A/. IMAGE EVALUATION TEST TARGET (MT-3) 7 Ac O {./ m. >y V J4i^ c?. &?/ i/.s /a 1.0 I.I Mi 1^ 2.2 140 III 2.0 III 1.8 1.25 U il.6 V] ^ (V ^iv v \\ .**'■' 4^ 'A 1;^ 6^ ■MMH CIHM/ICMH Microfiche Series. CIHM/ICMH Collection de microfiches. Canadian Institute for Historical Microreproductions Institut Canadian de microreproductions historiques 1980 Technical Notes / Notes techniques The Institute has attempted to obtain the best original copy available for filming. Physical features of this copy which may alter any of the images in the reproduction are checked below. D D D Coloured covers/ Couvertures de couleur Coloured maps/ Cartes gdographiques en couleur Pages discoloured, stained or foxed/ Pages ddcolor^es, tachet^es ou piqu^es Tight binding (may cause shadows or distortion along interior margin)/ Reliure serr6 (peut causer de I'ombre ou de la distortion le long de la marge intdrieure) L'institut a microfilmd le meilleur exemplaire qu'il lui a 6X6 possible de se procurer. 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The following diagrams illustrate the method: L'exemplaire film6 fut reproduit grdce d la g6n6rosit6 de I'dtablissement prdteur suivant : La bibliothdque des Archives publiques du Canada Les cartes ou les planches trop grandes pour dtre reproduites en un seul clich6 sont filmdes d partir de Tangle sup6rieure gauche, de gauche d droite et de haut en bas, en prenant le nombre d'images n6cessaire. Le diagramme suivant illustre la mdthode : 1 2 3 1 2 3 4 5 6 SPKECMI OF Hon. j¥ACKENZIE BOWKLL, :^^lbTER OF CUSTOMS. ''V 'lltE- MOIETY SYSTEM, UNDEE^ VALUATIONS AND- A ! )M IN isTHATiON OE TIEE CUSTOMS. O T T \ W A : PKI.NTED fob the QUKEN'h Pin.VTFRA COJUPTKOLLKKOF STATIONEEY. A. .Sekecai., ijupe: InU'Udeiil of Priating. SPEECH OF HOiORilBLE MACK[IZI[ BOWFLL M.P„ ON CUS^rOMS SEIZUKES. In tho House of Oommone, Ottawa, on 16th April, 1889, on a motion by Mr. Holton, M.P., for Chatoauguay : That the Speaker do not leave the Chair; but that it be resolved, that It ig expedient to amend the Customs Act in such a manner that while Becurine er^ry proper and necessary protection to the revenue, it will relieve the honest importer from the danger of oppression, and in the case of persons charged with violation of the Oaatoms law, provide that no one shall be subject to fine or Eoes except after a tkir and public trial ; and provided further, that in no event shall th(? officers makinir seizures participate in the fine or forfeitures imposed for such offences. Hon. Mackenzsio Bowell, Minister of Customs, spoke as follows : — Mr. Speaker, I have very little to complain of as to tho manner n which the hon. member for Chateauguay (Mr. Holton) has presented his case to the House. I frankly admit, before alluding to the cases to which he has referred, or before answering any of the arguments which ho has advanced, that there is cause not only for diversity of opinion, but for differences of opinion, as to the manner in which the Customs laws should bo carried out, and the revenue protected. I can readily understand that among those who have not had any practical knowledge of the working, particularly, of a protective tariff, and of the provisions of the law which it is necessary to enforce in order to secure a proper revenue and to protect the honest importer— there may be not only diversity of opinion, but there may be many argument::^ to sustain the position which has been taken by the gentleman who has just addressed the House. Having admitted that much, I must take exception to his introductory remarks in which ho ; Bays that just before tho last election I visited Montreal in great haste, in order to have a consultation with the Board of Trade, or to receive advice, or tender advice to tho gentle- men composing that body. 1 have boon in the habit, since I have had tho honor of occupying tho important position I now hold, in endeavoring to enforce the laws and regu- lations, which are onerous in their character, of visiting not only the Boards of Trad oof Montreal and Toronto, but also in other sections of the country — not at the time of elections, however, but upon every occasioL when complaints have been mado to tho Department — and 1 have found I could come to a deci'uon better, more equitably, and much more in accordance with the law, by visiting those who have entered complaints, and by having a friendly consultation with them, I have visited the Boards of Trade, not only of Montreal, bat as far east as Halifax and as far west as Victoria, and upon all occasions, after consulta- tion, wo have come to an understanding as to the course that should be pursued, particalarly in the administration of this, if I might use tho expression, somewhat intricate law. With respect to the interview to which the hon. gen- tleman has referred — whether it was before tho election or not I do not know, but 1 kn^-w 1 met a deputation, I think the executive committee of the Board of Tradeof Montreal ; and upon that occasion we discussed many of the clauses of the Customs Act, and the mode in which they had boon enforced by the Customs officials. 1 made no such promises as those to which the hon. gentleman referred. I da not say that the hon^ gentleman has made those state- ments without believing them to be correct ; £ can only presume that ho has taken statements made by irre- eponsible persons, and which appeared in the different newspapers in Montreal, at the time, in regard to what actually did take place at that interview. All that I promised the merchants at that time has been carried out since. Many amendments which they suggested 1 combated to the best of my ability, and I am vain enough to believe that, in some .cases, 1 succeeded in showing them that their suggestions would bo detrimental to tho inter- est of the honest importer rather than beneficial to him. Although the hon . gentleman has not spoken so long, as I have no doubt he might have desired, upon this subject, he has said enough to necessitate my occupying a little more time than I would choose to do under other cir- cumstances. I dissent in ioto from the statement made that for every offender caught and punished, two at least of the 8 honest importers rocoivo worse treatment than does the smuggler ; and I think a little attention to the working of the law and to the faclH, if they wore all before the hon. gen- tleman, would have led him to other oonclQeiona. ALLEGED ILLEGAL EXACTION OP FEES BY 0D8TOM8 OPFIOEaS AT MONTREAL. I do not propose to take up each ease to which the hon. gen- tleman has referred, but while it is fresh in my memory 1 do* Bire to reply particularly to his closing remarks in regard to the approval which, he says, I, as head of the Dopartment, gave to the exaction of fous by any officer in Montreal or elsewhere. I remember distinctly the case to which the hon. gentleman has called the attention of the Houso. I made enquiry as to what was the practice in Montreal, and instead of approving of the system of exacting fees from importers, I gave instructions positively that no officer should receive any fee from merchants; and if the hon. gentleman will refer to the rules and regulations which are now in force, but, unfortunately, which are not now be- fore me, he will find they provide that do officer shall re- ceive any fee for any service he may render to a merchant. Mr. LAUKEER. What about Mr. Johnson's letter ? Mr. BOWELL. Mr. Johnson's letter says nothing of the kind. There is a practice, and it has been in existence ever since Customs officers have been appointed in this country, of giving remuneration for extra services, either before the hour in the morning when official duties begin, or alter the close of the Custom house at night. The Grand Trunk Company pays into the revenue between $15,000 and $20,0U0 annually towards covering such expenditure. Every railway, the Allan line and other ocean companies, and every steamboat on the inland lakes and waters, that requires the services of an officer after hours, to superintend the loading or unloading of goods so as not to have the vessels detained on their trip, pays so much per hour, or per month, as the case may be. The amount paid by the different railway companies and steamboat proprietors, ocean as well as inland, amounts annually to between $40,000 and $50,000. I admit that it is a grave question whether it would not be better to have day as well as night officials to conduct this business, instead of exacting the amount from the parties who now pay it. It is a question which has been under the consideration of the Government for some time. The principle is not a new one ; it prevailed when I assamed office, and it continaes at the present time. If the House should doom it advisable to make an extra appropriation annually, to the extent of $50,000, in order to enable the Department to increaso its staff and pay night as well aH day handw, then we could do away, 1 have no doubt, with many of the complaints made, not only by the officers thomselvos, who wrargle about the amount they should receive, but also by those who have to pay this amount out of the proceeds of the entorpriees in which they are engaged. That is a point, I repeat, which is very fairly open to discu<^8ion. But I de- sire to call the attention of the House to this fact, that that is one particular in which our system differs diametrically from that of the United States. There the fees, as I shall show before 1 close my remarks, are enormous. In some cases, with respect to small articles which are free under the tariff, these fees reach an amount equal to 50, 60, or 75 per cent. Wo have no such system in this country, and the only fee an officer or Collector is entitled to receive from any importer when he desires to make an entry is 5 cents for the three forms upon which the entry is ma'^e, and that sum is paid into the rovonuo. Even as to that pay- ment, the importer is not obliged to purchase the forms from the Custom bouse officer ; they are simply kept as a matter of accommodation for the convenience ol importers. And I defire to call the attention of the hon. member for Chftteauguay (Mr. Holton) to the difference between the remunerating of an officer who performs duty alter official hours, and the acceptance of fees, m the hon. gentleman put it to the House. I do not know any system that could be more abused than the system to which he has drawn attention, provided it prevailed in this country, and if it is practiced by any officer in Mon- treal it is contrary to the regulations of the Department, as there is no authority for any Customs officer to receive fees. The statement having been made, however, I shall take the earliest opportunity to call the attention of the Collector at Montreal to it, in order that ho may ascertain whether such be the fact or not. The hon. gentleman ^said that the extent to which this has been carried on has been such as to add thousands of dollars to the salary of the office)', Mr, Hatchette, who performs this duty, or others who may perform it. If this be so, Mr. Hatchette is receiving money to which he has no right, for all he is entitled to receive is payment for whatever time he may give to importers before or after office hours, at so much per hour, or so much per month, as may be arranged. Il » My hon. friend has placed a resolution before this Houeo, which, to my mind, is somewhat novel in its character, and I am quite sure that anyone who will reflect for a moment, -liust como to the conclusion that the policy involved in this resolution is one utterly impraclicublo, or if not impractic- able, it would add a groat deal more to the discomfort of the honest importer, and particularly those who are accused and not guilty, than any system which prevails at present. One part of his resolution reads, that the desire is : "To amend iho Custoraa Act so as to relieve the honest importer from danger of oppreasion," PRESENT LAW CABEFDLLY aUARD3 LEGAL RIGHTS OF IMPORTERS. The present law provides for all that is involved in that Bontence. It the importer is dissatisfied with the action of the seizing officer, or if he is dissatisfied with the ruling of the Department, all be has to do is to appeal to the courts, and he can then obtain just that publicity which my hon. friend desires he should have. The resolution j^oes on to Bay : 'And in the case of persons charged with Tiolation of the Oustomi law, to provide that no one shall be Bubj«>/Ct to fine or fines except after a fair public trial" I notice that the hon. gentleman left out the words " should he demand it," as his resolution originally read. I infer from this, that if a man is caught red-handed in smuggling across the borders, or evading payment of duty on en- closures, or breaking the law by any other means, the case must bo put into court and a judge asked to adjudicate upon it. I confess that I had the fame idea for a long time. It was a principle which 1 tried to impress upon my own colleagues, but when I began to reflect upon the result of the adoption of a policy ot that kind, I came to the con- clusion that it could not bo carried out. It may surprise members of this House wLon 1 tell them that the average of seizures for some years past has been from six to eeven or eight hundred ; some small and some large. Juft fancy a man having goods which are perishable, seized when smug- gling them across the boi'dor ; there is no question as to the fact of their being t^maggled, the man was caught in the act ; but under this resolution, if it was carried out, before you could condemn, or sell, or dispose of thof^e perishable articles, yon would first have to employ a lawyer to carry the case into court, — and so it would be in all ot those seven hundred i 6 cases ayear, eomoof whicliaroofthe most trivial character, although otherw are very important. The law at present lays down clearly what the importer muy do, in cat-e he is interfered with, either directly or indirectly, in the transac- tion of his busincBs. If the goods are seized, a report must bo made by the Cubtomrt officer as soon as pOH^ihle, to the Department, arid as soon as the notification of ' o seizure is received by the Department, the pertou whoso goods have been »eizcd is immediately notified, and he is given a full month in which to put in his defence. Then the ruling of the Department is given, and if he objects to that decision, he has thirty days with'n which to put in his defence, and he can then go into the Exchequer Court, to oppose the decision. All ho requires to do is to say, 1 will not accept the decision of the Department Mr. HOLTON. Ho can only go into court, if the Min- ister allows him. IMPORTER MAY DL..IAND THAT lira 0A8E BE PLACED HRFOEB A OOUttT, IP NOT