val of those obstacles to others, which have been | still he is a man of human feelings, and thoughts sources of monopoly and profit to themselves. The of home, wife and children may well overshade his monied man often reaps a harvest of per cent, from brow. He was a large importer; the late fire has the difficulties of his neighbors, and naturally dis-swept all,-even the insurance office, on which his likes for other capitalists to be introduced to share, worst apprehensions were wont to rely. Only a or, by competition, to diminish his gains. But let few days before the awful calamity, he had recei us for a moment consider the real interests of the ved a large supply of costly and high dutied foreign merchants of New York. articles, and had paid to the Government many thousands of dollars in cash for duties. These, too, are gone, and not one farthing in return, unless the Government choose to restore them;-which can only be realized, after much trouble and expense in petitioning, and what is worse than all, after the arduous toil of expectation. And now, whither shall he turn. Even should his known integrity and fair prospects of success procure him credit from the foreign houses, with which he had dealt; whence can he raise the amount necessary to pay the cash-duties? How would the jobbers and retailers like to see the import trade of New York monopolized by one individual, or even by a few? Upon the same principle that they would deprecate this, they should oppose the concentration of that trade, in the hands of any fewer, than would secure to them a constant supply of foreign productions, at the lowest rate. It is too obviously the interest of all those who are dependent upon the Importers for their stocks, to throw into the Import trade the largest amount of competition; and this can be done by removing those obstacles, which the cash system Whilst he is revolving these things in his mind, of duties now places in the way of small capital- and deploring his late reverses, he meets a friend, ists, and enterprising, but unfortunate merchants. who had been once engaged in the Import trade: Though the large Importers, by their position and but had failed, from some misadventure. His faith influence, may get up a strong opposition to the and good name, however, had only been rendered Warehousing System, yet they bear a very small more conspicuous, by his honorable conduct toproportion to the numerous and active class of job-wards his creditors,—all of whom he had paid to bers and retailers, whose interests are all opposed the last mite. Well acquainted with the course of to whatever smacks of unnecessary exclusiveness or restriction in the Import trade. I must not be here understood as alluding to the Tariff; I mean to take things as they are, and to apply all my arguments respecting the Warehousing System to the existing laws. We must have revenue;-let Congress fix the mode of levying it; I mean not to interfere here with their mode. commerce, throughout most of the world,—having resided many years, and, in days of prosperity, established extensive connexions abroad,-with bu siness ramifications extending into nearly all lands, no one could be better qualified to engage in extensive importations. But he has not the means, and for several years, has only been enabled to furnish, for small compensation, his intelligence and facilities to others. One great obstacle in his way, has been the necessity of paying duties in cash upon whatever he may import. Should he be enabled to raise funds sufficient to procure him credit abroad, by paying a portion down, still he is utterly unable to raise the additional sum for duties. But whatever be the amount of duty and howsoever imposed, the Importing merchant is now compelled, upon the arrival of his cargo, before he can have the least opportunity to dispose of it,-except such small portions as he may engage beforehand,--to advance, in cash, the whole amount of duties. The portion of his capital thus tied up, in cash duties, might have gone to the purchase of a larger stock abroad, or have enabled him to purchase on more favorable terms. And at the same time, the inability to encounter this additional burden may have deterred competitors from enter-Warehousing System would have saved it, as the ing the lists. The inconvenience and loss attending the payment of duties in cash, may be forcibly illustrated, by the effects of the late disastrous fire in New York. Much as I would prefer to be deprived of so apt and cogent an illustration, yet it may happen, that the argument thus enforced may reach some minds, which, a short time since, would have been closed to it. You see there that serious face,-marked with sadness and anxious thought. He is brooding over his misfortunes; and even though much of Christian hope and fortitude should sustain his heart, Well, these friends are met. The one complains bitterly of the amount of duties so utterly lost, and talks of petitioning Government to refund it. His friend reminds him of the difficulty of moving Congress to speedy action, and shows him that the duties would not have been paid until the goods were disposed of. He also tells him, that though, in his prosperity, he had found no difficulty in paying cash for duties, and had opposed the Warehousing System, now he found himself in the condition of those who had felt the burden of the cashsystem, and he hoped he would now view the subject more candidly. "Yes," he replies, "my wings are clipped enough; and I can hardly hope to rise again." "Not so