of the

discounts, allowances, and drawbacks, were a | total drawback on re-exportation; ten per scent on prompt payment; and fifteen par cent. on bonded duties. The gross produce of the tax, at a medium, 754,1917. 4s. 7d. the net produce only 161,000/.

Having made these statements with the ut most exactness and perspicuity, he proceeded

"I shall now point out as clearly as I can, and as amply as my knowledge will enable me, the principal frauds and most glaring instances the of dishonesty, which occasion this amazing disproportion. And first I shall mention one, which seems alone capable of diverting from its proper channel the amount of any tax. I mean that of using light weights inwards, and beavy weights outwards, of paying by the first, and taking the drawback by the last, and charging the planter, and taking commission by the whole. This evil is farther enhanced deby negligence; for it is customary to weigh a few hogsheads only, and if they answer, the whole pass according to the numbers in. the cocket.

that

"A particular instance of this fraud came lately to our knowledge by mere accident: one Mitford, who had been a considerable tobacco merchant in the city, happened to fail, at a time when he owed a large sum of money on bond to the crown. An extent was immediately issued against him, and government obtained possession of all his hooks, by which the fraud was discovered. For it appeared, as may be seen by one of his books, which I have in my hand, upon the column where the false quantities which had been entered at the importation were marked, he had, by a collusion with the officer, got a slip of paper so artfully pasted down, that it could not be discovered, and upon this slip of paper were written the real quantities which were entered, because he was obliged to produce the same book when that tobacco was entered for exportation. But upon exportation, the tobacco was entered and weighed according to the quantities marked on this slip of paper, by which he secured a draw back, or his bonds returned, to near double the value of what he had actually paid duty for apon importation. Yet this Mitford was as honest a man, and as fair a trader, as any in the city of London. I desire not to be misunderstood; I mean, that before he failed, before these frauds came to be discovered, he was always reckoned as honest a man, and as fair a trader, as any in the city of London, or in any ather part of the nation."

After enumerating several other instances where government had been defrauded of a full third of the duties imposed, and legally payable, he came to Peele's case, which is ngular from its enormity. "In September 1732, this Peele entered in the James and Mary, from Maryland, 310 hogsheads of tobacco, for which he paid the duty in ready money. In October following, he sold 200 Hogsheads to one Mr. Hyam, for exportation,

and they were immediately exported Ioc ap pears on these 200 hogsbeads, that the duties paid at importation, according to the weights in the land-waiters books, were short of the real' weights by 13,292 pounds. The certificates sworn to for Mr. Peele to obtain debentures, were to discharge bonds given on a former entry of Virginia. tobacco, imported in November 1731. The indorsement on the cocket made by Mr. Peele, in onder to receive the debentures, exceeded the real weights actually shipped by 8,288 pounds, so that the total of the pounds weight gained by this fraud, amounts to 21,580..

"The next fraud to which I shall direct your attention, is that of receiving the draw. back on tobacco for exportation, and relanding it. The effects of this practice are too obvious to require elucidation, and it has been carried to such an extent, that a great number of ships were employed at Guernsey, Jersey, and the Isle of Man, in receiving and relauding such tobacco. Nor was the evil confined to these ports; a very intelligent gentleman, Mr. Howel, who resided many years in Flanders, has frequently observed several quantities of tobacco imported into Ostend and Dunkirk, and there repacked in bales of one hundred pounds each, and put on board vessels which waited there to reland it in England or Ireland. About twelve months ago, nine British vessels were employed in taking cargoes for this pur pose at Dunkirk.

"The third fraud to which I shall direct the attention of the committee, is that of receiving the whole drawback for a commodity of almost no value, namely, the stalks of the tobacco, which it is usual, after the leaf has been stripped off, to press flat and cut, and by mixing this offal with sand and dust, impose on the revenue officers, and obtain the same drawback as for an equal weight of the entire plant. This miserable stuff, when the fraudulent pur pose has once been answered, is either thrown into the sex, or relanded and sold at three far things a pound, with an allowance of 1,010 pounds weight in five hogsheads.

