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The Committee to whom this matter was referred by the Council have the honor to report theii' doings up to the present date. In March ISTD, the Customs Department promulgated for the first time the suggestion that ad valorem duties should be levied not merely on the cost or foreign value of imported goods, but also on certain of the transport and transhipping charges incident to the importation. On that occasion Sir S. L. Tilley opened his budget in the House of Common!? at night, and its provisions were put in force all over the Dominion next morning. One of these provisions was as follows : — " Besolved, That it is expedient to provide that in determining the suitable [dutiable ?] value of merchandise, there shall be added to the cost or the actual wholesale price or fair market value at the time of exportation in the principal markets of the country from whence the same has been imported into Canada, the cost of inland transportation, shipment and trans-shipment, with all the expenses included, from the place of growth, pro- duction, or manufactm-e, whether by land or water, to the vessel in which shipment is Aade, either in transitu or direct to Ca- nada." To introduce and put in force a change of so great magnitude to the importing and freighting interests of the country, without notification to the persons affected and without giving them an opportunity of being heard, was in itself a grievance of no mean proportions. EemonHtrances moi'e or less eifective quickly followed the en- forcement of the resolution, with the result that the minister gave way in so far that he consented to minimize its scope, by excluding the United Kingdom from its operation, and to other- wise modify it. It now forms section 61 of the Customs Act, and is in these terms — the words within brackets being the modifying clauses : — " 61. In determining the dutiable value of goods (except when imported from Great Britain and Ireland), there shall be added to the cost, or the actual wholesale price, or fair market value, at the time of exportation in the principal markets of the country from whence the same have been imported into Canada the cost of inland transportation, shipment and transhipment, with all the expenses included, from the place of growth, pro- duction or manufacture, whether by land or water, to the vessel in which the shipment is made, either in transitu or direct to Canada, (subject to such regulations as may be made by the Gov- ernor in Council; — Provided that in case of any dispute as to the proper amount of such inland transportation charges, the Minister of Customs may determine the same, and his deci- sion shall be final in that respect)." In addition to the exports from the United Kingdom, which are expiessly excluded from the operation of the section, goods imported from and through the United States, from Mexico, the West Indies, Central and South America, the Pacific Inlands and elsewhere, are scarcely or not at all affected by its provisions. Of the one hundred million dollars annual value of dutiable goods imported into the Dominion, perhaps not more than four or five million dollars' worth come fiom countries reached by it, and a modicum of even that trifling amount may repiesent the value of the goods, the freight charges upon which have been assessable under it. Up to this time, therefore, while the trouble and in- convenience have been veiy considerable, the revenue obtained has been of trifling moment. There was no public requetit for legislation of this character nor any public interest subserved by its enactment. In its nature it was a mere Departmental experiment, and was passed without reasons being adduced in its favor. The Department seems to have simply copied from the customs' laws of the United States without adequately considering, whether, in freight- ing matters, this was a well-considered and provident course, in view of our smaller population and trade, our geographical position, and our climatic disabilities. But in the experience of the United States this legislation was a signal failure. It induced fraud, it proved unequal in its operation, and it led to endless friction between the importing merchant and the Custom House. This dissatisfaction may be said to have culminated in 1883, with the result that the provision was repealed by Congress with more than usual emphasis, and the influence of a few per- sistent official doctrinaires has been powerless to procure even a reconsideration of the matter by Congress since that date. The enacting and repealing clauses are as follows : — Extract from the Revised Statutes of tfie United States as in force December 1st, 18*73. " Section