TREASURY DEPARTMENT, _March 30, 1847_.
The PRESIDENT.
SIR: Your instructions of the 23d instant have been received by this
Department, and in conformity thereto I present you herewith, for your
consideration, a scale of duties proposed to be collected as a military
contribution during the war in the ports of Mexico in possession of our
Army or Navy by conquest, with regulations for the ascertainment and
collection of such duties, together with the reasons which appear to me
to recommend their adoption.
It is clear that we must either adopt our own tariff or that of Mexico,
or establish a new system of duties. Our own tariff could not be
adopted, because the Mexican exports and imports are so different from
our own that different rates of duties are indispensable in order to
collect the largest revenue. Thus upon many articles produced in great
abundance here duties must be imposed at the lowest rate in order to
collect any revenue, whereas many of the same articles are not produced
in Mexico, or to a very inconsiderable extent, and would therefore bear
there a much higher duty for revenue. A great change is also rendered
necessary by the proposed exaction of duties on all imports to any
Mexican port in our possession from any other Mexican port occupied by
us in the same manner. This measure would largely increase the revenue
which we might collect. It is recommended, however, for reasons of
obvious safety, that this Mexican coastwise trade should be confined to
our own vessels, as well as the interior trade above any port of entry
in our possession, but that in all other respects the ports of Mexico
held by us should be freely opened at the rate of duties herein
recommended to the vessels and commerce of all the world. The _ad
valorem_ system of duties adopted by us, although by far the most just
and equitable, yet requires an appraisement to ascertain the actual
value of every article. This demands great mercantile skill, knowledge,
and experience, and therefore, for the want of skillful appraisers (a
class of officers wholly unknown in Mexico), could not at once be put
into successful operation there. If also, as proposed, these duties are
to be ascertained and collected as a military contribution through the
officers of our Army and Navy, those brave men would more easily perform
almost any other duty than that of estimating the value of every
description of goods, wares, and merchandise.
The system of specific duties already prevails in Mexico, and may be put
by us into immediate operation; and if, as conceded, specific duties
should be more burdensome upon the people of Mexico, the more onerous
the operation of these duties upon them the sooner it is likely that
they will force their military rulers to agree to a peace. It is certain
that a mild and forbearing system of warfare, collecting no duties in
their ports in our possession on the Gulf and levying no contributions,
whilst our armies purchase supplies from them at high prices, by
rendering the war a benefit to the people of Mexico rather than an
injury has not hastened the conclusion of a peace. It may be, however,
that specific duties, onerous as they are, and heavy contributions,
accompanied by a vigorous prosecution of the war, may more speedily
insure that peace which we have failed to obtain from magnanimous
forbearance, from brilliant victories, or from proffered negotiation.
The duties, however, whilst they may be specific, and therefore more
onerous than _ad valorem_ duties, should not be so high as to defeat
revenue.
It is impossible to adopt as a basis the tariff of Mexico, because the
duties are extravagantly high, defeating importation, commerce, and
revenue and producing innumerable frauds and smuggling. There are also
sixty articles the importation of which into Mexico is strictly
prohibited by their tariff, embracing most of the necessaries of life
and far the greater portion of our products and fabrics.
Among the sixty prohibited articles are sugar, rice, cotton, boots and
half-boots, coffee, nails of all kinds, leather of most kinds, flour,
cotton yarn and thread, soap of all kinds, common earthenware, lard,
molasses, timber of all kinds, saddles of all kinds, coarse woolen
cloth, cloths for cloaks, ready-made clothing of all kinds, salt,
tobacco of all kinds, cotton goods or textures, chiefly such as are made
by ourselves; pork, fresh or salted, smoked or corned; woolen or cotton
blankets or counterpanes, shoes and slippers, wheat and grain of all
kinds. Such is a list of but part of the articles whose importation is
prohibited by the Mexican tariff. These prohibitions should not be
permitted to continue, because they exclude most of our products and
fabrics and prevent the collection of revenue. We turn from the
prohibitions to the actual duties imposed by Mexico. The duties are
specific throughout, and almost universally by weight, irrespective of
value; are generally protective or exorbitant, and without any
discrimination for revenue. The duties proposed to be substituted are
moderate when compared with those imposed by Mexico, being generally
reduced to a standard more than one-half below the Mexican duties. The
duties are also based upon a discrimination throughout for revenue, and,
keeping in view the customs and habits of the people of Mexico, so
different from our own, are fixed in each case at that rate which it is
believed will produce in the Mexican ports the largest amount of
revenue.