SATISFIEU WITH DECFSION OP MINIS- TER IN ANY CASE OP SEIZURE. Mr. BOWELL. The hon. gentleman is quite mistaken. If he will turn to the law, he will find that the person whose goods have been seized can object to the deciHion of the Department; and, having objected, it is the duty of the Min- ister — except in certain cases where the notice of dissent has not been given in sufficient time — to put the case into court, before he can carry out his condemnation. There is no difficulty whatever in a man ^oing into court, if be so desires it. During ten years' experience I have no recollec- tion of any importer, or anyone else, feeling himself aggrieved, being deprived of the right of going into court if he desired go to do. Mr. HOLTON. If the Minister will allow me, I will refer him to clause 182 of the Act with regard to appeal to the courts. It says : " If the owner or claimaat of the thins seized or detained, or the Eerson alle({ed to have incurred the penalty, within thirty days after eing notified of the Minister's deciaion, gives him notice in writing that such decision will not be accepted, the Minister may refer the matter to the court." The Act says that the Minister " may," and it is, therefore optional for the Miniater to allow it. Mr. BOWELL. Suppose the Minister refuses — which is never done — all that the person feeling himself aggrieved ^vonld havo to do, would be to a))ply for n (iut to go into court, and it would bo granted at once, as wuh done in the Ayor case. That pormiflrtion has never been refused, nor JH it tho |iractioe of any 'Govornmont, or of the Crown, t rofutio IX flat where there is any cause of complaint by a sub* joot. Wo havo allowed caHOH to go into court in which wo Know the man had no case, and in which the corrospondonco showed that ho had no case; but the person considered hitn- Holf aggrieved, and wlien ho a«ked for the ])riviIe^o, it waa at once accorded to him. The next contention of my hon, friend is, perhapH, the most im})ortant from his standpoint, and that is the quosUon of doing away with the division of foffoiturcrt, and what is termed the moiety syntera, to which I will refer in a few momontt". One would havo supposed, hearing the speech of my hon. friend, that this portion of the law to which he objects, was the creation of the present Government ; that all these iniquitous claunes to which he refers, which Ic Use and allow so much of what he terms plundering — lea ot remember the other strong word which he used — to bo perpetrated by the Customs officers and to be approved of by the Minister, wore actually put upon the Statute-book by the ; resent Government. If ho will turn to the law which was enacted by my hon. friends opposite when they were in power, he will see that there are aoaroely any changes made between that law aad the law as it stands to day, except to simplify and, in many cases, to liberalise, instead of making more stringent, the provi- sions to whi'h my hon. friend has referred. Ho may laugh, but I attribute that to the fact that he has not given this question that study and attention which he should have given to it before he attempted to deal with it. i!' CASH VALUE OF GOODS NOT THE VALUE FOR DUTY. I now refer to a statement made by the Minister of Fin- ance of the former Administration, the present member for South Oxford (Sir Kichard Cartwright), in reference to the "iniquity " which he pointed out to this House,— if the reference is not against the rules of Parliament. I am not very often absent from this Chamber, but, unfor- tunately for myself, I happened to be absent when the ad- ministration of my Department was attacked. The hon. gen- tleman represented that there had been an actual case in which a man's invoice had been raised from a cash value Bome 50 per cent. I am not prepared to say whether it was 50 or 75 per cent. I know nothing of the case. 8 ! ! If it were mentioned to me, probably I could explain it to him, but if the hon, member from South Oxford will look at the Statute-book, ':o will find that when be was a member of the Government of the hon. member for East York (Mr. Mackenzie), he aBsisted to put on the Statute-book a \&\r (40 Yic, chap. 10, sec. 32) in which the principle is laid down that it ia not the cash value that is to guide in valu- ing an article for duty, but it must be the credit price of the article in the market where it is purchased ; and if he will turn to the numerous circulars which were issued by the Minister of Customs of that time, ho will find this provi- sion of the law particularly pointed out, and that the offlcers were instructed to raise the invoices for duty, and to see that the articles entered for duty were valued on that prin- ciple. I also find that another very iniquitous provision, that the onus of proof shall be on the importer, appears in much 8tron/;er terms in the law (sec. 52) which those hon. gentle- men put on the Statute-book, than in the present Act. Mr. HOLTON. I know it; I have read it. Mr. BO WELL. I have no doubt the hon. genlleman knows it, Lut when he was denouncing the law, he left the impression on everyone listening to him that those provi- sions of the law bad been enacted by the present Government, and not by those whom he is supporting, and whom, I have no doubt, from the peculiar -.oniwrmation of his mind, he will support for all time to come. Sir KICHARD CART WRIGHT. Hear, hear. Mr. BOWELL. We know the vilest sinner may return. We know what the hon. gentleman was in the good old times gone by ; we know what he is at present. I look with some commiseration on him in the position he occupies now, and 1 look foiward with a good deal of pleasure Sir RICHARD CARTWRIGHT. Perhaps you look to the time when you were with me opposing Sir Francis Hincks coming in. Mr. BOWELL. I do not know that 1 should be led into a discussion of my reasons for opposing Sir Francis Hincks. I had my reasons then Mr. PATERSON (Brant). What section are you reading t Mr. BOWELL. It is a section in the political history of the country, to which my hon. friend calkd attention ; and I was just explaining that 1 had no other object than what I believed, at that time, to be in the best interests of the coun- 9 try, in the opposition I gave lo Sir Francis Hinoks, and I am bound to extend the same credit to my hon. friend. The only difference that existed at that time between the member for South Oxford (Sir Richard Cartwr-gbt) and myself was, that if Sir Francis Hincks came up to the expectations of those who placed him in office, I would have had no hesita- tion in giving him what support my humble ability would enable me to extend ; and now that he is dead and gone, I will repeat what I said in the House afterwards, that my experience ot Sir Francis Hincks, and the manner in which he took hold of the questions then agitating the country, justified me in the course I took. Mr. MITCHELL. Hear, hear; I .was his colleague at that time. BURDEN OP PROOF ON IMPORTERS. Mr. BOWELL. Now, Sir, let me return to the 52nd clause of the Act to which I referred, and which the Gov- ernment ot the hon. member for South Oxford placed on the Statute-book. That clause roads as follows: — " The bardea of proof that all the reqmrements of thin &et. with refcard to the entry of aay goods, hare been oompHed with and fulfilled, shall, in all casea, lie upon the parties whose duty it was to comply with and fulfil the same." Mr. PATBRSON (Brant). Was that the first time it appeared in the statute ? Mr. BOWELL. I do not know anything about that. I dare say it was there before ; if it was, they perpetuated it; If it was unfair then, T take it for granted that, if they shared the opinions of the hon. member for Chateauguay, they would have repealed it. HI' REPEAL OP UNFAIR PROVISION IN CUdTOMS ACT OP 1877. I might here voiy properly remind that hon. gentleman of a most unjust and vexatious principle which obtained under the Act of 1877, lor which his friends, as before stated, are responsible. By section 40 of such Act it was provided that : " No evidence of the Take of any goods imported into Canada, or taken out of warehouse for CDUSumption therein, at the place whence and the time when they are to be deemed to have been exported to Can- ada, contradictory to or at variance with the value stated in the invoice Eroduced to the collector, wch the additions (if any) made to such value y the bill of entry, shall 'je received in any court in Canada, on the part of any party except the Crown " , 'i, '.". ..' .'V-rti'.i.'.'.'i,'..'''«.','„-ri' (,■..;':.>■ .'■>.'. •■','.- ti'.'L 10 i! i i I ! I The effect of such provision was often to compel a merchant, who had purchaeed, say, 50 tone of steel, at £20 per ton, on a falling market, and which, perhaps, was not shipped to Canada for some months after purchase— when, possibly, the price had declined to £15 per ton — to pay duiy on £20, which was the price stated on his invoice. Yet, if between the date of purchase and the time of shipment the price had advanced to £25 per ton, his invoice would be thrown aside and duty would bo demanded on the larger or market value. The present Government, becoming sensible of the unfair- ness of this principle, caused the passage of section 10 of the Tariff" Act of 1879, which ensured the fair valuation of goods in such a contingency, and such section reads as follows : — " The OoTernor in Council shall, from time to time, establish such regulations not inconsistent with law, as may be rrquired to secure a just, faithful and impartial appraisal of all goods imported into Canada, and just and preper entries of the actual or fair market value thereof, and of the weights, measures or other quantities therfof, as each case may require ; and such regulations, whether K^neral or special, so made by the Governor in Ooancil, shall have the full force and authority of law ; and it shall be the duty of the appraisers of Oan>»da and every of them, and every person who shall act as such appraisei of the OoUec- tor of Customs, as the case may be, by all reasonable v,.>vs and means ia his or their power, to ascertain, estimate and appraise tne true and fair market value and wholesale price (any invoice or affidavit thereto to the contrary notwithstanding) ot the goods at the time of exportation, and in the principal markets of the country whence the same have been im« ported into Canada, and the propar weights, measures or other quanti- ties, and the fair market value or wholesale price of every of them, aa the case may require." The hon. gentleman also stated, in reference to the amend- ments made to the Customs Act two years ago, that they were not amendments, but imposed still more onerous ex- actions and restrictions on the trade of the country, and on importers. If that be the case, it is somewhat singular that there was not a single division or objection taken, in this House, to the amendments 1 then suggested, after full ex- planations had been given of them On the contrary, those gentlemen who took an active part io the discussion ot those clauses, and of the changes and amendments which were made, after they had heard my explanations, approved of every one ot them, and every ohaoge which was made was in the direction of the protection of ttie honest merchant, and to punish, if possible, the diehonest importer. I Mr. MITCHELL. Arc not all these troubles of modern growth ? Mr. BOWEL L. No. I will thow the hon. gentleman thit even when ho was in power there were a good many seizures made. 11 Mr. MITCHELL. Wo never heard as many complainte, Mr. BOWBLli. Of course not, because there were not BO many seizares, for tb« higher the tariff the /greater the amount of smugglirg. But I have failed yet to. find that the honest importerei over iound fault witn the manner in which the laws have been carried out in regard to the pun- ishment of those who have violated them. I know that the newspapers have taken up the cause of those who have bcoa punished. Mr. MITCHELL. Do not say so much against the new8- papera now. Sir EICHARD CART WEIGHT. He is an old hand. Mr. BOWELL. Yes, I am, and I used to write jist as I thought, as plainly and honestly as I knew how ; and I was never taken into court, nor did t ever have to apologise for what I said. «l •'ENCLOSURE ' CLAUSE. In reference to the clause relating to enclosures, to which the hon. gentleman called the attention of the House, and which he declared to be so iniquitous, if he will turn to thp> 60th clause of the Act of 1877, he will find that it reads as follows :— "If any package is foaad to contaia any goods not mentioned in the invoice, snch goods shall be abaolately forfeited. " There is no discretion given to the Minister or the officer, but there is a simple declaiation of the absolute forfeiture of the goods. That word " absolutely " is not now in the Cus- toms Act. ciiAHaB OF "legalized robbery" in oonneotion with CERTAIN SEIZURES. Perhaps it is just as well, >^hile I am dealing with this question, to dispose of the attack which was made in connection wi.h the case of an importer at Niagara Falls, which my hon. friend duclares to be, not in the words of the lieutenant of the Opposition, " legalised robbery," bat an absolute robbery, without any legality whatever. Now, let us see what are the facts connected with this case. The importer of a certain kind of paper had boon in the habit of importing wall paper as one quality, when, in fact, it was another quality. The hon. gentleman told us that he had as good information on the subject as I hai. I have no i'^ 12 doubt ho thinks the information, which he probably received from the importer, equally reliable with that of the officers of Customs. Mr. IIOLTOX. Quite bo. Mr. BO WELL. If tne hon, gentleman knew that the in- voice which was ^iresented for entry gave a misdencription of the goods, perhaps he would not say so It requires neither the oath of the 'IScer nor that of the importer, lo prove what an article is, when it is neeo, and if the invoica indicated one class of paper called " brown blanks," when, :n fact, t'e merchant imported another class called " white blanks," which latter is taxed at a higher rate of doty, it would be an easy matter to detect the fraud. Mr. HOLTON. But your own officer at Niagara Falls classified that for duty and entry, at the importer's request, and the importer paid the duty which was aeked. Mr. BOWBLL. I am coming to that point. It is quite true that when an importer presents to the Customs clerk an invoice, the Customs clerk looks at tbe face of such invoice, apd marks opposite each item the rate of duty ; but if upon examination by the appraiser, the article is found not to be that described in the invoice, how is the Customs clerk, who had nothing but the invoice to go by, to be held re- sponsible for anything wrong ? That is this case precisely. The merchant presented the invoice to the Customs officer to beratedfor duty, that invoice described the goods as "brown blanks," and the officer rated them accordingly ; but when they were examined by the appraiser thoy turned out to be another kind of paper altogether. Then the importer made an affidavit, in which be stated that he went to the Collector and his officers and asked for their rating. The moment that representation was made to mo, I did as I da in other oases : I ordered an investigation to be made, and I refused, because tho affidavit of the importer was so strong, to take the mere r^tatements or ipse dixit of the Customs officers who transacted the business, and compelled them to make thoir statements under oath. Mr, Peter Flynn, the Collector— and those who know Mr. Flyrn, of Niagara Falls, would never suspect him for a moment of tolling an untruth, and he could have no possible object to gain in telling one — wrote, concerning the statement of the importer, as follows: — " The importer has mentioned my name in hisaffilavitas haviagf refused him information aa to hovr he should enter the goods." 