Sf>07. In determming the dutiable value of merchandise, there shall be added to the cost, or to the actual wholesale price or general market value at the time of exporta- tion in the principle markets of the country from whence the same has been imported into the United States ; — the cost of tiansportation, shipment and transhipment, with all the expenses included, from the place of growth, production or manufacture, whether by land or water, to the vessel in which shipment is made to the United States ; — the value of the sack, box or covering of any kind in which such merchandise is contained ; — commission at the usual I'ates, but in no case less than two and one-half per centum ; and 6 —brokerage, export duty, and all other actual or usual charges for putting up, preparing and packing for transportation or ship- ment. All charges of a general character incurred in the purchase of a general invoice shall be distributed pro-rata among all parts of such invoice, and every part thereof charged with duties based on value shall be advanced according to its proportion, and all wines or other articles paying specitic duty by grades shall be graded and pay duty according to the actual value so determined." Extract from an Act of Congress, approved March 3rd, 1883. ''Section 7. That Sections 2907 and 2908 of the Eevised Statutes of the United States and Section 14 of the Act entitled " An Act to amend the Customs' Kevenue Laws, and to repeal Moieties," approved June 22, 1874, be, and the same are hereby repealed, and hereafter none of the charges imposed by said sections or any other provisions of existing laws shall be estimated in ascertaining the value of the goods to be imported ; nor shall the value of the usual and necessary sacks, crates, boxes or cover- ings of any kind be estimated as part of their value in deter- mining the amount of duties for which they are liable ;— Provided, that if any packages, sacks, crates, boxes or coverings of any kind shall be of any material or form designed to evade duties thereon, or designed for use otherwise than in the bona fide trans- portation of goods to the United States, the same shall be subject to a duty of one hundred per centum ad valorem upon the actual value of the same." The importing and shipping merchants of the Dominion have not been so ibrtunate. In March, 1885, two years after the United States had abandoned the principle that certain freights and shipping charges should be included in all dutiable values, our Customs' Department again promoted fresh legislation of this character; the mercantile community and the Board of Trade again protested and memorialized, and the attempt was again abandoned. The Board's memorial on that occasion was as follows :— To The Honorable Macken/ie Bowell, Miiuster of Oustoms of the Dominion of Canada. The Memorial of the Council of the Montreal Board of Trade : — Most respectfully siieweth, — i. as reqaiids duty upon [nland rates op preiqiit : — That strong representations have been made to your Memorial- ists by importers, merchants, and persons representing the ship- ping interests, against the proposal in Taritf Resolution 2, clause (1) — to add inUmd freights and costs of trans-shipment etc., to the value of imported goods for customs duty ; That, with a noteworthy exception, the clause seems to your Memorialists, to be in the main, similar to section 9 of the Tariff Act of 18*79, said section having been amended by the House of Commons, by the addition of the following words in the first and second lines thereof — ''except when imported from Great Britain and Ireland" — and now, after being on the statute-book for about six years, that decision of Parliament is eliminated from what now stands before the House of Commons as part of the second tariff resolution ; That it is contended as strongly now as it was in 1879, that such a method of raising revenue for the Government is false in principle, and would be urbiti-ary in its operation, as well as troublesome and vexatious in detail ; and that all the arguments brought to your notice, and that of the Hon. the Minister of Finance, by deputation and otherwise, are quite as valid now, if not more so, as they were when, in deference to the remonstran- ces of the mercantile and shipping interests, Parliament ordered the before-mentioned exemption in favour of merchandise im- ported from the United Kingdom. That, as has been the ease heietofore concerning the value of imported merchandise, interminable questions and disputes will, in the opinion of your Memorialists, be sure to arise between Customs' officials and importers, as to the true rates of inland transportation, trans-shipment, charges, etc., especially as regards importations from Gre.