John Quincy Adams.

Substance of the speech of John Quincy Adams : together with a part of the debate in the House of Representatives of the United States, upon the bill to ensure the more faithful execution of the laws relating to the collection of duties online

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Online LibraryJohn Quincy AdamsSubstance of the speech of John Quincy Adams : together with a part of the debate in the House of Representatives of the United States, upon the bill to ensure the more faithful execution of the laws relating to the collection of duties → online text (page 1 of 5)
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* SUBSTANCE

OF THE J ^.

SPEECH OF JOHN QUINCY ADAMS,

TOGETHER WITH A PART OF THE DEBATE IN THE

HOUSE OF REPRESENTATIVES



UNITED STATES,



UPON THE



BILL TO ENSURE THE MORE FAITHFUL EXECUTION OF THE LAWS



RELATING TO THE



COLLECTION OF DUTIES ON IMPORTS.



BOSTON:

PRINTED BY PERKINS «fc MARVIN.
184 0.



SPEECH OF MR. ADAMS.



HOUSE OF REPRESENTATIVES, MAY 8, 1840.



The House being in Committee of the Whole on the state of the Union,
(Mr. Bell, of Tennessee, in the chair,) the subject under consideration
being a bill to ensure the more faithful execution of the laws relating to the
collection of duties on imports; and the inunediate question before the
committee being a motion of Mr. Rhett, of South Carolina, to strike out
the enacting clause of the bill —

Mr. ADAMS rose in opposition to that motion, and addressed the com-
mittee nearly as follows :

The motion of the gentleman from South Carolina is to strike out the
enacting clause of this bill, but, as far as I understood the gentleman, that
is not the object he seeks to obtain, nor does its propriety or necessity at
all follow from the objections which the gentleman has urged against cer-
tain features of the bill. To strike out tlie enacting clause is the parlia-
mentary mode of annihilating the bill. Now, as I understood him, the
gentleman is not unwilling that a bill shall pass for the object proposed,
though he has several objections to this bill. The gentleman declared him-
self willing to assist the collector of New York (on whom he passed a
eulogium) in the more effectual discharge of his duty, and he at first moved
to recommit the bill, with the avowed purpose that such amendments
might be made in it as should meet and remove his objections. He was
informed by the Chair that that motion was not in order ; that the bill had
been read through, and the Clerk was proceeding to read the first section,
when the gentleman said he objected to the whole bill, and thereupon
moved to strike out the enacting clause.

It does not appear to me that this committee will think that his motion
was warranted by the objections he had stated, or will agree that the bill
shall be nullified at once. Without replying to him, therefore, I might
directly call upon the committee to decide that question, because, if it
shall be decided in the affirmative, it will be useless to proceed further in
discussing the details of the bill. Under these circumstances, I feel some-
what embarrassed. The objections of the gentleman going to certain ])arts
of the bill, but not to the whole, I do not know whether it will be in order
for me to reply to them till the question on this motion shall be decided.
On the whole, I think it best, and I accordingly propose that the question on
striking out the enacting clause be for the present postponed ; that we now
proceed to consider the bill by sections. I will endeavor to explain each
section in order, and when we arrive at those to which the objections of
the gentleman more particularly apply, I hope to be able to satisfy this



committee that there exists no objection of sufficient force to warrant us
in strikino- out any one of the sections, much less to destroy the whole bill.

There are, however, one or two objections brought forward by the gen-
tleman which go to the bill itself, and which it may, therefore, be proper
that I should now answer, as far as I am able.

