Reciprocity Treaties.—At various times in the past reciprocity treaties have been negotiated with foreign countries by which it was provided that lower rates should be levied on articles imported from such countries in return for reciprocal concessions of a similar kind from them; or that there should be free admission of articles by one country from the other.
Collection of Customs Duties.—The collection of the customs duties is part of the work of the treasury department. The country is divided into collection districts, in each of which there are one or more ports of entry and customhouses at which all imported goods must be landed. In each district there are a collector and a corps of appraisers, weighers, gaugers, naval officers, surveyors, and the like.
By far the most important port of entry in the United States is the city of New York, where the aggregate receipts for the year 1910 were two thirds of the entire amount received from customs duties in the United States. Until recently a number of the collection districts, however, were unimportant, and in a few the expenses of administration exceeded the receipts. Thus the receipts of the Georgetown (S. C.) district in 1910 were only $49.38, while the expenses were $265; the receipts of the Rock Island (Ill.) district were $51.79 and the expenses $660; the receipts of the Saco (Me.) district were $9.08 and the expenses $753.92. In pursuance of an act of Congress passed in 1912, the President has recently abolished or consolidated many of these districts, so that the number is now only 49, whereas formerly it was 120. For a long time the secretary of the treasury had urged Congress to authorize this reform, mainly in the interest of economy, but it acted tardily.
When goods are purchased abroad to be imported into the United States, the importer files with the United States consul at the foreign port from which they are to be exported an invoice containing a list of the goods and a statement of their value at the place where manufactured or produced. The consul certifies to the correctness of the invoice and sends a copy to the collector of the port at which the goods are to be landed.
Appraisals.—Upon arrival in the United States, the cargo is examined by the customs officers to see that it corresponds with the description contained in the invoice. If it is found that the goods are undervalued the value will be raised by the appraiser. If there is evidence of fraud, the goods will be confiscated or a heavy fine imposed on the importer.[37]
There is a general board of appraisers to which appeals may be taken by the importer on questions of valuation, and recently there has been created a United States court of customs appeals for the determination of various questions arising in the administration of the tariff laws.
Internal Revenue Taxes.—The second important source of federal income is excise taxes, or what are popularly known as internal revenue duties, that is, taxes on commodities produced in the United States.
The Receipts from internal revenue taxes as compared with those from customs duties were inconsiderable before the Civil War. In 1862, however, Congress passed a comprehensive internal revenue law which increased the tax on liquors and levied a tax on tobacco, besides license taxes on various trades and occupations. So many articles were taxed that the revenue from this source in 1866 amounted to more than $309,000,000, the largest sum collected in one year from internal revenue taxes until 1915. In 1917, in consequence of the war, the rates of many taxes were increased and new taxes were levied on freight and passenger transportation, express charges, telegrams, insurance policies, theater tickets, automobiles and many other articles, and a great variety of business transactions, such as stock transfers, bond issues, etc. For some purposes the taxes on incomes, profits, and inheritances (page 224) are called internal revenue. The following are the principal items of internal revenue in the year ending June 30, 1921:
| Income and profits tax | $3,228,137,673 |
| Distilled spirits | 82,623,428 |
| Tobacco | 255,219,385 |
| Estate inheritance tax | 154,043,260 |
| Tax on sales | 282,222,065 |
| Tax on tickets of admission | 95,890,650 |
| Tax on corporations | 81,525,652 |
| Tax on bonds, stock issues and transfers, etc. | 72,468,013 |
| Tax on transportation, telegraph and telephone | 301,512,413 |
Collection of Internal Revenue Taxes.—For convenience in collecting internal revenue taxes, the country is divided into some sixty districts, not by act of Congress as is the case with customs districts, but by the order of the President. Sometimes several states are grouped into one district; sometimes a state is divided into several districts. Thus there are four districts in Illinois, six in New York, and five in Kentucky. In each district there is a collector who acts under the supervision of the United States Internal Revenue Commissioner. The collection of internal revenue taxes is a much more simple task than the collection of customs duties, and is done for the most part by the sale of stamps to the manufacturer, who is required to affix them on the articles taxed. In assessing the tax on most articles their value is not taken into consideration, and hence there is less opportunity for arbitrary action on the part of the government officials and of course less likelihood of controversy, than is the case with the administration of the customs laws.