In order to realize from this system the largest amount of revenue, it
would be necessary that our Army and Navy should seize every important
port or place upon the Gulf of Mexico or California, or on the Pacific,
and open the way through the interior for the free transit of exports
and imports, and especially that the interior passage through the
Mexican isthmus should be secured from ocean to ocean, for the benefit
of our commerce and that of all the world. This measure, whilst it would
greatly increase our revenue from these duties and facilitate
communication between our forces upon the eastern and western coasts of
Mexico, would probably lead at the conclusion of a peace to results of
incalculable importance to our own commerce and to that of all the
world.
In the meantime the Mexican Government monopoly in tobacco, from which a
considerable revenue is realized by Mexico, together with the culture
there which yields that revenue, should be abolished, so as to diminish
the resources of that Government and augment our own by collecting the
duty upon all the imported tobacco. The Mexican interior transit duties
should also be abolished, and also their internal Government duty on
coin and bullion. The prohibition of exports and the duties upon exports
should be annulled, and especially the heavy export duty on coin and
bullion, so as to cheapen and facilitate the purchase of imports and
permit the precious metals, untaxed, to flow out freely from Mexico into
general circulation. Quicksilver and machinery for working the mines of
precious metals in Mexico, for the same reasons, should also be admitted
duty free, which, with the measures above indicated, would largely
increase the production and circulation of the precious metals, improve
our own commerce and industry and that of all neutral powers.
In thus opening the ports of Mexico to the commerce of the world you
will present to all nations with whom we are at peace the best evidence
of your desire to maintain with them our friendly relations, to render
the war to them productive of as little injury as possible, and even to
advance their interests, so far as it safely can be done, by affording
to them in common with ourselves the advantages of a liberal commerce
with Mexico. To extend this commerce, you will have unsealed the ports
of Mexico, repealed their interior transit duties, which obstruct the
passage of merchandise to and from the coast; you will have annulled the
Government duty on coin and bullion and abolished the heavy export
duties on the precious metals, so as to permit them to flow out freely
for the benefit of mankind; you will have expunged the long list of
their prohibited articles and reduced more than one-half their duties on
imports, whilst the freest scope would be left for the mining of the
precious metals. These are great advantages which would be secured to
friendly nations, especially when compared with the exclusion of their
commerce by rigorous blockades. It is true, the duties collected from
these imports would be for the benefit of our own Government, but it is
equally true that the expenses of the war, which Mexico insists upon
prosecuting, are borne exclusively by ourselves, and not by foreign
nations. It can not be doubted but that all neutral nations will see in
the adoption of such a course by you a manifestation of your good will
toward them and a strong desire to advance those just and humane
principles which make it the duty of belligerents, as we have always
contended, to render the war in which they are engaged as little
injurious as practicable to neutral powers.
These duties would not be imposed upon any imports into our own country,
but only upon imports into Mexico, and the tax would fall upon the
people of Mexico in the enhancement to them of the prices of these
imports. Nearly all our own products are excluded by the Mexican tariff
even in time of peace; they are excluded also during the war so far as
we continue the system of blockading any of the ports of Mexico; and
they are also excluded even from the ports not blockaded in possession
of Mexico; whereas the new system would soon open to our commerce all
the ports of Mexico as they shall fall into our military possession.