13 The importer had made the direct etatoment that he had applied to the Collector for information as to the mode of procedure in paetiing the goods. Mr. Flynn continues: '* In reply to thia part of the importer's evidence, I must say he never asked me a question in regard totbiaoraay other entry made by him. Personally, I know nothing of the matter in dispute more than accompanying Mr. VVattera." Mr. Watters, by-the-bye, was not eent from Ottawa to transact this business. He is an officer stationed in the west, who, in the ordinary pursuit of looking after smuggled goods, went to this man's store to investigate this afifaii', and made the seizure of the good^. Then there is the evidence of Mr. Clarence Bartle, Customs officer, who stated distinctly and positively under oath that he gave no such instructions as those roferr 'd to by the importer. That evidence is substantiated by Mr. Preston, the broker — not a member of the Customs staflF, but a gentleman who makes his living as a Customs broker. Upon these facts the Commissioner made his report as follows ; — " The evidence submitted in rebuttal of the charge com'ista only of the party's own affidavit, while many of the stattments therein are contradicted by the aworn statements of the officers of the Department, and of the broker employed to make the entriea." Employed not by us, I wish the House distinctly to understand. The report continues : " Apart from thia contradictory evidence, the fact remaina that the paper ban^in(<3 were not properly described in the entry made at the Oustoms, and that but about one-third of the proper duty was paid thereon. There is a clear violation of sections 33 and 119 of the Customa Act, for which the importer must be held responsible. Thia evasion of the payment of the proper duty has under the law forfeited the goods, or the aacertained value thereof aa per section 193, and the undersigned respectfully recommends that the seizure be confirmed, aad the amount deposited, as representing the value cf the gooda, be for- feited to the Crown." Such are the facts in the case to which my hon. friend has called the attention of the House, and which he has described as absolute robbery, when in fact the whole thing resolves itself into this : that a merchant imports a class of paper, h?3 it misdescribed in the invoice, presents that mis- description to the Customs officer, in order to have the goods rated, and, on examination at the warehouse by the appraiser, it is found that the duty was paid on another class of paper altogether from that which waa really imported, and which called for a higher rate of duty. Then, when the merchant's affidavit is made, that affidavit is contradicted by the statement of the Collector and the affidavits of two Customs officers. i 14 REGULATIONS UNDER WHICH SEIZURE MONEYS ABE DISTRIBUTED TO OFFICERS AND INFORMERS. I shall now call the attention of the House for a few mo- ments to iho question of distribution of proceeds of seizures* My hon. friend from .Chatoauguay had two very strong objections to the law aa it now exists. O'/e was with regard to the provisions respecting enclosLves, and the other to the distribotion of the proceeds derived from seizures ; and he tried to lead the House to believe that the regulations governing these matters were the crea- tion of the present Government. I see the hon. gen- tleman smilei^, but 1 propose to place the paternity of these regulations, whether they are good or bad — and I am not now denouncing them — upon the proper persons. If the hon. gentleman will turn to the Order in Council of the let July, 1876, he will find that one of the clauses reads as follows : — " In case of sekure of goods or chattels which have been condetnaed and sold, according;; to law, an allowance of not more than one-third of the net proceeds of each shall be awarded to the seizing officer, and not more than one-third to the informer, if any. In case of seizures made without information, and which hare resulted from special vigilance oa the part of an oflBcer, the informer's share, or a portion thereof, may be awarded to such officer, at the discretion of the Minister of Oustoms. When seizure of gootjs or chattels has been made, and released by order of the Minister of Oustoms, on the condition of the payment of a fine or penalty, whtre such fine or penalty is of the amount of $100, or over, it may be considered as the net proceeds of the seizure, and dealt with in the same manner as if the goods had been condemned and sold." So that you c^ ild distribute two-thirds of the amount, with- out reference . > the expenses. The next clause says: " When the fine or penalty is under f 100, the Minister of Customs may, at his discretion, award the whole, or any portion thereof, to the ofBcers and informer, if any, as a reward for vigilance. la respect of fines or penalties recovered for violation of the revenue laws, in cases where there has beea no seizure of goods or chattels, the Minister may, in his discretion, aw'.rd such portion thereof to the officers concerned and informer, if anj , as may appear to be equitable and judicious under the circumstances of each case." These regulations are based upon and under the authority of the Act31 Vic, chap. 6, section 1 13, which was passed, or if my hon. friend from Brant (Mr. Paterson) prefers the phrase, remained upon the Statute-book, in 18b*7. Mr. PATERSON (Brant). Then that provision was first passed in 1867. Mr. BOWELL. I did not say eo. I said the regulations were adopted by the Governor in Council in 1876, and these are the regulations under which I have been acting. 16 Sir ErcHARD CARTWRIGHT. Tbo hon. gentleman Bpoke of these rogulationB having been passed in 1876, and no doubt he is qaite correct, hut does ho remember what were the regulations prior to ihut date ? Mr. BOWEL L. I do not. Sir RICHARD CARTWRIGHT. My rooollection is that there wero regulationa before, which had been in existence from 1867 to 1876, regulating the division of those funds, and that this was a modification of those regu- lations. Mr. BOWELL. I think my hon. friend is correct, because there is a clause in the law which provides that this may be done. Whether those regulations were modified, or made more restrictive than tho former regulations, I am not prepared to say. I asked the Assistant Commissioner to investigate this question and see how far the earlier statutes agreed with the present law, and this is what ha says : " I JSad, upoa tracing it back, that the wording is identical with the word^.ngof the Act 31 Vic, sectioa 113 0867), with the exception that after the words ' Governor in Oouncil ' the worda ' or the Minister of Oustoms ' have been introduced. (Tpon tracing this back, I fiad this was donu in the amended Act of 1877, and iarther, that it was there inserted in consequence of the Tariff Act of 1867 which gave the same power to the Minister of Customs as is therein coitaiaed, so that Tirtually the Acts of 1867, Customs and Tariif combined, gave pre- cisely the same powef as is now embodied in section 191 of the Revised Statutes." SYSTEM OP CHECKING UNDERVALUATION OP QOODS. My hou. friend referred to one matter in particular, that of increasing the value of goods lor duty, as being onerous, and in regard to that subject — I do not say it offensively or intend it in that way — his whole speech would come very well from one who was employed to defend all the smugglers and violators of the law in the country. I do not believe that the hon. gentleman intended that, but certainly his speech could bear no other interpretation, and one would suppose also that this, so-called, iniquitous system of treating undervaluations, arose under this Government. I hold in my hand circulars which were issued by my prede- cessor commencing with March 21, 1874, and ending a few months before those hon. gentlemen wont out of office, calling the special attention of tho Customs officials to the necessity lor watching undervaluations. We all know the depression of trade which took place in the United States and in most parts of the world during 1874, ' 1'^ 16 1876, 1876 and 1877, and, m trado became depressed, eo in proportion did tho valuoH of goods fall and become depre- ciated in the markets in which they were produced. It is in Huch caeca that, in proportion to tho surplus stock which manufactureife have on haiid for tho homo market, ho do they make a shiugbter market of other oouatrion into which they can Hend their goods; in order, first, to relieve their own market so as not to depreciate the price of tho goods at home, and also to got rid of the stock without disaster to their own business. I find that, on March 2l8t, 1874, a tow ■ months after tho hon. gontlomon opposite took oflSce, a cir- cular was issued by Mr. Bouohette, the then Uommissioner of Customs, m which ho says : " The attention of the Minister of OuBtomg has been called to the fact that different systems ar") piacticed by collectors and other officotH at the several porta and oatports of the Dominion in the collection and protection of the revenue, causing much dissatisfaction among a large liumber of importers, who comply strictly with tho revenue laws." He goes on to point out Mio abscl ite necessity of uniform- ity — a very difficult thing to accomplish, as follows : — " I am directed to rcqneat your careful attention : •' Ist. To the necessity of a careful examination of invoices, not only with respect to their general correctness, but to the prices of the goods represented, especially the invoices of certain classes of Americain manu- factures — such as machinery of various kinds, sewing machines, musical instruments, agricultural machims and implements, patent medicines, &c., ttc. '* 2. 1 am also to call your particular attention to the provisions of iho " Act respecting the Customs," Section 29 and followiafj Sections, pro- viding for the proper appraisement of goods, and examination of pack- agfci, and to enjoin upon you and your officers whose duty it is to appraise goods, a strict compliance witii the terms and conditions of the law ; and you are to report monthly to this Department, all important particulars connected with the appraiser's duties, stating how many packages have been entered, and what proportion of such packages have been examined, with particulars of any illegalities which have been thereby discovered.'' On the 20th Jul3% 1874, tho following Order was issued : •• The Minister of Customs having received certain evidence that manufacturing firms in the United States have adopted schedules of prices for their respective goods, specially adapted to purchasers for the Canadian market, at rates very much below those at which they sell to American purchasers, to the serious injury of Oaaadiau manufacturers of the same articles ' ' If I. wore to issue a circular containing this language at the present day, I should bo accused of naving done so in tho interests of what, the hon. gentlemen term, iniquitous manufacturers and combines, which they say exist under the tariff. He goes on to say : *' I am desired to call your special attention thereto, with a view to your subjecting such goods to the most rigid examination, for the par- n Ills J ^ pOie of ABce'taiuiOcc whether the ioroices aro made at the ' fair market value,' in the prodacinp; or raanufiicturitig country, and not at an excep- tional rate adopted for this particular market h or example " Q'lion ho ynoccoda to particularise, a thing which would bo iniquitous if I had done it, but which, I suppoHO, was all right when it was done by a free trade or revenue tarill" Goveruinont: "For example, a circular of a Pittsburg hardware manufacturing firm, "With quotations of prices of b^lts, nuts, hooka, rivets and various other articles, so specially redu(;ed for Uanadian purchaser), is in possession of the Department, and where you have satiafdctory proof of this des- cription of undervaluation, you are to insist upon entry being made at the proper appraised valuation." The Bystera of appraieetnent existed then, jast the same as it does today, with tte exception of a Dominion Boatd, which now exists, and to which the merchant can apjoal, if the appraisers at the ports where ho transacts his business do what he «hinIn holding tbo position I now occupy, to see prolocted. His duty was precisely the fame as mine, toe ee that tho honest importer was protected, and that the provisions of tho Customs Act and of the Tariff were literally carried out. Ho goes on to say : "It in alleged that the sellors furnish their goods to be delivered in Canada duty paid, and free of all charges. Transactions of this nature are always liable to suspicion, and call for the closest scrutiny, not only of the article mentioned, but in every class of goods imported. la the present state of commerce in the United Seated, it is all important that the true principle of legal valuation for duty should be '-ept con- stantly in view, viz., the fair market value of the goods in the principal markets of the country where the same are purchased for consumption therein, not for exportation, or under any exceptional consideration whatever.' ' I will not weary the House by reading a score of circulars of this kind, which 1 might do; but I find that, on some ooca- eions, the then Minister actually indicated the value at which certain tirticles should be entered. In the circular issued on the 16ih November, 1875, he says: "I have especially to draw jour attention to the article of nails, respecting