Part 18

Duties on Imports.

The House again resolved itself into a Committee of the Whole on the state of the Union; Mr. PAGE in the chair.

Mr. BLAND, from Virginia, thought the committee not prepared to enter on the business of impost in the accurate manner which the form of the propositions seemed to imply. No gentleman on the floor could be more desirous than he was to go into the measure of a permanent system; but he could not agree to proceed at this time, for want of information. When he looked at the list of articles, he saw some calculated to give encouragement to home manufactures. This might be in some degree proper; but it was a well-known fact, that the manufacturing arts in America were only in their infancy, and far from being able to answer the demands of the country; then certainly you lay a tax upon the whole community, in order to put the money in the pockets of a few, whenever you burthen the importation with a heavy impost.

Mr. SCOTT.--The subject before us naturally divides itself into two heads. First, what article shall be the subject of a particular tax, and what shall remain in the common mass liable to an impost ad valorem? The second, what the sum is that is proper for the article we select? For both these points will be necessary, because it can hardly be supposed that all articles can be enumerated, while some certainly ought. This being the case, it leads us to inquire what rule or principle shall be laid down in order to make a proper discrimination; for surely some reason should be assigned for this distinction. I presume the particular article which is to be subjected to an extraordinary duty must either come at so cheap a rate, according to its intrinsic value, as to bear a greater impost without being unreasonably expensive, or it must be one which we do not stand in need of at all, and only used for the purposes of luxury. If an article does not come within one of these descriptions, I see no reason why it should be taxed in an extraordinary manner.

On motion of Mr. GALE, the word rum was changed into distilled spirits of Jamaica proof.

Mr. LAWRENCE proposed to lay twelve cents on this article, saying, I believe, Mr. Chairman, it will be necessary to consider, when we are about to lay a duty on any article, how far it is likely to be collected, especially if our main object is to obtain revenue by our impost. I trust it does not require much illustration to prove to the satisfaction of the committee, that if you lay your duties too high, it will be a temptation to smuggling; for, in the proportion which that sum bears to the value of the article, will be the risk run in every attempt to introduce it in a clandestine manner, and, if this temptation is made too strong, the article will furnish no revenue. I believe, if the committee shall impose a duty of fifteen cents, as proposed by the gentleman from Connecticut, (Mr. SHERMAN,) it will be so strong a temptation for smuggling, that we shall lose our revenue altogether, or be compelled to use a mode of collection probably different from what we have been accustomed to--a mode so expensive as to absorb the whole produce of the tax.

I wish to lay as large a sum on this article as good policy may deem expedient; it is an article of great consumption, and though it cannot be reckoned a necessary of life, yet it is in such general use, that it may be expected to pay a very considerable sum into your treasury, when others may not with so much certainty be relied upon. But, when we consider the relative proportion of the first cost of it, and the fifteen cents duty, we shall find it about one third. This, I cannot help thinking, is too high, as the risk of a total loss may be ventured in order to save so great a sum; it is surely a great temptation, and I dread its consequences on more accounts than one.

Mr. MADISON.--I would tax this article with as high a duty as can be collected, and I am sure, if we judge from what we have heard and seen in the several parts of the Union, that it is the sense of the people of America that this article should have a duty imposed upon it weighty indeed. The duty proposed by the gentleman from New York (Mr. LAWRENCE) very little exceeds what is laid in this State, and very little what is laid in some other States, while some have thought it expedient to impose an excise superior. The question then is, whether the highest sum can be collected? I am of opinion that higher duties may generally be collected under the government of the Union than could be under that of the particular States, because it has been the policy of some, not only to decline going hand in hand together, but actually to oppose regulations made in a neighboring State. Being persuaded, likewise, that the highest sum will not exceed the power of the law to enforce the collection of, I shall vote for it.