-it Britain and Ireland, becau.st' for many years past, competition for freight has boon so shar]), as |)racti- cally to merge inhmd freights, so-called, from the |)laco of pro- duction or manufacture, into a single through-rate oia the ])ort of shipment. That it appears to your Memorialists that the tendency ofsueh an enactment would be to increase inequitably the rate of duty upon certain of the cheaper kinds of heavy goods for which com- pai-atively high freight-rates are paid, wiiile moi-o expensive but lighter merchandise of the same class would bo far less att'eeted by that method of raising revenue; and that, as your Memorialists believe, the enactment of the clause in question would not bo in- sisted upon for revenue purposes, it would bo in the interests of trade and shipping to have it omitted altogether from the Tariif. Wherefore your Memorialists, etc., etc. Signed on behall of the Council of the Montreal Board of Trade. Montreal, 19th March, 1885. Jno. Kerry, President. Wm. J. Patterson, Seeietary. U And now, and for the third time, the Minister of Customs has proposed the same legislation to Parliament and the Board has again remonsti-ated in the following terms : — Offiob of the Board of Trade, ) Montreal, March 19th, 1889. j Hon. Mackenzie Bowell, Minister of Customs, Ottawa. Sir, — The attention of the Council has been called to a notice given by you in the House of Commons of a resolution to amend the Customs Act, one paragraph of which reads : — "That in every cuho the vnluo for duty shall include the chargOH for transportation and Hhipment." * Literally consti'iiod, thJH would moan that the freight and ship- ping chari^oH from the j)liice of purchuHO to tho poi-t of enti-y must bo added to the cost of tho goods to n.i*ke up the value for duty. Goods puichaHod in Paris and shipped thence vt'a Liver- pool and Montreal to Vancouver, would thus have to be assessed by the collector at Vancouver on tho Paris cost, lAm " the charges of transportation and shipment" iVora Paris to Vancouver. It is assumed that this cannot be the intention of the Depart- ment, atid that when tho resolution comes t'> bo expanded into a bill, its scope will be limited somewhat alter the provisions of tho resolution passed in 1879 and now embodied in section 61 of the Customs Act. * Mr. BovvoiU's notice oi' motion, given ^Larch 7th, read as fol- lows, the clause to which the Council's remonstrance applies being italicized : — "On motion of Mr. Bowell, the Mouse resolved to go '.nto Com- mittee of the Whole, to-morrow, to consider the following pro- posed resolution: — " That it is expedient to amend " The Customs Act " ana the Act amending the same, and to provide: (a) That the bringing of goods into Canada by land conveyance other than railway cars shall be prohibited during tho night and on statutory holidays, except under permit and supervision ; (6) That the Board of Customs and Dominion a])pi-aisers shall be authorized to review tho valuations of port appraisers ; (c) That in eoery case the value for duty shall include the charges of transportation and shipment, and shall bo that of the quantity imported ; {d) That such value shall include any ro^-alty, rent or charge in respect of exclusive rights or territorial limits ; {e) That goods entered for warehouse shall bo placed therein without delay ; (/) That information shall be exigible as to goods in transit through Canada, for statistical and other purposes; ((/) That tho manner of ascertaining the time of exportation from any place out of Canada shall be detined ; (A) That moneys deposited in lieu of articles smuggled, and subject to seizure, shall bo treated in like manner as if such articles had been seized." ;S 10 The principle of the clause is of comparatively recent enact- ment m Canada, having been brought forward for the first time at the above-nimed date of April, 1879, and for reasons which were not publicly announced. At that date this Board, in common witi numerous importing and shipping merchants, Htrcnuo.isly opposed its enactment on the ground that while no possible good could result from it, the effect of Its enforcemenf would be to injure the Canadian direct importer, the Canadian carrier, and the Canadian route. Although the Board was unable at that time to procure from the Department the withdrawal of the clause, the Minister con- sented to modify it so far as to exempt Great Britain and Ireland from Its operation, and to make the remnant of the enactment subject to such regulations as might from time to tin^a be promul- gated by the Governor-General in Council,-with which conces- sions the Board was fain to be content. By these concessions the volume of European imported nierchandise