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the pound ; but, three years afterwards, it was again reduced

to sixpence. It was raised to eightpence in the second year of

Henry IV. ; and, in the fourth of the same prince, to one

shilling. From this time to the ninth year of William III.,

this duty continued at one shilling in the pound. The duties

of tonnage and poundage were generally granted to the king by one

and the same act of parliament, and were called the subsidy of

tonnage and poundage. The subsidy of poundage having

continued for so long a time at one shilling in the pound, or at

five per cent., a subsidy came, in the language of the customs,

to denote a general duty of this kind of five per cent. This

subsidy, which is now called the old subsidy, still continues to

be levied, according to the book of rates established by the

twelfth of Charles II. The method of ascertnining, by a book

of rates, the value of goods subject to this duty, is said to be

older than the time of James I. The new subsidy, imposed by the

ninth and tenth of William III., was an additional five per cent.

upon the greater part of goods. The one-third and the two-third

subsidy made up between them another five per cent. of which they

were proportionable parts. The subsidy of 1747 made a fourth five

per cent. upon the greater part of goods; and that of 1759, a

fifth upon some particular sorts of goods. Besides those five

subsidies, a great variety of other duties have occasionally been

imposed upon particular sorts of goods, in order sometimes to

relieve the exigencie’s of the state, and sometimes to regulate

the trade of the country, according to the principles of the

mercantile system.

 

That system has come gradually more and more into fashion. The

old subsidy was imposed indifferently upon exportation, as well

as importation. The four subsequent subsidies, as well as the

other duties which have since been occasionally imposed upon

particular sorts of goods, have, with a few exceptions, been laid

altogether upon importation. The greater part of the ancient

duties which had been imposed upon the exportation of the goods

of home produce and manufacture, have either been lightened or

taken away altogether. In most cases, they have been taken

away. Bounties have even been given upon the exportation of some

of them. Drawbacks, too, sometimes of the whole, and, in most

cases, of a part of the duties which are paid upon the

importation of foreign goods, have been granted upon their

exportation. Only half the duties imposed by the old subsidy upon

importation, are drawn back upon exportation; but the whole of

those imposed by the latter subsidies and other imposts are, upon

the greater parts of the goods, drawn back in the same manner.

This growing favour of exportation, and discouragmnent of

importation, have suffered only a few exceptions, which chiefly

concern the materials of some manufactures. These our

merchants and manufacturers are willing should come as cheap as

possible to themselves, and as dear as possible to their rivals

and competitors in other countries. Foreign materiais are,

upon this account, sometimes allowed to be imported duty-free;

spanish wool, for example, flax, and raw linen yarn. The

exportation of the materials of home produce, and of those which

are the particular produce of our colonies, has sometimes been

prohibited, and sometimes subjected to higher duties. The

exportation of English wool has been prohibited. That of beaver

skins, of beaver wool, and of gum-senega, has been subjected to

higher duties ; Great Britain, by the conquests of Canada and

Senegal, having got almost the monopoly of those commodities.

 

That the mercantile system has not been very favourable to the

revenue of the great body of the people, to the annual produce of

the land and labour of the country, I have endeavoured to show in

the fourth book of this Inquiry. It seems not to have been more

favourable to the revenue of the sovereign; so far, at least, as

that revenue depends upon the duties of customs.

 

In consequence of that system, the importation of several sorts

of goods has been prohibited altogether. This prohibition

has, in some cases, entirely prevented, and in others has very

much diminished, the importation of those commodities, by

reducing the importers to the necessity of smuggling. It has

entirely prevented the importation of foreign wollens; and it has

very much diminished that of foreign silks and velvets, In both

cases, it has entirely annihilated the revenue of customs which

might have been levied upon such importation.

 

The high duties which have been imposed upon the importation of

many different sorts of foreign goods in order to discourage

their consumption in Great Britain, have, in many cases, served

only to encourage smuggling, and, in all cases, have reduced the

revenues of the customs below what more moderate duties would

have afforded. The saying of Dr. Swift, that in the arithmetic of

the customs, two and two, instead of making four, make sometimes

only one, holds perfectly true with regard to such heavy duties,

which never could have been imposed, had not the mercantile

system taught us, in many cases, to employ taxation as an

instrument, not of revenue, but of monopoly.

 

The bounties which are sometimes given upon the exportation of

home produce and manufactures, and the drawbacks which are paid

upon the re-exportation of the greater part of foreign goods,

have given occasion to many frauds, and to a species of

smuggling, more destructive of the public revenue than any other.