bad," says his friend. "A., B. and C. have offered you enough capital to procure credit abroad. Perhaps Congress will adopt the Ware housing, next session*, and we may both mount again. Taking short and cautious flights at first, with no weight of cash-duties upon us, we may yet rise to our former elevation, with more liberal views and stronger sympathy for our less favored brethren." would have to be paid in cash, on arrival. It is usual and mutually desirable, for factors to make advances on consignments,-both for the purpose of employing their capital, and of procuring consignments. Now, the funds paid for duties might have been advanced to the consignor; and the ability of the factor to make advances has been diminished by the amount of cash-duties paid to the Government. In order not to suffer this portion of his capital to lie idle, some body must be made to pay for it and indeed the large Importer Suppose a foreign house should send to a factor is sure to make the jobber, and through him the in New York, or Boston, a cargo of goods, for sale consumer compensate him for his capital paid to on commission :-The duties on the whole cargo the Government. What I have said of New York, applies equally to Boston, Philadelphia and every importing city in the Union. Let us now consider the effect of the cash-system of duties upon factors, and commission merchants. Again, suppose there were a cargo of rice or cotton, in Charleston, in the hands of a commis*The Warehousing System is the best mode of carrying sion merchant. How would he ship it? If a vesout the wise maxim, that "Every tax ought to be levied at sel go for it empty, it will have to pay nearly the the time, and in the manner, that is most likely to be convenient for the contributor to pay it." Yet the English nation were expense of two voyages, in freight. He might slow in appreciating its benefits. With their example be- wish to make an importation, that his rice or cotton fore us, however, there is no reason why we should wait might make a return cargo; but then he has had and hesitate. Sir Robert Walpole was the first who began to advance so many thousand dollars, to the planto perceive its advantages; when in his famous Excise ter; and in addition to that, to pay cash for duties Scheme in 1733, he wished to oblige Importers to deposit is more than he can afford. Even should he imwine and tobacco in Warehouses;-at the same time relieving them from the payment of duties, until withdrawn port, there may be no demand; and he might wish for home consumption. This scheme, however, was near to send them to the West Indies in a vessel just producing a rebellion; and Sir Robert's life was even in arrived with fruits, sugar, &c. But if the goods danger. Dean Tucker, in 1750, ably pointed out the dis- once enter, the duties must be paid in cash, though advantages of the existing system and the superiority of the Warehousing. But it was not until 1803, that the they be "drawn back" soon aftewards. Could he Warehousing System was established in England. warehouse his goods, he would even wait for a vessel The Statue of the 43 Geo III. c. 132, laid the founda- and reship them to the West Indies, South Amertion of it; and it was improved and extended by subse-ica, Texas or Mexico. quent acts. The regulations respecting it were at length Our commercial relations with Texas, particuembodied in Stat. 3 and 4 William IV. c. 57, which went larly at this time, afford one of the most striking into operation in September 1833. Doubtless, some later exemplifications of the inconvenience and impolicy laws have been enacted upon the subject. of the cash-drawback-system of levying duties. Some account of the mode of operation may be desirable. The Commissioners of the Treasury designate the Texas occupies the anomalous position of being ports, and the articles to be admitted and warehoused at both in the Union and out of it. The War, State each. They also appoint, and publish in the Gazettes, and Navy Departments throw their ægis over secure and suitable warehouses. On arrival, the goods her; but the Treasury Department treats her as are entered and warehoused, under the supervision and a foreign country, and her products have to pay authority of the custom-house officers. The keeper of a warehouse gives a general bond, with two approved secu- duty. It is true, that under the Warehousing rities, for the payment of duties on all goods deposited with System, such as were consumed here would have bim, or for their due exportation; or each importer must to pay duty; but the inconvenience of drawbacks give such bond and security. Goods can not be exported would be entirely obviated, and this would seem in any vessel of less than 70 tons. All goods fraudulently more particularly due to a country, which (what concealed or removed are forfeited. Goods are to be clear ed from the Warehouses, in 3 years; and ships' stores, in ever our opinions of annexation) is in so many re1 year; or both will be sold. In case of destruction of spects a part of our own. Besides, under the goods by accident, going to or coming from the Warehouses, Warehousing System, the products of Texas might the duties are remitted. Goods can be removed from one be stored away for several months, in New Orleans, port to be warehoused at another,-bond, &c,, being given until Congress can take action in the matter. Let as in the first instance. And some species of goods may be removed for the purpose of cleaning, and having other us take things as they are at present. New Oroperations