Mr. BOUDINOT.--I am in favor of taxing this article as high as there is a probability of collecting the duty. I think our doing so will answer two or three good purposes. The present object of the committee is to raise a revenue, and no article on the list before you is more likely to be productive than this one; but a high duty may also discourage the use of ardent spirits; if not, it may discourage the West Indies from turning their molasses into rum. This being the case, they have no other market for molasses than this country, and our own distilleries, with the advantages arising therefrom, will be able to rival them in the manufacture of that article; so far it may tend to the benefit of the country. I conceive it might be proper, on these accounts, to lay a much higher duty than has been proposed, were it not for the considerations mentioned by the gentleman from New York, that we run a risk of losing all by grasping at too much.

Mr. LAWRENCE.--The sum proposed is higher than the duty collected in this State, which is about eight cents; I fear, therefore, that it cannot be collected. If we are to reason and act as moralists on this point, I am certain it is the wish of every member to prevent the use of ardent spirits altogether, for their influence on the morals of the people is of the most pernicious kind. Nor does the mischief terminate here, as I apprehend it is equally destructive to the health; but we are not to deliberate and determine on this subject as moralists, but as politicians, and endeavor to draw (if I may use the expression) from the vices of mankind, that revenue which our citizens must, in one form or other, contribute. The question is, what shall be the duty on any particular article? To accomplish this purpose, we must determine by the circumstances of that article. Now, if we lay a high duty on Jamaica rum, it is supposed it will prevent the consumption; but then the purpose we have in view is frustrated, either because we cannot collect the tax, or the object of it is no longer imported. The consequence in this latter case would be, that the morals of our citizens are not impaired; yet it does not appear to me that this consequence would certainly flow from a system of high duties. I rather fear it would lead no further than to set men on schemes to evade the duty; and none of us are ignorant of the ingenuity and invention which can be exercised, when interest prompts mankind to an evasion of the law. We know the situation of the different States; the coast disposed by its prodigious extent to favor every means of illicit trade. A cargo of rum could be landed in Jersey, and the whole, reshipped in small vessels, might soon be brought into this city. If this should be the effect of our law, we have no other way to correct the operation, but by adopting a mode of collection odious to all, on account of the numerous train of officers it would require in its execution. But there would also be a danger of vessels running into creeks and small inlets, for the purpose of landing their cargoes, as well as on the sea-shore. Hence a necessity would arise of employing a number of vessels to check and correct such abuses, and the probable event would be, that all the impost collected would go to defray the expense of getting it into the treasury.

The committee now agreed to tax ardent spirits, of Jamaica proof, fifteen cents; and all other spirituous liquors twelve cents.

On filling up the blank on molasses:

Mr. MADISON.--It is agreed, I presume, that spirits of every kind are proper objects of taxation, but whether we shall tax spirits in the case before us, or whether we shall tax the article from which it comes, is a question worthy of the consideration of the committee for several reasons. I believe it will be best to lay our hands on the duty, by charging this article on its importation, to avoid a more disagreeable measure. I would, therefore, lay such a duty on molasses, as is proportioned to what we have affixed upon rum, making an allowance in favor of our own manufacture. I think eight cents per gallon will allow a sufficient advantage to them, but of this I am not positive, and, therefore, shall not pertinaciously adhere to that sum, if it be thought too high; but I presume I am right in the principle upon which I contend, that we ought to collect the duty on the importation of molasses, in preference to any other way.

Mr. FITZSIMONS.--I think the duty on this article depends, in a great measure, upon what has been already agreed to. If the tax of West India and country rum is not well proportioned, it may be destructive of the end we have in contemplation. If, agreeably to the idea of the gentleman from New York, we affix a low duty, a great deal more rum will, in all probability, be distilled and used, than heretofore; of course, it will effectually rival the Jamaica rum, and the Union will lose the revenue which we calculate upon. Eight cents, I apprehend, is as well proportioned to the other taxes as can be devised.

Mr. GOODHUE considered molasses as a raw material, essentially requisite for the well-being of a very extensive and valuable manufacture. It ought likewise to be considered (as was truly stated) a necessary of life. In the Eastern States it entered into the diet of the poorer classes of people, who were, from the decay of trade and other adventitious circumstances, totally unable to sustain such a weight as a tax of eight cents would be upon them. Moreover, the tax was upon particular States as well as individuals, for it was a fact of public notoriety, that Massachusetts imported more molasses than all the other States together. She imports from 30,000 to 40,000 hogsheads annually. He would make one observation more. It had been the policy of Great Britain, as he well remembered, to encumber and depress the distillation of molasses. To do this, at one time they laid a duty of three pence sterling per gallon. It was conceived to be an oppressive measure, but it had little other effect than to cause heart-burnings and enmity. It produced no revenue, and the Parliament were forced to reduce the duty to a penny. From experience, therefore, as well as from the arguments before urged, he was inclined to believe that the committee would be satisfied with fixing a lower sum. He could not consent to allow more than two cents.

