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competition would be created in the business of importation,
can hardly be doubted. Such, at least, is the opinion of the
mercantile community ; and so believing, it is natural that
they should look with great interest to the concurrence of
the Senate in a measure which appears to them so inti-
mately connected with the prosperity of the country.

And finally, Mr. President, if uniform prices and steady
markets are, as we are taught to believe, advantageous to
the producing classes, the manufacturing interest, next to
the commercial, is likely to be most benefited by the pro-
posed measure, through supplies of merchandise near at hand,
ready to meet sudden and unusual demands, thus preventing
a transient scarcity from becoming the basis of speculation,
and furnishing an additional safeguard against those derange-
ments which are always the most injurious to steady industrv.

Mr. Dix then proceeded to suggest and explain certain amendments
to the bill, which he intended to propose at a future stage of the dis-
cussion.



124. SPEECHES US THE SENATE.



n.

After the preceding explanatory speech, Mr. Huntington, of Con-
necticut, spoke at length in opposition to the bill, although his speech
was never published except in the form of an outline. Tlie following
speech in reply was delivered by Mr. Dix on the 9th July, 1846.

Mr. President : It was my intention to reply to the
Senator from Connecticut^ on the day after lie addressed the
Senate ; but I have been prevented by a variety of circum-
stances over which I could exercise no control. With the
lapse of time which has intervened, (now more than a week,)
his remarks have lost something of their freshness ; and I
may not be able to follow his argument as closely as I might
have done if I could have had an opportunity to respond at
an earlier day, — especially as I have been, for a consider-
able portion of the intervening time, absent from the city,
and in no condition to examine his arguments. It would
now be in vain, if I were to undertake to follow him from
the beginning to the end of his able and well-considered
speech. I shall not attempt it. But I desire so far to tax the
indulgence of the Senate as to notice the objections he has
made to the .details of the bill under consideration, to ex-
amine a few of his leading arguments against the general
policy of the measure, and to point out what I consider
grave misapprehensions with regard to certain commercial
facts which have an essential connection with the subject.
His objections to the details of the bill came first in the
course of his argument, and I shall take them up in the
order in which they were presented to the Senate.

But I desire to notice, in the first place, a preliminary
remark of the Senator. He did me the honor to say that

1 Mr. Huntington.



THE WAREHOUSE SYSTEM. 125

he considered me capable of drawing this bill, — a compli-
ment for which I beg him to accept my thanks, though I
did think he took from it much of its value when he added
that, in bis opinion, such a bill ought not to receive the sanc-
tion of the Senate. He said, also, that he considered me
capable of drawing a bill on any subject: in this he conceded
to me entirely too much merit. And he concluded by saying
that, if he had not felt this assurance, he would have sup-
posed the bill, from his view of its probable operation, to have
been drawn by some large capitalist, or the factor of some
foreign manufacturer. Now, I beg to assure my honorable
friend from Connecticut that no person of the description
referred to by him had any agency in the matter. The
person to whom I was principally indebted for suggestions
in respect to it, before it was prepared for presentation to
the Senate, was one of those "regular dealers" in New
York, who, according to the Senator, have no interest in a
warehouse system, — who neither desire nor can afford to
use it, — a gentleman of intelligence and information, and
who is now a member of the convention engaged in revising
the constitution of the State. But I can assure the Senator
that the gentleman to whom I allude deems the measure of
the utmost importance to those who, under the present sys-
tem, have not the means of entering into competition with
large capitalists, and believes that it will have a salutary
influence upon the commercial prosperity of the country.

