
the preponderance of authority is quite overwhelming the other
But now, Mr. President, I come to a part of this act, to which
I am exceedingly desirous to call the attention, the serious
attention, of gentlemen on both sides of the Senate. The
eighth and ninth sections of this bill appear to me to be so
extraordinary and so objectionable, that I cannot persuade my
self that any gentleman, who will take the trouble of reading
and studying them, will hazard the revenue of the country upon
such provisions. In the first place, allow me to read the ninth
section of the bill. Let me repeat, that the danger in the prac
tical operation of the ad valorem system arises from the great
* probability of under-valuation, fraudulent or otherwise, in the
foreign market. The thing to be guarded against, therefore,
wherever the ad valorem system of duty prevails, is fraudulent
\ or accidental under-valuation ; and therefore the law now in op
eration provides specific and adequate penalties in such cases.
If there be any fraudulent under-valuation under the existing
law, and it be detected, there is a penalty, there is~~redress. But
if I understand aright the legal effect of these provisions, that
effect will be (and to that I wish to call the attention of the legal
minds of the Senate) to remove all penalties whatsoever from
fraudulent under-valuation ; because, perhaps, of the opinion of
the chairman, that no such case need be provided for, as he
THE TARIFF. 181
thinks none such ever yet happened ! There will not be, as it
seems to me, the smallest penalty, or the least check to any
amount of under-valuation that any body may choose to make.
Here is the ninth section of the bill :
" Sec. 9. And be it further enacted, That if, upon the examination
of any parcel, package, or quantity of goods, of which entry has been
made, the appraisers of the United States shall be of opinion that the
same was undervalued by the owner, importer, consignee, or agent, with
the intention of defrauding the revenue of the United States, it shall be
lawful for the collector, within whose district the same may be entered,
the sanction of the Secretary of the Treasury being first obtained, if, in
his opinion, the same shall be advisable, to take such goods for the use
of the United States. And such collector shall cause such goods to be
sold at public auction, within twenty days from the time of taking the
same, in the manner prescribed by law for the sale of unclaimed goods ;
and the proceeds of such sale shall be placed forthwith in the treasury
of the United States ; and such collector is hereby authorized to pay
out of the accruing revenue, to the owner, importer, consignee, or agent
of the goods so taken, the value thereof as declared in the entry, and
five per centum upon such amount in addition thereto ; and the said col
lector shall render to the Secretary of the Treasury, with his accounts
of the customs, a statement showing the amount of moneys so paid, the
amount of duties chargeable on the goods so taken, and the amount of
proceeds paid into the treasury ; and this section shall be in force until
the first of July, eighteen hundred and forty-eight, unless otherwise di
rected by Congress."
Sir, there never was such a provision as that on the face of
the earth ! I pray gentlemen to look to it. Here is a man who
comes with a fraudulent invoice ; it is proved to be fraudulent ;
the present law punishes him by forfeiting the goods ; but what
does this law say ? It says that the collector may take the
goods, sell them, put the proceeds into the treasury, but shall pay
him the cost, and five per cent, over ! So that the fraudulent
importer, if found out, shall yet be made safe against loss ! He
may yet sell his goods to the United States for cost, and five per
cent, profit. Now, I am guilty of no misrepresentation. Here
are the written words. It is exactly what I state. He comes
with his goods, and the collector charges him with a fraudu
lent invoice. " Very well," he says, " if you say so, take the
goods and give me what I allege they cost, with five per cent.
VOL. v. 16
182 THE TARIFF.
profit. Make the most of it!" Whether he made a good im
portation or a bad one, the law very kindly provides him with
a way to get rid of his goods. There is not a particle of
penalty, not a particle of inconvenience to be suffered by him.
It is all considerate kindness for one proved guilty of a fraud!
On general principles, this section would seem to supersede and
abrogate all previously existing provisions, because the enact
ment is made in relation to the same subject-matter, and covers
the cases covered by existing laws, and is nowhere said to be
additional, or cumulative ; but, on the contrary, the twelfth sec
tion declares that all previous laws repugnant to the provisions
of this act shall be repealed.
But if this be regarded as a new provision, not intended to
repeal existing laws, but designed merely to give a new power
to the collector or the Secretary, then it is still more objectiona
ble, because, if viewed in that light, it gives a dispensing power,
or an unlimited power of favoritism. It enables the Secretary
to excuse, and even to reward, one fraudulent importer, while
others, not more fraudulent, forfeit their goods. It seems to be
thought that the Secretary may well show favor and kindness
in particular cases, though deliberate fraud has been actually
perpetrated. This is exactly in the spirit of the serving-man s
address to Mr. Justice Shallow :
"I grant your worship that he is a knave, Sir; but yet, God forbid,
Sir, but a knave should have some countenance at his friend s request.
