THE SELECT COMMITTEE appointed to inquire into the several Duties levied on imports into the United Kingdom, and how far those Duties are for Protection to similar Articles the Produce or Manufacture of this Country or of the British Possessions abroad, or whether the Duties are for the purposes of Revenue alone—and to whom several Petitions were referred—and who were empowered to report the Minutes of Evidence taken before them to the House—have considered the mat- ters to them referred, and agreed to the following Report.
The evidence is of so valuable a character, that your Committee could hardly do justice to it in detail, unless they were to proceed, step by step, to a complete analysis; which the advanced period of the session will not allow them to do. They must, therefore, con- line themselves to reporting the general impressions they have re- ceived, and submit the evidence to the serious consideration of the House; persuaded that it cannot be attentively examined without producing a strong conviction that important changes are urgently required in our Customhouse legislation. The tariff of the United Kingdom presents neither congruity nor unity of purpose ; no general principles seem to have been applied.
The schedule to the Act 3 R: 4 Will. IV% c. 56, for consolidating the Customs duties, enumerates no fewer than 1,150 different rates of duty chargeable on imported articles, all other commodities paying duty as unenumerated; and very few of such rates appear to have been determined by any recognized standard ; and it would be difficult for any person unacquainted with the details of the tariff to estimate the probable amount of duty to which any given cominedity would be found subjected. There are cases where the duties levied are simple and comprehensive ; others, where they fall into details both vexatious and embarrassing.
The tariff often aims at incompatible ends : the duties are some- times meant to be both productive of revenue and for protective objects, which are frequently inconsistent with each other : hence they sometimes operate to the complete exclusion of foreign pro- duce, and in so far no revenue can of course be received; and sometimes when the duty is inordinately high, the amount of revenue becomes in consequence trifling. They do not make the receipt of revenue the main consideration' but allow that primary ebject of fiscal regulations to be thwarted by an attempt to protect a great variety of particular interests, at the expense of the revenue and of the commercial intercourse with other countries.
Whilst the tariff has been made subordinate to many small pro- ducing interests at home, by the sacrifice of revenue in order to sup- port these interests, the same principle of preference is largely applied, by the various discriminatory duties, to the produce of our Colonies, by which exclusive advantages are given to the colonial interests at the expense of the Mother-country. Your Committee would refer to the evidence respecting the articles of sugar and coffee, as examples of the operation of these protective duties. Your Committee refer to a general account prepared by the In- spector of Imports, of the several articles imported into the United Kingdom in 1838-39, stating in separate columns the quantity im- ported, exported, and retained for home consumption, with the rates of duty chargeable on each, and whether in a raw state, par- tially manufactured, or manufactured ; by which it appears that 862 articles are divided into eight schedules, which they submit to the serious consideration of the House ; viz.
chedule. Totals. . ,L containing 349 articles, producing less than 100/. each of
Customs 'duty, and in the aggregate 8,050
IL containing 132 articles, producmg from 100/. to 500/. each 31,629
IIL 45 IV. 107 V. 63 10 VII. 9 500,000/. each & upwards 18,575,071 VIIL 147 on which no duty has been received, but on which there has been an excess of drawback of 5,398
it appears from the evidence of Mr. Porter, of the Board of Trade, that the total amount of Customs revenue received in the Uuited Kingdom in the year ending January 1840, was 22,962,6101.;
. to 1,000L ,, 32„056 1,000/. to 5,000/. „ 244,733 5,0004 to 100,000/. ,. 1,397,324
100,000/. to 500,000/. --1,838,630
of which total amount, 17 articles, each producing more than 100,0007., produced 94, per cent., or £21,700,630 That 29 articles produced 3 9-10ths per cent., or 898,661 And that these 46 articles produced 98 2-5ths per cent. or That all other articles, amounting to 144 in number, produced 1 3-5ths per cent., or 22,599,291 363,319 Showing that 190 articles, exclusive of about 80,000/.
collected upon 531 other articles, and excluding 147 articles, upon which an excess of drawback of 5,398/. was allowed, produced the total revenue of .£ 22,962,610' It will be seen that seventeen articles, affording the largest amount of Customs revenue, are articles of the first necessity and importance to the community—viz. sugar, tea, tobacco, spirits, wine, timber, corn, coffee, butter, currants, tallow, seeds, raisins, cheese, cotton wool, sheep's wool, and silk manufactures; and that the interests of the public revenue have been by no means the pri- mary consideration in levying the import-duties, inasmuch as com- peting foreign produce is in some instances excluded, and in others checked by high differential duties, levied for the protection of British Colonial interests; • and in many cases such differential duties do not answer the object proposed, for it appears, in the case of foreign clayed sugars, where it was obviously intended they should be excluded from the British market, that the monopoly granted to British Colonial sugars has so enormously raised the prices in our market, that they have lately come into consumption though charged with a duty of 63s. per hundredweight, while our Plantation sugars pay only 24s. Another inconvenience which the differential duties create is,
that they offer a premiuwfor evading the intention of the Legisla- ture. Foreign coffees are eharged Is. 3d. per pound ; Colonial coffees only 6d.; while coffees fdliterted from the Cape of Good Hope pay 9d. Now as the cost of -Onding in an unusual and indirect way coffee from foreign countries, to the Cape is only from iel. to Id. per pound, very large quantities are shipped from the Brazils and Hayti to the Cape, and thence reshipped to England: the English consumer thus pays the: 'increased duty an4 ,the difference of freight, and the foreign coffee is not excluded ,from the British market, though it was obviously ,he purpoge of the law to ex-
clude it. it .-e I
Your Committee cannot refrain frpm impressint,strongly on the attention of the House that the effici of prohibitory duties, while they are of course wholly unproductive to the reierftip, is to impose an indirect tax on the consumer, often equal to the Whole difference of price between the British article and the foreign article which the prohibition excludes. This fact hes been strongly and em- phatically urged on your Committee by several witnesses ; and the enormous extent of taxation so levied canitee fail to awaken the at- tention of the House. On the articles 4411od alone, it is averred, according to the testimony laid , before the Committee, that the amount taken from the consumer exceeds the amount of all the other taxes which are levied by.the Government. And the wit- nesses concur in the opinion that The sacrifices of the community are not confined to the loss of revenueebut that they are acconixa- nied by injurious effects upon wages ;Lind capital : they diminish greatly the productive powers of the,eountry, and limit our active
trading relations. - Somewhat similar is the action of high and protective duties. These impose upon the customer a tax equal to the amount of the
duties levied upon the foreign article, whilst it also increases the price of all the competing home-produced articles to the same amount as the duty ; but that increased price goes, not to the Treasury, but to the protected manufacturer-- kik obvious that high protective duties check import qao .teansi cona,quently are L.
