746 POPULAR SCIENCE MONTHLY, 



whicli there is a great difference of opinion, is, the form in which 

 the duty on the imports of sugar shall be assessed specific or 

 ad valorem ? To help to the formation of a correct opinion on 

 this subject, attention is asked to the following exhibit of the na- 

 ture and practical workings of these two forms of taxation. The 

 ad valorem system, proportions duties to the worth of the goods 

 at the place of shipment at so much per cent of their market 

 value. Its chief merit is its justice and equity. It adjusts itself 

 automatically to differences of valuation or of commercial quali- 

 ties, so that the tax collected from the consumer varies in propor- 

 tion to his ability to pay at least so far as this may be deter- 

 mined by his ability to buy goods of greater or less cost. 



The chief demerit commonly ascribed to it is the temptation 

 which it is said to offer to fraudulent undervaluation. Since 

 the duty to be paid depends upon the foreign value, if this can 

 be made to appear less than it really is, some part of the tax is 

 evaded, and the cost of the goods to the importer diminished. 

 The difficulty of evading a customs revenue under a good and 

 intelligent administration through undervaluation is illustrated 

 by the circumstance that, in order to secure a saving of as much 

 as six per cent on the landed cost of goods, the dishonest importer 

 in the case of a forty-per-cent duty would have to swear an under- 

 valuation of more than twenty per cent. On the other hand, the 

 great advantage of a simple specific duty is the care and certainty 

 with which it may be applied. If, for instance, the duty upon a 

 class of textile fabrics should be fixed at forty cents a pound, includ- 

 ing all accessories involved in packing, the weight of the contents 

 of a case would show, by simple multiplication, the exact amount 

 of duty to be paid. No expensive process of examination need be 

 entered upon. Disputes can hardly arise, and false swearing is 

 out of the question. Such duties have been found most useful 

 when imposed upon simple articles not produced in widely vary- 

 ing grades of greatly differing commercial values. 



The injustice and inexpediency of specific duties are, that they 

 bear so much less heavily upon the high-priced than upon the 

 low-priced qualities of goods, that the poorer classes of the com- 

 munity are taxed at a much higher rate than the richer. Neither 

 do they adjust themselves to ups and downs of market values ; 

 and a rate of duty reasonable enough when enacted is often trans- 

 formed by a fall of price into an onerous and prohibitory tax 

 restricting imports and diminishing revenue. It is not, therefore, 

 surprising that the attempt had been made to unite, if possible, 

 the certainty and inevitableness of the specific system with the 

 justice and equity of the ad-valorem principle. Two methods of 

 combination of specific and ad-valorem rates have therefore here- 

 tofore been adopted. 