An honest man, Sir, is able to speak for himself, when a knave is not.
I have served your worship, truly, Sir, this eight years, and if I cannot
once or twice in a quarter bear out a knave against an honest man, I
have but a very little credit with your worship. The knave is mine
honest friend, Sir; therefore, I beseech your worship, let him be coun
Mr. Cameron here rose, and was understood to say, that he really
could hardly suppose that such a blunder had been committed in pass
ing the bill. He wished to hear the section again.
I will read it again, "with discretion and due emphasis."
Well, now, (continued Mr. W.,- after reading the section,) the
fraudulent importer may himself purchase the goods at auction.
He may perhaps buy them at fifty per cent., and make the gov
ernment pay the full amount ! And besides, he thus evades the
THE TARIFF. 183
duty altogether. He gets his goods in free, and has a certainty
of being paid all that he rates them at, and five per cent, besides.
Now, Sir, our predecessors did not leave the matter in that state.
The provision in the seventeenth section of the act of 1842, and
the nineteenth section of the same act, are the provisions under
existing laws for prevention of under-valuation, in addition to
the general penalty of forfeiture, when invoiced fraudulently.
The eighth section of the bill, is still more remarkable. I do
not mean to say that there is any purpose in the Treasury De
partment, or any officer of the government, to give facilities to
fraudulent importations. They are not capable of that. Yet I
say that this eighth section is open to mu,ch fraudulent abuse.
See what it is :
" Sec. 8. And le it further enacted, That it shall be lawful for the
owner, consignee, or agent of imports which have been actually pur
chased, on entry of the same, to make such addition in the entry to the
cost or value given in the invoice, as in his opinion may raise the same
to the true market value of such imports in the principal markets of the
country whence the importation shall have been made, or in which the
goods imported shall have been originally manufactured or produced, as
the case may be ; and to add thereto all costs and charges which, under
existing laws, would form part of the true value at the port where
the same may be entered, upon which the duties should be assessed.
And it shall be the duty of the collector within whose district the same
may be imported or entered, to cause the dutiable value of such imports
to be appraised, estimated, and ascertained in accordance with the pro
visions of existing laws ; and if the appraised value thereof shall exceed
by ten per centum or more the value so declared on the entry, then, in
addition to the duties imposed by law on the same, there shall be levied,
collected, and paid a duty of twenty per centum ad valorem on such
appraised value : Provided, nevertheless, that under no circumstances
shall the duty be assessed upon an amount less than the invoice value,
any law of Congress to the contrary notwithstanding."
By statute of long standing, fraudulent invoices for under
valuation are declared to be grounds of forfeiture of the goods,
and the seventeenth section of the law of 1842 goes further, and
imposes a personal penalty. Its provision is this :
"Provided also, That in all cases when the actual value to be ap
praised, estimated, and ascertained, as hereinbefore stated, of any
goods, wares, and mercharidise imported into the United States, and
184 THE TARIFF.
subject to any ad valorem duty, or whereon the duty is regulated by, or
directed to be imposed or levied on, the value of the square yard, or
other parcel or quantity thereof, shall exceed by ten per centum, or
more, the invoice value, then, in addition to the duty imposed by law on
the same, there shall be levied and collected on the same goods, wares,
and merchandise fifty per centum of the duty imposed on the same,
when fairly invoiced."
Now, the object of the eighth section in this bill appears to be
to shield the honest importer from the penalties of under-valua-
tion, where he has actually purchased the goods at a price below
the market value; and it permits him, in his entry, to add so
much to the value given in the invoice, as, in his opinion, will
Apise the goods to the market value in the country from- which
they were imported. Yet see how open to abuse. If the value
put upon the goods by the appraisers shall exceed by ten per
cent, the value so declared by the importer in the entry, then the
goods shall be liable to an additional duty of twenty per cent.
ad valorem. This is a provision for an entry of goods at a valu
ation which differs from the invoice. It prescribes no oath for
the importer to take in regard ~to the addition which he proposes
to make; and -in all the revenue laws I can find no oath which
a collector i^ authorized to administer, and which is applicable
to such a case. /> Here is opened a door for fraud, if a purpose to
commit fraud exists. An importer may require his foreign cor
respondents to send him half a dozen invoices of the same
goods, graduated all along down to seventy-five per cent, be
low their value ; and on arrival he will use that invoice which
shall be ten, twenty, or thirty per cent., or more, under the
true value, according to circumstances. If he find the apprais
ers particularly sharp as to such articles as his, he will add