The first of them was, tliat this bill has been reported to the House by
the Committee on Manufactures, the gentleman being of opinion that it
should have come from the Committee of Ways and Means, or from the
Connnittee on Commerce. I believe it would have been in order if re-
ported by eitiier, certainly if by the Committee of Ways and Means ; for it
will be recollected that, when the first of the memorials on which the bill
is founded was presented in the House, it was proposed and urged by my-
self to refer it to the Committee of Ways and Means, but the House decided
not to do this, but to refer it to the Committee on Manufactures. The evil
complained of exists in the execution of the laws of the United States, and
is therefore, in the first place, an evil directed against the revenue. It is a
fraud committed by foreign traders, the effect of which is to defeat the col-
lection of the revenue. The evil, tliei-efore, falls first on the Government,
and, touching the revenue, it would have been an appropriate subject for
the consideration of the Committee of Ways and Means. But these frauds
aflfect, in the second place, the manufacturing intei-ests of the country,
which are injured in the same manner as the revenue ; the principal diffi-
culty takes place in that branch of the revenue derived from the importa-
tion of woollens, Avhich goods, for several years past, have amounted ia
value, according to the invoices at the custom-houses, to not less than ten
millions of dollars annually. Now, I shall endeavor to show that, in fact,
these ten millions of dollars constitute but two-thirds of the real value of
the woollens imported, which is not less than fifteen millions, and that by
these frauds the duties on the balance of five millions are actually lost to
the revenue. At the time of the compromise, the average duty on these
goods was fifty per cent, on the value ; but, in consequence of the reduc-
tions which have since been made in the rates of duty, the average is now
forty-one per cent, on the value. This, on five millions, amounts to over
two millions of dollars. That is the loss which the revenue of the country
sustains by means of these frauds in the port of New York alone.

By this deduction of one-third of the amount of duties, the manufac-
turers of our own country are rendered unable to sustain the competition.
They state in their memorial :

" That they have for many years past been engaged in the manufacture of wool,
having entered upon the business under the belief that it would be safe and per-
manent, inasmuch as it would necessarily become an extensive and useful branch
of industry in this country ; and relying upon the faithful execution of the tariff
laws. But while these laws have been carried into full effect with regard to the
importation of the raw materials, tlioroby keeping up the prices of wool in particu-
lar, very much above the prices paid by Ibreign manufacturers, manufactured goods
have been coming to this country in large quantities, invoiced at much less than
their cost or value, thereby evading the laws, and placing the American manufac-
turer upon worse ground than if no tariff existed. This has been done almost if
not entirely by foreigners, who have been thereby enabled to undersell the honest
American "importer, and this has increased within a few years to such an extent
as to drive from the importation of woollens nearly all the American importers, and
it is now estimated that seven eighths of all the woollens imported come into the
country on foreign account. But your memorialists will leave the American im-
porters to speak for themselves, and respectfully represent that these fiauds on the
revenue, and consequent extreme low prices of woollens, liave ruined many, and
forced all to slop their mills cither wholly or in ])art, until at the present time less
thun one-half of the woollen machinery in the country is in operation, causing
much distress among tiie operatives as well as many of the owners."

Thus it appears that the fraudulent pi-actices complained of have driven



the American manufacturers out of the market, and the American import-
ing merchants out of their business.

Anotlier part of tlie memorial shows the reason wliy this bill has been
reported by the Committee on Manufactures, rather than by the Connnittee
of Ways and Means :

" Your memorialists are aware tliat the attention of the collectors, and in particu-
lar the vigilant collector at New York, has been called to this evil, and efforts are
making to stop it ; but they believe that further action by Congress is necessary to
guard against the evasion of the laws. Recent experience Iras shown the great de-
fects of existing laws, particularly in regard to goods which have passed through
the custom-house and been taken from the original packages, although by means of
fraud and perjury they may have paid but a small part, if any, of the duty fixed
by law.

" Your memorialists therefore ask that the laws for the collection of duties may
be revised, and made eflectual in preventing frauds of every kind."

I have fifty other memorials from American manufacturers, containing
similar complaints. It was the pleasure of the House to refer them to the
Committee on Manufactures, and it consequently became the duty of that
Connnittee to report to this House a bill providing a remedy for so great
an evil.

But the committee did not proceed on the statements of the manufac-
turers alone. Knowing that the interest of the government and that of the
manufacturers was, in this matter, identical, the first thing they did was to
consult the Secretary of the Treasury as to the facts, and through him to
hold communication with the collector at New York, and from the replies
of both these public oflicers they received a full confirmation of the state-
ments made in the memorials. There had in fact been much correspon-
dence on this matter between the Secretary and the collector, previous to
the meeting of Congress ; all which I liave here, but will not detain the
committee by reading.

