the government tax being levied on the piece of cloth in the hands of the importer, than if it was paid by the person who procured it for his own use from the tailor. The credit at the custom-house counteracts this evil to a certain extent; and ordinarily before the bonds, which are in general payable at periods varying from three to twelve months, become due, the importer has transferred his goods to subordinate dealers, and never having advanced his own capital to government, he is not obliged to charge a profit on the amount of the duties to place his profits on a level with those of other capitalists. Indeed, the universal adoption of cash payments would operate much against the principles of the exclusive system. They who argue against the introduction of foreign capital, should remember that now, when money will scarcely command three per cent. in Europe, and interest must always, for a variety of reasons, be lower there than with us, those who can conveniently make advances of the duties, are the British capitalists, and not the American merchants.

In the entry of goods, our system makes no discrimination between those which are intended for immediate consumption and those which are to be re-exported. In England, duties are paid in cash on the entry of the merchaudize for home consumption, but the effect of this regulation is there obviated by the large capital of the traders and by the warehousing system, "a system," in the language of the learned and experienced statesman who presides over our department of foreign affairs, " to which may be justly attributed the vast extension of the British commerce; it allowing a period of from two to five years, in some cases, for the payment of duties, and by reserving constantly in depôt an immense stock of merchandize, preventing violent fluctuations of prices, and enabling its merchants to avail themselves of every favorable opening for exportation to any part of the world." This remark was made with reference to the warehousing system, when, comparatively speaking, it was confined to a few enumerated articles. The first section of 4 Geo. IV. c. 24 declares that "it is expedient for the general encouragement and increase of commerce that ALL GOODS and MERCHANDIZE WHATSOEVER, should be allowed to be imported into any part of the United Kingdom of Great Britain and Ireland, and secured in warehouses and otherwise, under regulations to be made for that purpose; notwithstanding any prohibition or restriction now in force upon the importation of any such goods; and that

* Digest of the Commercial Regulations, p. 210.

certain goods and merchandizes should be allowed to be taken out of such warehouses either for the purposes of exportation, free of any duty whatever, or (on the payment of the duties) for home consumption, at the option of the proprietors."*

Notwithstanding the general terms above used, there are several articles not subject to the new regulations. The exceptions are, however, not of sufficient consequence to effect the general principles of the act. The new law went into operation July 5, 1823. Ample provision is made for the selection of ports and warehouses, under the direction of the commissioners of the treasury, "where goods of any description, or of any particular description, may be lodged and secured without payment of duties." In the United States there is a special regulation as to teas, by which they may be entered to be placed in store for two years, and the payment of duties deferred for that period, but in no instance have we provisions resembling the warehousing system. Our laws permit drawbacks on exportation, and they also form a distinct branch of the English commercial regulations; but where they apply with us a portion of the duty, is always retained,

Now, it is precisely a transit duty that tends to defeat the objects proposed to be effected by the warehousing system. We cannot better express our ideas on this point, than by quoting from a work to which we, in our last number, had occasion to refer.

"As illustrative of this principle, we may mention that foreign linens were formerly allowed to be freely warehoused in this country; but in compliance with the solicitations of the manufacturers, they were loaded in 1810, with a transit duty of 15 per cent. Their importation was thus entirely stopped; and the foreigners, who had previously been in the habit of shipping German linens from our ports, because they could get their cargoes conveniently completed with an assortment of our own goods, were in consequence obliged to resort to Amsterdam and Hamburg, and complete their cargoes with the goods of the continent; so that by this injudicious proceeding, we not only lost the advantages of the entrepôt, but had the market for our own produce considerably narrowed."+

The recent events in the southern part of our continent, will probably produce a most sensible effect upon our future commerce. In supplying the states formerly under the dominion of Spain, ample employment will be given to the enterprize and capital of our countrymen. Mexico is very deficient in harbors, on the Atlantic coast, and the want of commercial knowlege and capital will, without doubt, give to the merchants of the United States great advantages over those of all the new republics. Many articles of our own manufacture are already

* Digest of the Commercial Regulations, p. 272. † Ed. Rev. No 76. p. 491.

in great request among them, and by affording every facility to the introduction of merchandize for exportation "free of any duty whatever," our country would soon become the great entrepôt of America, and obtain those advantages, which, if we disregard our best interests, will be procured for Great Britain. Let the manufacturers look to the effect of the Spanísh American demand on the price of their commodities, and let them bear in mind that the possession of an abundant supply of foreign goods facilitates the disposal of our own domestic fabrics.

In our notice of the documents from the other departments, it gave us much pleasure to trace the principles of free trade adopted by our government since its establishment, and we referred with satisfaction to that part of the President's Message which alluded to the disposition of other countries to place our commerce with them upon a footing of perfect reciprocity. This the Secretary of the Treasury seems disposed to counteract by a measure which must provoke the hostility of nations with whom we have treaties of commerce, lead to "embarrassing commerce under piles of regulating laws, duties and prohibitions," while it would be in principle at variance with the true doctrines of national wealth, and in practice entirely inoperative.