which a distinct acalo of values cannot ba giveCf ')at it is safe ■i ■Ul ' \ r] i if. I 18 • to ssT that the Urf^er description of cut nails, gay 10 dy. and orer, Bhonld not be ioToicedj even m the present Inn- market, at less than $2 85 gold per keg of 100 Iba., and the Bmaller uaila proportionately higher." Jam finding no fault with the ipsne of these circularfl be- cause it waH h\n duly to do procipoly wbat ho ^ Jt value thoreot in the prlucipal markets of the country frjm whence imported,' in the strict sense intended by geo- tions 31 and 32 of the Customs Act. " Much of the cast iron pipe from the United Slated la stated to be manufactured from Scotch pig iron, upon the exportation of which from the United States a drawback ia allowed the manufacturer of the original duly paid upon the iron, thus reducing the price at which it can be sold for exportation to this country, far below the actual fair market value, aa UDderstood bv the Canadian Customs law. There- fore, the price paid cannot be tuc ' fair market value.' " Again, on 10th November, 1877, the Minister of that day instructs his officers as follows : — ^ " The tact is becoming every d»y more apparent that goods purchas- ed in the United Slates markets are invoiced for Canadian buyera at much lower rates than those which are charged to purchasers for home consumption, and I have to remind you, aa you have been frequently in- formed, that the value for duty under our Customs law, ia not the rate which may be agreed upon in consideration of the goods being for ex- portation to Canada, but that which is usually paid by purchasers in the United States. No special rate, whatever may be the consideration, can be recognised under oor lawj." And, in the same circular the at'ention of collectors is called to the p:"'^3tice on the part of United States vendors, of deducting from the usual market value of their goods, the drawback allowed by the United States Government. On this subject the Minister says : "This practice cannot be allowed. On receiving invoices from the United States you are to satisfy yourself whether such deduction faaa been made or not, and if made you are to add the amount to the foot of the invoice ao as to bring it to the ' fair market value of the goods ' in the place of purchase when Bold for home consumption and not for ex- portation." He then gives a list of two or three pages of articles to 'which he calls special attention. He enumerates all tho articles which he contended were being imported by this method at an undervalaatioo, and with respect to which ho declares that it was tho duty of the cfHccrs to increase the value wboD invoices were presented for entry. of I in bx- le DDir LEVIED ON PACKAGES. There is a circular as long ago as the 28lh of July, 1874, in which the Minister of Customs of that day calls attention to that much vexed question of which wo have hoard so often, tho duty upon packat(0ri, — the law he points out pro- viding that packages which form the receptacle of the article as sold in the home market shall bo snbj )0t to duty, I find tho following instruction was given on this subjoct by my predecessor, as follows: — •' If it bo the first receptacle : wbether bnx, barrel, cask, case, bottle, tin or other coveriof^ ImrnediHtelj encloainir goods for purposes of sale, such receptacle is a package liable to duty." It is only the package used exclusively for export which is free of duty. I have read those circulars in order to show the House that the system which the hon. member for Chateauguay says is so iniquitous, that is, the scanning nar- rowly and closely of invoices which are presented for duty, is the system which prevailed when his own friends were in power, and which must prevail in every country hav- ing the same Customs law that now obtains in this country. I want to show one instance of how this is carried out ; and I propose to read a letter sent to Toronto in the month of February, 1888. The goods were to be supplied by a com- pany in the United States, and the case is one of scores that have come under ray notice. The American firm writes to Messrs. Nichols & Howland, of Toronto— I give the names so that the House may know who they are. They say: " Gkntlbmbw,— We have no doubt you considered us very b1oii ! ■ I 1'^ i I ] i ;i 80 *' — wo Amoricana think we are doinK DOthiog wrong if we beat ib^ Queua OLl, of a little duty." It boing Six o'clock, tho Spoakor loft the Chuir. After Recess. Mr. BOWELL. When you, Mr. Speiiker, left tho Chuir at Hix o'clock, 1 had stated, that if focH worocolluctod in tho manner suggottted by the hon. tiiombor for Cbatcauguay (Mr. llolton), they were collected in violation of the rnles and regulations ol the Department. Since the adjournment I have procured a copy ol' the rule, and 1 dcHire that it may be placed on record, in order that thowe who fancy that the Departnoeut, tho head, or tho Commi8»ioner, approve of any act of that kind on the part ot their officerH, may have their minds diBabuHod. Hero are the inbtiuctionH to officers ot Her MajeHty'8 Cu8tomH in the Daminiun of Canada, and they were approved by Order in Council on 1 4th June, 187o, when Hod. Itiaac Burpee • /as Minister of CustomH, and Jamoj Johnson, Commissioner. These are tho rules which are still in force, and No. 1 reads as follows : — " All ofHcera of Oiistoms, npon th«ir aJmiaaioa to oflBcc, must take and Bubicribeaa oath as required by law, not to lake or receive any fee, per- quisite, gratuity, reward oremolumeut, whether pecuniary or ot any other sort or description 'whatever, either directly or indirectly, that is, either as a present or uu'ier the pretence ot their making out documents which in their cfBcial capacity they are not required to do, or of paying tor tho aame, or any other act, duty, matter or thing done or performed in the execution or discharge ot any of the duties of their respective olficea, other than their &alarieg or what may be legally allowed them, aad any collector or other ofi9',er acting as such, shall promptly report any rio- latioa of this rule which may come to his kaowledgu, to the Com- missioner," 1 may add that within tho last two or three years I dismissed an appraiser in Montreal fur no other reahon than because be had received presents and obtained credit on the strength of the position he held, from the merchants who were importers, and whose goods ho had to assess for duty. 1 do not know, neither am 1 prepared to contradict the state- ment made by the hon. member lor Chateauguay (Mr. Holton) that this rule has been violated. All 1 can say is, that it that rule, which is very strict, has been vio- lated, the punishment which follows those who infringe it, Will be meted out to the person who has accapted the fees in the manner in which it is said they are accepted. Mr. HOLTON. The Minister will remember I stated that this otficor received those fees with the approval of his Buperior. I I .: 21 beat the e Chair i in Iho lauguay ho rnloH irnment , it may oy that prove of ay havo • offioors ,da, and h Jane, )mrt, and IB which t take and y fefl, per- fttiy other t is, either nta which rig for the aed ill the ve otficea, aud any t any rio- the Com- ismiesed bocauso Btrongth 10 wero ty. I do 16 slate- ay (Mr. in say ia, e«n vio- in fringe pled the icoeptod. I stated rjA of his Mr. BO WELL. I rcmombor that you aino Htutod that it wan with my a|>|)roval, beoauho the OomniiHHJoner'H letter uaj'Hthe matter had been fully invohtigutod and the Minister had approved. What the MiniHter had approved was tiira ply what 1 pointed out to the Uouho botoro recot^s, and that was that the officer was enlitlud to certain remuneration per hour, or per month, for the performance of the particu- lar Horvico to which the hon. gentlerauu referred, but not to receive feoA direct from merchants. I may add further, in explanation, that when money is received for extra services from railway companioB, morchantn, or others, who deem it neooesary to havo tbo t«erviceH of an officer after lours, it is cot paid to the officer himself, but to the Col- lector, who pays the man who potior ms the service. COTiLECTION OF DUTY ON PEACH BASKETS. ' While upon this subject, I may refer, for a few moments, to the charge which has been made against the Cust ,aig Departmonl of having exacted duty upon packages con- taining free goods, or in other words, imponing a duty upon the baskets which contain poaches brought into this country. I know that it has boon a source of a good deal, not only of abuh*. but of amusement, on the part of those who look upon the exaction of duty upon thoKe articles as a very small matter, and one lo which the department or the Government should not descend. Well, T have this to point out, that it is not for the officers of the Gustoma Department, whose duty it is to oarry out the law, to ques- tion an to whether «.he provisions of that luw be absurd or whether they be onerous on the importers. Instead of abusing or condemning the officers who perform their duty, such condemnation should be aimed at the law or at the Government which retains it upon the Statute-book ; and, I repeat, it is not fair to officers who are sworn to do their duty, to condemn them for having performed it. It was stated by the hon. member for Welland (Mr. Ferguson), when the question wa^. under discussion tho other night, that the fees exacted on the American frontier, particularly in the west, were much higher and more onerous than tho duty collected in OanaJa, or tho duty which wan imposed upon the packages containing free goods. The hon. member for Huntingdon (Mr, Scriver) smiled. He gave one of those ironical laughs in which he eomotimes indulges, when the hon. gentleman called attention to tho fact. Perhaps, after all, the hon. gentleman was laughing at 'omething else, and if such was tho case I withdraw my fctatement. I remombor seeing a broad smile on I .1: ■ ■ I ,11 !1 22 i.l the hon. gcnllt man's counlcnanco, and I uDderblood him to dissent in ioio fiom the proposition made. During my absence, last tumraer, the question of duty upon peach baskets was brought before the Department, and when I loturncd I iound no little commotion, not only in the press but among' many of our own friends, upon this question. I at once made enquiiy as to what was the piactice in the United States, and what order had been issued by the Com- missioner and the then acting Minister of Customs. I found that the Commissiocer had carried out the law literally as it stands on the Statute-book, and the acting Minister at the time had done precisely what I would have done had I been here— approved his conduct. I then asked the Collector at the Falls atd the Inspector ol Customs to make enquiry as to what the practice was in the United Slates, and 1 found that although the United States authorities impose no duty upon packages containing free goods, yot the exac'ions in the way of fees are equal to a duty rungirg fror^ 25 to •ven 60 or 70 per cent. FEES CHABQTD FOR CUSTOMS ENTBIES ON UNITED STATES FRONTIER, AND CONTRASTING SAME WIIH COST OF MAKING ENTBIES IN CANADA. In order that the country may understand precisely the dif- ference in the practice on the frontier between the two Departments, I propose to read the letter of the Collector, and also the report of the Inspector upon this question. Mr, Peter Flynn, the Collector at Niagara Fallp, on 29th September, 1888, wrole me as follows ; — "In reply to your favor of 27ih inst., I beg to inform you that the United States Customs do not collect duly on packa();es containing fruit, but they collect $ I on each entry of fruit, and all other non-dutiable goods; 26 cents is charged for manifest, 25 cents for blanks, and 50 cents for entry. Fifty cents of the dollar goes to the department at Washington, and the collector, as bis perquisite, keeps the oiber half." I have also here a letter from the Collector at Hamilton on the same subject, but I will not trouble the House with it. The Inspector of Customs, Mr. Mew burn, wrote mo as follows : — "/?« Unitbd States Cdstom Houan Fees at Fbontikr Ports. " At the inland port of Paris, Ont , a thort time ago, in conversatioo with ft railway cfficial 1 was told that when a parly shipped goods to the United States, in addition to the shipping oi advance charges, a further charge for Custom house fies was made at ihe following places : Island Pond, $1.45 ; St. Aibans, $1,55 ; Buffalo, 85 cents ; Suspension Bridge, N. Y , $1 ; Ktiuae's Point, $l.i ; Prescott, Canada, 70 cents ; Fort Gratiot, $1.45, and Detroit, |il.45. I believe representations have been m^de to the Department at Ottawa on this tubject. I beg leave, 33 however, ti» submit to yoa a report coverlnjt procedure in the United States, aod the.aystetn wliich prevails in Oanadain relation to fees, &c. " I find that the United States Government fees are on entry for con- sumption of goods imported in vehicles, railroad cars and boats of le33 than 6 tons : — Receiving manifest 25 cents. Entry ot goods, including permit to land... 60 do Total 75 cents. " At Detroit, I enclose 3?raple forms A, B, ; (liese forms are required when the value is ever |6, and for which a charge is made, Say, entiy fee .., , 60 cents. do blanks 20 do Total 70 cents. '•The fee of 70 cents is charged if the goods come over, gay, by waggon, or the ferry boat between Windsor and Detroit. If by railroad, then 25 cents addition'il for receiving a manifest. If, howf ver, the value is less than $5, no entry fee is rr q'lired ; a stub book is u^ed, and receipt given ; see form "D," attache! Detroit forms At Buffalo, Black Rock and Black Ferry, the Government fee is 50 cents, and collector charges 10 cents for a blank for free goods, and 20 cents if dutiable. The diflference between Detroit and Buffalo is the former allows goods under $5 value to bs entered without fees, the latter charges whether free or dutiable, if the value is over $1. At Niagara Falls, N.Y , at the two Suspension Bridges I beg to ca\l special attention. Certain parties residing in Canada were sometime ago allowed to ^tart sand from sand pits on this side to the oilier. Tne value of s load of sand at the pit is about 60 cents a load, when loaded ready to cart, about $1. These parties were allowed to make entry once a week or two weeks; say on one entry paying for entry, Ac, $1. This has, however, been stoppe^ and the parties were called upon to pay $1 for every load lor entry rees, so that if a party took over five loads of sand a day, he would have to pay }6 for fees, although sand is on the free list. The consequence is tho parties sell to Americans living across the bridge ^v ho pay the fee themselves, but they as American citizens are allowed to make entry in the old way, once a week or once a month, which is manifestly injurious to our own people living in Canada. Within a short time a f>and or gravel pit has been opened out near Lock* port, N.y., and I am told influences are being ased with the collector to compel every load of sand to pay entry fees, so as to prevent sand be- ing imported from Canada, in order to develop the sand pit at Lock- Eort, N.Y. In retVrence to Duluth goods, I enclose you forms A, B, 0, , B. These are all required in making one entiy ; say one load mixed vegetables, value $3. duty 10 per cent.