"The fourth fraud I shall advert to, is one of very great consequence, known by the name of socking, which is a cant term for pilfering and stealing tobacco from ships in the river. This iniquitous practice, which was discovered in 1728 and 1729, was chiefly carried on by watermen, lightermen, tide waiters, and city porters, called gangs-men: the commodity so pilfered was deposited in houses from London Bridge to Woolwich, and afterwards sold, fre quently to eminent merchants. Five hundred examinations have been taken on the subject, from which it appears, that, in the space of one year, fifty tons were socked on board shipp and on the quays. Sixteen tons were seized, but that quantity was reckoned an inconsidera ble part of the whole. In consequence of these informations, 150 officers were dismissed, nine were convicted, of whom six are ordered for transportation, three to be whipt: there

prosecutions were all carried on at the expence of government; and it is not a little remarkable, when we recollect the professions of patriotism, virtue, and disinterestedness, which are now so copiously poured forth, that not a single mershant, though the facts were so notorious and shameful, assisted the state, either by information or pecuniary. exertion, to suppress the fraud, or bring the delinquents to punishment. "The last grievance I shall mention, cannot so properly be denominated a fraud, as an abuse arising from the nature of the duties paid, and the manner of paying them; I mean the advantage afforded to the merchant of trading with the public money, or making government pay more than they receive. Bonds are given for eighteen monthis, three years are allowed for the exportation of the article, and new importations discharge old bonds. The losses which result to government from the failure of the obligors in these bonds, is immense; besides the ungracious task to which it subjects them of suing the sureties, who had no interest in the contract. The rich trader bas another advantage; he avoids giving bonds, by paying the amount of his duties in ready money, for which he is allowed a discount of ten per cent. Now it is very common, and not out of the line of fair trade, for a merchant to pay this duty, receive the discount, and by immediately entering the same commodity for exportation, gain an advantage (I will not say defraud the revenue) of ten per cent. without loss, risque, or expenditure.

"The frauds which I have here enumerated are, I apprehend, sufficiently proved to satisfy the Committee of their existence, and their enormity is obvious enough to demand active interference. The only remedy I can devise, is that of altering the manner of collecting the duties. Frauds become practicable by having but one check at importation, and one at exportation; if there is but one sentinel at a garrison, and be sleeps, or is corrupted, the castle is taken; but if there are more than one, it is in vain to corrupt the first, without extending the same influence to those who remain; and when difficulties are so multiplied, the project becomes hazardous and uncertain, and is abandoned.

"If the grievance then is admitted, it only remains to mention the remedy, and to consider whether it is effectual, or whether it is worse than the disease.

"The laws of the customs are manifestly insufficient to prevent the frauds which already exist; I therefore propose to add the laws of excise and by means of both, it is probable, I may say certain, that all such frauds will be prevented in future.

:

"I have already stated to the committee, that the several imposts on tobacco amount to sixpence and one third of a penny per pound, all of which must be paid down in ready money upon importation, with the allowance of ted per cent. upon prompt payment; or there must be bonds given, with sufficient sureties, for payment, which is often a great loss to the public,

and always a great inconvenience to the mer chant importer. Whereas, by what I shall propose, the whole duty will amount to no more than fourpence three farthings per pound, and wilk not be paid till the tobacco is sold for home consumption; so that if the merchant exports his tobacco, he will be quite free from all payment of duty, or giving security: he will have nothing to do but re-load his tobacco for exportation, without being at the trouble of attending to have his bonds cancelled, or taking out debentures for the drawbacks; all which, I conceive, must be a great ease to the fair trader; and to every such trader the prevention of frauds must be a great advantage, because it will put all the tobacco traders in Britain on the same footing, which is but just and equitable, and what ought, if possible, to be accomplished.

"Now, in order to make this ease effectual to the fair trader, and to contribute to his advantage, by preventing, as much as possible, all frauds for the future, I propose, as I have said, to join the laws of excise to those of the customs, and to leave the one penny, or rather three farthings per pound, called the farther subsidy, to be still charged at the custom house, upon the importation of tobacco, which three farthings shall be payable to his Majesty's civil list as heretofore; and I propose for the future that all tobacco, after being weighed at the custom-house, and charged with the said three farthings per pound, shall be lodged in a warehouse or warehouses, to be appointed by the commissioners of excise for that purpose, of which warehouse the merchant importer shall have one lock and key, and the warehousekeeper to be appointed by the said coinmissioners shall have another, that the tobacco may lie safe in that warehouse, till the merchant finds a market for it, either for exportation or home consumption; if his market be for exportation, he may apply to his warehouse-keeper, and take out as much for that purpose as he has occasion for, which, when weighed at the custom-house, shall be discharged of the three farthings per pound with which it was charged upon importation, so that the merchant may then export it without any farther trouble. But if his market be for home consumption, he shall pay the three farthings charged upon it at the custom-house upon importation, and then, upon calling liis warehouse-keeper, he may deliver it to the buyer, on paying an inland duty of fourpence per pound, to the proper officer appointed to receive the same.