affected by the clause was largely restricted, and the nuisance of the double impost much diminished. Never- theless the inconvenience to the Canadian importer and the loss to the Canadian carrier have been sufficiently marked to warrant the Board in demanding of the Department a reconsider- ation of the whole matter, with a view to a return to the princi- ple that uniformly prevailed in Canada prior to the year 1879. The conditions of the t'.ans-Atlantic trade are year by year changing for the worse as regards the Canadian route. The port of ^ew York is drawing to herself a constantly increasing share of traais-Atlantic tonnage, until now Scandinavian, German, ^brench and Mediterranean steamship lines, and lines from the leading British east-coast ports, continue to ply regularly sum-ier and winter with that port ;-and this in addition to the regular hnes to Glasgow, London and Liverpool, with which alone the Canadian route was formerly in competition. Moreover, these various steamship lines, while they do not dis- agree or unduly compete with each other for United States n traffic as a general rule, are nevertheless ready to privateer as regards Canadian traffic, and in doing so they are joined by the trunk lines of railway centring in New York. The Canadian lines cannot hope to emulate this immense direct traffic, nor can they make reprisals. Canadian steamships, to find cargoes at all, have to confine themselves lai-gely to the leading British ports, and have, in conjunction with the Canadian railways, to compete with the New York route for Canadian traffic from the interior and east-coast of Britain, and from the continent of Europe, making a throngh-rate of freight from all these points to the Canadian destination, and paying the transit freights out of that through-rate. It is therefore manifest that a levy of duty upon this tr;insit freight is not really a charge on the goods, but is a direct charge on the Canadian railway and Canadian steamship carriers, and a discrimination against the Canadian and in favor of the New York route which remains untaxed. In fine the Council begs earnestly to represent : — (1) That a levy of customs duty upon any freight-charge, inci- dent to the importation of merchandise, is a measure of doubtful utility in any event, and the Council would strongly recommend that the duty should, in all cases, be levied on the cost price or fair market value at the place of purchase; (2) That a levy of customs duty upon certain of the freight- chai'ges due upon any one importation and not upon the others will be inequitable and unjust in its operation ; and (3) That if such levy bo upon the transport and shipping- charges from European or other sea])orts to the ports of depar- ture of the Canadian steamship lines the injury and injustice will be most grievous. The Council, therefore, confidently trusts that the Department will reconsider its course a d revert to the principles of assess- 12 :! i:i yea?im"*'"' '"'^ ^^^^^ P-^-^^^ in Canada pi lor to the We have the honor to be, Sir, Tour obedient servants, J. P. Cleqhorn, President ; Geo. Hadrill, Secretary. Customs^^-^'"'''"^ ''^^^ ™ '■^'"'"'''^ ^'^"' *^^ ^'°^'*"^' «f Ottawa, March 21, 1889. J. P. Cleqhorn, E.q., President Board of Trade, Montreal: Dear Sir,-! am in receipt of yours of the 19th, calling my attention to the resolution now before the Commons in re amend- ment to Customs Act. You arc quite correct in supposing that It IS not the intction of the Government to make goods dutiable on their value at the port of entry. The proposition is simply to strike out from the 61st clause the words ''except Great Bntain and Ireland." Your further representation in reference to this matter nhall be brought, at the earliest moment, before the notice of my colleagues. Yours truly, M. Bowel L. The Council replied to the Minister in the following terms :_ Office Board of Trade, Montreal, April 3rd, 1889. Hon. McKenzie Bowell, Minister of Customs, Otfaioa. S[R,-I have the honor to inform you that the Council of this Board has considered your letter of 21st ultimo, and that it has also taken communication of the debate in the Commons on same date, and of clause 4 of Bill 117 which re-enacts and greatly ex- tends section 61 of the present Customs' law. 13 It is stated in your lettei- that the Department's proposal is "simply to strike out from the 61st clause the words except Great Britain and Ireland." But inasmuch as the words proposed to be struck out i-epresent imports aggregating an annual value of from thirty to thirty-five million dollars, and the clause as it stands perhaps a value of only four or five millions, the change is one of very great importance. The usual Continental custom is