Mr. THATCHER.--It appears to me, that for the want of a certain and fixed principle to act upon, there is a great danger of making some improper establishments. It is for this reason that I wish not to hurry on the business with so much precipitation. Did gentlemen consider, when they agreed to a high duty on ardent spirits, that it would be a pretext for increasing the duties on a necessary of life. I presume a principal reason why a high tax on spirits was admitted, was in order to discourage the use of it among ourselves. If this was the intention of the committee, I have no objection to the burthen; but, even here, I fear difficulties will arise. Did we judiciously examine whether the spirit of the law accords with the habits and manners of the people? and did we assure ourselves of the full execution of the law? If we did not, the act becomes impolitic, because a law which cannot be executed tends to make the Government less respectable.

Mr. AMES.--I have not had the advantage of hearing all the arguments in support of the eight cents proposed; but those I have heard I am not satisfied with. The principles on which this tax is founded, I understand to be this: that it is an article of luxury, and of pretty general consumption, so that the duty is expected to fall equally upon all; but that it will not operate in this manner, I think is easily demonstrable. Can a duty of fifty per cent. ad valorem, paid, as it were, in an exclusive manner, by the State of Massachusetts, be equal? No, sir. But taking it as a part of the general system, can it be equal unless a proportionable duty, equal to fifty per cent., is laid upon articles consumed in other parts of the Union? No, sir; and is it in the contemplation of gentlemen to lay duties so high as to produce this equality? I trust it is not; because such duties could never be collected. Is not, therefore, eight cents disproportioned to the rates fixed, or intended to be imposed on other articles? I think it is; and, if to these considerations we add what has been said before, relative to its being a raw material important to a considerable manufacture, we cannot hesitate to reject it.

However gentlemen may think the use of this article dangerous to the health and morals of our fellow-citizens--I would also beg them to consider, that it is no more so than every other kind of spirituous liquors; that it will grow into an article for exportation; and although I admit we could export it even encumbered with the duty proposed, yet by it we run the risk of having the manufacture totally ruined, for it can hardly now stand a competition at home with the West India rum, much less can it do so abroad. If the manufacturers of country rum are to be devoted to certain ruin, to mend the morals of others, let them be admonished that they prepare themselves for the event: but in the way we are about to take, destruction comes on so sudden, they have not time to seek refuge in any other employment whatsoever. If their situation will not operate to restrain the hand of iron policy, consider how immediately they are connected with the most essential interests of the Union, and then let me ask if it is wise, if it is reconcilable to national prudence, to take measures subversive of your very existence? For I do contend, that the very existence of the Eastern States depends upon the encouragement of their navigation and fishery, which receive a deadly wound by an excessive impost on the article before us.

I would concur in any measure calculated to exterminate the poison covered under the form of ardent spirits, from our country; but it should be without violence. I approve as much as any gentleman the introduction of malt liquors, believing them not so pernicious as the one in common use; but before we restrain ourselves to the use of them, we ought to be certain that we have malt and hops, as well as brew-houses for the manufacture. Now, I deny that we have these in sufficient abundance to the eastward; but if we had, they are not taxed. Then why should the poor of Massachusetts be taxed for the beverage they use of spruce, molasses and water? It surely is unreasonable. I hope gentlemen will not adopt the motion for eight cents until they are furnished with some better evidence of its propriety and policy than any that has yet been given, or as I suspect that can be given.