Neither our own nor foreign merchants are required to send any goods to
Mexico, and if they do so voluntarily it will be because they can make a
profit upon the importation there, and therefore they will have no right
to complain of the duties levied in the ports of Mexico upon the
consumers of those goods--the people of Mexico. The whole money
collected would inure to the benefit of our own Government and people,
to sustain the war and to prevent to that extent new loans and increased
taxation. Indeed, in view of the fact that the Government is thrown upon
the ordinary revenues for peace, with no other additional resources but
loans to carry on the war, the income to be derived from the new system,
which it is believed will be large if these suggestions are adopted,
would be highly important to sustain the credit of the Government, to
prevent the embarrassment of the Treasury, and to save the country from
such ruinous sacrifices as occurred during the last war, including the
inevitable legacy to posterity of a large public debt and onerous
taxation. The new system would not only arrest the expensive transfer
and ruinous drain of specie to Mexico, but would cause it, in duties and
in return for our exports, to reflow into our country to an amount,
perhaps, soon exceeding the $9,000,000 which it had reached in 1835 even
under the restrictive laws of Mexico, thus relieving our own people from
a grievous tax and imposing it where it should fall, upon our enemies,
the people of Mexico, as a contribution levied upon them to conquer a
peace as well as to defray the expenses of the war; whereas by admitting
our exports freely, without duty, into the Mexican ports which we may
occupy from time to time, and affording those goods, including the
necessaries of life, at less than one-half the prices which they had
heretofore paid for them, the war might in time become a benefit instead
of a burden to the people of Mexico, and they would therefore be
unwilling to terminate the contest. It is hoped also that Mexico, after
a peace, will never renew her present prohibitory and protective system,
so nearly resembling that of ancient China or Japan, but that,
liberalized, enlightened, and regenerated by the contact and intercourse
with our people and those of other civilized nations, she will continue
the far more moderate system of duties resembling that prescribed by
these regulations.
In the meantime it is not just that Mexico, by her obstinate persistence
in this contest, should compel us to overthrow our own financial policy
and arrest this great nation in her high and prosperous career. To
reimpose high duties would be alike injurious to ourselves and to all
neutral powers, and, unless demanded by a stern necessity, ungenerous to
those enlightened nations which have adopted cotemporaneously with us a
more liberal commercial policy. The system you now propose of imposing
the burden as far as practicable upon our enemies, the people of Mexico,
and not upon ourselves or upon friendly nations, appears to be most just
in itself, and is further recommended as the only policy which is likely
to hasten the conclusion of a just and honorable peace.
A tonnage duty on all vessels, whether our own or of neutral powers, of
$1 per ton, which is greatly less than that imposed by Mexico, is
recommended in lieu of all port duties and charges. Appended to these
regulations are tables of the rates at which foreign money is fixed by
law, as also a separate table of currencies by usage, in which a
certificate of value is required to be attached to the invoice. There is
also annexed a table of foreign weights and measures reduced to the
standard of the United States, together with blank forms to facilitate
the transaction of business.
It is recommended that the duties herein suggested shall be collected
exclusively in gold or silver coin. These duties can only be collected
as a military contribution through the agency of our brave officers of
the Army and Navy, who will no doubt cheerfully and faithfully collect
and keep these moneys and account for them, not to the Treasury, but to
the Secretaries of War or of the Navy, respectively.
It is recommended that these duties be performed by the commandant of
the port, whether naval or military, aided by the paymaster or purser or
other officer, the accounts of each being countersigned by the other, as
a check upon mistakes or error, in the same manner as is now the case
with the collector and naval officer of our several principal ports,
which has introduced so much order and accuracy in our system. It is
suggested that as in some cases the attention of the commandant of the
port might be necessary for the performance of other duties that he be
permitted to substitute some other officer, making known the fact to the
Secretaries of War or of the Navy, and subject to their direction.