nical specialists. Some commodities, such as earthen and china ware, for example, are not adapted to this type of duty because of difficulty of classification. In spite of careful classification it is possible, under specific duties, for the manufacturer to produce goods that barely fall in the (for his purpose) more advantageous classification and thus evade the payment of higher duties.

The general effects of ad valorem or specific duties may be discussed in their relation to protection, fiscal results, trade, and consumption.

Ad valorem duties, it is argued, afford the least protection when foreign goods are cheap and when protection is most needed; on the other hand, when foreign values are high and imports therefore fall, the protection is greatest. Since the course of domestic and foreign prices is not necessarily parallel, ad valorem duties, when based, as is usual, on foreign prices, do not correspond to the needs of protection represented by domestic prices. Especially is this true when unusual fluctuations of foreign exchange cause excessive differences between foreign and interior price levels. Home valuation has been proposed as a remedy for this condition. Specific duties, on the other hand, do not as a rule provide for a change in values. The protective effect of a specific duty becomes constantly less as the price of the commodity on which it is levied advances. In some European countries, however, specific duties are adjusted to changes in price levels by means of coefficients (see) of value. (See also DUTIABLE VALUE.)

From a fiscal point of view it is maintained that the income derivable from ad valorem duties can not be accurately estimated, being dependent upon changing prices, and increasing with high and decreasing with low prices. On the other hand, it is pointed out that when foreign values are low imports will be greater, and this in a measure stabilizes the revenues. Specific duties provide against a fall in the Government revenue when prices fall. Customs duties, however, are not always so large a proportion of the total Government revenue as greatly to affect by slight fluctuations the national income. In considering the application of specific duties to a commodity, the element of price fluctuation should be kept in view, as should also the effect of varying demand upon the price. As a tax, ad valorem duties are said to be more equitable. Specific tariffs frequently burden an inferior quality of goods in equal measure with better grades and thereby fall more heavily upon the poor than upon the well to do.

In their effect upon trade, ad valorem duties do not always fall with equal weight upon similar goods. It frequently occurs that goods which must sell for the same price are given different values by the appraisers, or are invoiced at different prices or values. The consequent imposition of different duties may thus give one merchant an artificial advantage over another and make competition unequal. Furthermore, it is difficult for different customs offices always to maintain similar standards of values, and thus goods entering one port may be subject to discrimination. In order to ascertain fair values, customs organization for the purpose is necessary at the port of entry. Because of the expense, it is impossible to maintain such a service at all ports. Commerce may therefore be practically forced to these centers, and away from other points of entry having an equal right to a fair share of trade. Moreover, because of the constant possibility of undervaluation and the ensuing advantage obtained by the sharp

tradesman, the honest importer is constantly liable to be placed at a disadvantage.

In their effects upon consumption specific duties, as has been mentioned, may operate to the disadvantage of goods of cheaper quality. On the other hand, specific duties tend to exclude worthless and inferior articles.

In administration specific duties are generally preferred to ad valorem. The chief objection to the latter is the difficulty in determining correct values. Ad valorem duties necessitate the service of a large number of experts, which increases the cost of their collection. This method of assessment is a fruitful source of dispute and litigation, and often results in delay and error. It is difficult to hold appraisers responsible for mistakes, since they can attribute errors to differences in judgment. Under ad valorem rates, "the facts to which the rate is to be applied must be gathered in places many thousand miles away and under circumstances most unfavorable to the administration of justice." Besides, a large proportion of imported goods is sent for sale at the best price that can be obtained and there is consequently no fixed value.

Ad valorem duties are peculiarly subject to evasion. "The history of United States tariffs reveals a continuous series of attempts at undervaluation, smuggling, etc." Under ad valorem duties there is great provocation to dishonesty of officials.

The specific tariff is easily understood, for everything capable of being counted, weighed, or measured is dutiable according to quantity.

It is alleged that the system of specific duties is sometimes employed to mask the real character and burden of the tariff and to conceal prohibitive duties, since the meaning and effect of a specific duty are often known only to a few persons familiar with the details of some minute branch of trade.

(See also CLASSIFICATION OF TARIFF; COMPENSATORY DUTIES; COMPOUND DUTIES; MIXED DUTIES; OFFICIAL VALUATION.)

ADAMS, JOHN (1735-1826), member of the committee which drafted the Declaration of Independence; elected to First Continental Congress; 1777-1779, commissioner to the French Court; 1785-1788, Minister to Great Britain: 1789-1797, Vice President; 1797-1801, President of the United

States.