performed. Indemnification is granted for the leans must ever be the great depot of the Texan frands and defalcations of officers, &c. Goods are allowed trade. The products of Texas enter that great to be exported without any drawbacks. Rates of storage emporium, and are thence distributed. But as are prescribed, and the mode of stowing goods away. soon as they enter New Orleans, they must pay Whilst every facility is granted to the Importer, every the same amount of duties as if they were to be care is taken to preserve the goods aud to prevent frauds upon the public Revenue. Such is a very imperfect outconsumed in the country. When they are reline of some of the features of the Warehousing System shipped, the Government refunds. What is the in England. use and benefit of the Government thus tempora VOL. XI-72 Under the present system, when an importer orders a cargo of foreign articles, he must reserve the full amount of the duties; and when the goods arrive, he must pay, in cash, that whole amount, though he may be several months in disposing of his stock, and the highest dutied goods may be the last sold. Under the Warehousing System, the Importer could send all, or very nearly all, his capital abroad, and purchase on more favorable terms. Upon their arrival, the goods are warehoused and bonded. His customers,-come when they may, can buy from the Warehouses, and at the very moment that he is called on for the duties, he effects his sales, and may even hand over to the Government the very money received for the goods just imported. In this way, whilst Government has security as effectual as cash payment, the merchant is enabled to employ all his capital,-to receive with one hand from his customers, and pay over to the Public Treasury with the other. rily abstracting so much of the merchant's capital, [ that is so soon to be restored-diminished perhaps by some charge for the trouble to which it has so needlessly subjected itself and him; when, too, it can obtain ample security, that the articles will not be consumed in the country. At the same time, the merchant needs his capital, to make advances to the producer, who is sure to require it. And without the drawback system, more goods would be imported into New Orleans and warehoused, for the purpose of supplying the markets of Texas and other places on our Mediterranean. It may perhaps be doubted, whether the inconvenience of paying cash in duties and drawbacks is as great as has been stated. It may be well, therefore, to exhibit some figures on the subject. The amount of Imports per annum is near one hundred millions of dollars. This, then, is the amount on which cash duties are to be paid. Suppose the duties should average only 10 per cent; -$10,000,000 would be a considerable sum to be abstracted from the importing capital of the Country. But the duties average more than 20 per cent. I do not know what the amount received from customs the last year was; but it was estimated in advance, by the Secretary of the Treasury, to be $20,000,000. This is the nett revenue from customs. The gross amount is much larger; for great and unnecessary Permanence and stability in commercial relaexpense attends its collection, as has been recently tions are among the greatest blessings of a country. proved by some statistics published in the National Speculation produces extravagance, impatience to Intelligencer. Here, then, are greatly over $20,- be rich, recklessness and even dishonesty. Rapid 000,000 abstracted from the importing capital of fortunes engender ostentation, pride, folly and many the country, to pay cash-duties, when the goods can vices. A community whose business is stable are be warehoused and bonded, and the merchant per-prosperous, virtuous and industrious. Whatever mitted, without loss or risk to the Government, to remain in possession and use of it, until his goods can be sold. Besides the advantages already pointed out, the Warehousing System would give permanence and stability to the import trade; remove temptations to speculation; prevent fluctuations in the price of foreign products; and make the revenue dependent upon, and steadily indicate the natural consumption of the Country. tends, even in a remote degree, to confer these blessings, deserves serious attention. And what lessons of wisdom may we not learn from the experience of the last few years! Now, our former prosperity is returning, and with it, our extrava But to the amount of capital paid in cash-duties, must be added the amount uselessly paid to be drawn back. The amount of foreign articles ex-gant and speculating propensities. ported from the United States is, at least, $9,000,000. Under the cash-system, importers will necessaEstimating the drawback on this at the low rate of 20 per cent, we have $1,800,000, that are put into the Treasury merely to be taken out again. Whilst in the Treasury, this sum may enter into the estimates of the department, and only tends to cause trouble and error, without any possible advantage to the Government or the citizen. I take it for granted, that it is perfectly useless to attempt to show that the abstraction of TWENTYFIVE OR THIRTY MILLIONS OF DOLLARS, from the importing capital of our merchants, for even a brief period, is inconvenient and injurious. Of course, the capital that remains in use, must compensate for the idleness of that in the hands of the Government; and thus, whilst all benefit of the competition of more than $25,000,000 is lost, for the time being, the country are made to pay to the Importers