"And whereas all penalties and forfeitures to become due by the laws now in being, for regulating the collection of the duties on tobacco, or at least all that part of them which is not given to informers, now belong to the crown, I now propose that all such penalties and forfeitures, in so far as they formerly be longed to the crown, shall for the future belong to the public, and be applicable to the same uses to which the said duties shall be made applicable by parliament; and for that purpose I

"First then, turning duties upon importation into duties on consumption, is manifestly a great benefit to the merchant importer. The paying down of duties, or bonding, are heavy burthens. The payment of duties requires a treble stock to what would else be requisite in trade; and the asking securities, besides numerous other inconveniences, subjects the merchant to the necessity of returning the favour. It hardly requires to be mentioned, that it is a very great accommodation to be obliged to provide for the payment of one penny only, instead of sixpence and one third of a penny. "The next benefit is the great abatement on the whole duty. The inland duty being fourpence per pound, and the remaining subsidy three farthings, gives an abatement of 10 per cent. and of 15 per cent. upon the whole: whereas, the 25 per cent. is at present given only on the money paid down, which is not a fifth of the whole, and but 15 per cent. allowed on the four fifths which is bonded. Thus a duty of five pence farthing is paid on four fifths of the tobacco, and fourpence three farthings on the other fifth; while by the plan I propose, no more than fourpence three farthings will be paid on the whole. It is easy to calculate how great the advantage must be to the planter and fair trader from this arrangement, which demands 10 small an advance, exempts them from all the inconveniences of finding sureties, and requires no payment of any consequence, till the moment when a purchaser presents himself to refund the cost.

"If it should be objected against this project, that it makes the tobacco trade a ready money business, which it cannot bear; I an

swer, that it may be so or not, as the parties themselves may chuse to arraign it; for if the merchant gives the consumer credit, as he now does, for the duties as well as the commodity, the objection ceases to have any weight.

"The great advantage to the public will be this, that no duty being paid on tobacco de signed for exportation, an immediate stop will be put to the fraud on drawbacks, and to most of the disgraceful efforts of dishonesty, which I have previously enumerated. This fact does not require to be verified by an experiment; it is sufficiently proved by the success and facility which attend the collection of the malt duty.

"I come now to the main point, and which alone can admit of debate; the grand objection of making the dealers in tobacco subject

to the laws of excise. I am aware, that on this subject I have arguments or rather assertions to encounter, which are of great import in sound, though of very little in sense. Those who deal in these general declamations stigmatize the scheme in the most unqualified nanner, as tending to reduce those subjected to it to a state of slavery. This is an assertion, the fallacy of which can only be determined by comparison. There are already ten or twelve articles of consumption subjected to the excise laws; the revenue derived from them amounts to about 3,200,000l. per an nuin, which is appropriated to particular purposes. A great number of persons are, of course, involved in the operation of these laws yet, till the present moment, when so inconsiderable an addition is proposed, not a word has been uttered about the dreadful hardships to be apprehended from them. These clamours of interested and disaffected persons are best answered by the contented taciturnity of those in whose behalf their arguments, if of any force, ought to operate. Are the brewers and maltsters slaves, or do they reckon themselves so? Are they not as free in elections, to elect or be elected, as any others? Or let any gentleman present say, if he ever met with any opposition from, or by means of an exciseman? I quit this general topic to advert to more particular and specific objections: The chief of them are, houses liable to be searched; the being subject to the determination of commissioners without appeal, who are necessarily creatures of the crown; the number of excise officers, the injury the subject will sustain in being tried without a jury; and the particular interest of the crown in this alteration.

"To all these objections one general observation will apply; that if for these reasons this scheme is to be relinquished, the whole system of excise laws ought to be abandoned. But I shall examine them one by one. I begin with the last, the most cruel, and unjust, because it tends to set up an improper distinction, and draw a strong line of opposition between the interests of the crown and the interests of the people; that is to say, between the estate and particular property of the crown, and the ess tate and particular property of the public: this naturally leads to a general consideration of the public revenues.