Adams was not much involved in tariff controversies. He did not refer to the matter of protecting manufactures either in inaugural or annual addresses.2

He elsewhere wrote:

"What would be the consequence of the abolition of all restrictive, exclusive, and monopolizing laws, if adopted by all the nations of the earth, I pretend not to say. But while all the nations with whom we have intercourse persevere in cherishing such laws I do not know how we can do ourselves justice without introducing, with great prudence

1 Higginson, John Hedley, Tariffs at Work, London, 1913, pp. 47-74: Fontana-Russo, Politique Commercial, Paris, 1908, pp. 491-494; Cyclopedia of American Government; 50th Cong., 1st sess., Senate Report No. 2332, p. 7, pp. 51-53, including appendix, in which are given opinions on ad valorem and

specific duties by 10 Secretaries of the Treasury; Report of the Secretary of the Treasury on the Collection of Duties, 1888; 63d Cong., 1st sess., House Report No. 5, on Tariff Bill of 1913; 64th Cong., 1st sess., Senate Doc. No. 366, 1916; U. S. Tariff Commission, Information Concerning American Valuation as the Basis for Assessing Duties Ad Valorem, Washington, 1921, pp. 38-39; Taussig, F. W., Tariff History of the United States, New York, 1923.

1 Stanwood, Edward, American Tariff Controversies, Boston, 1903, Vol. I, p. 121.

and discretion, however, some portions of the same system." 1

ADAMS, JOHN QUINCY (1767-1848); 1794, Minister to The Hague; 1799, negotiated a commercial treaty with Prussia; 1802-1803, member of Massachusetts Senate; 1803-1808, United States Senator; 1809-1814, Minister to Russia; 1815-1817, Minister to England; 1817-1825, Secretary of State; 18251829, President of the United States; 1831-1848, Member of National House of Representatives. Two acts relating to the tariff were passed in Adams's administration, including that of 1828. Speaking of the latter in his fourth annual message, President Adams said:

"The tariff of the last session was in its details not acceptable to the great interests of any portion of the Union, not even to the interests which it was specially intended to serve. *** But if any of the duties imposed by the act only relieve the manufacturer by aggravating the burdens of the planter, let a careful revisal of its provisions, enlightened by the practical experience of its effects, be directed to retain those which impart protection to native industry and remove or supply the place of those which only alleviate one great national interest by the depression of another." 2

As chairman of the Committee on Manufactures of the House of Representatives Adams presented a report in which he urged the duty of levying revenue enough for "common defense" and also to "protect manufactures." 3

The veto message on the tariff bill of 1842 was referred to a select committee of which Adams was chairman, and the committee in due time made a report arraigning the President for his rejection of the bill.

ADMISSION TEMPORAIRE (temporary admission), a customs device which permits free importation of dutiable merchandise when such merchandise is destined to eventual reexportation after undergoing manufacture or other transformative process. The purpose of admission temporaire is similar to that of the drawback (see) e. g., to place domestic exporting industry on a nearly equal plane of competition with foreign industry by providing free admission to foreign materials employed in export manufacture.

more

Admission temporaire as at present understood was introduced into France by the law of 1836, although various measures of a somewhat similar nature had previously been in operation. Under the law of 1836 the maximum period allowed before reexportation or deposit in an entrepôt reel (see WAREHOUSES) was six months. The administration was given authority to decide what articles should enjoy the privilege of temporary admission. The obligation of identity, i. e., the reexportation of the identical products imported, was imposed upon all merchandise subject to temporary admission. Stamping or sealing were required for avoidance of fraud and, in the event of the inadequacy of these, customs inspection and verification were employed.

The system of identity brought forth numerous complaints, especially from millers and certain

The Works of John Adams, Boston, 1856, Vol. X, p. 384. Other references: Morse, John T., John Adams, Boston, 1892. Messages and Papers of the Presidents, Washington, 1911, p. 980. Quincy, Josiah, Life of John Quincy Adams, Boston, 1858, pp. 202-203.

Stanwood, Edward, American Tariff Controversies, Boston, 1903, Vol. II, p. 26.