In order to obtain the bounty or drawback, the goods, it is well

known, are sometimes shipped, and sent to sea, but soon

afterwards clandestinely relanded in some other part of the

country. The defalcation of the revenue of customs occasioned by

bounties and drawbacks, of which a great part are obtained

fraudulently, is very great. The gross produce of the

customs, in the year which ended on the 5th of January 1755,

amounted to �5,068,000. The bounties which were paid out of

this revenue, though in that year there was no bounty upon corn,

amounted to �167,806. The drawbacks which were paid upon

debentures and certificates, to �2,156,800. Bounties and

drawbacks together amounted to �2,324,600. In consequence of

these deductions, the revenue of the customs amounted only to

�2,743,400 ; from which deducting �287,900 for the expense of

management, in salaries and other incidents, the neat revenue of

the customs for that year comes out to be �2,455,500. The expense

of management, amounts, in this manner, to between five and six

per cent. upon the gross revenue of the customs ; and to

something more than ten per cent. upon what remains of that

revenue, after deducting what is paid away in bounties and

drawbacks.

 

Heavy duties being imposed upon almost all goods imported, our

merchant importers smuggle as much, and make entry of as little

as they can. Our merchant exporters, on the contrary, make entry

of more than they export ; sometimes out of vanity, and to pass

for great dealers in goods which pay no duty gain a bounty back.

Our exports, in consequence of these different frauds, appear

upon the custom-house books greatly to overbalance our imports,

to the unspeakable comfort of those politicians, who measure the

national prosperity by what they call the balance of trade.

 

All goods imported, unless particularly exempted, and such

exemptions are not very numerous, are liable to some duties of

customs. If any goods are imported, not mentioned in the book of

rates, they are taxed at 4s:9�d. for every twenty shillings

value, according to the oath of the importer, that is, nearly at

five subsidies, or five poundage duties. The book of rates is

extremely comprehensive, and enumerates a great variety of

articles, many of them little used, and, therefore, not well

known. It is, upon this account, frequently uncertain under what

article a particular sort of goods ought to be classed, and,

consequently what duty they ought to pay. Mistakes with regard to

this sometimes ruin the custom-house officer, and frequently

occasion much trouble, expense, and vexation to the importer.

In point of perspicuity, precision, and distinctness, therefore,

the duties of customs are much inferior to those of excise.

 

In order that the greater part of the members of any society

should contribute to the public revenue, in proportion to their

respective expense, it does not seem necessary. that every single

article of that expense should be taxed. The revenue which is

levied by the duties of excise is supposed to fall as equally

upon the contributors as that which is levied by the duties of

customs; and the duties of excise are imposed upon a few articles

only of the most general used and consumption. It has been the

opinion of many people, that, by proper management, the duties of

customs might likewise, without any loss to the public revenue,

and with great advantage to foreign trade, be confined to a few

articles only.

 

The foreign articles, of the most general use and consumption in

Great Britain, seem at present to consist chiefly in foreign

wines and brandies ; in some of the productions of America and

the West Indies, sugar, rum, tobacco, cocoa-nuts, etc. and in

some of those of the East Indies, tea, coffee, china-ware,

spiceries of all kinds, several sorts of piece-goods, etc.

These different articles afford, the greater part of the perhaps,

at present, revenue which is drawn from the duties of customs.

The taxes which at present subsist upon foreign manufactures, if

you except those upon the few contained in the foregoing

enumeration, have, the greater part of them, been imposed for the

purpose, not of revenue, but of monopoly, or to give our own

merchants an advantage in the home market. By removing all

prohibitions, and by subjecting all foreign manufactures to such

moderate taxes, as it was found from experience, afforded upon

each article the greatest revenue to the public, our own workmen

might still have a considerable advantage in the home market ;

and many articles, some of which at present afford no revenue to

government, and others a very inconsiderable one, might afford a

very great one.

 

High taxes, sometimes by diminishing the consumption of the taxed

commodities, and sometimes by encouraging smuggling frequently

afford a smaller revenue to government than what might be drawn

from more moderate taxes.

 

When the diminution of revenue is the effect of the diminutiun of

consumption, there can be but one remedy, and that is the

lowering of the tax.

 

When the diminution of revenue is the effect of the encouragement

given to smuggling, it may, perhaps, be remedied in two ways;

either by diminishing the temptation to smuggle, or by increasing

the difficulty of smuggling. The temptation to smuggle can be

diminished only by the lowering of the tax ; and the difficulty

of smuggling can be increased only by establishing that system of

administration which is most proper for preventing it.

 

The excise laws, it appears, I believe, from experience, obstruct

and embarrass the operations of the smuggler much more

effectually than those of the customs. By introducing into the

customs a system of administration as similar to that of the

excise as the nature of the different duties will admit, the

difficulty of smuggling might be very much increased. This

alteration, it has been supposed by many people, might very

easily be brought about.

 

The importer of commodities liable to any duties of customs, it

has been said, might, at his option, be allowed either to carry

them to his own private warehouse ; or to lodge them in a

warehouse, provided either at his own expense or at that of the

public, but under the key of the custom-house officer,

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