"The revenues may be computed at 6700000% per annum. The public has of this, as its particular interest and property, about 5,900,000l. per annum, namely, the appropriated funds and anuual supplies. The preportion remaining to the crown, 800,000l., is not an eighth part of the whole. And here, in order to obviate a general misrepresentation, it is necessary to state, that the civil list revenues, in five years, from Midsummer 1727 to Midsummer 1732, have fallen short of the sum they are supposed to produce by upwards of 26,000l. a year on the average. Happy indeed would be the state of the country, if the appropriated duties would answer all the proper

engagements, and leave a surplus sufficient for the current service! But if that great object is not attainable, it is surely well worth the attention of parliament to provide for a moiety, or even a fourth part of the current service. The appropriated duties were funds for paying the interest of the national debt. There had been deficiencies in several, but now a supply is made; a sinking fund for gradually discharging the principal. A million per annum has for several years been applied, and that, by the public creditors, is now thought more than sufficient.

"If under the present management, the duties produce much less than ought to be paid to the public, has the public a right to make the most of their own revenues, or are they alone excluded from doing themselves justice? To object against the improvement of the king's part, is to say, that the public had better be defrauded of seven parts in eight, than that justice should be done to the crown in the eighth. If manifest frauds were discovered in a branch belonging entirely to the civil list, the post office for example, would you rather sanction the wrong than do justice to the crown? Why then this unreasonable jealousy in the present instance? I call the jealousy unreasonable, because in this proposition all possible care has been taken to avoid the imputation of being designed for the benefit of the crown. The penny which goes to the civil list is left to be paid at the Custom house. All increase from the inland duty is not to go to the crown, but to the public. All fines, forfeitures, and penalties arising from the inland duties, are renounced by the crown, and appropriated to the public. In a word, the crown will have no interest in the inland duty, but as trustee for the public.

"This fact, duly considered, answers the great objection to the determination of commissioners. For granting, for a moment, that commissioners are to be supposed corrupt, venal, and creatures of the crown, what influence can their regard for the crown have on them, to induce them to oppress the people, when the crown has no interest in their determination? But though this answer might reasonably be deemed satisfactory and sufficient, yet to obviate even speculative objections, a remedy is supplied for this supposed grievance, by investing three of the twelve judges with a power of determining, in a summary way, all appeals brought before them within the bills of mortali ty; and in the country, the same power is to be vested in one of the judges of the assize going the next circuit. This renders it impossible that the interest of the subject can be sacrificed to undue influence on the one hand, or the revenue to private solicitation, personal friendship or regard on the other. While such a tribunal presents itself, no offender would chuse to he carried into Westminster-hall, rather than have his cause judged in a summary way. The benefit of a trial by jury would not induce a man to encounter the tedious, vexati

ous, and expensive proceedings in a court law, more birthensome than the penalties forfeitures in dispute, as far as my own obses vation enables me to judge on the present sys tem, where the commissioners have, in mos cases, a power to determine themselves, or t bring informations, I have found that most peo ple, against whom informations have been laid have been desirous that their causes should be determined by commissioners; but I never yet heard of one who was willing to take his cause out of the bands of the commissioners to have it tried in Westminster-hall. One reason which contributes to render the exercise of power by the commissioners more popular is, that they possess the privilege of mitigation, which is not entrusted to the judges, who are merely admi nistrators of the law according to the letter.

h

to

C

t

st

it

"The next objection is the increase of reve nue officers, which fear, interest, and affecta tion have magnified into a standing army. This standing army, allowing the proposed addition to extend to tobacco and wine, will not ac cording to the estimate of the commissioners, exceed one hundred and twenty-six persons; that number, in addition to those already employed, will do all the duty. In this compu tation, warehouse-keepers are of course not included, their number must be uncertain, fot the satisfaction and accommodation of the mer chants: Few houses, however, out of London, will be subject to the Excise laws which are not Pe so already.

"The only remaining objection is, the power of officers to enter and search houses. This objection could not possibly have any weight, without the aid of gross misconception, or misrepresentation. All warehouses, cellars, shops, and rooms used for keeping, manufacturing, or selling tobacco, are to be entered at the inland office. These are to be always liable to the inspection of the officer, and it is to be made penal to keep or conceal tobacco in any room or place not entered. But no other part of the house is liable to be searched without a warrant and a constable, which warrant is not to be granted without any affidavit of the cause of suspicion. The practice of the customs is now stronger; they can enter with a writ of assistance with out any affidavit. But why all this solicitude in the behalf of fraud? If the powers given by either, or both the systems of revenue law are not sufficient (as I am informed they are not in the case of tea,) it is an arguinent to add more checks, but no argument against the application of this.