— 30 cents. You will notice oa the stub, receipt marked * E.' For duties 30c. Untry of merchandise 60c. Manifest ' 26c. Blanks 26c. Total for one load of vegetables, valued at $3 f l.£0 " I may, however, be permitted to pay that the collector might have charged 10 ceuts for each of the four blanks — 40centsiasteadof 25 cents and he would not have violated the United .Stales Customs laws. The fee of 60 cents and 25 cents —75 ceata. is not retaiaei by the collector, as perquisite, but is remitted to the United States Treasury. Thi^*, there- fore, operates as an indirect addition to the United States tariff. I am. !! n I ;» l. I 'i 24 oot at all Burprlsed &t onr people complaiaing of Buch indirect tax&ttoO' in the shape of United States Customg fees. "Onr Bystem in Canada is directly the contrary. No fees ar» charged with the exce{)tion cf 6 cents for blanks if supplied by the coUe^ctors ; at ihe ferries, if the value does not exceed |5 in value the amount is entered on the ferry book, and all the importer has to do is to Biccn the book, opposite the entry ; over f 5 entry is madu at the head ofQce without charge. " I am told by the officials connected with the United States Customs Department that all these Goveinment fees are to be done away with." 1 hope the Houee is not wearied by my having delayed so long ia pointing oat the important diflFerence between the treatment received by Canadian exporters to the United States, even on free goods, and comparing it with that which grevaiis in this country. In Canada the importer, as I ave already stated, is not even obliged to pay the 5 cents for the form, unless he applies for it, for he can obtain it in any other place that be thinks proper. There are many other regulations in connection with the Customs on the other tide of the line to which I could call the attention of the Houpe. but I shall forbear doing so on the present occasion. I want to point out as an illustration of this fact, that while the people in Canada are continually finding fault with Customs officials for being too exacting, they should not forget that the regulations on the other side of the line are much more onerous and vexatious than they are here. A person sitting in the gallery and listening to the speeches which are con- Btftntly being made on the other side of the House must come to one of two conclusions : either that our rules and regu- lations are much more objectionable atid vexatious than the rules in the United States, or that gentlemen on the other side of the Houte are anxious to point out every little defect in order to create all the difficulty they can between this country acd the neighboring Republic. My hon. friend from Chatcauguay (Mr. Holton) in defence of that portion of bis resolution which provides for the carrying of every case into couit, says that the Minister of Customs does not seem to have much confidence in thecourts. Well, if I were to speak frankly I would say that, judging from my past experience, my hon. friend is not far wrong. It may De prohumption on my part to say that cases which have gone before the courts have net been decided in accordance with, what I believe to be, CustOkns law or Customs usages. My hon. friend referred to the Grinnell case and to the Ayer case, and he might have gone a liltle further and referred to the Bertin case, lately tried in Montreal. The Grinnell case was one which came within the I 25 meaning of that eection of the Act which provides that parts of machinery brought into this conntry bhall be valued for duty relatively to the value of the whole article when inc ported. We all know why that clause was placed on the Statute* boobs. If a completed article bore a rata of duty of 30 or 35 per cent., the practice was to bring it in piecemeal and put it together in Canada; and in order to prevent that kind of fraud the law was so framed as to make them pay duty on the parts of an article relatively to the value they bore to the whole article. Tho Grinnell parties objected to the ruling of the Department. It was taken to the Exchequer Court, and Judge Gwynne, who is certainly as eminent as the Chief Justise himeelf, gave a decision in favor of the Customs Department, and in giving that judgment he went a great deal further than the Customs Department ever thought of going, because he not only declared that the Customs officials were correct in im- posing tho duty in the manner I have pointed out, but that they would have been justified had they added the Koyalty which is paid in the (Jnited States, and then imposed a duty on the full value of the article, though it had to be pat together when it came into this country. The practice of the Department has been this : When an article is brought into the country in different parts, we deduct the expense neaessary to put it together and complete it i' this country, and charge the duty on the residue. Mr. Justice Gwynne decided that wo need not even have gone that far, but that we would have been justified in collecting a duty on the full value of the article i^ if it bad been complete when it came into the country. The Ayer case was on all fours with the Grinnell case. The Ayers had been in the habit of importing their patent medi* cines in bulk, as in barrels, puncheons, or casks, and then bottling it, and labelling it in this country. In that case we decided precisely as we had done in the Grinnell case. Chitf Justice Eitchie took a very strong view in opposition to the decision of the Department, and delivered the judgment which my hoii. friend read to-day, and which, I am bound to say, to my mind was not creditable to a judge occupying his poeition. Mr. JONES (Halifttx). Order. Mr. BOW ELL. It may bo in order to defend a judgment, and to read to ihe flouse a condemnation of ofiicials by a judge, as the hon. getitleman opposite has done, and to denounce such offioii.18 as everything that is wrong and W m 26 villaiDoas ; but it is apparently oat of order, iu the opinion of the moraber for Halifax (Mr. Jones) to question that condemriation, particular ly if it comes from so emineni a gentleman as a juflgo on the bench. Bat I say to my Eon. friend who called mo to order, that if he had been in the witness box, as I was, and the judge had prevented him from tolling the whole story, as 1 waa prevented, he would feel precisely as 1 do in reference to that matter. It may bo the rules of court to stop a witness from telling the whole truth ; but I question very much whether it is either moral, or correct, or oquitablo. DIFFICULTY OF CBTAININQ CONVICTION TN COURTS, IN CUSTOMS CASES. In reference to the other Montreal case, I will call the atten- tion of the House to it for a few moments, as it makes one doubt, in Cufctoms matters particularly, whether magistrates or judges are always ready to mete out for infraction of the Customs law, that justice, which perhaps they would insist upon for the violation of other laws. We had complaints, very strong and repeated, from the city of Halifax, that it was impossible for the importers of wines of a certain quality, such as clarets and burgundies, from Bordeaux and certain other parts of France and the continent, to get them and pay the duty, as cheaply as they could be purchased, duty paid, in the city of Montreal. That was rather a serious charge. The officers were put on the alert, and they made a seizure. The magistrate, after hearing the case, dismissed it, but had some little qualms of conscicnco, because he made the importer pay his ovn coats, and the Government theirs. Now, 1 propose to read the facts in connection with this cafe, as reported to mo, in oider that the House and the country may see how difficult it is to punish an offender when taken into court : " Berlin keepa a email clnb on St. intoiae street in tbia city, and in addition has been for the past eighteen months acting as a sort of an agent for a house in Bordeaux, called A. Delinon & Oo. (lis practice was to obtain orders for certain wine nd send them to Delmon & Oo. Delmon & Oo would ship the wines ^d send out an invoice to Berlin covering the whole lot, and tlnn anumber of separate invoicesforeach individual to show that the consignment would be direct. Suspicion falling upon him, Customs officer Grone went to his house and seized his books and papers, from which it appeared that a special invoice had been asked for specially for the Customs ; and on examination it waa found that the prices ment'oned on the one produced at the Custom house were considertbly less than those in the invoices made out lor the parties direct, or in the account current sent from Delmon & Oo. to Berlin. V 27 " Fivo icformatioas were made out under sectioa 192 of the Customs Act. •' The case made out for tbo proaacution was, I think, very strong. *' From Berlin's own letter-book we showed that the Iranaactious commenced by a deliberate requoijt on his part, in writing, to Oelmoa & Co , when askiofi^ for a consignmbnt ct wines to ba seat out at prices named, be wished a special invoice to be made out for use of the Customs. In this letter he askod that it fchonld be made out in a specific form and with prices get opposite it lower than thoje Oelmoa & Uo. were to (harge. On the face of ihis letter he aho staled that the invoice for the Customs woald bo null as between himself and Delmon & Co. Letters in ihe same sense were found throughout the letter-book. " Oelmon Si Co. accepted Mr. Berlin's request and, for these five entries sent out what purported to be an invoice wuli prices set opposite as requested by Berlin. None of the^e invoices used at the Customs were made out on the regular printed ruled linroice heads IhatDelmoa & Co. appeared to hive used, and on which they made out their invoices when sending direct to the individuals. Sometimes these Customs invoices were on plain paper, entirely written and haad-rulel, luid sometimes they were on a lelter-liead paper. " The proof then showed on procuring invoices sent to the various individuals, that the prices mentioned in the invoices used ai the Cas* toma were about 60 p^r cent lower than that charged by Delmon & Co. to the individuals. We produced also (having fouud it in Berlin's pos- aession) an account current between himself aud Oelmon & Co., by which It appeared that Berlin was charged with the prices mentioned ia the invoices sent to the individuals, and not charged the lower amounts shown in the invoices produced at the Customs. It also appeared from these invoices that we found in the possodaion of individuals, that Del- mon & Go. were in the habit of arawiog drafts for the face amoanV of these invoices upon the individuals. '• This was the proof for the prosecution, and as far as documentary evidence could go, and documents found in Berlin's possession, one would think ought to be conclusive, the letter-book, the low-pricel in- voices to the Cubtom?, the price or invoices seat to iudividuals, and the account current recogDising the latter, there seemed to be little doubt as to the result of the judgment. "The defence conteiJaed that the wines imported were very low priced, and a low class of wines, that Berlin was acting as agent for Delmon & Co , and got 20 per cent, commiesion ou the prices mentioned in the invoices sent to individuals, which also included the duty, freight and charges. •• There was some proof, to which I objected, adduced that this wine was very inferior and of low class, and probably entered at the right price of duty." This prosecution was not as to whether the wines were entered al an underval nation, but it was a criminal prose- cution on the ground that he ha(.' presented to the Customs a false invoice and not a correot one. The report con- tinues : " Two witnesses were brought to show that the prices thsy were to pay and mentioned iu the invoices which they produced, included all charges, while one witness. Who bad been dealing with Mr. Berlin, aaid he undorlood that he had to pay duly aud freight." Which was not the case " A statement was produced to show that the price in the invoices eent the individuals could also include the freight and charges, and which I! i ) i 28 Btat«ment is as follows:— Price of 50 gallons wine at Bordeaux, |20, charges, 30 per cont. Out.y $ 6 00 25 cents per gallon 12 60 OommissioQ 4 CO Freight 2 00 Insurance •« 26 Tranerortation 60 Brok»rnge 50 laterest 10 Exchange ^ 20 $28 45 ' AssnmiDg the above charges, bovever, I make a calculation on the invoice produced by a man named Cizul. fie was to pay for 4 bariquea containing 48 gallons, $108.08. The charges would be :— Duty 25 c. per gallon $18 00 The wine was entered at the Gustoms at $20 per bhd. or 90 francs per half bariqne, and 30 per c. on tbip would be 24.00 Bertin's commission at 20 per c 21 6U Freight 8 00 Leakage, &c ...» 