for the seller to offer his goods to the (Canadian buyer at a price fi-ee-on-board at a r^hipping poi't, whicli price is also the value for duty. In Great Britain this cus- tom is not so prevalent; the rule there is fbi- the Canadian buyer to purchase at the point of manufacture and to make his own packing and shipping arrangements. Eonce it is that the pro- posed clause will have a much wider application, in proportion to value, upon British than upon Continental exports to Canada. This Continental custom is so common as respects exports from Germany to Canada that the Council thinks the Minister must have been misinformed as to the onerous inland freight charges in the foi-mer country ; but if it be true that these charges have sometimes amounted to fifty or sixty per cent of the dutiable value of an importation, it is manifest that with such almost prohibitory freight-charges the quantity of said ex- ports must be so trifling as to be unworthy of £iotice iu the gene- ral volume of traffic. Another change in section 61 has also received attention from the Council, viz., the insertion of the words " of the quantity so exported and imported," so that it reads thus, — " In determining " the value for duty of goods, there shall be added to the fair " market value, at the time of exportation, of the quantity so " exported and import' d, etc., etc." Tn principle this propos-^d change, intended to favour the wholesale purchaser of large lines of goods, is both just and reasonable, but in view of the great doubt as to whether it could be generally and elfectively ajDplied, the Council recommends its withdrawal. After consultation with numerous large impoi-ters of Eussian German and French goods paj^ing ad valorem duties, the Council has found the wish foi' a return to the principle that prevailed fi 14 prior to 1879 to be unanimous; ™p„rte,^ f,„„ great Britain be.„g especially urgent in protesting against the levying of dutv upon the cost of inland transportation Li shipmontThtges "^ difflcalS'" will 'nTr '"*'"• '"™''"'" "•^"''o "<=o-titutional sec , on 01, It ,8 true that discrimination in favor of Great Bnta,„ would be removed, but that in favour of countrirs on u hT '"?' """"'"' """" ^"""^ """y -"«-«« to be brought L" such distant points as California and Mexico, the freigh^charZ irom whence far exceed those refcn-ed to ii Germany witl^fu anch charges being made to form a part of the dutiabi^f^te the department >-^s7:>,ti:T^-:^::zzzi''^::i eZ and tt ''■^^°"«™» °" M'"''"' 3.-d, 1883. Such being th; S-P/br thee- r'' "' '''' '-'"^ '"ns alu^red, the mison a aie 101 the clause have ceased to exist. tio?,?r'"°" f '""'' """ ''<""« »"» "f '^™«»e or of protcc i" 2 aundt^ J T''"'*' "^""^ ^°''*' ^l-o'^ views were embodied whith i::;;':^::: -»-nication, havercstated them in aletter I have the honor to be, Sir, Your obedient servant, Geo. Hadrill, Secretary. 15 Montreal, April 3, 1889. J. P. CLEaHORN, Esq., President of the Board of Trade, Montreal. Sir, — ^We, the undersigned, owners and agents of steamships trading with Europe, having taken communication of the corres- pondence that has passed between the Council of the Board of Trade and the Customs Department in re the re-enactment and extension of clause 61 of the Customs Act, fully concur in the position taken by the Council ; and we enter our earnest protest against the inclusion of transportation and shipment chai-ges in valuations for duty, as being inimical to the interests of the Cana- dian steamship lines, and a discrimination against the St. Law- rence route. We are your obedient servants, (Signed) (( tt (( tt H. & A, Allan, Agents Allan Line. David Torrance Co., Agents Dominion Line. EOBERT ReFORD Co., ' Agents for The Donaldson Clyde < Line. The Thomson Line. \^ The- Temperly Line. H. E. Murray, General Manager Canada Shipping Co. Beaver Line 8.S. J. G. SiDET, S. S. Agent. Anderson, McKenzie Co., Agents Furniss Line. n 16 *>; The foUowini? is the text of chiUHO 4 of Bill IIT as it now stands before the House of Commons. The Board of Trade peti- tions that so much of the clause as is placed within bi-ackots shall be eliminated and the remainder passed into law : — " 4», Section sixty-one of the first cited Act as amended by section thivtocn of the secondly cited Act is hereby repealed and the following substituted therefor : " Ol. [In determining the value for duty of goods, there shall bo added to the foir mai'ket value, at the time of exporta- tion, of the quantity so exported and imported, in the principal markets of the country from whence the same have been import- ed into Canada, the cost of inland transportation, shipment and transhipment, with all the expenses included, from the place of growth, production