Grundy), and letters from the collectors of the customs in all the principal Atlantic ports, all relating to the practical operation of the ad valorem system, and showing it to be unequal, uncertain, unsafe – diverse in its construction – injurious to the revenue – open to unfair practices – and greatly expensive from the number of persons required to execute it. The whole document may be profitably studied by all who deprecate unwise and pernicious legislation; but a selection of a few of the cases of injurious operation which it presents will be sufficient to give an idea of the whole. Three classes of goods are selected – silks, linens, and worsted: all staple articles, and so well known as to be the least susceptible of diversity of judgment; and yet on which, in the period of four years, a fraction over five millions of dollars had been lost to the Treasury from diversity of construction between the Treasury officers and the judiciary – with the further prospective loss of one million and three-quarters in the ensuing three years if the act was not amended. The document, at page 44, states the annual ascertained loss during four years' operation of the act on these classes of goods, to be:
"Making in the four years $2,362,845; and the comptroller computes the annual prospective loss during the time the act may remain unaltered, at $800,000. So much for silks; now for linens. The same page, for the same four years, represents the annual loss on this article to be:
"Making the sum of $1,411,389 on this article for the four years; to which is to be added the estimated sum of $400,000, for the future annual losses, if the act remains unaltered.
"On worsted goods, for the same time, and on page 45, the report exhibits the losses thus:
"Making a total of ascertained loss on this head, in the brief space of four years, amount to the sum of $1,285,142; with a computation of a prospective loss of $500,000 per annum, while the compromise act remains as it is."
Such were the losses from diversity of construction alone on three classes of goods, in the short space of four years; and these classes staple goods, composed of a single material. When it came to articles of mixed material, the diversity became worse. Custom-house officers disagreed: comptrollers and treasurers disagreed: attorneys-general disagreed. Courts were referred to, and their decision overruled all. Many importers stood suits; and the courts and juries overruled all the officers appointed to collect the revenue. The government could only collect what they are allowed. Often, after paying the duty assessed, the party has brought his action and recovered a large part of it back. So that this ad valorem system, besides its great expense, its chance for diversity of opinions among the appraisers, and its openness to corruption, also gave rise to differences among the highest administrative and law officers of the government, with resort to courts of law, in nearly all which the United States was the loser.
CHAPTER LIII.
REFINED SUGAR AND RUM DRAWBACKS: THEIR ABUSE UNDER THE COMPROMISE ACT OF 1833: MR. BENTON'S SPEECH
Mr. Benton rose to make the motion for which he had given notice on Friday last, for leave to bring in a bill to reduce the drawbacks allowed on the exportation of rum and refined sugars; and the bounties and allowances to fishing vessels, in proportion to the reduction which had been made, and should be made, in the duties upon imported sugars, molasses and salt, upon which these bounties and allowances were respectively granted.
Mr. B. said that the bill, for the bringing in of which he was about to ask leave, proposed some material alteration in the act of 1833, for the modification of the tariff, commonly called the compromise act; and as that act was held by its friends to be sacred and inviolable, and entitled to run its course untouched and unaltered, it became his duty to justify his bill in advance; to give reasons for it before he ventured to submit the question of leave for its introduction; and to show, beforehand, that here was great and just cause for the measure he proposed.
Mr. B. said it would be recollected, by those who were contemporary with the event, and might be seen by all who should now look into our legislative history of that day, that he was thoroughly opposed to the passage of the act of 1833; that he preferred waiting the progress of Mr. Verplanck's bill; that he opposed the compromise act, from beginning to end; made speeches against it, which were not answered; uttered predictions of it, which were disregarded; proposed amendments to it, which were rejected; showed it to be an adjournment, not a settlement, of the tariff question; and voted against it, on its final passage, in a respectable minority of eighteen. It was not his intention at this time to recapitulate all the objections which he then made to the act; but to confine himself to two of those objections, and to those two of them, the truth and evils of which TIME had developed; and for which evils the public good demands an immediate remedy to be applied. He spoke of the drawbacks and allowances founded upon duties, which duties were to undergo periodical reductions, while the drawbacks and allowances remained undiminished; and of the vague and arbitrary tenor of the act, which rendered it incapable of any regular, uniform, or safe execution. He should confine himself to these two objections; and proceed to examine them in the order in which they were mentioned.
At page 208 of the Senate journal, session of 1832-33, is seen this motion: "Moved by Mr. Benton to add to the bill a section in the following words: 'That all drawbacks allowed on the exportation of articles manufactured in the United States from materials imported from foreign countries, and subject to duty, shall be reduced in proportion to the reduction of duties provided for in this act.'" The particular application of this clause, as explained and enforced at the time, was to sugar and molasses, and the refined sugar, and the rum manufactured from them.
As the laws then stood, and according to the principle of all drawbacks, the exporters of these refined sugars and rum were allowed to draw back from the Treasury precisely as much money as had been paid into the Treasury on the importation of the article out of which the exported article was manufactured. This was the principle, and this was the law; and so rigidly was this insisted upon by the manufacturing and exporting interest, that only four years before the compromise act, namely, in 1829, the drawback on refined sugars exported was raised from four to five cents a pound upon the motion of General Smith, a then senator from Maryland; and this upon an argument and a calculation made by him to show that the quantity of raw sugar contained in every pound of refined sugar, had, in reality, paid five instead of four cents duty. My motion appeared to me self-evidently just, as the new act, in abolishing all specific duties, and reducing every thing to an ad valorem duty of twenty per centum, would reduce the duties on sugar and molasses eventually to the one-third or the one-fourth of their then amount; and, unless the drawback should be proportionately reduced, the exporter of refined sugars and rum, instead of drawing back the exact amount he had paid into the Treasury, would in reality draw back three or four times as much as had been paid in. This would be unjust in itself; and, besides being unjust, would involve a breach of the constitution, for, so much of the drawback as was not founded upon the duty, would be a naked bounty paid for nothing out of the Treasury. I expected my motion to be adopted by a unanimous vote; on the contrary, it was rejected by a vote of 24 to 18;2 and I had to leave it to Time, that slow, but sure witness, to develope the evils which my arguments had been unable to show, and to enforce the remedies which the vote of the Senate had rejected. That witness has come. Time, with his unerring testimony, has arrived. The act of 1833 has run the greater part of its course, without having reached its ultimate depression of duties, or developed its greatest mischiefs; but it has gone far enough to show that it has done immense injury to the Treasury, and must continue to do it if a remedy is not applied. Always indifferent to my rhetoric, and careful of my facts – always leaving oratory behind, and laboring to establish a battery of facts in front – I have applied at the fountain head of information – the Treasury Department – for all the statistics connected with the subject; and the successive reports which had been received from that department, on the salt duties and the fishing
The following was the vote:
Yeas – Messrs. Benton, Buckner, Calhoun, Dallas, Dickerson, Dudley, Forsyth, Johnston, Kane, King, Rives, Robinson, Seymour, Tomlinson, Webster, White, Wilkins, and Wright – 18.
Nays – Messrs. Bell, Bibb, Black, Clay, Clayton, Ewing, Foot, Grundy, Hendricks, Holmes, Knight, Mangum, Miller, Moore, Naudain, Poindexter, Prentiss, Robbins, Silsbee, Smith, Sprague, Tipton, Troup, Tyler – 24.