4 00 Total $106 60 " Deducting this from the amount of the invoice, it would leave $3.48 coming to Mr. Deimon for four bariques, or 60 cents a bariqoe, or a trifle more than a cent a gallon. A somewhat similar result waa shown in each of the other invoices that were produced by individuals." And yet in the face of that evidence, the magistraio dis- misBed the case, but his qualms of' conscience would not allow him to charge the Government with the costs to which this importer had to be put. I may here remark that, in relation to many classes of crime, there is but one opinion held by law abiding citizens: the universal verdict is that such offences must be stamped out, and the execu- tion of the mofit severe laws is hailed with general satisfac- tion. Unlorlunately for those who are charged with the administration of the Customs laws, there seems to be abroad among a largo number ot | eople, who give but casual conhideration to the subject, a disposition to mildly reprobate the putting into execution of the inhibitive and penal sections of the Customs Act. POPULAR VIBW OP THE OFFENCE OP SMUGGLING. Let us take smuggling for example. This has been a common oflFence in all countries depending upon foreign trade for revenue. Strong repressive measures have been necessary tor its prevention, and never more so than in our country at the present time, because of our proximity ta the United States frontier and the facilities with which il 29 goods can bo introduced into the Doraiiiion, both by sea and by land from that country; and also because of the great; temptation from high duties, and the hope of great profits to the smuggler. Under the old English laws, the punishment was of exceeding severity, bearing no reanona- ble proportion to the offence. Smuggling has novel* been looked upon us in itself a crime^ and hence it has in no age encountered the restraining iufliences of morality and good conscience. It is of that class of offences which are criminal only because they are prohibited by law. MAGISTERIAL CLEMENCY TOWARDS TH03B WHO BREAK THB CUSTOMS LAW. The Bertin case is a fair specimen of the frauds practiced on the Customs, and the difficuiiies that present themselves in enforcing ihe law. Let me give you another that occur- red in Montreal one or two years ago. VVhen they wore constructing the Montreal abattoir, they imported machin- ery for the equipment of the buildings, and ontries were made for machinery valued at $800. The secretary of the company made atfliavit to the correctness of the invoice as presented for duty^ His books and the original invoices that were suppressed showed that $8,000 had been paid by the company for the very machinery which they had entered at $800. That case was brought before a magistrate of the district of Montreal. He took two or three months to consider his judgment, and then dismissed the suit, on the ground that as the secretary-treasurer could have had no personal interest in the ma.Ur- bj could not have been guilty of making a false affidavit ; and this in face of evidence that, in addition to his being a paid servant of the company, he held $8,000 stock in it In the county of the hon. member for Northumberland!, N.B,, we had another case. A merchant of one of the towns in that county had employed a pilot to go to St Pierre to bring in certain quantities of liquor which he was to land upon a wharf and for which he was to receive a certain remu- neration, — the merchant taking all the responsibility after the liquor was landed. Subsequently the liquors were found, though a large portion of them had boon hidden away in the woods. 1 came to the conclusion that this was a clear case ; that the parties who induced the pilot to take his boat and commit the fraud of smuggling should be punished, and that a nominal fine of $100 should be imposed upon the owner ofthe boat. The case was taken before the grand jury, ^i:! I • • 30 and what was Ihoir prosorlmont ? It was a condemnation of the Government for not huving prosecuted the captain of the boat, the grand jury declaring wo had no right to prosecute the man who was the principal, and who had paid the pilot to commit the fraud. Lot me refer to another case which occurred in Ontario. A man who had been actually caught in the act of smuggling, attempt- ed to bribe the officer. The officer reported the fact to his Collector. The Collector reported to headquarters. In the Audit Act, the punishment for attempting to bribe an officer is very severe, and I thought that was a good cage in which to make an example of those who tamper with the honesty of the officials. The case went before a magis- trate, and he came to the sage conclusion that, as the man did not take the money, the other party did not commit the bribery , but as the offering of the money was an attempt to bribe, which the law punishes by sending the oflFender to gaol and condemning him to pay a fine not exceeding a cer- tain amount, the magistrate sent the accused to gaol lor a few minutes and fined him a few cents. Mr. JONES (Halifax). Was he a Grit or Tory ? Mr. BOWELL. The Customs law is not political, but one which aflfects Liberal as well as Conservative, and which ought to be administered regardless of politics. These are not the only cases to which I could call the attention of the House, but I do not desire to continue this discussion any longer than necessary. CONDUCT OP CUSTOMS OFFICERS. I notice my hon. friend from Welland (Mr. Ferguson) made use of very strong language in reference to some seizures that had been made in his own county. I have no doubt that he had been told by those whose premises had been raided by these *' pirates," as they are termed, that they had been very impropeily and very badly used. I looked up these caees, and what are they ? What is the fact in regard to these druggists whom the hon. gentleman desired to defend ? The decision in the one case was come to because no defence was put in by the party, and is as follows : — "No evidence haTinR been received by or on behalf of the party from whom tbo seizure was made, in rebuttal of the charge, the uadereigned would respectfully recommend that the seizure be confirmed, and the amount deposited on release of th« goods be declared forfeited to the Crown," i 81 That was one oaso in which tho person received the regular notice, but put in no defoncc, and, under buch circumBtances, the .Department could do nothing else than declare thegooda forfeited. The other ca^^o wan whore the individual acknow- ledged the emuggling, paid the money and abandoned all claim to the goods. Those are some of the caeos to which reference was made, at Niagara, when the offi>;erH went to that port to search certain storoH, the keepers of which had been represented to have been smuggling It la true that one of the drug shops searched for smuggled goods, was iound to have none, and consequently no penalty was imposed. I quite admit tiat that appears to ba an indignity to an inno- cent man, but tuo duty of the officers and of tho officials here is, when complaints are made, to investigate them, and the officers did their simple duty in ascertaining whether smuggling had been carried on or not. The argument that the law should be altered because of alleged abut^e of its provisions by incompetent officers is surely a lame one. As well might all law bo abolished in districts where it might bo badly administered by the magistracy. Why, instead of general fulminations against the whole body of Customs officers, do not hon. gentlemen specify tho exact occasions and circumstances under which the powers given them by law have been abused by indi- vidual officers ? It would then be pofrsiblo to investigate such specific charges, and if the officer were found to have exceeded his duty, or in any way could bo dealt with. misused his powers, he PROBABLE EFFECT OP ADOPTION OF THE HOUSE. MOTION NOW BBPCHE I li: Let me read the deliberato opinion of the official in charge of the United States Customs at New Orleans, as to the re- sults of a change in the Customs laws of that country, such as hon. gentlemen opposite appear to advof'ate for Canada. Writing to tho Secretary of the Treasury, under date 8th iSeptember, 1885, the official in question, Special Agent Neven says : " UnderralnatioDS li»ve been on the increase since tbo passage of the Act of 22Dd June, 1874. It was comparatively nothing before that time. The law of 1863 relating to the seizure of books and papers was a great protection to the revenue, and was only objectionable in the manner of Its enforcement by certain officers. Instead of correcting the abuse, the anti-moiety Act was conceived and became a law, at once destroying the importing trade in the bands of American merchants and turning it over to foreign manufacturers, and costing the revenue untold millions." !M 1 h! I ( ! i| 82 FEELING OF CANADIAN MERCANTILE COMMUNITY ON HCBJEOT OF STBIOT ENFORCEMENT OF CUSTOMS ACT. I have this to say to my hoc. friond from Chatcnuguay (Mr, Ilolton) : He states that the merchants of this country are horrified at the actions of the Dopnnmciit and the seizures that havo been made, but that applies only to those who have been violating the law or havo been guilty of smug, gling in some way or other. The best evidence of such fact is that which 1 shall now lay before the IIouho. A ehcit time eince, the JDcparlmeut, mainly through the assistance of one of the reputable wholeHalo houses of the Dominion, was enabled to lay bare a scandalous system of fraud, extending even to poijary aud forgery, which had been successfully carried out for years, by a Toronto hard- waie firm. The facts comirg to the knowledge of the general businens community, various urgent representations wore made to rao that the principals in these crimes hhould be made ox- bmples of in tsuch a manner as to deter others from the con- tinuance ot similar practices. 1 hold in my hand and will now read to the House, a pe- tition from the buMiness men of Montreal on the fubject of the propriety of, and necessity for, the most rigorous prose- cution of the firm in (juestion. The petition is as follows: — " MoNTRBAi, 25lh Jaouary, 1688. " Hon. Macebneib Bowkll, " Minister of OxBtoms, '• Ottawa. " Siu, — We the undersigned merchants and importera of hardware in the city of Montreal, liavinR beard of the irrepr.lar and fraudulent entries made by a certaia firm in Toronto in the same line of buainess as our- selves, do petition th.»t you will investigate the matter thoroughly, and have the entries of the said firm during the years 1886, 1887, a3 well as 1888, carefully examined. Our reason lor thus uri^ing the matter is that, for a long time past, we have been unable to compete in certain lines of goods with the house in question, thereby losing us not only the confi- dence of our customers, but in many instances a conaidorable amount of bnsinesd. We hope that, in dealing with this matter, you will protect the interest of the honest importer by inlhcting the full penalty which the law imposes for such irregularities against the revenue." " We remain, yours respectfully, FROTaiV(JHAM& WORKMAN. 0. 0. SJfOWDOV & CO., OAVERHILL, LKaRMOX T & 00., HOWDEV, STARKE & 00., BENNY, MAOPHERSON & CO., L. N. RfiBERT, ORATHBrtV & CAVEaHlLL, PREVOST, PRSVOST & 00., McOLARV MFG. CO., PIOHE, TISDALE & PAINOHAUD, BEfBOLD, SON & 00., flB»EV''& LACROIX, TH08 DAVIDSO.V & CO., LBWId BR03 & CO. R. A W. WARMINTON. ^8 Poeaibly hon. gontlomon, hu t? hoard this lostimouy, will admit tho oojjncy of Iho . eon'rg of tho Montreal merchaiitH, wIidbo buslnees intere. i have suffered .so tangi- bly in IIiIh inHtance ; and it muat be bcrrio in mind that tho Htrong probability is that tbiti purtioalar case is only an cxcjptionul discovery, an'l that Hirailar Hystrms of fraud, equally baneful in their roHults, aio still, and have for long been, going on undiucoverod and conHoqucntly unchecked, ft can thus bo, perhap^i, underHtood that tho offering of premiums to tho proper class of Customs officers is csaon- tially in tho best interests of tho Dominion, Now, why did these firms deem it nocosHary to send such a petition as that to tho Customs Department ? For the rea- Hon that, when iniortnation waS' put boioro me, and I sent officers to i jvestigato tho matter, the newspapers at onco commenced publishing a serios of articles condemning tho Cudtoms Department for going into honest men's establish- ments, seizing their books, weakening tho confidence of tho people in them, and destroying their business. When it was found that a thorough investigation was being made, a chargo was then made against tho officers, because they were anting civilly to the guilty parties, that they Wv^re being purchased and tampered with, and that those persons were to bj let off with a nominal })enalty. Well, tho penalty inflicted was some $9,000, and when a criminal prosecution was to be in- stituted, both partners in the business lelt for the United States. I KMrLOYMBNT OF CUSTOMS DETECTIVES FAVORED BY MON- TREAL BUSINESS MEN OF IIIQU STANDING. Another indication of popular feeling in this direction is now before me. in reply to a que^tion recently asked in this House, I informed an hon. gentleman that John A. Grose, one of tho detectives employed on the Special Agent's staff, had stated his intention of resigning and entering upon some other oraploymont. This person may be held to rep- resent the very class of Customs employe whoso high- handed and, as alleged, illegal and offensive cDnduct in connection with the making of seiziros, would presumably make tho morchantilo community anxious that tho vacancy caused by his retirement should not bo tilled. Bat what is ihe fact ? I have hero a recommendation, signed by 32 of tho wholesale firms in Montreal, asking that this position bo filled, and recommending a man for it. This memorial ia as follows : — 3 84 ^M t ! . 'il i ! J " MoNTHiAL, Janiury 30tb, 1889. *' To the Hon. Mackikzii Bowill, " Minister of Oustoms, Ottawa. •• We, the undersiKncd morchaDts of the city of Montreal, have mnr.b pleaiure io recoinronndiDcr [[ need not uuution ttie name] for th« Tftcant position of Special Oustoms Detectire. " We are, " Your obeiient servants, H SaOREY AGO., GAULT BROS, k CO., D. MORRIS, SOW A CO, JA8. O'BRIEN & CO., JAS. LINTON AC<'., J AS. POPHaMAOO., MILLS k HUTOHISUV. 8. GRKKNSHIKLDS. SOS & McINTYJiB.SO.'^ & CO., B. A. SMALL* 00., R. TYLER, BB ALL, ROSS 4 00, MAOKAY BR0THRR8, P. D. DO0D8 A CO., JAS JOHNSTON k 00, ^OHNMAOLKANAOO., GHBEN, SONS A CO., JAMBSOORI^TINB A CO, HODGSJN, 8DMNKRAC0, BRNNY, MAOPHF;RSON k CO.. RANKIN, BKATTIE A CO., J. O. MACKENZIK A CO., R tiY. HOLLAND A CO., '' CO.,B. LRVIN A CO, TOOKE BROS., H. A NELSON A SONS, LOCKERBY BROS, KINLOCK, L'NOSaY A CO., ^ J. W. MaCKRDIS A CO., MIVTO, LA VI ONE A CO., ROBERTSON, LINTON A CO., SILVERMAN, BOULTSRAOO. 