i88 Early History of American Auctions 



cash ; if exceeding $200. be paid or secured in the manner 

 formerly required — one-half payable in three months and the 

 balance in six months. When any installment of duties became 

 due. enough merchandise was to be sold at public auction to pay 

 them, if this was not done by the importer."^"" 



The object in allowing a credit in the payment of duties on 

 foreign imports was to enable the importer, out of the proceeds 

 of the sales of the goods imported, to reimburse himself the 

 amount of such duties before they became payable. The length 

 of the credit was, therefore, presumably determined by the 

 interval required to dispose of the goods after entry ; a shorter 

 credit would force the importer to tie up his capital in customs 

 paid and limit the volume of his business and our foreign trade. ^'" 

 whereas a longer credit would provide the importer with addi- 

 tional capital from the time the goods were sold till the revenue 

 bonds came due. Our early national policy was to promote 

 foreign trade and navigation ; there was little capital in the 

 country, and the provision of capital by this indirect means was 

 thought necessary to divert trade from foreign ships and mer- 

 chants. ^°- In the East Indies trade the voyages were under par- 

 ticularly heavy expense ; the goods were of high price, large 

 quantity, slow consumption, and slow returns, and therefore 

 Congress gave exceptionally long credits to goods from the Far 

 East.^°^ The British government provided warehouses for the 

 deposit of imported goods and the payment of duties only when 

 removed and sold ; the United States government had provided 

 no warehouses as yet, nor had private warehouses arisen due to 

 the dearth of capital, and so customs credits were allowed instead, 

 being cheaper for the government. 



The amount of the duties was in fact a loan from the govern- 

 ment to the importer, without interest, and became a real part 

 of his capital and as productive as his direct contributions. When 

 the term of the customs credits exceeded that allowed by him in 



"" Bolles, I, 495; Act of 1832, Sections 5 and 6. Further limitations 

 were passed in 1842. Bolles, I, 480. The difficulties attending these 

 restrictions were great, but were somewhat allayed by the establishment 

 of the British warehouse system in the United States in 1854. 



^"' Annals of Congress, 8th Congress, 2d session, p. 1494. 



'"=Niles, 18: 299. 



^"'Annals of Congress, i6th Congress, ist session, p. 2342. 



