tail exports; reduce customs revenue and so necessitate increases in other forms of taxation; and, in short, aggravate all our current evils of depression, high cost of living, and business uncertainty.

In the tariff of 1922 (Section 402), (a) the general basis for assessing duties is declared to be the foreign value or the export value, whichever is higher. Foreign value is defined as the market price "at the time of exportation of such merchandise to the United States, at which such or similar merchandise is freely offered for sale to all purchasers in the principal markets of the country from which exported, in the usual wholesale quantities and in the ordinary course of trade, including the cost of all containers and coverings of whatever nature, and all other costs, charges, and expenses incident to placing the merchandise in condition, packed ready for shipment to the United States." (b) If neither the foreign value nor the export value can be ascertained to the satisfaction of the appraising officers, the duty shall be based on the United States value; that is, the wholesale price of similar merchandise in the principal markets of the United States, minus the import duty, the necessary shipping charges from the point of exportation to the place of delivery, and commission or profit not exceeding a stipulated percentage. (c) If neither the foreign value nor the export value nor the United States value can be ascertained, the dutiable valuation shall rest upon cost of production. (d) Ad valorem duties on certain imported coal-tar dyes are to be based upon the American selling price of similar competitive articles manufactured or produced in the United States. (e) The American selling price may be employed as the basis for assessing duties on any other imported commodity whenever, upon investigation, the President shall declare that such action is necessary in order to equalize the differences in the costs of production in the United States and the principal competing country.

Advantages and Disadvantages of Specific Duties. As already indicated, the chief advantage of specific duties rests in the simplicity and cheapness of their administration. Customs officials have, for the most part, only to weigh, measure, or count the merchandise crossing the national boundaries a procedure involving but little technical skill, expense, or opportunity for fraudulent practice, and aiding commerce by its speed of execution. On the other hand, such duties are not readily adaptable to currency fluctuations and they are inequitable. Coarser and cheaper goods are generally taxed proportionally higher than the finer and more expensive articles, while the opposite rule should prevail. For example, if imported cotton cloth were taxed ten cents a yard regardless of quality, the cloth worth five cents per yard would be paying duty equivalent to two hundred per cent, while the material worth fifty cents per yard would escape with a duty of only twenty per cent. This inequality is partially obviated by arranging merchandise in groups based upon the degree of manufacture, the fineness of the goods, or upon some other common basis, and applying special rates to particular groups. For example, razors valued at less than 75 cents per dozen are dutied in the American Tariff of 1922 at 18 cents each; valued at 75 cents and less than $1.50 per dozen, 25 cents each; valued at $1.50 and less than $3 per dozen, 30 cents each; valued at $3 and less than $4 per dozen, 35 cents each; valued at $4 or more per dozen, 45 cents each, to which is added in each case 45 per cent ad valorem. Some such general method of grouping is characteristic of nearly all customs tariffs, and rates thus adjusted are called graduated duties.

An important point to consider in regard to specific duties is whether they are levied on net or gross weight or measure. The duty ought naturally to be based upon the article exclusive of the packing; but, as the removal of the latter for the

purpose of obtaining net weight or measure would often be a serious damage to the goods or would delay commercial transactions, many tariff laws make a legal allowance, known as "tare," on various kinds of articles.

Specific Duties: Basis of Weight. The basis of weight for the assessment of specific customs duties varies widely in different countries and even among different commodities imported into the same country. Three general bases are, however, well-marked: (a) gross weight, which includes the weight of the merchandise and of all its packing; (b) net weight, which is the weight of the goods without any packing; and (c) legal weight. The last is a less standardized term, occurring in Latin-American usage particularly, and defined in the Mexican tariff as "the weight of the articles including that of the internal packing, wrappings, bottles, boxes of cardboard, wood or tinplate, straw or chip covers, in which the goods are packed inside the outer case which serves as the general receptacle for the goods." It corresponds to the semi-gross weight of the French tariff.

Switzerland, Venezuela, Colombia, and some Central American states use gross weight exclusively; several countries of Europe and Asia, among them Japan, United Kingdom, Belgium, and the Netherlands, depend upon net weight; while some other European nations employ gross weight only in the case of articles dutiable at low specific rates, e.g. ten francs or less per kilogram in France. The South American states present great variation in usage, including different combinations of gross weight, net weight, legal weight, and detailed stipulations in the tariff acts as to tare allowances on designated articles or types of packages. In nearly all countries of the world in which net weight is the basis, there are provisions for calculating the net weight by applying certain tare allowances; weight thus arrived at is termed 'legal net weight."

By the American tariff law (1922) the Secretary of the Treasury is authorized to prescribe and issue regulations for the ascertainment of tare upon imported merchandise, including the establishment of reasonable and just schedule tares therefor; but in no case shall there be any allowance for draft or for impurities, other than excessive moisture and impurities not usually found in or upon such or similar merchandise.

Payment of Customs Duties. As a general rule the standard money of a country is receivable in payment for its customs duties. Some states having depreciated currencies require these taxes to be paid in gold. One result of this is virtually to raise existing imposts, a condition which has brought ineffectual remonstrances especially from countries having commercial treaties with the offending nation. When Russia in 1877 and Austria-Hungary in 1878 enacted that imposts be paid in gold, the effect was to enhance the prevailing rates of duty thirty-three and fifteen per cent respectively. Another result of requiring gold payments in depreciated currency countries is to increase the gold reserve, a situation especially advantageous for countries having interest to pay on foreign loans. This was practically the situation in the United States as a result of the Civil War. At that time large amounts of depreciated paper money were issued which were receivable in payment for all public dues except duties on imposts and of all claims against the United States except interest on the public debt. This was virtually a requirement that import duties be paid in coin. However, in 1879 when the so-called “ greenbacks or United States notes came to a par with gold, the requirement of coin payment was revoked by an order of the Secretary of the Treasury. At the present time not only gold coins and silver dollars but also United States demand notes, United States Treasury notes, gold and silver certificates of the United States, Federal

Reserve notes, and circulating notes of national banks are receivable for duties at their nominal value in unlimited amounts. Furthermore, it is lawful for customs officials to receive certified checks drawn on national and state banks and trust companies in payment of customs duties, under such regulations as the Secretary of the Treasury shall prescribe.

Argentina and Chile fix duties in gold pesos, but collect them in paper pesos at an official rate. In Brazil, part of the duty is payable in paper and part theoretically in gold, but actually in paper with agio.

Extraordinary conditions as to foreign exchange and currency depreciation since the World War have brought forth the greatest variety of regulations in regard to payment of customs duties. In some countries gold payment has been insisted upon, if not on all imports, at least on certain classes of goods, for example, luxuries brought into Austria. More frequently payment in paper has been permissible, but only at rates sufficiently higher than those for gold payment to offset more or less accurately the difference in purchasing power between gold and paper. Commonly the statutory tariff rates hold for gold payments, and, in fixing the terms for payment in paper, they are taken as the basis which is either multiplied by a number adopted for the purpose or is supplemented by a surtax stated as a percentage of the basic rate. The latter method has been employed, for instance, in Italy and Bulgaria; the former, in Germany, Austria, Poland, Hungary, Roumania, and other countries of Central and Eastern Europe. The multiples or surtaxes are revised from time to time in the light of changes in the currency situation; in Germany and Austria sometimes as often as once a week. Thus the number of paper marks required in payment of German import duties for the week of June 5, 1923, was fixed at 9919 times the basic gold rates specified in the customs tariff. Nor are these differentials always the same for all commodities