In addition to this, the committee had personally before them two offi-
cers of the customs from New York, who gave to the committee a narra-
tive of the mode in which these frauds had been accomplished. Indeed,
the substratum of the bill was drawn up by the collector of New York and
submitted to the district attorney there — the former attorney general of the
United States. It has been drawn with a view to meet this nation of
swindlers from abroad. I call them a nation, for this practice is a sort of
national thing. In saying this it is not my intention injuriously to reflect
on the British nation, for ever since our Declaration of Independence a
part of my creed has been expressed in the language of that instrument, for
I hold the British nation " enemies in war, in peace friends," and my feel-
ings are now altogether friendly towards them ; but when a portion of that
nation come over to this country to cheat us out of our revenue, and to
defraud our own manufacturing interest, it is my duty to defend my
cauntry against that injury.

I have said that there is something national in tliis matter, and I will
now proceed to state what, in my judgment, lies at tlie bottom of this pro-
ceeding. It is a maxim of British commercial law that it is lawful for the
citizens of one nation to defraud the revenues of other nations. The
author of the maxim was a man famous throughout the civilized world — a
man of transcendent talents, who fixed more, perhaps, than any other man
of the same century, his impress on the age in which he lived, and upon
the laws of England — I mean Lord Mansfield. In some respects it has
been greatly to the advantage of those laws, but, in others, as much to their
disadvantage and discredit ; of which the maxim of which I now speak is
a signal instance. He was the first British judge who established the prin-
ciple that it is a lawful thing for Englishmen to cheat tlie revenue laws of
other nations, especially those of Spain and Portugal. This principle was



6

first settled in an act of Parliament, the object of which was to suppress
what are denominated wager poHcies of insurance — a species of instrument
well known to lawyers as gambling ])olicies, being entered into when the
party insuring has no intei-est in the property insured. It had been a
question whether such policies were lawful by the common law. The
practice had greatly increased, insomuch that wager policies had become
a cotmnon thing. It was with a view to suppress these that the statute of
the nineteenth of George the Second, chapter 37th, was passed. The
object of that statute was good ; it was remedial in its character ; it went
to su[)press a public evil; but while it prohibited wager policies in all other
cases, it contained an express exception in favor of those made on vessels
trading to Spain and PortugaL It is entitled " An Act to regulate insur-
ance of ships belonging to the subjects of Great Britain, and on merchaa-
dises or effects laden thereon." And its preamble is as follows :

" Wliereas it hath been found by experience that the making assurances, interest
or no uiteipst, or without further proof of interest than the policy, hath been pro-
ductive of many pernicious practices, whereby great numbers of ships, with their
carooes, liave either been fraudulently lost and destroyed, or taken by the enemy
in time of war; and such assurances have encouraj^ed the exportation of wool and
the carrying on many other proiiibited and clandestine trades, whicli, by means of
such assurances, have b^en concealed, and the parties concerned secured from loss,
as well to the diminution of the public revenue, as to tlie great detriment of fair
traders; and by introducing a mischievous kind of gaming or wagering under the
])retpuce of assuring the risk on shipping and fair trade, the institution and laudable
design of making assurances iialh been ])erverted; and that which was intended for
the encouragement of trade and navigation has, m many instances, become hurtful
of and destructive to the same."

'' For lemedy wiiereof, be it enacted, &c. That from and after the 1st day of
August, 174(), no assurance shall be made ... on ships or goods . . . interest or
no interest, or without farther proof of interest than the policy, or by way of gaming
or wagering, or without benefit of salvage to the assurer; and that every such
assurance shall be null and void to all intents and purposes."

Observe that the class of policies declared null and void by this act are
not only those denonunated gaming or wager policies, in which the assured
had no interest in the thing insured, but those in which he had an interest
of unlawfiil trade. So that, in the event of loss by seizure or confiscation,
the assiu'ed might recover from the insurer, without being required to prove
his interest in the thing insiu-ed. They were, therefore, policies for the
protection of prohibited and clandestine trade, or, in other words, of
smuggling.

To suppress such policies of insui'ance is the declared purpose of the act,
and a worthy and laudable purpose it is. And yet the third section of this
same act reads thus :

" Provided, also, and it is hereby enacted, That any merchandises or effects from
any ports or places in Europe or America, in the possession of the Crowns of Spain
or Portugal, may be assured in such way and manner as if this act had not been
made."

