Miscellaneous Back Matter [pp. 472A-RD06]

FREE TRADE-DUTIES ON IMPORTS.
carry on the Government and maintain the necessary civil and military
establishments of the Confederacy. Under this conviction, Mr. Haywood,
a Senator from North Carolina, who was reputed to be a very respectable
and well-meaning man (though hlie must have been a very weak one), resigned his seat at the last moment rather than vote for the bill; and it was
only by great exertions on the part of the administration that it was passed.
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LOW DUTIES ARE MORE PRODUCTIVE THAN HIGH ONES.
There is no principle or law of finance more certain and unfailing than
that low duties are more productive in proportion to their rate than high
duties. Whatever may be the amount of revenue which a duty of ten per
cent. would produce, a duty of five per cent. will surely produce more than
half that sum; and, generally, the lower the duty, the greater will be.its
relative productiveness. Duties on imports raise the price of the articles
on which they are laid. This result they produce by causing a less quantity to be imported; for if the same quantity was imported, notwithstanding
the duty, the supply would be the same and the demand remaining the
same there would be no change in the relation between the supply and the
demand, and the price would not be raised. The higher the duty the
greater must be the diminution of the import, in order to produce a corresponding enhancement of price. It is impossible to ascertain the degree or
extent to which any increase of duty would diminish importation or any
reduction of duty would enlarge it. Very much must depend upon the
nature of the article imported, the practicability an(l the cost of producing
a similar article at home; whether it was an absolute necessary of' lift or a
luxury or superfluity, which might be dispensed with, and many other considerations. But it may be confidently affirmied, as a general truth, that
every increase of duties on imports will be followed by a diminished importation, and every reduction of duties by an enlargement of imports. If a
duty so high as to be almost prohibitory were reduced one half, there might
and probably would be so great an increase of importation as to make the
revenue not only more than half; but actually snore than the whole of what
it was before. But the same reduction of a duty which was already moderate, though it would certainly cause some increase of importation, and,
therefore, would. not reduce the revenue one half, might and probably would
diminish it in some degree. It is apparent, then, that no increase of the
rate of a duty ever adds to the revenue in the same proportion, and a reduction of duty never diminishes the revenue in as great a ratio as that of
the reduction, and may sometiimes actually increase it. When duties on
imiports are laid for the purpose of raising revenue, and with no other
intent, the true cardinal principle which should control their adjustment is,
that they shall always be low.
We have endeavored-we hope not without some success-to show that
duties intended honestly and exclusively for revenue, ought to be an(l must
be low. If this be true, then it follows that the Constitution of the Confederate States, under which the Government is about to be orgaiized, forbids any other than low duties I
The clause which defines the taxing power, instead of being literally
transcribed from the Constitution of the United States, is as follows:
"The Congress shall have power to lay and collect taxes, duties, imposts and
excises, for the revenue necessary to pay the debts and carry on the Governmnent
of the Confederacy; but no bounties shall be granted from the treasury: nor shall
any duties or taxes on importations from foreign nations be laid to promote or
foster any branch of industry; and all duties, iinposts and excises shall be uniform
throughout the Conifederatte States."
Revenue is distinctly declared to be the sole and exclusive purpose for
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