Mr. FITZSIMONS was pleased that gentlemen went so fully into a discussion of a subject which they conceived of great importance, but he begged them not to lose sight of an observation that had already been made, that whenever a particular duty was supposed to bear hard on any one member of the Union, it ought to be regarded as a part only of a system bearing equally upon all. He was a friend to commerce, it was his particular profession, and what he had principally devoted his attention to; and therefore it might justly be imagined he was unwilling to fetter it with restraints; but as a member of this body, he considered it proper to forego a pertinacious adhesion to that system, when its interest came in competition with the general welfare.

The gentleman from Massachusetts (Mr. Ames) has represented the proposed regulation as tending eventually to the ruin of the commerce, fisheries, and manufactures of that State. I do not believe (added he) such a consequence would result from a duty of eight cents on a gallon of molasses; if I did, I would be one of the last to advocate the measure; but to understand this circumstance more fully, let us proceed to an inquiry of the ground on which we stand. The State of Massachusetts imports a greater proportion of this article than any other in the Union; she will have therefore (say the opponents of the measure) to pay exclusively all the impost upon it. Let us examine this. Some part of the molasses is consumed in the substance, but all the remainder is distilled: this must either be consumed in the State, or exported from it; in the latter case, I would propose that all the rum shipped to foreign nations should draw back the duties it had paid as molasses. This would obviate all that was said relative to the competition between this State and other nations at a foreign market. As to what is exported, but consumed in some other parts of the United States, it is but proper that a duty should be paid, and although it may be advanced in the first instance by the people of Massachusetts, yet it will be ultimately paid by the consumers in other parts.

What is consumed within the State itself, gentlemen surely do not mean to have excluded from a duty. If they consume more country rum than West India, they pay a less duty than those States which consume a greater proportion of the latter. As to what is used in its raw, unmanufactured state, it will be sufficient to observe, that as it is generally a substitute for sugar, the consumers will therefore avoid the tax on that article, and pay it on the other. In Pennsylvania they mostly use sugar; now, if the people there pay a tax on that article, it is but distributive justice that the people of Massachusetts pay one on the article they use for the same purpose.

Mr. GOODHUE.--Fifteen cents, the sum laid on Jamaica spirits, is about one-third part of its value; now eight cents on molasses is considerably more: the former is an article of luxury, as was observed when it was under consideration, therefore that duty might not be improper; but the latter cannot be said to partake of that quality in the substance, and when manufactured into rum, it is no more a luxury than Jamaica spirits. I cannot see, therefore, why molasses ought to be taxed forty or fifty per cent. when the other pays but thirty-three. Surely the substance ought not to pay at this rate--then what good reason can be offered for the measure?

Mr. BOUDINOT had attended to the arguments of the gentlemen on both sides of the question, and was led to believe the proportion was not properly observed. By the resolution of Congress in 1783, the molasses was fixed upon due consideration at one penny, and West India rum at fourpence. The proposed proportion was two-thirds of what is charged on West India rum. He thought this too high, as it would be an encumbrance on a considerable manufacture; six cents were therefore a more equitable rate than eight cents were; he believed also, that it was as much as the article would bear, especially if it was considered that the whole of the article was not manufactured into rum, but a large proportion consumed in substance. This might also be near what is intended to be charged on sugar; by fixing it at this rate, the necessity of lowering the duty at some future day would be avoided, which he thought an object worthy of the committee's consideration.

Mr. BOUDINOT wished the gentleman to consider the difference in the price; if he did that, he would allow it to be reduced to six cents; if this principle could now be fixed, it would carry them through the whole.

Mr. PARTRIDGE allowed, if all the molasses was distilled into rum, that a small duty might be proper; but when it was considered as an article of sustenance to the poor, and as a requisite to the support of the fisheries and navigation, he hoped the committee would allow but a very small one indeed. He wished it was possible to discriminate between what was manufactured into rum, and what was consumed in the raw state, because a higher duty might be collected in the former case than in the latter.

Mr. FITZSIMONS stated, that there were 327,000 gallons of rum imported into Pennsylvania in 1785, which would tend to show how great a part was consumed by the citizens of the Union; a demand in one State so great as this, proved how likely it was for New England rum to rival the West India. He thought the prices of the two articles gave the country rum a very considerable advantage, and therefore a duty of seven cents could not be very injurious to the manufacture.

The question was put on seven cents and lost.