And why this excci)tion of policies ujion merchandises or places in
Europe or America in the possession of the Crowns of Spain or Portugal?

Now, I .say that the princij>Ie of this excc[*tion lies at the foundation of
the whole system of revenue frauds in the port of New York. I invite the
attention of the connnittec to the words of filackstone on this subject.
After stating the natm-c and dwelling on the innnorality of these wagering
and struiggling policies, he says :

" But as a practice had obtained of insuring large sums without having any
propotty on board, which were called insurances, interest or no interest, and also
of insuring the same goods several times over, both of which were a species of
gaming, without any advantage to connnerce, and were denominated wagering



policies, it is therefore enacted by the statute of 19 Geo. 2, c. 37, tiiatali insurances,
interest or no interest, or without further proof of interest than tiie pohcy itself, or
bj way of gaming or wagering, or without benefit of salvage to the insurer, (all
which had the same pernicious tendency,) shall be totally null and void, except
upon privateers, or ships in the Spanish and Portuguese trade, for reasons svf-
ficiently obvious." — 2 Blackstone, ch. 30, p. 4, § 1.

^Ix, is an old maxim of the schools that frauds are always concealed under
generalities. What were these obvious reasons ? Why were they con-
cealed ? It is known to the committee that in the celebrated controversy
of the man in the mask — I mean Junius with Blackstone — he said that for
the defence of law, of justice, and of truth, let any man consult the work of
that great judge — his Commentaries upon the laws of England — but that if
a man wanted to cheat his neighbor out of his estate, he should consult the
doctor himself. I go a little further than Junius, although I do it with
gi'eat reluctance, for I hold the book to he one of the best books in the
world. I say that the observation of Junius applies to the book as fnuch
as to the judge, when, from reasons like tliose with which scoundrels cover
their consciences, that book evades telling why the exception was made in
regard to Spain and Portugal, and what those I'easons were which the
Judge declares to be '■^sufficiently obvious.''^ This exception of the British
law was infectious ; it spread into France, whose Government adopted the
same provision by way of reprisal./ I have here the work of Ernerigon, the
principal authority of French la\Vyers on insurance, and I will read a short
extract of which I have made a translation. Emerigon gives the report of
a case, and, after stating the general principles of insurance, he says :

" Let us now come to the principal question. Is it lawful to cause insurance to
be made of merchandise, the importation or exportation of which is prohibited in a
friendly country ?

" From the principles above established, it seems that such an insurance ought
to be declared void, although the underwriters should have known the intention to
smuggle. Yet the usage is otherwise."

He then refers to the English statute of 19 Geo. 2, ch. 37, cited by Black-
stone, and, quoting his remark that the reasons for the exception of ships
trading with Spain and Portugal are sufficiently obvious, adds :

" That is to say, that the English smugglers in the dominions of Spain and Por-
tugal cannot produce invoices to prove their property. The same usage is toler-
ated by us."

He next produces reports of two cases, one of 23d June, 1745, and the
other decided in the Court of Admiralty at Marseilles, 31st July, 1758,
in which the insurei's of goods in such a smuggling trade recovered from
the underwriters.

Emerigon communicated his argument on these cases to Valin, the author
of the Commentary on the Marine Ordinance of Louis XIV, well known
as the great commercial law book of France.

" I distinguished," says Emerigon, " between smuggling in France and that of
Frenchmen in foreign countries. No merchandise, the importation or exportation
of which is prohibited in France, can be insured, and the underwriters cannot be
held for confiscation pronounced by the King's authority, because the insurance is
null and void. But it is not so with merchandise smuggled against the laws of
foreign nations.

" This distinction made by me was adopted by the sentence of the Parliament of
Aix, rendered June 30, 1759, which confirmed the decision at Marseilles."