Other reference: Morse, J. T., John Quincy Adams, Boston, 882.

machine manufacturers, whose raw materials, wheat and iron, under the existent rules of identity were denied free admission. The restrictions were necessary because it was practically impossible to insure the identity of particular importations of wheat with the flour or of iron with the manufactured products that came from the mills. By a decree of 1850 the principle of equivalence was introduced for wheat. The object of this change was to allow grain merchants to export as the equivalent of imported wheat any flour, whether manufactured from domestic or foreign grain. After the delivery of the acquit-à-cantion (see) the imported wheat was allowed free circulation, and on the presentation of an equivalent amount of flour for exportation or storage in entrepôt reel the customs authorities had merely to satisfy themselves that it was of pure wheat and in good condition, and the bond for the previously imported wheat was released.

With the decree of 1851 the method of equivalence was extended to iron to be manufactured into machinery, and later decrees broadened the application of the principle to other metals.

This liberal treatment brought certain inconveniences. The imported merchandise was thrown upon one market, while the merchandise to be exported was manufactured elsewhere from other material. There was consequently sometimes produced in the zone of importation a superfluity of the article in question and a stagnation in the local market for similar French products. Thus in 1864 and 1865 foreign iron imported under acquits-à-caution by the north and east frontiers represented 85 and 92 per cent of the total importation, while the exportation of the center and south was 60 and 77 per cent of the total exportation. Furthermore, the exported metals were nearly always of a quality and value inferior to that of the metals they were supposed to replace.

This situation was the subject of much complaint. After making several investigations the Government instituted a number of restrictions. By the decree of 1870 the iron and other metals enumerated in the order of 1862 were to be transported directly into the factories authorized to convert them into manufactures. There were also other regulations to prevent too free substitution. The decree of 1888 extended similar obligations to forged metals. These requirements did not, however, recall the principle of identity.

The obligation to transport the imported materials sometimes considerable distances to the exporting factory reduced some of the benefits of the former practice, but ended the traffic in acquits-à-caution which had weighed upon the regions of importation to the advantage of those of exportation.

1

In regard to wheat, the system of unrestricted equivalence allowed by the decree of 1850 had also engendered abuses, similar to those described above. Grain imported through the southern ports was placed upon the local market and compensated for by the exportation of domestic flour from the north and east. The result of these operations was an abnormal depression of grain prices in the south, to the prejudice of agriculture in that region. The exporters received from the importers for the cancellation by their exports of the bonds of the latter a remittance varying with tariff and prices.

After an investigation in 1870, the Government issued the decree of 1873, whereby each customs district was made a special zone and the reexpor

tation of flour was required to take place from the same zone into which it had been imported.

It was soon recognized that these restrictions presented a great inconvenience to the flourmilling industry. Following considerable agitation, a first decree of 1896 established larger zones, and finally, in 1897, the restrictions relative to points of entry and export were completely abolished. In fact, the privilege of reexportation under equivalence was reestablished.

In spite of various precautions the former abuses returned. The law of 1902 attempted a radical reform, requiring that the declarations of exportation should be presented by the importer, and making it obligatory under the provisions of admission temporaire to transport the imported grain to the works of the importer, and to ship from these same works the products destined to cancel the importation by their exportation.1

Further problems in the administration of admission temporaire have arisin in the difficulty of guaranteeing the quantitative equivalence of the merchandise imported and exported, since raw materials yield varying amounts of the manufactured product, according to the quality of the article and the efficiency of the process. (See BOUNTIES.)

Another objection to the system is the frequent possibility of producing manufactured articles from materials other and cheaper than those imported for their alleged manufacture. For example, corn may be admitted free for the production of lactic acid. The corn, however, may be sold and glucose substituted. Upon export of the lactic acid, the liability to pay duty on the corn is canceled.

Because of such conditions it has been necessary

to reduce the list of materials enjoying the privilege of temporary admission.

To the other inconveniences of this system are added numerous administrative annoyances, delays, and formalities.2

As previously stated, the law of 1836 granted to the Executive the power to specify the classes of merchandise to be allowed the privileges of admission temporaire. The customs law of 1892 withdrew this power from the Executive branch of the Government except as related to the following classes of goods:

Articles to be repaired, used on trial, or for experiment.

Articles presenting a distinct and exceptional character and not susceptible of being dealt with under general rules.

Bags and receptacles to be filled.

This act provided that otherwise the classes of merchandise enjoying the benefits of admission temporaire should be established by law. The same statute gave a list of such classes of articles, and others have since been added. Of course, the administration of admission temporaire involves many special rules.

This form of entry has been of some importance in France. The average annual value of raw materials imported under temporary admission in the period 1906-1910 was 176 million francs. In the same time the average annual value of manu factures incorporating and reexporting these materials was 243 million francs. These figures do not include sugar. (See also IMPROVEMENT TRADE.) 1 Pallain, G., Les Douanes Françaises, Paris, 1913, Vol. I,

pp. 550-564.