'i I I might here remind the flouee that Montreal has, within the j)aHt five years, lurniehed many Borious cxamplos of fraudulent traneactions in respect of Custonas entries, and the local press there has teemed with extremely hostile criticisms of the methods adopted by the Special Agent's staff, to which the person in question was attached. It cannot, however, bo denied that this memorial from the merchants of Montreal must be accepted as the best popsi* ble testimony to the fa«t that the success of the honest merchant is materially aided by the employment of special Customs officers who are capable of fiucceas- fuUy circumventing and suppressing the various schemes which are resorted to in order to defraud the ievenae of its just dues. If the actions of the Special Agent •were of such a villainous character as has been repre- sented, if the honest merchants had been interfered with to such an extent and had become so disgusted with the system as it has been stated they are, would the most wealthy class of the community of Montreal, who are deeply interested in seeing that every man should pay the duty properly, have petitioned to have the position named filled by a man in whom they had confidence ? I think I am quite safe in saying that the merchants and the honest importers throughout the whole country approve of the system which has been in force in Canada for a long time. I do not desire to be understoo^^ to say that, where I ;i I i i i I 35 HO many caHoa aro ooroiog before tho Department and com- plaiotH &re being conhtanlly made in regard to ditthonost importorH, tlioie may not be canon of bardnhip. When tboHe cases c )rao botore the Dopurtmont, thoy are alwaya conuidored and dealt with an leniently an the law will per* mit. That reminds me oi a charge which wan made, I nauht admit to my Hurpfiwo, by tho hon. member for North Norfolk (Mr. Cbarltrn) on a provioun occasion, wheu, in Hpeaking of these CDsoti, he said : " The case iaroftrred of course to the hnad of the Depar'inent, ftvd the bead of the Oepitrtuieot in uiae rases out of ten will sustaia tho of&cial whether tho offlotal is right or wrong. "Mr. FOHFEft. No. " Mr. OIlAllfjTON. The Bjatpot promotes tyrannical conduct the part of the oQlciala of the Government. It is in every respect a it Ticious system, and tbe^e men will pay more attention to tboir own interest in the matter ot making seizures than they will to the public interest." I hoBitato cot to nay that there ih not a man in this IIoaBe of the whole of the 214 members, to whom 1 would, if I had boon in the IIouho, have appealed with more oontidence in denial of that ntitement than to him. 1 told him I intended, when the question came up, to roter to tho eubjeot here, and I say diHtiuctly that he of all men has no right to make that charge aj^ainut the head of the Department ; he of all men in this House has had leniency shown him by the head of the Department in dealing with penalties which had been imposed upon vessels in which he was interested. I do not desire to be understood as stating that he was a party to the violations of the law, but I do say that when repre- sentations were made by him on behalf of the captains of vessels which bad violated the law, instead ot enforcing the report made by the offioialB at the points at which the seizures were made, and the reports made upon them by the Commissioner and the AssistHut Commissioner here, leniency was extended after a fall investigation by myself into the ( ases in which he wa& interested ; and, in some cases, captains were allowed to go without payment of any penalty other than the oost attached to their own negli- gence, whi^e in other cases they have been refunded a part of the penalty which tho officials had exacted from them. I may add that hon. gentlemen sometimes, in discuss- ing this question, forget the facts connected with their own transactions and they forget also the difficulties that arise, not only in the investigatiou, bat in coming to a cor- rect conclusion as to the veracity of the parties who make the statements, whether they be officials or whether 3i > " M 36 they bo parlies who have violated the law. There are many cases in which the officers do their duty to the letter, but there are circumstances attending the transac- tion which justify the head of the Department in uDt im- posing the penalties which are provided by the law. The very laist case that I decided, in connection with a vertsel which had i aid a rather heavy penalty in the west, was one of those cases : it was one in which the hon, member for North Norfolk (Mr. Charlton) was interested, and upon his representations, and upon the evidence of the captain, which was confirmed by the collector at Windsor, he had every dollar remitted to him except the expenses. And yet, in myabsenc", he declares to this House that in nine cases out of ten, whether right or wrong, the head of the Department confirms the reports of his officers. THE MOIETY SYSTEM. '' '^ ' l^h i ! \l P.'-: Now, I propose to call tha attention of the House for a few moments to the moiety question, and will bo as brief as possible. 1 must apologise to the House for occupying so much time, but I do so because this question has created a good deal of dissatisfaction, among those who had to pay penalties, more particularly ; and I regret to say — perhaps I am wrong — but my impreeeion is that politicians have taken it up in order to create a feeling, not against the officials particularly, but to injure the Government for en- forcing the law. It has been in many directions of great advantage to Canadian legislators to avail themselves of the past experience of the United States. Notwithstanding our different systems of government, there are many subjects for legislation in respect of which the traditions and educa- tion of our own people tend to make the example of the United States of peculiar value, and in no direction can the experience of that country be more adva^itageously studied by Canadianp, than in relation to revenue and tariff matters. 1 wish, therefore, to remind hon. gentlemen that in the year 1874, in consequence of pressure brought to bear upon Congress by prominent and interested business men, the provisions of their Customs law were repealed, under which moieties of fines, penalties or forfeitures were paid to officers of Customs. Up to the date of such repeal, United Staids Customs officers and infoimers were awarded one-half the proceeds of seizures and fines, the remaining one-half reverting to the Treasury. A great deal has been said in reference to the action of the United States Government in S7 repealing what is termed the Moiety Act. This matter was fully investigated by Secretary Manning in 1885. Ho issued a circular to all bis officials and to prominent mer- chants, asking their opinion as to the effect which the repeal of that Act had had upoit the collection of the re- venue and upon honest importers, and whether the result had been the diminishing of smuggling or its increase. In issuing this circular, he >&jb : " In order that I may have before me, in preparing my annual report to Oongreas, a correct appreciation of the results and the effects of our recent investigition;; of Uustom bouse afiTaiirs, and in orde: that I mety decide how much and wh*t proportion, if anv of the record shall be sent to Congress, I desire that careful and official replies to the following enquiries, with adequate completeness of details of facts and figures, be prepared for my use at the earliest practical d^." This is signed by Daniel Manning, Secretary of the United States Treasury. It covers a great many subjects, but that to which I desire to reler is covered by the 17th question: " Have the fitlpe reports by the appraisers been increased by the repeal, in 1874, cf the moiety law. and by the Customs legislation of that date, modifying ihe tiisiing law, and especially modifying that of 1863, respecting seizures of books and papsrs ? " Many answers are given to that question. I ha^o them before me, atd have made extracts which it may be inter- esting for me to read. Here is a joint memorandum placed before the secretary in 1884, and tii^ned by the chief clerk, assistant clerk, and the auditor of the New York Custom house. This memorandum will be found on page 696 of the report of the Secretary of the Treasury, of 1835, to which I call the attention of the House. It concludes as follow-^: — '• The solvency and the life of the Government are dependent upon the rertainty of the collection of its revenues, and strict laws are an absolute necessity to ensure their payment into th« national Treasury ; and such statutes may be efficiently executed w.thout injustice to tne citizens who, having the welfare of' this country at heart, would not knowingly commit a fraud upon it Stringent laws are as essential to the honest taxpayers as to the Government, for smuggled and other fraudulent iraroriations would not fail to destroy the business existence of loyal and ccnscientioas mer< littits. No Government can afford laws that would be inimical to the interests of such citizens, and yet our Congress has a Bill before it, which, if it becomes law, will certainly encourage frauds upon the revenue and drivo icovn trade and make bank- rupt the honest importer, who, of coursr.. could not compete in prices with those who might successfully evade the payment of tha just im- post." Eeforring to Customs officers and the moiety system, they Bay: "The Customs officer, of course, would execute the Uw ; but deprive him of his jast moiety, and he will and mast avoid personal risk. The 38 experiment of detecting frxuda without moietiea hts been tried and found wanting (see the Act of lltii Februarj, 1846) and in itie absence of a proper equivalent to the seizing officer and with a high tariflf in operation, Bmugorling and fraudj upon the revenue will be encouraged and run rioi in every port in the United States. • • ♦ " Moreover, he ia under heavy bonds for the faithful collection of the revenue. Will any man in that office take the great responsibility of making seizures without a fair and equitable compensation ? No. And it would be unreasonable and contrary to the laws of nature to expect it. An incentive or reward is a necessity to the sure punishment of offenders." I may add that instances of that kind have come under my own knowledge. The one to which 1 called attention a few moments ago was an example, in which case the im- porter, having acknowledged that he had smuggled and paid the fine, then said that he had done so through coercion and had never been guilty of fraud. Quoting from the report of the Secretary of the Treasury on the Collection of Duties, 1886, we find on page 340, the joint opinions of Special Agents L, G. Martin and A. K. Tingle, to be as follows : — " '"'" vonsignment system as it now exists, has largely grown up since the enactment in 1874, of the law known as the Anti-.VIoiety Act. A careful examination of the provisions of this law will show to any unprejudiced mind that, if it was not designed for that object, its tendency is to create the very condition of affairs, ai to values, which now exists. It practically ties the hands of the (Government, and pre- vents the enforcement of the tariflf laws, in that it prevents its officers from obtaining proofs necessary to establish a fraud by undervaluation. Proof of 8n«h frauds could be usually obtained under the old law bv an examination of the books aod papers of the importer, where such an examination was made withoat giving him an opportunity to sequester the papers. There ia a provision of the Act of lb74 under which books and papers of an importer may be examined by the attorney of the Qov- ernment after enit is commenced, but notice must be given to the im- porter of the particular hooka and papers desired, and this gives an opportunity to those who are dishonest to suppress proof of guilt. " Under former l&ws, informers in Customs eases were assured of 25 per cent, of the sum realised by the Qovernment for the information furnished. Under the present law their compensation is dependent upon many contingencies. If the fraud revealed cunaists of aadervaluation, they are not sure of any reward, because of the diffiuulty of collecting even advanced duties, not to ^peak of the impossibility of securing for- feitures; and the amount in any case depends upon the discretion of the Secretary of the Treasury and cannot exceed $5,0 >0. When a great fraud has been sujcessfal, those having knowledge of it find it more profitable to treat with the guilty parties than with the Government." The same officers in reply to the additional enquiries, on page 348 of the same report, say : — '* Bv the very condition of affairs as to values which now exists as fltated in the second sentence of our reply to enquiry No 17. we mean the prevalent practice of under-invoicing oonsigued goods, which has been for some years past and is now so geueriil as tJ many lines of merchandise. We think that the comparative immunity from all risk of 39 pnnishment either in pocket or in peraoa enjoyed by importers since the paaaage of the Anti-Maiety A.ct h%H tea lad to encourage the fraudulent practices by which the revenue laws are so largely evaded." It is under this conHignnlont system tho greatest frauds are perpetrated, as every merchant who pays his duly knows, and the instance of Bertin & Co., wine tnerchants, is a case in point, for, as I have shown, when they deducted the charges and duty on the consignment, there was left about 2 cents per gallon to send to the party from whom the wine was purchased in Bordeaux. On itat^e 36i of the report, Special Agent A. M. Barney, of Galveston, Texas, says : *'***So far as ray experience goes there has been no percepti- ble increase of false reports by appraisers, since the repeal of the so- called Itfoiety Law in 1874, althoucrb there has arisen sinue that time a distrnat on the part of appraisers and others of their ability to toroe an increase in values honestly l^lieved to bo dutiable, as by the repeal of that Act the burden of proving intent has been thrown upon the Government, and the right to examine books, paoers, invoices, ic , has been taken away from the Qovernment, or so hedged about with difll- calties as to render it inoperative and void The repeal of the Moiety Act had also had the effect to decrease to a large extent the number and values of seizires for undervaluation and in smuggling cases. The United States seems to be the only civilised country on the globe that does not offer a premium for information in regard to an intraution of its laws. On page 391 of the report, Special Agent, N". W. Bingham, of Boston, Mass., says : " I have already stated that, io my judgment, the repeal of the Moiety Law has resulted in largely increasing the andervalaation in invoices and entries, and has resulted, naturally, in the increase of incorrect reports by the appraisers, for the reason that the invoice, in the absence of contradictory evidence, would be taken as conclusive evidence of value. But the evils resulting from the repeal of the Moiety Liw extend beyond this; they are not alone found in the encouragement given to illicit transactions whereby the appraising officers are deceived, but the encouragement to give information is withdrawn, except in matters of comparatively email importance, and with those who are willing to be published in the courts, and annually to Oongress as informers, and the officers are deprived of the inoeniive to a special vigilance and the means of obtaining testimony from the books and papers of the importers." On page 406 of the report, James B. Power, Special Agent at New York City, writes : '• The repeal of thr Moiety Uw and the modification of the iaw au- thorising seizure ot books and papers, restricted the power of Cuatoms officers in vhe pursuit of fraud. While the Governmeut still has the power to examine books and papers, this power can only be exercised under the