I proceed now to notice the objections the Senator has
taken to the details of the bill : —

1. The first objection, as I understood it, was, that in
depositing merchandise in store no invoice was required, no
appraisement was necessary, nothing, indeed, to show the
nature of the merchandise, or the amount of the duties
chargeable on it. If the Senator will refer to the amend-
ments I have proposed, he will see that all these objects are
effectually accomplished. The importer of foreign merchan-
dise is required " to make entry " for warehousing it, " in



X26 SPEECHES IN THE SENATE.

such form, and supported by such proof, as shall be pre-
scribed by the Secretary of the Treasury." To make entry
of merchandise has a specific and well-known meaning in
the operations of the custom-house. It involves the neces-
sity of an invoice, and a compliance with a variety of well-
digested forms. Nor is this all. Another amendment
provides that the duties and the charges on merchandise
deposited in store shall be ascertained " on due entry there-
of." The duties cannot be ascertained without weighing,
gauging, measuring, or appraising the merchandise. Thus
it will be seen that a compliance with all the forms of pro-
ceeding which are required in the payment of the duties on
the entry of merchandise is to be rigidly exacted when it is
deposited in store.

2. The next objection is, that if goods are burnt while in
store, the government will lose the duties. Now, sir, I ask
if the government should exact duties in such a case? Is
it not enough that the importer or owner should lose his
merchandise ^. Have not the duties usually been remitted in
such cases ? I suppose this to have been the practice ; and
certainly it is opposed to every principle of liberality, and
even of fjiirness, to exact duties on merchandise which has
never come into the home market for domestic consump-
tion.

3. The Senator says, if merchandise deteriorates while in
store, the government will lose the whole amount, or at least
a portion of the duties, and that they will be calculated on
the reduced value. In this he is entirely mistaken. The
duties, as I have already said, are to be ascertained on the
entry for warehousing the merchandise. They will be calcu-
lated on its full value; and if it becomes perishable, the offi-
cers of the customs will cause it to be sold forthwith under
the provisiion relating to perishable goods, and thus realize
the duties before the merchandise becomes worthless.

4. The Senator is of the opinion, that, under the pro-
visions of this bill, merchandise may be taken out of store



THE WAREHOUSE SYSTEM. 1^7

and reexported in any quantity, however small. The hill
is not so intended, nor do I think it can properly receive
such a construction. If he will look at the twenty-ninth
hne, he will see that a conij)liance with the requirements of
existing laws, in relation to the exportation of merchandise
with the henefit of drawhack, is necessary. It must, there-
fore, he exported in the original packages. But if there is
any douht on this subject, a verbal amendment will be all
that is required to remove the objection.

5. With regard to the necessity of a bond to pay the
duties, there is good ground for a difference of opinion. It
is to be remembered that the goods are to be in the pos-
session of the collector, or, in other words, in the possession
of the government. They are a perfect security for the
payment of the duties. Why, then, exact a bond ^ If it be
thought expedient, there certainly can be no valid objection.
Under the British system no bond is required, if the goods
are dejjosited in the public stores, and are in the ])ossession
of the Crown. When the goods are deposited in warehouses
belonging to individuals or companies, a bond- is required,
not usually from the owner of the goods, but a general bond
from the owner of the warehouse, stipulating that the goods
deposited with him shall be exported, or the duties paid in
full.

6. With regard to the danger of a clandestine removal
of goods, — another objection urged against the bill, — the
answer is, that the danger must be very slight, as the goods
will be, as those now deposited in store are, in possession of
the custom-house officers. There is, I believe, no provision
by law now for the punishment of such offences. But if
experience shall show the necessity of such a provision, it
can at any time be made. Indeed, I will not object to such
an amendment of the bill, if it be thought advisable.

7. With regard to the provision exonerating the master
of a vessel from all claim of the owner of merchandise,
which has been sold by the collector for the non-payment



128 SPEECHES IN THE SENATE.

of the duties, I will only say that it is copied verbatim from
the tariff" act of 1842, that it is in constant practice, and no
difficulty is known to have resulted from it.

8. It is also objected that if goods are once withdrawn
from the public stores, and the duties paid, they can never
afterwards be reexported, or, in other words, that foreign
goods can only be reexported from the stores. Sir, this is
an entire misapprehension. All the laws relating to deben-
tures will be left in full force. If an importer or owner of
merchandise deposited in store withdraws it, and pays the
duties, he may at any time, within the period allowed by
law, reexport it with the benefit of drawback. The existing
provisions of law will, in this respect, remain untouched.
But in case of reexportation under such circumstances, a
deduction of two and a half per cent, will be made on
refunding the duties.