Bossnet, Jacques, Ports Francs, Zones Franches, Paris, 1904, pp. 170-181. Tableau des Droits d' Entrée et de Sortie, Paris, 1921. 'Pallain, loc. cit.

AGAR-AGAR. See GELATIN.

AGATE, ARTICLES OF. Besides ornaments, many industrial articles are made of agate, such as scale bearings, mechanical bearings and supports, mortars, and balls for water meters.

Production of agate and other varieties of chalcedony averages about $9,000 annually. In 1915, however, the value increased to $23,262, but was only $7,580 in 1918. These figures represent the value of the raw article, not of the manufactured wares. It is understood that most of the domestic agate is used for jewelry.

Imports of articles (other than jewelry) made of agate were valued at $20,165 in 1914. Germany normally supplies about 80 per cent, most of the remainder being from England and France. Later statistics follow:

1 Agate, articles of, not separately shown; after Sept. 22, 1922, statistics include rock crystal and other semiprecious stones.

Exports. Not recorded separately.
Survey B.-11.

AGATE BUTTONS. See BUTTONS.

AGATES. Agate is a variegated chalcedony consisting of bands or layers of blended colors. Certain varieties are distinguished as ribbon agate, fortification agate, moss agate, star agate. zone agate, clouded agate, etc. Most commercial agate is artificially stained, so that stones naturally unattractive come to be valuable for ornamental purposes. Agates are used in rings, cups, beads, boxes, handles of small utensils, burnishers, pestles, mechanisms, such as bearing-surface pivots and mortars, and trivial ornaments, and in delicate knife edges of weighing apparatus.

Production-Numerous localities yield agates. They are abundant in trap rocks of the Lake Superior region. Wood agate, or agatized wood, is found in Colorado, California, and elsewhere in the West, the "silicified forest," known as Chalcedony Park, in Arizona, being most noted. Foreign agates are found mainly in Uruguay and Brazil; these were formerly sent to Germany, where their polishing was an important industry.

Import values of agate from 1907 to 1914 ranged between $247 in 1912 and $934 in 1907. Imports wholly ceased shortly after the outbreak of the World War, because of the blockade of Germany, whence came the principal supply.

$1,764; 1921, 192,487 pounds, valued at $12,962; Imports for 1920 were 42,235 pounds, valued at 1922, 38,575 pounds, valued at $1,994; 1923, 70 pounds, valued at $21.

Exports.-None recorded.
Survey N-1.

AGREEMENTS, TARIFF. See RECIPROCITY AND TARIFF AGREEMENTS OF THE UNITED STATES.

AGRICULTURAL IMPLEMENTS AND MACHINES may be classified as (1) agricultural implements, including cotton gins, (2) machinery and carts. The first group includes implements used for use in the manufacture of sugar, and (3) wagons in plowing, planting, reaping, and preparing crops for use in their raw form or for manufacture. cotton gin, whose function is merely to separate the

The

AGRICULTURAL TARIFFS. Historical. The earliest agricultural tariffs and customs restrictions were principally concerned with grain, and were usually applied to the export rather than to the import of that commodity. According to the theories of Mercantilism (see) an important function of government was the promotion of manufacturing, and one of the means of so doing was to lower the cost of food, Prohibition or restriction of grain exports was thought to attain this end by increasing the domestic supply, and thereby lowering prices. These measures were also thought to insure against famine. Moreover, the preventing of neighboring countries from obtaining cheap staples was part of the policy of thwarting foreign competition. The earliest discussions of agricultural tariffs are concerned with these questions. The Physiocrats (see) argued that freedom to export in years of abundant domestic crops would increase the prosperity of the farmers, and consequently of the country. It would also promote more extensive grain culture, which, in turn, would be the most effective insurance against insufficient domestic supplies.

As a result of this agitation the restrictions of exportation (except when grain reached a certain high price) were removed in France in 1764. Insufficient crops caused a temporary return to the former policy in 1768 and 1770,

Until 1770 England's exports of grain exceeded imports, after which year she was more and more compelled to depend upon imported breadstuffs to feed her growing industrial population. Her experiences with grain tariffs are discussed under CORN LAWS; SLIDING SCALE TARIFFS (see).

