A Biography of Henry Clay, the Senator from Kentucky / Containing Also, a Complete Report of All His Speeches; Selections From His Private Correspondence; Eulogies in the Senate and House; and a Poem, by George D. Prentice, Esq.

by Unknown

‘Section 3. And be it further enacted, that until the thirteenth day of June, one thousand eight hundred and forty-two, the duties imposed by existing laws, as modified by this act, shall remain and continue to be collected. And, from and after the day last aforesaid, all duties upon imports shall be collected in ready money; and all credits now allowed by law, in the payment of duties, shall be, and hereby are, abolished; and such duties shall be laid for the purpose of raising such revenue as may be necessary to an economical administration of the government; and, from and after the day last aforesaid, the duties required to be paid by law on goods, wares, and merchandise, shall be assessed upon the value thereof, at the port where the same shall be entered, under such regulations as may be prescribed by law.’

What is the meaning of this language? Can any thing be more explicit, or less liable to misconception? It contains two obligations. The first is, that there shall be an economical administration of the government; no waste, no extravagance, no squandering of the public money. I admit this obligation, in its fullest force, in all its length and breadth, and I trust that my friends, with or without my aid, will fulfil it, in letter and spirit, with the most perfect fulfilment. But the second obligation is no less binding and imperative; and that is, that such duties shall be laid as may be necessary to raise such revenue as is requisite to an economical administration of the government. The source of revenue is defined and prescribed—the foreign imports, to the exclusion of all other sources. The amount, from the nature of things, could not be specified; but whatever it may be, be it large or small, allowing us to come below, or requiring that we should go beyond twenty per centum, that amount is to be raised.

I contend, therefore, with entire confidence, that it is perfectly consistent with the provisions of the compromise act, to impose duties to any amount whatever, thirty, forty, or more per centum, subject to the single condition of an economical administration of the government.

What are the other principles of the act? First, there is the principle that a fixed ad valorem duty shall prevail and be in force at all times. For one, I am willing to abide by that principle. There are certain vague notions afloat as to the utility and necessity of specific duties and discriminations, which I am persuaded arise from a want of a right understanding of the subject. We have had the ad valorem principle practically in force ever since thecompromise act was passed; and there has been no difficulty in administering the duties of the treasury on that principle.

It was necessary first to ascertain the value of the goods, and then to impose the duty upon them; and, from the commencement of the act to this day, the ad valorem principle has been substantially in operation. Compare the difference between specific and the ad valorem system of duties, and I maintain that the latter is justly entitled to the preference. The one principle declares that the duty shall be paid upon the real value of the article taxed; the specific principle imposes an equal duty on articles greatly unequal in value. Coffee, for example, (and it is an article which always suggests itself to my thoughts,) is one of the articles on which a specific duty has been levied. Now, it is perfectly well known that the Mocha coffee is worth at least twice as much as the coffee of St. Domingo or Cuba, yet both pay the same duty. The tax has no respect to the value, but is arbitrarily levied on all articles of a specific kind, alike, however various and unequal may be their values. I say that, in theory, and according to every sound principle of justice, the ad valorem mode of taxation is entitled to the preference. There is, I admit, one objection to it; as the value of an article is a matter subject to opinion, and as opinions will ever vary, either honestly or fraudulently, there is some difficulty in preventing frauds. But, with the home valuation proposed by my friend from Rhode Island, (Mr. Simmons,) the ad valorem system can be adopted with all practicable safety, and will be liable to those chances only of fraud, which are inevitable under any and every system.