9. It is said, also, that goods may be withdrawn in the
smallest quantity for home consumption, and that the public
stores will become mere retail shops. It is certainly very
unlikely that any such result will follow. No merchandise
can be withdrawn without a permit from the collector, and
this permit must be paid for. The inconvenience and ex-
pense will, in ordinary cases, constitute sufficient obstacles to
the withdrawal of minute quantities of merchandise. But
if gentlemen think it material, the objection can readily be
removed by a proviso that no merchandise shall be with-
drawn from store in less quantities than in an entire pack-
age, bale, box, or cask.

These, as I understand them, are the objections made to
the details of the bill ; and I am sure it will afford the
Senator pleasure to find, on a more critical examination of
the subject, that there is not one of them which is not either
groundless, or which may not be removed by the most
simple amendment.

I will only say, in conclusion, in respect to the details of
the bill, that it has been subjected to the rigid scrutiny of



THE WAREHOUSE SYSTEM.



129



some of the most intelligent individuals in the revenue
service, — some now in commission, and others who have
become familiar with the operations of the system, through
long experience in prominent situations. All these gentle-
men concur in the opinion that it will be adequate to the
objects it has in view, and that it is sufficiently guarded
against abuse. But should experience point out necessary
changes, it will always be easy to make them.

I come now, Mr. President, to a portion of the Senator's
remarks which will require a somewhat extended and criti-
cal examination. When this bill was first called up for
consideration, I alluded incidentally, in my explanation of
its provisions, to the British warehouse system, and to the
influence it had exerted upon the commercial prosperity of
Great Britain. I did not say, nor did I intend to intimate,
that the plan proposed by the bill under consideration was
copied, in any degree, from the British system. On the
contrary, I had, throughout my remarks, kept steadily in
view the idea that it was founded upon our own laws regu-
lating the deposit of merchandise in the public stores, and
that the objects it had in view were to be accomplished by
an enlargement and more extended application of the pro-
visions of those laws. In his reply, the Senator referred
to the British system, comparing the plan proposed by the
bill under consideration with it, and in his references to the
operation of the former he came to conclusions to which I
cannot yield my assent.

I have no printed report of the Senator's remarks, and,
speaking from very hasty and brief notes of his topics, I
may inadvertently misstate him. I trust I shall not ; but
if I do, I beg him to be assured that no one will regret it
so much as myself.

I understood one of his first remarks, in relation to the
British warehouse system, to be, that it was designed to
extend the commerce of Great Britain, and to depress the
trade and shipping of other countries. I cannot concur

17



130 SPEECHES m THE SENATE.

with him in all respects, though not differing with him en-
tirely as to its design ; and I shall endeavor to show that its
effect has not been to exclude foreign shipping from a par-
ticipation in the commerce of the British empire.

Its design, as I have always understood, was chiefly to
remove great commercial inconveniences, arising from the
necessity of paying duties in cash on the entry of merchan-
dise. These inconveniences are stated by McCulloch to
have been : —

" 1. That the merchant, in order to raise funds to pay the duties, was
frequently reduced to the necessity of selling his goods immediately on
their arrival, when, perhaps, the market was glutted.

" 2. That the duties having to be paid all at once, and not by degi-ees,
as the goods were sold for consumption, their price was raised by the
amount of the profit on the capital advanced in payment of the duties.

" 3. That competition was diminished in consequence of the greater
command of funds required to carry on trade under such disadvan-
tages ; and a few rich individuals were enabled to monopolize the im-
portation of those commodities on which duties were payable.

" 4. That the system of paying cash on the entry of merchandise had
an obvious tendency to discourage the carrying trade.

" 5. That it prevented the country from becoming an entrepot for for-
eign products ; and hindered the importation of such as were not imme-
diately wanted for home consumption, and thus tended to lessen the
resort of foreigners to the markets of Great Britain, inasmuch as it
became difficult, or rather impossible, for them to complete an assorted
cargo."