"But whatever motives," says the Secretary, "there may be for allowing a credit for the duties to our own citizens, no sufficient reason is perceived for continuing it to foreigners, who are not domiciliated into the republic. A discrimination, in this respect, between the citizens of the United States and others, would tend to confine the commerce of the nation to its own citizens, and would aid in restraining the practice of shipping merchandize to this country, upon consignment, for foreign account, which has hitherto been found to interfere with the interests of our own regular merchants."*

We would ask how does this proposition accord with the spirit of our existing conventions, with foreign nations? If it would not contravene their letter, it would at least induce a repeal of all laws passed in the spirit of amity by which particular favors have been accorded to the citizens of the United States. In the case of the Trinity House Dues, American are the only foreign vessels besides those of Portugal, which are placed on an equality with British ships,t and "by 59 Geo. 3. c. 54. sec. 3. all goods and effects imported in vessels of the United States, duly owned and navigated into Great Britain, are exempted from the auction duty at their first sale on account of the original importer, if within twelve months from

* Report of Dec. 14, 1824.

+ Digest, &c. p. 233.

the time of importation."* In one of the new states of South America, the remains of the old Spanish prejudices, which excluded from the colonial trade the subjects of other nations, led to the adoption of a rule that goods should be consigned to citizens of the country. The foreign merchants resident in that republic soon gave their correspondents to understand that all requisite arrangements had been made, and that by means of the names of Colombians, their business would be transacted without interruption. When perusing the able articles which appeared about a year since in "El Colombiano," we little thought that we should so soon be obliged to apply their reasoning to our own country. The new republic listened to common sense, and the obnoxious regulation no longer forms a part of its code.

It can hardly be necessary to prove that the use of capital creates wealth, and that consequently the more foreign means of carrying on business we possess, the more rapidly will our condition improve. Suppose the capital in this country to be merely adequate to our present industry, it is obvious that nothing can be appropriated to new pursuits, except the surplus revenue which may remain after supplying the present branches of industry. The accumulation from these sources would probably allow something to be annually applied to new experiments, but it is perfectly clear that our improvements would be greatly circumscribed in comparison with what would take place if there was a supply of capital from abroad. To il lustrate this position, we may take the case of a state in the interior of the union, which should resolve to confine its improvements to its own resources, and interdict, by discriminating regulations, the application of the capital of non-residents to its agricultural or manufacturing industry. What would all enlightened men say of such a policy, which is the same in principle as the Secretary of the Treasury's proposition? The right to hold land was interdicted to aliens by the common law. The rule was the result of feudal policy; but though this property has ever been peculiarly favored in this country and in England, yet the provisions in relation to foreigners have been in a great degree, and wisely, defeated by the special acts passed at every session of the legislature. The sole reason assigned for them, was that the state would be benefitted by the introduction of the capital invested here by the privileged aliens.

If the proposed regulation should in any case be operative,

* Digest, &c. p. 222.

the American commission merchant, not the foreign trader, would be the sufferer. Our commision merchants must either abandon their employment, become importers, for which purpose capital must be withdrawn from sources more profitable both to the country and to the individuals, or to place their correspondents on a footing with rival importers "domiciliated into the republic," they must deduct from their commissions the discriminating duty. The withdrawing of credits would amount to a duty of one per cent., but as it is calculated on the invoice price and the commission charged on the proceeds of the sale, the loss to the commission merchant would not much exceed the half of one per cent., a sum which, if borne by the foreign merchant, would be too inconsiderable to affect importations, but which would be seriously felt by the American consignee. It has been said that the rate of duties paid on importations on foreign account, were less than those which are received from our own merchants. It has been supposed that the British manufacturer invoices his goods at the price which they cost him, while the American importer adds to the amount of the invoice the manufacturer's profits. This remark can of course only apply to ad valorem duties, the specific duties not being affected by the invoice charges. Though had the fact been as stated, it would not have been material, on our principle; yet it may be proper to observe that the law has effectually provided that the invoice shall be according to the market prices.

By act of April 20th, 1818, sec. 5. "in addition to the oath now required by law, to be taken by any owner, consignee, agent or importer, on the entry of any goods, wares or merchandize, imported into the United States, such owner, &c. shall, on the entry of any goods, wares or merchandize, imported, and subject to an ad valorem duty, declare on oath, that the invoice produced by him exhibits the true value of such goods, wares or merchandize, in their actual state of manufacture, at the place from which the same were imported." And by the 8th section of the above act, no goods, &c. can be admitted to entry on behalf of a person residing out of the United States, unless the invoice is verified, as required by the 5th section, before an American consul; and "such owner or owners shall farther declare on oath, whether he or they are the manufacturers, in whole or in part of such goods, wares or merchandize, or are concerned directly or indirectly, in the profits of any art or trade, by which they have been brought to their present state of manufacture; and if so, he or they shall farther swear, that the prices charged in the