Again. What has been the fact from the origin of the government until now? The articles from which the greatest amount of revenue has been drawn, such as woollens, linens, silks, cottons, worsteds, and a few others, have all been taxed on the ad valorem principle, and there has been no difficulty in the operation. I believe, upon the whole, that it is the best mode. I believe that if we adopt a fixed rate ad valorem, wherever it can be done, the revenue will be subjected to fewer frauds than the injustice and frauds incident to specific duties. One of the most prolific sources of the violation of our revenue laws, has been, as every body knows, the effort to get in goods of a finer quality and higher value admitted under the lower rate of duty required for those of a lower value. The honorable gentleman from New Hampshire, (Mr. Woodbury,) and the honorable senator from New York, (Mr. Wright,) both well know this. But if the duty were laid ad valorem there could be no motive for such an effort, and the fraud, in its present form, would have no place. In England, as all who have read the able report made by Mr. Hume, a Scottish member in the house of commons, must perceive, they seem to be giving up specific duties, and the tendency in the public mind appears to beinstead of having a variety of specific duties and a variety of ad valorem duties, to have one permanent fixed rate of duty for all articles. I am willing, I repeat, to adhere to this great principle, as laid down in the compromise act. If there be those who suppose that, under the specific form of duty, a higher degree of protection can be secured than under the other mode, I would observe that the actual measure of protection does not depend upon the form but on the amount of the duty which is levied on the foreign rival article.

Assuming that we are to adhere to this principle, then every one of the leading principles of the same act can be adhered to and carried fully out; for I again assert that the idea that duties are always to remain at precisely twenty per centum, and never to vary from that point, be the exigencies of government what they may, does not belong to the language of the act, nor is it required by any one of its provisions.

The next resolution I have proposed to the consideration of the senate, is this:

‘Resolved, that the provision in the act of the extra session, for the distribution of the proceeds of the public lands, requiring the operation of that act to be suspended in the contingency of a higher rate of duty than twenty per centum, ought to be repealed.’

Now, according to the calculations I have made, the repeal of the clause in question, and the recall of the proceeds of the sales of public lands from the states, even if made, will not dispense with the necessity of a great increase in the existing rate of taxation. I have shown that a duty of thirty per centum will not be too much to furnish the requisite amount of revenue, for a just and economical administration of the government. And how much of that rate will be reduced, should you add to the revenue from imports the million and a half (which was the amount realized the last year,) derived from sales of the public domain? It will be but the difference between thirty and about twenty-eight and a half. For, since thirty per centum yields a revenue of twenty-six millions, one per centum will bring about nine hundred thousand; and every million of dollars derived from lands will reduce your taxation on imports only nine hundred thousand; if you get a million and a half from the lands, it will reduce the taxes only from thirty to twenty-eight and a half per centum; or if you get three millions, as some gentlemen insist will be the case, then you will save taxes in the amount of the difference between thirty per centum and about twenty-seven per centum. This will be the whole extent of benefit derived from this land fund, which some senators have supposed would be so abundant as to relieve us from all necessity of additional taxation at all. I put it then, to every senator, no matter whether he was opposed to the land bill or not, whether heis willing, for the sake of this trifling difference, between thirty and twenty-eight and a half per centum, or between thirty and twenty-seven per centum, to disturb a great momentous and perplexing subject of our national policy, which is now settled, and thereby show such an example of instability in legislation as will be exhibited by the fact of unsettling so great a question within less than eight months after it had been fixed, on the most mature consideration? If gentlemen can make more out of the land fund than I have here stated it likely to yield, I shall be glad to hear on what ground they rest their calculations. I say that all the difference it will produce in the amount of our increased taxation is the difference between thirty and twenty-eight and a half, or between thirty and twenty-seven per centum. Will you, I repeat the question, when it is absolutely and confessedly necessary that more revenue shall be raised, and the mode in which it may be done is fraught with so many and so great benefits to the country, as I shall presently show, will you disturb a great and vexed national question for the sake of eking out in so trifling a degree, the amount to be raised? But let us look at the subject in another view. The resources on which government should depend, for paying the public creditor, and maintaining inviolate the national faith and credit, ought to be such as to admit of some certain estimate and calculation. But what possible reliance can be placed on a fund so fluctuating and variable as that which is derivable from the sales of the public lands? We have seen it rise to the extraordinary height of twenty-six millions in one year, and in less than six years afterwards fall down to the low amount of one million and a half!