These are the reasons assigned by McCulloch for estab-
hshing the system ; and it is curious to observe how closely
this enumeration of inconveniences describes those under
which our own commerce labors.

In the "Yearly Journal of Trade" for 184<5, — a work
which has been published for twenty-three years, and which,
I believe, may be safely referred to as authority in matters
touching the commercial system of Great Britain, — I find
the following passages in some preliminary remarks in rela-
tion to warehousing : —

"Antecedently to the present century, a system of restraint and
prohibition pervaded the administration of our maritime and revenue



THE WAREHOUSE SYSTEM. 131

affairs, producing inconvenience to the merchant and detriment to com-
merce. Much of such inconvenience arose from the circumstance of
the import duties being required to be paid on the landing of goods,
amounting frequently to many thousand pounds. Such was more par-
ticularly the case during the late war, when the usual regularity of
commercial transactions was much interrupted, and the merchant, at
times, called upon on the unexpected arrival of a ship for a large ad-
vance of duties. This gave rise to a system of deferring payment, by
allowing goods to be secured in warehouses or other approved places
under the locks of the crown, and to be taken out as might suit the
convenience of parties, the payment not being called for until the goods
were taken out. Hence, in 1803, the establishment of the general
warehousing system."

" The principle upon which the warehousing act was founded was,
that goods, upon being taken out, either for home consumption, for
exportation, or removal coastwise, should be subject to the like condi-
tions as when first imported. This was then deemed a prodigious
boon ; such it unquestionably was."

Such was the design of the system. It had no direct
connection with any consideration of policy in respect to the
trade or shipping of foreigners. It was a matter purely of
domestic interest, framed exclusively for the benefit of the
commerce of Great Britain, — not to depress the commerce
of other countries. Indeed, by referring to her statutes, it
will be seen that foreign vessels are permitted to carry into
her ports, and to warehouse for exportation, articles prohib-
ited to be introduced into the kingdom for home use.

Its effect has not been to discourage the participation of
foreign shipping in the commercial intercourse of Great
Britain with other nations. On the contrary, foreign ton-
nage enters to a very remarkable extent into her foreign
trade.

In connection with this subject I will proceed to state
some of the principal modifications and relaxations of her
ancient anti-commercial system, which have taken place
within the last half-century. For this purpose I will again
refer to the last-named work, in which the changes are bet-
ter and much more briefly stated than they would be if given
in my own words : —



132 SPEECHES IN THE SENATE.

" The opening of the East India trade to private individuals stands
foremost in the list of modem alterations in our commercial code.
That this trade was almost exclusively confined to the East India Com-
pany since the year 1595, during the reign of Queen Elizabeth, is well
known.

" The first general warehousing act was passed in 1803. The lead-
ing feature of the warehousing act is to defer the payment of duties
formei-ly due to the king at the time of importation, and to allow goods
to remain, under certain regulations, in warehouses, or other places,
until it may suit the parties to remove them either for exportation or
home consumption."

"In the year 1824, an entirely new principle was introduced into
the economy of our foreign trade, and which affects in no slight degree
the interests of some of our staple manufactures.

" This principle is to abolish, as far as practicable, the prohibitions
on import and bounties on export.

"A system of reciprocity in our intercoui-se with foreign nations
has been recently adopted. The ships of those kingdoms that choose
to avail themselves of the advantages, may now enter British or Irish
ports upon the same terms as ships of the United Kingdom ; and, on
the other hand, our vessels may enter into the harbors belonging to
those foreign nations upon the same terms as if built and navigated by
their own countrymen."

Among the most important of these changes are the
privileges granted by the reciprocity treaties, to which the
writer refers. I confess I was somewhat surprised, when
I came to look into the subject, to see their number and the
liberal nature of their stipulations. I find that Great Britain
has arrangements with twenty-three independent States re-
lating to the trade with the United Kingdom, and nineteen
relating to the trade with her possessions abroad. Some of
these arrangements rest upon treaties of a very liberal char-
acter, and others upon orders of council issued by virtue of
a statute authorizing the sovereign to concede certain priv-
ileges in consideration of like concessions from the States
to which they are granted. I will read to the Senate a few
stipulations from two of the treaties, in order that the sub-
ject may be better understood.