the same profits, as if those $25,000,000 were actively employed in the Import trade. rily keep on hand as small stocks, and especially of high dutied goods, as possible; preferring rather to fall short of the home demand than to exceed it. Suppose the supply should fall short, up go prices immediately; and buying and selling on speculation, among the importers, inevitably takes place. If the season be not too far advanced, some enterprising merchant may attempt to get in a cargo, to supply the deficiency; and as the result is attended with much uncertainty, this is but a kind of speculation. Perhaps, several may give a knowing shrug and wink, and look forward to making 3 sudden fortune, the next season. The next season comes; the same hope has influenced others, and this year the market may be overstocked. Now, disappointment and loss ensue, and the next season, the stock may again fall short. Or prices abroad may have risen, and yet there is no old stock in the country to rely upon. All this hap pens from the necessary endeavor of our merchants, | this time, she has on hand such an extensive supto hit exactly the demand of the home market. ply of cotton, that prices are in a great degree indeEvery season, they have their whole supply to pur-pendent on our present crop. Her stock on hand, chase, and must abide by all the fluctuations abroad. in Liverpool alone, is about 1,058,620 bales.* Revenue should come in pari passu with consumption, or the demand for dutiable articles. But now the receipts at the Custom-House vary, in a month or so, according to the winds; or according to the high hopes and speculating dispositions of our merchants. We export annually from 10 to 15 millions of dollars in Tobacco. England is the great depot for it. When her annual consumption was only 20,000 hhds.,† she had on hand 50,000 hhds.; being inde English merchants write, in reply to letters suggesting the effects of the drought upon our crops, that short crops here, aided by unfavorable prospects in England, are not likely materially to affect prices there, since "the stocks leaving the stock on the 1st Inst., 1,058,620 bales, of which 833,560 were American, against 995,830, of which 761,900 were American, the same time last year. On the 1st of January 1844, the entire stock was 342 millions of lbs.,equal to about 855,000 bales, more than the consumption of six months. But the English market is not so well stocked with bread-stuffs, and the effect of the drought here and of the unfavorable prospects in England, is already beginning to be felt. In reference to these, she is in a situation similar to that in which we are towards our foreign supplies. + Her annual consumption of cotton is about 1,716,000 bales: Having averaged, according to the circular of Baring & Brothers, 33,000 bales per week, for the last 7 months. The following tables from the European Times, will confirm this.-The estimates are for 6 months. For a year they can be doubled. Under the Warehousing System, the fear of overstocking the market, would not operate so strongly they had better employ their capital in importing too much, than in paying cash to Govern-cular, procured for me, by our friend, the Editor, states on hand are unusually heavy." The latest Liverpool cirment; and then an opportunity for exportation that the sales of cotton, for 5 weeks preceding the 1st of might offer, and no drawbacks would have to be August last, were 278, 450 bales ;—say, 120,900 to Specuencountered. The consequence would be, that sur-lators;-20,200 for Exportation, and 155, 350 to the Trade:plus quantities of foreign goods would be brought, and kept in the country. Yet the natural consumption would go on, and even be stimulated by so constant a supply. The course of trade would be affected only by the natural consumption; and prices would be uniform. The merchant would not be so imprudent as to force himself to sacrifice his goods. Government would not demand any duties until his goods were sold, and he would be able to wait for a demand. And though fluctuations should take place abroad, the old stock on hand would make us less subject to them. That these effects would be produced, has been proved by the experience of England. Suppose a British merchant had a ship at Dantzic, which was about to return in ballast. To prevent this, he would purchase a load of wheat, though at the time, there should be little prospect of making a speculation. As no cash is required for duty, he warehouses it and waits; for even if he can save himself, he is satisfied. Other merchants may have done the same. A scarcity might then happen, and these merchants would make a good profit. But this is not all:-the home producers and holders of wheat, who, but for this extra supply, might have extorted very high prices, are prevented; and even though fresh orders should be sent to the Baltic for wheat, they would be limited to lower rates, in consequence of the supply known to be on hand. Operations of this kind have taken place in England, and it is obvious that great suffering may have been prevented and immense sums saved, by such opportune and unexpected supplies of the great staples of life. In England, when the duty on tea was 50 cents per lb. and her annual consumption about 44,000,000 lbs., the stock in bond (warehoused) was about 40,000,000 lbs. Hence, she might have been supplied for nearly a whole year, without importing another pound; and what would she have cared for fluctuations of price in China, or for a year's blockade of the Celestials. So also are the stocks of sugar, coffee, rum, &c., large in England. At "Bags of Cotton Wool Imported into England and Scotland; In the First Six Months ၂၀ Mule Twist, on the Imported Average Total Prices of on 1st July. Prices of 40's Mule Twist on 1st July. Bags. Bags. Bags. d. 5" 71 d. d. 1835 674,523 952,445 17,384 451,984 10 to 12t 1 5. 