or manufacture, whether by land or water, to the vessel in which shipment is made, either m transiiti or direct to Canada ; subject to such regulations as are made by the Gov- ernor in Council : I'l-ovided, that in case of any dis >ute respect- ing the proper amount of such inland transportation charges, the Minister of Customs may determine the same, and his decision shall be linal in that i-espect : " 2.] "When parts of any manufactured article ai-e imported into Canada, each such part shall bo charged with the name rate of duty as the finished article, on a propc/rtionate valuuti(m, and when the duty chai-geable thereon is specific, or specific and ad valorem, an average rate of ad valorem duty, equal to the si^ecific or specific and ad valorem duty sochai'geable, shall be ascertained and charged upon such parts of the munufhctured article." Some of the anomalies produced by this legislation, as it now stands, arc noteworihy. Countries that are without sea-pci'ts (as Switzerland) are under jjei'manent disabilities; countries whose ports are winter-bound are under disabilities during the ice season ; while countries whose ports are always open are under no dis- abilities in that respect. The Canadian who is untbrtunato enough to have his goods frozon-in at Hamburg is assessed on the raihvay freight to a more southern sea-port, he may however evade the tax by holding over his goods until the navigation is again open. 11 (lis Again, the cost of all-rail carraige, which in Eui-ope must always be asseaeed,* is in America always exempt, all-rail shipments from the remotest parts of the United States and Mexico being without the scope of the section. But should a vessel intervene, say at Prescott or at Windsor or on the Lakes, all the rail freight beyond will then become assessable for duty. This latter levy may however be avoided by waiting until winter and then carting the goods over on the ice. These anamolies are much more numerous under the proposed extention of the legislation to the United Kingdom, and, because of the greater volume of traffic, will become largely intensified. Artificial ports like Glasgow, reached through dredged chan- nels, are free ; while markets nearer to the seaboard like Man- chester are taxed because their communication is by rail, but when the hitter's ship-canal is built she too will be free. Irish markets like Dublin and Belfast may use Liverpool as a shipping port without being taxed ; but Sheffield, Huddersfiold and other .English inland markets, must always pay duty. The Minister has explained that Havre purchases may be freighted aci'Oss the channel to London and thence by rail, to the Canadian steamship at Liverpool, without being subject to this tax, the channel steamer being — " the vessel in which shipment is made ;" but that London purchases shipped from thence over the same railway to the same steamship will have to pay duty on the rail freight. So that of two shipments of goods, freighted to that extent identically, the English shipment would be taxed and the Fj'ench shipment would go free. There are, however, two or more modes whereby the Canadian importer from London may avoid this impost. He may hii-e a vessel to freight his goods from London to Liverpool, as, under * Mr. Bowell says otherwise with respect to goods purchased in Leipsic and sliipped to Canada na Havre (see Hansard p. 797,March 21st), but the terms of the law are quite exphcit on the point. Mr. Bowell's ruling, while the rail freight would he dutiable the water freight would not be dutiable. Or he may avoid the Canadian route, with its taxation and woi-ry, and ship his goods from London to Toronto via New York where all is plain sailing. Hitherto our tariff policy has been to favor importations from distant markets and producing countries (e. g. on raw sugar the duties arc 7^ p. c less on direct importations than on indirect) ; but section 4 reverses this and discriminates against such markets unless they happen to be on the seaboard. This adverse discrimination does not however apply in the case of North America. Those, and numerous other anamolies that might be quoted, are incident to this and indeed to any tariff enactment which fulfils no public requirement and which is devoid of any well-defined underlying pi'inciple. At a meeting of the Committee held on Saturday, Aj^ril 6th, it was arranged that a deputation should proceed to Ottawa, to be there Joined by deputations fi-om the Boards of Trade of Toronto and Hamilton, to meet the Minister of Customs. This meeting was held on Wednesday, April 10th, when, among others, the following points were argued with the Minister : — (1.; That while the present impost yields no revenue,* it is nevertheless very