"The regulation in these two commodities, can affect neither trade, the poor, or the mann facturer. The poor are not all concerned in the question of tobacco, as the retailer now sells all tobacco at the rate of duty paid. The manufacturer is concerned as little, for the same reason, and neither one or the other drinks any wine. The landed interest cannot be affected by it in consequence of an advanced charge on the poor and the manufacturer. The whole clamour then is in favour of the retailer

un

b

L

W

m:

ers; bell

I look upon it as a most innocent scheme can be hurtful to none but sinugglers and fair traders. I am certain it will be of great Benefit to the revenue, and will tend to make ondon a free port, and by consequence, the arket of the world. If I had thought otherise of it, I would never have ventured to prodose it in this place.

Therefore I shall now beg leave to move that may be resolved," That it is the Opinion of this Committee, that the Subsidy and additional Duty upon Tobacco of the British Plantations, granted by an act of the 12th of King Charles II. and the Impost thereon, granted by an Act of the first of King James II. and also the one third Subsidy thereon, granted by an Act of the 2d of Queen Anne, amounting in the whole to 5d. per Pound, for several terms of years in the said respective acts mentioned, and which have since been continued and made perpetual, subject to Redemption by Parliament, shall from and after the 24th day of June 1733, cease and determine." Sir Robert Walpole having thus opened and xplained the nature of the Excise-Scheme, Mr. Perry answered him as follows:

N

Sir, The honourable gentleman on the floor as taken up a great deal of the time of the Committee, in stating a great number and vaety of facts, and in drawing conclusions and haking calculations, upon the supposition that very one of those facts was exactly as he has been pleased to represent them to us. This I Fannot entirely agree with the gentleman in, or if all those facts were exactly as he has represented them, and if all the computations he as made upon that supposition were just, that juantity of tobacco, the duties of which the Sublic is thereby supposed to be entirely derauded of, would amount to a much greater quantity of tobacco yearly, than grows in the rhole country from which we fetch that comVOL. VIII.

modity. I did not expect to have heard so long a detail of facts, or so many particular computations: I do not think it at all necessary upon the present occasion; I expected that the gentleman would have taken a much more general and a more just method: I thought he would have stated to us the quantity of tobacco yearly imported, the quantity yearly exported, and would have given us the best proofs that could be found for justifying his computations in that respect, because from thence every man might have easily seen what quantity remained for home consumption, and what sum of money this would have yearly brought in, if the duties had been all regularly paid; and upon comparing that with what those duties have really amounted to for some years past, we might have been able to have made some guess at the value of the frauds that have been committed, and at the advantage that may accrue to the public, supposing that all frauds had been prevented for the time to come.

This is the proper way, the only way of coming at any sort of certain knowledge in the affair before us, but I am afraid if we should consider it in this way, we should find that the scheme now propsed to us would he of no such mighty advantage to the public revenue as has been represented, even supposing that all frauds were for the future to be thereby entirely prevented: and considering that no method of collection, no pains or penalties, that can be contrived, can be supposed effectual for preventing every fraud that may hereafter be invented and set on foot; we should find no great temptation for agreeing to any scheme, by which the liberties of our country may he brought into the least danger for the sake of any advantage that we could suppose would thence accrue to the public revenue. That there are frauds committed in the tobacco-trade, I shall never pretend to deny, I make no manner of doubt but that there are too many frands committed in that trade as well as in every other branch of the public revenue: But upon a fair state of the case, I am sure they cannot amount to near that value which the honourable gentleman has been pleased to mention; and therefore I beg leave to examine a little those particular frauds and. calculations which have been mentioned by him. [Here Mr. Perry went through and examined all the frauds that had been mentioned, and all the computations that had been made, more particularly as to the bonds, then went on.]

Sir, It has been pretended, that the public has sustained, and are still in danger of sustaining great losses by the method of granting bonds for the duties payable upon tobacco: This I had before heard hinted at by the honourable gentleman, and therefore I have lately had a meeting with several of the merchants in London trading in Tobacco: We have examined that affair, and I can now tell that gentleman, that I have it in commission from them to propose, that if the government will give us a discount but of 20,000%, we will give undeniable 4 N