From a convention of commerce and navigation with
Sweden and Norway : —



THE WAREHOUSE SYSTEM. 1,33

" Duties, ^'c. — British vessels entering or departing from the ports
of the kingdoms of Sweden and Norway, and Swedish and Norwegian
vessels entering or departing from the ports of the United Kingdom
of Great Britain and Ireland, shall not be subject to any otlier or
higher ship-duties or charges than are or shall be levied on national
vessels entering or departing from such ports respectively.

" Vessels and Goods. — All goods, whether the production of the king-
doms of Sweden and Norway, or of any other country, which may be
legally imported from any of the ports of the said kingdoms into
the United Kingdom of Great Britain and Ireland in British vessels,
shall, in like mannei", be permitted to be so imported directly in Swed-
ish or Norwegian vessels ; and all goods, whether the production of
any of the dominions of his Britannic Majesty, or of any other coun-
try, which may be legally exported from the ports of tlie United King-
dom in British vessels, shall, in like manner, be permitted to be ex-
ported from the said ports in Swedish or Norwegian vessels. An exact
reciprocity shall be observed," «&;c.

From a treaty of commerce and navigation with the Neth-
erlands : —

'^Duties of Customs, Privileges, Sfc. — No duty of customs or other im-
post shall be charged upon any goods, the produce of one country,
upon importations by sea or by land from such country into the other,
higher than the duty or impost charged upon goods of the same kind,
the produce of, or imported from, any other country ; and her INIajesty
the Queen of the United Kingdom of Great Britain and Ireland, and
his Majesty the King of the Netherlands, do hereby bind and engage
themselves not to grant any favor, privilege, or immunity, in matters
of commei'ce and navigation, to the subject of any State which shall
not be also, and at the same time, extended to the other subjects of
the other high contracting party, gratuitously, if the concession in favor
of that other State shall have been gratuitous ; and, on giving, as
nearly as possible, the same compensation or equivalent in case the
concession shall have been conditional."

By referring to the " Yearly Journal of Trade," for
1845, page 45, it will be seen that Great Britain has reci-
procity treaties with fifteen independent States, granting to
each other, mutually, the " benefits of the most favored na-
tion." The stipulations above quoted are, therefore, appli-
cable to all the fifteen States.

What has been the result of these international coramer-



134 SPEECHES IN THE SENATE.

cial arrangements 1 It is one of which I must confess I
was not apprised, though other Senators may be more fa-
miliar with the subject, and the statement may give them no
surprise. In the year 1841, (I cannot find the returns of
a later year,) the foreign shipping engaged in the commerce
of Great Britain bore a greater proportion to her own ton-
nage than the foreign shipping engaged in the commerce
of the United States in the year 1845 bore to our own ton-
nage. These details I shall give more at length at a subse-
quent stage of my remarks.

Great Britain has thus adopted the maxim, which it is to
be hoped may become universal, — that national prosperity
is to be sought for, not in unnecessary restrictions, not in
commercial conventions framed with a view to obtain exclu-
sive advantages by subtlety and address, but through the
better and more enlightened policy of securing mutual priv-
ileges by a liberal application of the principle of reciprocity.

In the commercial intercourse of foreign nations with her
colonial possessions, she still maintains, to some extent, a
system of restriction. A vessel from any country may
carry to her colonies a cargo, the produce of that country,
and carry away from those colonies a cargo to any country
not a British possession, but not from one British possession
to another.

But it is time to return to the details of the British ware-
house svstem. The Senator stated that it was a restricted
system. I disagree with him. I shall prove it to be an
exceedingly liberal system, not only in respect to the number
of warehousing ports, but in respect to the articles allowed
to be warehoused. It was established in 1803, on a very
limited scale as to the favored articles, and for the port of
London alone. It now embraces sixty-eight ports in Eng-



Online LibraryJohn A. (John Adams) DixSpeeches and occasional addresses (Volume 1) → online text (page 12 of 40)