M. Pothier, who writes not as a mere lawyer, but as a moralist and a
philosopher, protests against this doctrine, and appeals to the eternal laws
of morality. After citing both the passages I have quoted —



«' It is false," says Pothier, vol. iii. p. 22, § 56, " that a Frenchman may jnslly
carry on a smuggling trade in a foreign country, forbidden by its laws. They who
trade in a country are, by the laws of nature and of nations, bound to conform, so
far as regards that trade, to the laws of the country where they carry it on. Every
sovereign has empire and jurisdiction over all that is done within the country
where he has the right to conmiand. He has consequently the right to enact laws
relating to commerce within his territories, binding upon all who trade therein, as
well upon strangers as upon his own subjects. The right of a sovereign to retain
within his dominions certain merchandise existing there, is incontestable ; and if
he forbids the exportation of them, to export them against his prohibition is to vio-
late his rio-ht to retain them, and consequently is an injustice. Besides, even if a
Frenchman were exempt, which he is not, from the laws of Spain, with regard to
commerce in Spain, it cannot be denied that the Spaniards, whom he is obliged to
employ, are subject to those laws, and grievously trespass, by combining with him
to effect the exportation forbidden by the said laws. Now, inasmuch as he cannot
accomplish this smuggling trade in Spain, without seducing Spaniards to sin, he
sins himself, for whoever tempts another to sin sins himself. This commerce is
therefore illicit, and contrary to good faith, and consequently the contract of insur-
ance intervening to favor and protect such trade by holding the underwriter re-
sponsible for the risks of confiscation to which it is exposed, is equally unlawful,
and consequently can raise no binding obligation."

There is one part of this passage wljich is peculiarly gratifying to me,
because I feel confident it will have an influence on the gentleman from
South Carolina, for it lays down the genuine doctrine of State rights.

This is an honest and an honorable man — he founds himself not on the
decision of courts, but on the eternal laws of justice. Emerigon replies to
this, and says :

♦' Far be it from me to disapprove the doctrine of this respectable author. But
perhaps he would have been less rigid if he had considered that smuggling is a
vice common to all commercial nations. The Spaniards and English practise it
■with us in time of peace. We are therefore warranted, by a sort of reprisal, to
practise it with them." — Emerigon, 2, 212.

And now, to show to this committee what those reasons "sufficiently
obvious " referred to by Blackstone really are, I will turn them to the Avork
of William David Evans, the English translator of Pothier; and, in his
commentary on him, his language shows what is the moral sense of an
upright Englishman on this practice :

" An intention to defraud the public revenue is a frequent cause of vitiating con-
tracts ; but the law of one country does not interpose to protect the revenue of
another ; and therefore an engagement, valid in other respects, is not defeated by
any contrivance to evade the revenue laws or special commercial regulations of a
foreign country, (b) "

" (b) Pothier, in his treatise on insurance, makes some observations in opposition
to this principle, which are apparently very judicious. Having cited a judgment
from Valin, in which it was held that it was not forbidden to a Frenchman to carry
on in a foreio-n country a commerce prohibited by the law of such country, and
that therefore, the risk of confiscation might be insured like all other perils of the
sea, he observes that this principle appears false ; for that those who carry on com-
merce in any country are obliged by the laws of nations, and also by the law of
nature, to conform, in respect to such commerce, to the laws of tlie country where
they carry it on. Every sovereign has empire and jurisdiction over whatever is
done in the country where he has a riglit to command, and, consequently, he has a
right to make laws respecting the commerce that takes place in his country, which
shall be obligatory upon foreigners as well as upon his own subjects. It cannot be
disputed that a sovereign has a right to retain in his territories certain merchan-
dises which are there, and to prohibit their exportation. To export them, then,
without his orders, is to infringe his right of retaining tliem, and is, consequently,
an injustice." — Evans's Translation of Pothier' s .■Jppendix, 2. 4.

But the imputation of discreditable motives for this exception in the act
of Parliament shall not rest upon the arguments or inference of foreign



moialists or lawyers. I will prove them from the recorded action of the
Court of King's Bench itself, and trace them by direct testimony to the
person of Lord Manstield.

In the second vohune of the Term Reports, page 164, the following are
the words of the celebrated Judge 15ul!er :

" And, indeed, other parts of the Act (19 Geo. 2, c. 37) show that the Legisla-
ture turned their attention to different cases which might arise in the course of


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Online LibraryJohn Quincy AdamsSubstance of the speech of John Quincy Adams : together with a part of the debate in the House of Representatives of the United States, upon the bill to ensure the more faithful execution of the laws relating to the collection of duties → online text (page 1 of 5)