1 5 01 0 11 pendent on our crops for two years and a half. The | fice them, to the injury of the manufacturer here. duty on Tobacco is 1,200 per cent. Were the If they did, they would sacrifice themselves,—and drawback system enforced, what millions of dol- this would certainly be done only in a few extreme lars would it require! Can it be supposed that Brit-cases. They would calculate in advance how long ish merchants would keep such a supply on hand, they could wait, and the very capital, which under if, in addition to the immense capital requisite to the cash-system is paid to Government, would enapurchase the Tobacco, they had to pay the duties ble them to wait. The instances of sacrificing in cash? Whatever be the duty, it operates pro | goods at too low rates would necessarily be as rare tanto in the same way as a duty of 1,200 per cent. as possible. It must be obvious what advantage a country It may be objected, that this waiting and purthus supplied would have in war. Should the du-chasing excessive supplies, requires the merchant ration of the war be short, her deprivation of the to be out of his capital, as much as cash-duties. great articles of consumption would be compara- This is true; but in the one case, it is in the way tively slight; and millions would be saved to the of trade, with the hope of gain before him; and community, in the prices at which they would be encourages commerce and navigation; and which obtained. The Warehousing System is one great employment is best for the country? means of preparing for war, in time of peace. Suppose prices should be unusually low, a cer It might here be objected, that such large sup-tain season, and an Importer should desire to buy plies of foreign articles would interfere with the an extra supply, he would be restrained by the cashprotection of home industry. If so, one party duties; for should he overrate the market, he must would not dislike such an effect; and the other lose, and lie out of the duties as well as the value could put a money value upon such interference, of the goods. For if he should purchase to the and give the home manufacturer the benefit of it. amount of $300,000, and sell only $200,000; a stock We must have revenue, and the best mode of de- of $100,000 would still be on hand, and cashriving it is from duties. Whatever the amount of duties paid, besides. If they were warehoused, he revenue and however levied, the Warehousing might be contented to hold them over to the next System offers the greatest advantages in collect-season; and when prices were low, might buy ing it. largely, for the express purpose of holding over. But without a word upon the Tariff, let us con- I omitted to remark above, that one of the greatsider this interference. If protection be right, it est advantages of the Warehousing System bas ought to be adequate, and conferred by the Tariff, reference to the Tariff. Alterations in the rates and not by the mode of collecting the Revenue. of duty can be more easily made, without causing The merchant, then, imports his goods under a a deficiency of imposts, at one time, and an inunTariff adequate to protect the domestic manufac-dation, at another. Some suppose that when we turer. It is supposed that he cannot undersell the touch the Tariff, it must be revised from Alpha to latter, to his injury. What, then, is the use of sub-Omega; but this is not the case. If the revenue jecting him to any inconvenience by cash-duties? be deficient, a duty can be laid on tea and coffee, It may be feared, that when the Importers get such and the duty being paid only when they are sold, large stocks on hand, they will be forced to sacri- our trade with Brazil and China would be uninter The Liverpool circular above referred to, dated the 4th of August last, says "Tobacco does not require much remark, there having been a dull market throughout. * * * The accounts lately received, shewing every probability that the amount to come forward must be limited, particularly from Virginia, having had no effect whatever. *** Buyers look more to the stock on hand, than to the more limited quantity expected, and until they feel some effect, they will perhaps decline becoming free purchasers." The reason of this is obvious from the annexed statement of the stocks in Liverpool and London. But there are 9 ports in England, besides London and Liverpool, and 4 in Scotland, at which Tobacco is allowed to be entered and warehoused. (Cotton is allowed to enter some ports from which Tobacco is excluded.) If we add the quantity of Tobacco at other ports, the whole stock in Great Britain would be probably over 50,000 hbds. We see, then, how stable England's markets are rendered by the Warehousing System; and though we might desire more fluctuation, yet stability and uniformity are obviously benefits to her. Nothing but the natural consumption of the country and the course of regular trade, influences her operations; and in the long run, just the same quantity, (if not more,) of our produce is bought, sold and consumed, as would be under a system like our own. Hence, there would be no just ground of objection here to too large stocks being introduced, by the adoption of the Warehouse System. |