4. What different regulations have been adopted during the post-war period as to valuation of imports from countries with currencies depreciated as compared with the currency of the country of importation? Appreciated as compared with that of the country of importation? GREGORY, Tariffs, 363-366; Foreign Tariff Notes, No. 39, pp. 105, 129; No. 40, p. 177; No. 41, pp. 274, 283; Commerce Reports, November 21, 1921, p. 735; February 6, 1922, p. 337; February 20, 1922, p. 475; March 27, 1922, p. 779; May 15, 1922, p. 444; August 14, 1922, p. 485; Tariff Commission, Colonial Tariff Policies, 66, 775, 804, 809.

5. Trace the tariff history of one of the overseas possessions of the United States from the time of its acquisition to the present. Tariff Commission, Colonial Tariff Policies, 571-628.

6. Customs duties are levied in the United States only on goods imported from foreign countries. Are the Philippines and Porto Rico foreign countries? If not, may we levy duties on goods imported thence? The Constitution states that "all duties, imposts, and excises shall be uniform throughout the United States." Are the Philippines and Porto Rico a part of the United States? If so, must not the same rate of import duties be applied to them as to the rest of the United States and must there not be free trade between them and continental United States? Tariff Commission, Colonial Tariff Policies, 577; House Doc. 509, 56th Cong., 2d Sess.; De Lima vs. Bidwell, 182 U. S. 243; Dooley vs. U. S., 182 U. S. 222; Armstrong vs. U. S., 182 U. S. 243; Goetze vs. U. S., 182 U. S. 221; Fourteen Diamond Rings vs. U. S., 183 U. S. 176; Downes vs. Bidwell, 182 U. S. 244; WILLOUGHBY, American Constitutional System, Chs. 10 and 14.

7. To what extent do preferential tariffs affect favorably trade between colonies and mother country? Tariff Commission, Colonial Tariff Policies, 70-77, 409, 597; SMART, Return to Protection, Ch. 23; HERBERT AND MONTAGUE, Canada and Empire; ALLIN, Preference, Reciprocity and Annexation; CHOMLEY, Protection in Canada and Australia.

8. Outline the preferential system of the British Empire. Why not one customs union for the whole empire? GREGORY, Tariffs, 266–298; BRYCE, International Relations, 36; Tariff Commission, Colonial Tariff Policies, 693-714.

CHAPTER VIII

TARIFFS AND TARIFF SYSTEMS

Introduction. A tariff is a table or scale of charges; thus there are railroad tariffs, insurance tariffs, customs tariffs, and the like. The origin of the term is traced to "the little Spanish coast town of Tarifa from which in the olden days the boats of its feudal lord sallied forth to demand toll of every passing ship. This action was only the forerunner of what happens now in every harbor the world over"; and tariff, in the narrower and more familiar sense, has come to be identified with "the toll demanded of foreign goods before they may enter domestic markets." A customs tariff is a systematic arrangement of customs duties. It is spoken of as a tariff law, act, or bill and is usually divided, for purposes of convenience, into schedules, each schedule comprising the principal articles of allied groups which are subdivided into numerous sections with duties or rates for each section. The general arrangement within these schedules and sections is commonly alphabetical.

A tariff law is based upon the general economic and political conditions of a country and represents a compromise between the conflicting interests of producers and consumers. It also furnishes a basis upon which commercial relations with foreign countries may be regulated. The general character of a customs tariff depends largely upon its purpose, whether it is primarily for protection or primarily for revenue. In the latter case but few articles may be taxed. The pre-war revenue tariff act of Great Britain, for example, contained only

1 WHELPLEY, Trade of the World, 199.

about forty rates and eighteen different classes of articles and could easily be printed on four or five sheets of ordinary sized paper. On the other hand, the protective tariff of Germany is divided into nineteen chapters, contains nearly one thousand numbers or rates, and occupies over thirty quarto pages of printed matter. This contrast should not, however, be ascribed too exclusively to the protective purpose in the one case and the revenue purpose in the other; for some of the South American tariffs present a long list of commodities dutied primarily for revenue, while much of the length of the German tariff is doubtless due to the predominance of specific rates and the consequent minuteness of classification.

Contents of the American Tariff Act. The first tariff act of the United States, passed on July 4, 1789, comprised six sections with about eighty different rates, and might easily be printed on three sheets of ordinary sized paper. For some decades American tariff legislation grew in bulk and complexity through the widening application of import duties for both revenue and protective purposes. But not until 1846 did schedules appear in our tariff acts, and then only as lettered groups of articles which happened to bear the same ad valorem rate of duty. During the Civil War these schedules lapsed, to be revived in 1883 in the form which has since been retained and which finds its parallel in most countries.

The Fordney-McCumber Tariff Act of 1922 fills more than one hundred and forty printed pages. It is divided into four titles whose general scope and arrangement are indicated below:

TITLE I is devoted to the "Dutiable List." It consists of schedules numbered 1 to 14 inclusive, each of which relates to a special class of articles. The schedules are in turn made up of several paragraphs each of which sets forth the import duties on a given article or on a closely related group of articles falling within the classification with which the schedule

deals. There are 495 paragraphs in all, each of which is numbered according to a plan indicated in the following scheme :

TITLE II, headed "Free List," embraces Schedule 15, which is made up of articles not subject to import duties, arranged as are articles in the preceding schedules in paragraphs numbered 1501 to 1707.

TITLE III," Special Provisions," deals with such matters as bounty-fed imports, indication of country of origin, prohibited articles, articles admitted free under bond, bonded warehouses and manufacture in bond, drawbacks, reimportation of domestic products, discriminatory duties on goods coming in foreign ships, discretionary power of the President relating to equalizing costs of production and to meeting unfair competition or discriminations, and the added functions of the Tariff Commission.

TITLE IV, "Administrative Provisions," covers some fortyeight pages and constitutes a notable revision of customs administrative legislation.

The Free List; Unenumerated and Prohibited Articles. In some tariff laws, such as the tariff of Great Britain, certain articles are enumerated as dutiable or as prohibited, and all

other goods are allowed entrance free of duty. Many of the European tariff laws contain schedules or groups in which are to be found interspersed not only dutiable or prohibited articles but articles which are entered duty free. Other tariff acts contain a special or separate "free list" and stipulate a certain uniform rate of duty for all unenumerated articles. This is a feature of the Canadian and of the American tariff laws. In the American act of 1922, Title II is, as we have seen, devoted exclusively to the free list; paragraph 1459 of Title I provides "that there shall be levied, collected, and paid on the importation of all raw or unmanufactured articles not enumerated or provided for, a duty of 10 per centum ad valorem, and on all articles manufactured, in whole or in part, not specially provided for, a duty of 20 per centum ad valorem"; and paragraph 1460 stipulates" that each and every imported article not enumerated in this Act, which is similar, either in material, quality, texture, or the use to which it may be applied to any article enumerated in this Act as chargeable with duty, shall pay the same rate of duty which is levied on the enumerated article which it most resembles in any of the particulars before mentioned; and, if any non-enumerated article equally resembles two or more enumerated articles on which different rates of duty are chargeable, there shall be levied on such non-enumerated article the same rate of duty as is chargeable on the article which it resembles paying the highest rate of duty." Imported goods manufactured of two or more materials are dutiable under our law at the highest rate chargeable on the "component material thereof of chief value," that is, "that component material which shall exceed in value any other single component material of the article." In some countries it is customary to apply to such commodities the rate on the component material which is subject to the highest rate of duty.1

1 For more extended discussion of the subject of this paragraph, see GREGORY, Tariffs, 100-115.