troublesome and vexatious. (2.) That the new impost will jaeld a certain amount of revenue, but with greately increased trouble and vexation to both the importer and the Customs. (3.) That the new im^iost will of itself constitute a greater " cliiinge in the tariff" than if an equivalent amount of revenue were obtainetl from increased duties on certain goods. *Mr. Bowell mentioned $250,000 as about the sum now obtained from this source, meaning probably the total amount of ad valorem revenue derived from the goods under his review which were implicated in the clause as it now stands. The amount of duty or revenue collected from ad valorem assessments on inland freights last year could not possibly have amounted to one-tenth, or even to one-twentieth, of the sum named. D. a. Watt. 19 (4.) That if additional reveaue be required, it can be had in an unobjectionable form, and without a " chan<^e in the tariff," by the simple addition of a certain per ceiitage to the amount of duty now payable on each entry. (5.) That, in practice, it is an impossibility to distribute the sura paid for the inland freight of a mixed consignment, pro rata over the various invoice values, upon which diffei-ing ad valorem rates of duty are payable ; and that in the entries of such goods the proportion of the inland freight-charges will be in the nature of an estimate. (6.) That the new provisions will afford increased oppor- tunities for undervaluations and other frauds. (7.) That the two following clauses of the Customs' law have been proved to afford all needed protection to the revenue and have given satisfaction to the merchants : — Valuation for Duty. " 5S. Whenever any duty ad valorem is imposed on any goods imported into Canada, the value for duty shall bo the ftiir market value thereof, when sold for home consumption, in the principal markets of the country whence, and at the time when, the sarat* were exported directly to Canada. " 59. Such market value shall be the fair market value of such goods in the usual and ordinary acceptation of the term, at the usual and ordinary credit, and not the cash value of such goods, except in cases in which tho article imported is, by universal usage, known to be a cash article, an I so bona fide paid for in all transactions in relation to such article ;***'» But if the Department finds them not sufficiently stringent the merchants will gladly co-operate in their amendment. (8.) That the discrimination ci-eated by the new provision, in favor of the United States and against the Canadian route, is a most serious departure from the general public policy of the country, and cannot fail to bring about disastrous results. The Minister promised full consideration of the suggestions and a reply at an early date. On behalf of the Committee. D. A. Watt, Acting Chairman. Montreal, April 11th, 1889. 20 COUNSEL'S OPINION. In March, 1879, when the proposal to levy duties on the inland- freight and transhipment charges, was first made to Parliament, the opinion of Counsel was taken on the scope of the resolution then introduced, the terms of which do not materially differ from Section 4 of Bill 117 now before Parliament, and quoted oq page 16. Mr. Abbott's opinion is as follows : — Q UERiES in re 6th Eesolution op the Tariff op Customs, for OPINION OF Counsel, the Hon. J. J. C. Abbott. A certain line of goods was purchased by a Canadian merchant, Mr. James Johnston, in London, and shipped from thence to Canada. The route chosen was by rail to Liverpool, thence by Allan steamer to Halifax, and thence by rail to destination. On being offered for entry at Customs, the Collector required the cost of inland-freight from London together with the Liver- pool trans-shipping charges to be declared, and be levied on that sum as well as on the London value. His warrant for so doing being the 6th i-esolution. Was the Collector justifiable in demanding this extra amount of duty ? and if yea — Suppose the same line of goods has been shipped by direct steamer from London to New York (instead of via Liverpool to Halifax), and thence by rail or otherwise to destination in Canada, to what extent would the London value need to be written up, in respect of inland or other freights or charges, to meet the requirements of the Eesolution ? D. A. Watt. Montreal, 29th March, 1879. The Duty on Cost of Inland Transportation. Dear Sir: — I have carefully looked into the questions submitted to me in this matter, and the following are my views upon them : — 21 The 6th resolution of the Tariff * as it stands, is confused in its structure, and difficult of comprehension. It appears fo be in- tended to provide for the addition to the cost of the purchase of goods, the cost of inland tran^