figured goods,) the duties could be very equitably and equally arranged. I saw some merchants whose goods would have to pay more under the specific than under the ad valorem duty. Although unwilling to pay high duties, (as all merchants are,) they stated that the difference would be more than made up to them by the change, if it could, as they thought, prevent some of their concurrents from defrauding the revenue, and thereby enable them to undersell the honest merchants. A system of specific duties for silk goods would, in my opinion, have the following results: 1st. Render fraud almost impossible.-Duties, at present, are evaded by false declarations; giving false lengths to the pieces, or invoicing them much below their real prices, and deducting exaggerated discounts. All these means of fraud would frequently escape the attention of even a silk-goods manufacturer; and it cannot, therefore, be expected that they should be detected by appraisers, who have to examine goods of so many kinds and prices, and who are hurried for time, and who, besides, cannot always judge and distinguish the quality of the material composing the goods, (French, Italian, Chinese, Bengal, or Japan silk.) With specific duties the examination would be subject to no doubt. The only points to ascertain would be the class to which the goods belonged, and their net weight; this would leave no room for any difference of opinion. The class of the goods could be settled by the appraisers; the weight by sworn weighers, who, besides, could be every day, or even several times in the day, set to weigh a different kind of goods, and who need not know to whom the goods they weigh belong. 2d. Economy of time and money.-This kind of examination would not require as many men; take much less time, and, therefore, enable the customhouse officers to examine all the cases, instead of (as at present) examining only one case in the invoice. 3d. Equality of duties for all importers, protection of the honest importer, and particularly of the small jobbers and American importers.-Importers who are able to buy largely sometimes obtain larger prices, or extra discounts, which are not granted to the small purchasers. The usual discount here is 15 per cent. at sixty days. By paying cash, importers obtain frequently 16 per cent.; but I have seen many invoices of silk goods with 16 per cent. discount, and 1 per cent. extra for prompt payment-with 17 per cent. discount, and even with 18 per cent. Such discounts are sometimes obtained, I know; but is it just that the large importer, besides paying less for his goods than his less important concurrent, should also pay his duties on a less amount? Another case frequently happens: an importer (A) gives an order to a manufacturer for a number of pieces to be delivered in three or four months time, according to an assortment of samples. The manufacturer finding that the assortment is a good one, and having his looms ready for work, makes double the number of pieces ordered. When goods are delivered to A, the manufacturer offers for sale the balance of his manufactures. According to the desirability of the goods, the state of the markets at the time they are offered, and the price of the raw silk, they may be sold to another American importer (B) at a lower or at a higher price. In such cases, differences of 10 or 15 per cent. are frequently made. If B has bought the goods at lower price than A, it is evident that he has a double advantage; he pays less for his goods, and, besides, is charged duty on lesser prices. A and B may be perfectly honest merchants, always giving true invoices; and they may, at the same time, present for entry similar goods-invoices at prices varying 10 or 15 per cent., according to circumstances. One of two things will probably happen: either the one presenting the lowest invoice will be suspected, and perhaps his invoice will be seized, or the other, unwilling to H. Ex. Doc. 41-12 pay a higher duty than his concurrent for the same goods, will invoice his goods at a lower price than he really paid for them, and in that way sign a false declaration. There is one case still worse: sometimes the manufacturer, instead of selling his goods, consigns them. He then generally invoices them, not at the price he would sell them at to A, but at about their cost price to him; thus injuring the American importer and defrauding the revenue. Goods are not consigned from Lyons to the United States to a very great extent. Zurich and Basle for silks, and St. Etienne for ribbons, go much more largely in the consigning business. It is, however, proper to call your attention to the consigned silk goods. The manufacturers who consign their goods almost always undervalue them, although they have to swear or certify to the real market value. For them the market value is not the price at which they would be willing to sell the goods, and at which goods of the same description are really and currently sold in the market. They invoice their goods at the cost prices, and even sometimes lower, saying that they are proper parties to judge of the real market value; that if, by selling in the manufacturing place, they can obtain much higher prices, it is the fault of the purchasers, who do not know how to buy cheap; that they would be fools if they invoiced their goods so as to pay a duty of 30 or 40 per centum on supposed profits not yet realized. From the above it appears that, under the ad valorem duty, the same goods may pay very different duties, according to the prices they are invoiced at. On the contrary, with specific duties all silk goods of the same nature and kind would pay the same duty-irrespective of the prices they are purchased or invoiced at. 4th. Change in the quality of the goods imported.-A large proportion of the plain black silk sent to New York is composed of loaded black—that is, silks which, in the dyeing process, are loaded with various matters; the silk thereby is made to look thicker, of a richer quality; its weight much more, but is of a shorter duration, and does not wear as well. Such goods, made generally with low silks, are cheaper than the pure fine blacks, (not loaded,) and with the specific duties they would be comparatively taxed so high that their price of sale would be largely increased; they would have to be sold comparatively so much dearer than the pure fine blacks, that it is believed their importation would be diminished or cease entirely and better goods imported. The revenue would lose nothing by it, and the country would be benefited by the importation of a better class of goods. The sale of heavier goods can almost be said to be a fraud against the consumer-the people. I consulted several persons, some of them doing business with the United States; some others having no interest in the trade. They are almost unanimous in the opinion that specific duties would better protect the revenue, and be to the advantage of the honest importers. They also concur in saying that the specific duties can be so arranged as to work with ease and regularity. There is some difference of opinion as to the details to be introduced in the law. Three systems present themselves: 1st. One single duty on all kinds of silk goods, whether colored or black, figured or plain. 