Undcrvoluatiou of Imports 191 



increased. Auctions facilitated these operations ; by selling at 

 auction for cash, or on short term notes which could be discounted 

 at the banks, the amount of the duties thus loaned could be 

 invested in a new voyage, and possibly several such rounds be 

 completed before the first came due.^^** 



UNDERVALUATION OF IMPORTS. 



Another means by which the protection to American manu- 

 factures was minimized, and which was facilitated by auction 

 sales, was the system of evaluating" imports. ^''' The plan in use 

 was to take the invoice valuations, as of the exporting country, 

 and certain flat addenda of 10 or 20%.^-" Such additions were, 

 of course, artificial ; the foreign cost so augmented was not the 

 domestic cost, for the increment did not equal the difference in 

 value here and abroad. The importer, consignee, or agent, had 

 to make an entry and state under oath that the entry and invoice 

 stated the actual cost of the goods abroad; if the goods were not 

 invoiced at their actual cost at the place of exportation, with 

 the design of evading" any part of the duties, the goods, or the 

 value of them, was forfeited ; and if the collector suspected that 

 the goods were invoiced at less than this true cost, he might retain 

 them until an appraisement was made and the duties set accord- 

 ing to the appraised value. But in practice this privilege of 

 home appraisal was. for numerous reasons.^-^ not effective, and 

 the systematic evasion of duties by undervaluation was rank. 



"Even when the foreign manufacturer entered his goods at 

 their cost to him. the price was about 16% lower than the prices 

 of similar goods entered by American importers. "^-^ The foreign 

 merchants could always lay in their goods on better terms than 



''* Niles, 18 : 300. The Mercantile Society of New York therefore stood 

 for prohibitive taxes on sales at auction without any reduction in the 

 term of customs credits. Annals of Congress, i6th Congress, 2d session, 

 p. 1650. 



'"For complete statement of details of methods of collecting revenues, 

 see Annals of Congress, 15th Congress,, ist session, p. 35 ff. 



'=« Niles, 19: 157. 



'"^ The reasons are given in Annals of Congress, 15th Congress, ist ses- 

 sion, pp. 44-6. 



'" Bolles, I, 391 ; Proceedings, General, Harrisburg Convention, 1827, 

 pp. 47-51- 