unproductive to the revenue; and exile :shows that the profit to the trader, the benefit to the conswielier, and the fiscal interests
of the country, are all sacrificed when treavy import-duties impede the interchange of commodities with other nations.
The inquiries of your Committee haXe tilifttrally led them to in- vestigate the effects of the protectivel'Istem on manufacture any :
labour. They find on the part of those who 'are connected with some of the most important of our manufactures, a conviction, and a growing conviction, that the protective system is not, on the whole, beneficial to the protected manufactures themselves. Seve- ral witnesses have expressed the utmost willingness to surrender any protection they have from the tariffs, and disclaim any benefit resulting from that protection : and your Committee, in investi- gating the subject as to the amount of duties levied on the plea of protection to British manufactures, have to report that the amount does not exceed half a million sterling ; and some of the manufac- turers, who are supposed to be most interested in retaining those duties, are quite willing they should be abolished, for the purpose of introducing a more liberal system into our commercial policy. Your Committee gather from the evidence that has been laid before them, that while the prosperity of our own manufactures is not to be traced to benefits derived from the exclusion of foreign rival manufacturers, so neither is the competition of Continental manufacturers to be traced to a protective system. They are told that the most vigorous and successful of the manufactures on the Continent have grown, not out of peculiar favour shown to them by legislation, but from those natural and spontaneous advantages which are associated with labour and capital in certain localities, and which cannot be transferred elsewhere at the mandate of the Legislature, or at the will of the manufacturer. Your Committee see reason to believe, that the most prosperous fabrics are those which flourish without the aid of special favours. It has been stated to your Committee, that the legislation of Great Britain, whenever it is hostile to the introduction of foreign commodities, is invariably urged by the foreign states that produce such commodi- ties, as a ground and a sanction for laws being passed by them hostile to the introduction of products of British industry and while on the one hand there is reason to believe that the liberalizing the tariffs of Great Britain would lead to similar favourable changes in the tariffs of other nations, so it is seriously to be apprehended that a persistence in our illiberal and exclusive policy will bring with it increased imposts on, if not prohibitions against the products of British labour being admitted to other countries.
With reference to the influence of the protective system upon wages and on the condition of the labourer, your Committee have to observe, that as the pressure of foreign competition is heaviest on those articles in the production of which the rate of wages is lowest, so it is obvious, in a country exporting so largely as Eng- land dce:s, that other advantages may more than compensate for an apparent advantage in the money-price of labour. The countries in which the rate of wages is lowest are not always those which ma- nufacture most successfully ; and your Committee are persuaded that the best service that could be rendered to the industrious classes of the community, would be to extend the field of labour, and of demand for labour, by an extension of our commerce ; and that the supplanting the present system of protection and prohibi- tion by a moderate tariff, would encourage and Multiply most beneficially for the state and for the people our commercial trans- actions.
Your Committee further recommend, that as speedily as possible the whole system of differential duties and of all restrictions should be reconsidered, and that a change therein be effected, in such a manner that existing interests may suffer as little as possible in the transition to a more liberal and equitable state of things. Your Committee is persuaded that the difficulties of modifying the dis- criminating duties whichlavour the introduction of British Colonial articles would be very much abated if the Colonies were themselves allowed the benefits of free trade with all the world.
Although, owing to the period of the session at which the inquiry was begun, your Committee have not been able to embrace all the several branches which come within the scope of their instructions, they have thought themselves warranted in reporting their strong conviction of the necessity of an immediate change in the import- duties of the kingdom : and should Parliament sanction the views which your Committee entertain on these most important matters, they are persuaded that, by imposts on a small number of those articles which are now most productive, the amount of each impost being carefully considered with a view to the greatest consumption of the article, and thereby the greatest receipt to the Customs, no loss would occur to the revenue, but, on the contrary, a consider- able augmentation might be confidently anticipated. The simplification they recommend would not only vastly facili- tate the transactions of commerce and thereby benefit the revenue, but would at the same time greatly diminish the cost of collection, remove multitudinous sources of complaint and vexation, and give an example to the world at large, which, emanating from a com- munity distinguished above all others for its capital, its enterprise, its intelligence, and the extent of its trading relations, could not but produce the happiest effects, and consolidate the great inte- rests of peace and commerce by associating them intimately and permanently with the prosperity of the whole family of nations.
6th August 1840.