2d. Divide all silk goods into two classes: Blacks of all kinds, figured or plain. Colored goods of all kinds, or two rates of duty. 3d. A division in four classes or rates of duty, as proposed in my despatch No. 13, and illustrated by a collection of samples. (See copy of classification.) Each of these three propositions has good points, and would, in my opinion, be better than the ad valorem system. 1st. The adoption of a single rate of duty on silk goods of different qualities would certainly simplify the business at the custom-house. Some goods, how ever, rich silks in fine colors, made of very fine silk, and costing high prices, would certainly be favored by the single duty. It may, therefore, be objected that the consumers of rich silks would not have to pay as high duties as the consumers of low-priced heavy silks. But it must be borne in mind that these very rich figured silk goods form only a very small part of the importation. The second and third classifications would be more popular than the first, probably, as they would apparently tax rich goods more heavily than the first. 2d. The second classification is still very simple, and could be supported on the ground that black silks generally lose nothing of their weight in the dyeing process, and even very frequently gain weight, whilst all or nearly all the colored goods lose weight. In most cases, besides, the plain fine colored goods, and all the rich figured goods, are made of better materials, and cost comparatively more than the black goods. 3d. The third classification is, I believe, perfectly correct, and covers all kinds of silk goods except ribbons, and the goods as therein described could easily be set in their proper class without raising any difficulty at the custom-house. The only objection is, that by making four classes it would oblige the appraisers to examine the invoices and goods more carefully to determine to which class they belong. My attention so far has been entirely given to silk goods, and I have not yet been able to study the measures to be taken for the ribbons. It is, however, a very important article, and one, if I am properly informed, which gives occasion for immense frauds against the revenue. The change of duties to the specific system would, I have no doubt, create a great opposition. Representations of all kinds would be made, and strong efforts made to prevent the passage of the law. I have every reason to believe that this opposition would, in almost every case, come from houses (most of them of foreign origin) who are openly spoken of as defrauding the revenue under the present system of duties, and whose interest it is to oppose every change that would reduce the chances of success in their frauds. I believe that no honest American or foreign firm would oppose the change. I would, further, respectfully represent that manufacturers of silk goods, particularly those not interested in the American trade, could give much valuable information in regard to the prices and quality of silk goods, and their value comparatively to their weight. This full and detailed information would certainly be indispensable for the proper assessment of duties, the division into classes, and the correct and efficient rendering of the law. I have no doubt that the principal manufacturers of different kinds of silk goods in this city would, if requested, prepare the necessary rates and samples, giving the prices and comparative weights of their goods. We have in Lyons some schools in which the different branches of silk manufactures are taught, and much information could be obtained from the professors at their establishments. If a change of system in the collection of duties were adopted, the measure ought to be taken only after a thorough study, and after having colleeted and well considered the advice and opinion of persons accustomed to the different processes and manipulations through which the silk has to pass before being finished and prepared for the market. Copy of the third classification proposed, with additional items. First rate of duty, lowest No. 1.... Plain black silks, all boiled or half boiled. Second rate of duty 66 2 ...Plain colored silks, all boiled or half boiled. .... 66 3 ... Checked or striped silks, all boiled or half boiled, colored, white, or black grounds. 4....Cermure and figured silks, black or one color only, watered or moire silks, black or one color only. Third rate of duty......No. 5.... China silks, plain, striped or checked, without additional brocade effect. I enclose a statement showing the total exports from this consulate for the first two quarters of this year; they amount to 12,120,725 francs. Silk goods, of all kinds, including ribbons, amounting to 11,827,984 francs. I cannot give the total amount of the exportations for the corresponding months of last year, as, at that time, the invoices of consigned goods alone were verified. The good news received from home, the fall of the premium on gold, will, no doubt, have the effect of increasing the exports. The merchants, generally, are hopeful; they refuse to lower their prices, and they fully expect a large increase in their sales for the American market. Business is already more active, as proved by the enclosed statement of the exports of July, compared with those of the corresponding month of last season, showing for July an excess of 527,990 francs over January, 1863. I have every reason to believe that this proportionate increase will continue for the following months; and as soon as the success of our arms secures peace, the exports will reach an immense amount. The present increase has already added largely to the labor of this consulate. I have as much work as I can attend to; a further increase in the exports would prevent me, under the present organization of the consulate, from attending properly to all the business offered. The enclosed table shows a comparative statement of the number of invoices visaed at this consulate during the months of April, May, June, and July, 1862, and the same months of this year the increase for 1863 is 448 invoices, of which 170 are in the month of July. Besides this numerical increase, it is to be remembered that at present one invoice represents three certificates, so that in the month of July alone I have had really to issue 645 certificates for 215 invoices. |