As the Mercantilist policy waned and the interests of agriculture received greater attention, export prohibitions and restrictions were more generally removed, and import duties imposed. France adopted, in 1816 a grain import duty, which included the feature of the sliding scale. (See SLIDING SCALE TARIFF.) After 1819 the country was divided for this purpose into three parts and for each a special import tariff was instituted, to which a surtax was added when the price materially sank. When the price fell below a fixed minimum importation was forbidden. From 1853 to 1857 a period of high prices led to a discontinuance of restrictions.

After intermittent renewal of the old laws, a new tariff was imposed in 1860.2

Subsequent to 1875 the development of cheap land in the United States, and the cheapening of freight costs following the establishment of steamships and railroads, made it difficult for the western European farmers to compete with America, Russia, and India. This led to a strong Agrarian movement which found its expression in France in the maintenance of high tariffs for grain as well as for other agricultural products.3

In 1810 the Prussian export prohibitions were removed from grain, and in 1818 an import duty was imposed which continued with varying fortunes until 1865. From that year until 1870 importation of grain into Germany was free. As cheap supplies of grain began to be imported from overseas, the German agriculturalists began to experience a depression.

About 1875 the German Government was in especial need of funds, and took advantage of agri

1 Eggert, Dr. Ugo, Getreidezölle, Berlin, 1879, pp. 17-26. Handwörterbuch der Staatswissenschaften, Jena, 1911. Meredith, H. O., Protection in France, London, 1904, pp. A Handwörterbuch der Staatswissenschaften.

67-89.

cultural conditions to impose higher grain tariffs, which amounted to 1 mark per 100 kg. ($2.16 per short ton) on wheat and rye. The rates were insnfficient to protect and were raised in 1885 to 3 marks and in 1887 to 5 marks per 100 kg. ($6.48 and $10.80 per ton, respectively).

By the Caprivi treaties (see TARIFF HISTORY, GERMANY) German agricultural rates were lowered, but upon the ratification of these agreements the Agrarian League (der Bund der Landwirthe) was formed. This league carried on an extensive campaign for increased protection, and successfully cooperated with the industrialists to secure in the tariff of 1902 high import duties, as well as numerous measures of protection by administrative measures. (See PROTECTION, ADMINISTRATIVE.) Most other European countries have a wide variety of import duties upon agricultural products. Holland and Denmark are exceptions in the maintenance of a free trade policy for such articles.

6

United States. The first tariff act of the United States (1789) laid duties on sugar, cheese, hemp, and cotton; in 1790 plums and prunes, oranges, and lemons were added to the dutiable list. Alexander Hamilton (see), in his report on manufactures, advocated "the exemption of the materials of manufacture from duty," but did not specifically mention products of agriculture. Friedrich List (see), one of the early writers on the tariff, definitely opposed duties on agricultural products. (See RAW MATERIALS.) The tariff acts of 1789 and 1790 imposed duties of 5 per cent and that of 1816 15 per cent upon unenumerated articles, and, with the exception of wool and cotton under the acts of 1789 and 1790, most agricultural products came within this class. The tariff act of 1824 provided specifically for duties upon a number of agricultural articles, including bacon, beef, butter, ham, linseed, rapeseed, and hempseed oil, oats, pork, potatoes, wheat, wheat flour, and wool. At that time agriculture was in a depressed condition and stimulation was anticipated from the duties upon farm products. But the strongest hopes were placed in the development of a home market through the encouragement of manufactures. Alexander Hamilton had been one of the earliest advocates of this policy. The same line of argument was consistently pursued by Henry Clay (see).

In 1828 flax and in 1842 barley, rye, and corn were added to the list of specifically dutiable agricultural products.

The Canadian reciprocity (see) treaty (18541864), which virtually established free trade in natural products between the United States and British North American Provinces, affected the major agricultural products in which Canada was the chief competitor of the United States.

It was not until the tariff act of 1890 that "a complete schedule of protective duties upon products of agriculture can be said to have been adopted, embracing as it did the principal varieties of livestock, breadstuffs, and dairy products. Other enumerated farm and field products included beans, broomcorn, cabbages, cider, eggs, hay, honey, hops, onions, pease, plants, potatoes, and many kinds of seeds. Commercially important fruits and nuts and meat products were likewise protected. Miscellaneous products included chicory and dandelion root, salt, starch, dextrine, mustard, spices, and vinegar. Opponents of the measure averred that many of these duties, being placed upon exportable commodities, could have no effect except Dawson, Wm. Harbutt, Protection in Germany, London' 1904, pp. 72 ff.

• Items mentioned not inclusive.