sanction and authority of a justice of the Ualtoa States Court, and the particular books and papers miat be deacribed before such sanc- tion is given. Under the old lj,w an officer could make an unexpected descent on a suspected importer, an' having power to examine all books and papers, could discover fraud it any existed. While the power V\»r^ 40 conferred by this law was arbitrary and liable to abuse, the honest mer- chant hod nothioff to apprehend from its operatioq. The repeal of the Moiety Law removed all incentive to the (giving of information by clerks and other (mploj69 possessed of knowledge of fraudulent doing» by their employers." On page 504 of the report, Edmund D. White, Examiner in the Appraiser's Office at Boston, states : "It would seem to be almost self-evident that the repeal of the Moiety Law removed a great and ever present stimulus to Customs oflBcers, which added to the requirements of their oath and their sense of oflBcial cbli(i:ationB, to be not only true to their trusts but to exercise extra visrilaace. I do not believe that its repeal made any diflFerence with an honest appraiser like^Mr. Rice at this port, but its general effect could be but in one direction, and that the wrong one." On page 541 of the report B. B. Smalley, Collector of Customs at Burlington, Vt,, says : "In answer to interrogatory No. 1?: In my opinion frauds on the revenue have been largely increased by the repeal of the Moiety Law. I think it would be for the interests of the Government to have it re- enacted with proper guards to prevent abuses under it." On page 645, John Hitt, Special Deputy Collector at Chi- cago, 111., says : " The repeal of the Moiety Act, 22nd Jane, 1874, was a blunder of the first magnitude, fo far as the revenue was concerned. The fact remains that public opinion did not sustain the methods adopted by Special Ageni Jayne and other agents cf the Treasury. The reaction resulted in the repeal of the Mo'ety Act. Since that repeal undervaluation has increased greatly at the great ports, if we may believe the testimony of the merchnnts here, who cannot import silks and many kinds cf goods by reapon of the system of agents of European manufacturers stationed in New York. • • • The conscience of the country is not sensitive in regard to frauds upon the Customs revenue. • • • The loss to the Revenue by this laxness of opinion is, in my opinion, many millions each year." On page 557 of the report, Charles H. Ham, Appraiser at Chicago, 111,, states : "Herewith I enclose a schedule covering the years from 1873 to 1877, inclusive. From the schedule it will be seen that, whereas in 1873 the aeizures, Ac, smounted to $773,370.09, in 1877 tfa-^ total amount was only $110,131.09. I attribute this decrpase to the discouraging effedt of the legislation of 1874. The Civil Serrice Oomraission of 1871, known as the Curtis Conimiesion, estimated that one-fourth of the revenue of th> United States was lost in their collection " The Jay Commiesion (1877) quote this estimate; and Ihey also say : "Some facts submitted by the importers touching the offer of foreign manufacturers to deliver in New York goods at a lower rate than they can honestly be imported at, would not seem to indicate increasing strictness and success in protecting the revenue." Mr. Hsm continues : " The circumstances of this repeal of the Mciety Law show, 1 think, that it ought not to have been repealed, and go far to show that it ought to be re-eoacted. 1st — It was repealed on the heels of a series of enormous frauds, which were discovered through its aid— the seizure of bookn and papers. 3nd— It was repealed against the protest of those Qovtrnment officials who had found it an efficient 41 means of paniehiug and detecting frauds. 3rd — It was repealed at the demand ot the persons who had been proven gailty of its violation. At least I am inforined and believe such to be the facts, and if these are facts, the repeal legislation of 1874 was little less than infamous. " I see no good reason why the Moiety Act covering power to eeiase books and papers should not be airaia made part of the machinery for collecting the Castoms revenue, whether that revenue shall continue to be raised, as now, largely by ad valorem rates or, as I hope it will be, wholly by specific rates " I do not think that honest merchants ever have objected or ever would object to such a law as oppressive. It is to the interest of mer. chants that the revenue shoold be collected : not a part cf it but all of it " A member of one of the large importing houses here paid to me recently : ' I think the repeal of the Moieties Law under the circum- stances (and he knew the circumstances as I have described them in this report) was a very iniquitous act.' " To the qupstion, ' Would you object to Government officials looking at your books? ' he replied promptly : ' I am willing that Government agents Ehot:id examine my books to the last detail.' " On page 588 of the report, Edward L. Hedden, Collector of CastomB, N^ew Yoik, says : " I am of the opinion that the repeal of the Moiety Law has deprived the Government of millions of dollars of revenue, and has been one of the direct itfiuences to cause undervaluations." Oa pasje 676, N. G. Williams, Deputy Collector of Castoms, New Tork, says : " I believe that undervaluations of invoices greatly increased since the repeal of the Moiety Law. Although the law was denounced and made to appear as very unpopular, it is nevertheless true that it was be- neficial to the best interests of the Government, and it afforded the honest importer appreciable protection agcinst the dishonest practice of swindling importers. The sentiment against the law was stirred up and formulated by men inimical to the interests of the business men of the country. The practical effect of the repeal of the law has been to drive honest American importing houses out of the trade, so that to-day the vast bulk of the importing business is in the hands of foreign agents \7ho have no respect for our revenue laws, and are mercenary to the last degree. I believe it is this class of men who are most guilty of cor- rupting officers in the revenue service. Congress should restore the law to the Statute-book." On paere f)98, George N. Birdsall, Assistant Appraiser at New York, pays : " I am of the opinion that the repeal of the moiety provisions of the Act of 22nd June, 1S74, has caused more undetected undervaluation, because it removed an extra incentive to work for their detection. This dishonest importers have availed themselves of, thf y knowing that, if the incentive is not there, the risk of detection is lessened." On page 861, T. B. Sanders, Deputy Commissioner of Navi- gation, Washington, says: " The passage of the Anti-Moiety Act mu«t necessarily have increased the temptation to defraud the revenue, and I have no doubt has actually led to violations of the revenue laws." l' ' ■Hm 42 On page 42^, George B. Church, Infipector of Customs, Ot^dersburgh, N.Y., says: " There seems to be no difference of opinion among^ those whose duty has brought them in contact with the operation of the Act of 22nd Jane, 1874. While this Act was passed as a reform measure, for the proieotion ct the revenue, had it beea enacted for the purpose of enabling dishonest people to evade the tariff laws, it could not have better accomplished that object." It will be borne in mind that these varione expressions of opinion, were given to the Secretary of the Treasury during the year l886, and though some disposition was shown by the Govern mom of the United States, the succeed- ing year, lo move in the direction of re-enactirg a Moiety Law, the matter is still unsettled there; therefore it is interesting to know the opinion of Colonel James A. JewoU, the present Supervising Special Agent of the United States Treaenry, as to the difficulties which are at present being enco'ntered in the collection of proper duties in that coun- try. In his annual report to the Secretary of the Treasury, dated 26th November, 188*7, ho slates : ' The faulty construction of the present tariflF laws, the inadequate means prescribed for re-appraisements, and the restrictions upon prose- cutions for toifeiture, imposed by the Act of 1874, known as the * Anti- Moiety Act,' have made it impossible for the officers of the Oovernment charged with the administration ot the Tariff, to protect the revenue from fraud, or the honest merchant from unfair competition. " From any point of riew the present system ia objectionable, and instead of securing uniform and fair apnraisementB, as the law contem- plates, its effect is to obstruct the efiorts of the local appraisers to secure that object, and it affords the means by which unscrupulous importers, combining together, are enabled to perpetuate a well established system of defrauding the revenue." More recently, on 17th November, 1888, the same officer in his annual report states : "While the chief officers of the Customs at the principal ports have generally co-operated heartily with the department in its efforts to enforce the laws and regulations, the abuses still continue ; the unscru- pulous still prosper at the expense of the public nfvenue and honest importers, and it is manifeBt that justice and equality at the Custom houses cannot be secured to all interefited, without a radical revision of the (Justoms Revenue Laws and a reformation of existing adminis- trative methods and machinery. " All experience has shown that h'gh ad valorem rates cannot b9 collected with fairness and uniformity under any system of adminis- trative laws and regulations hitherto devised, much less under tho pre- sent loose re'^triotive laws and inadequate and ineSactive system of appraisement." UNITED STATES BUSINESS MEN ON THE MOIEIY LAW. All the foregoing opinions have emanated from res-ponsible officers of the United States Treasury Department, but I have before me replies addressed to the Secretary of liliji / 43 the Treasury by throe reprosontative bnsinoRS corporations, which muMt be admitted to have groat value as represontinff the probable views of the ejeneral business community, and I will a(«k the House to allow mo to load the same. On page 295 of the Secretary of the Treasury's Report, on Be- vieion of the Tariff, James Lees & Sons, woollen manufac- turers, Bridgeport, Pa., state : " We do any, howevpr, the 'moiety' Act should not have been re- pealed. As the law now stands, you are compelled to show the iateutioa ca the part ot an importer to defraud before yoa can convict. The court is even cbli(?ed to charge the jury— that the 'intention ' to defraud must be shown It ia a very difficult matter to proTe the intention of a persoa, 80 conviction ia frequently impassible. We are large importers our- selves, and we find a great deal of very unfdir competition on the part of those who have no regard for honest buaineas raethoia and the sanctity of an oath " On page 434, the manufacturers of Rhode Island, under date Providence R. I., 22nd October, 1885, say : " As you kindly invite information as to the character and extent of current fraud by undervaluation, as well as concerning methods for its suppression, we would say that the conviction is very general among Rhode Island business men that this class of fraui prevails as to nearly all kinds of imports whereon ad vilorem duties are assessed, and that its magnitude is heavy. Bspecially do the abuses prevail as to merchan- dise imported as actual property of foreign owners and handled solely for their account and profit. In our opinion, the suppression of such frauds was creatly weakened by the action of the Forty-third Congress concerning the law known as the 'Moiety Law,' to which action wa will tHke the liberty to make farther reference." ■'Referring again to the ' Moiety Law,' important provisions of which were repealed by the 43r'l Congress, we by no means assume the perfect- ness of that law as originally drawn, nor'do we forget the grave abusej under it, but inasmuch as its foundation principle seems sound and in harmony with the general experience ot other nations, we cannot but think that the repeal of its vital features, however the law may have needed am^dment in some details, was a serious impairment of facility for the honest collection of Government due". We believe that laws similar in principle and purpose to the ' Uoiety Law' are calculated to greatly advauco the end you seek to promote, in furnishing machinery indispensable to succesbful combat with the frauds under consideration." On page 321, The National Association of Wool Manu- factnrert", write as follows : — " Proposed remedy for undervaluation. — While the present tariff, in our opinion, should not be changed, we think its efficacy for revenue purposes and the protection of manufacturers and honest importers may be increased by improved methods of administration, fortunately, as we think, within your special province, and by improved administrative legislation, which you, above all others, are powerful to induce. We recognise with gratitude the administrative reforms which you have already instituted for correcting the undervaluation of imported mer- chandise entered for Customs duties, and would respecttully urge you ta exert your potent ioflueuce upon Congress for the repeal ot the section of the ' Huti-moieliea ' Act of 22ud Junej 1874, whereby tha burden of proof of intent to defraud in undervaluation is imposed upon the Gov- 44 ernment, and for the f■n^ct^[lent of a law imposing effectual penalties for undervaluation. " At the annnal meeting rf thn National Aasociation of wool manu- acturers, in the city of New York, on the 7ih October instant, the above paner was read at leni^th, and by a resolution of the aBSociation was unanimously approved." EeVIVINQ of MOIBTY STSTEBf BY THE UNITED STATES GOVERNMENT. In 1886 a Bill was laid before the United States Senate dealing with tariff and revenue matters, and among other flections pjoposed for enactment we find the following : — " Section 4. That ono-half of all moneys which shall be hereafter paid into the Treasury of the United tstates from fines, penalties or forfeitures incurred for violation of tha Customs revenue lawB, shall constitute a fund from which may be paid from time to time, on the joint order of the Secretary of the Treasury and the Secretary of State, who are hereoy created a board for that purpose, such sums as they may In tlieir discretion determine, to meritorious officers of the Customs or Consular service, who shall have been instrumental in the detection or ]>uni8hment of frauds upon the Customa revenue, and the board thereby created shall annually malie a report of th«ir doings hereunder to Congress, stating in detail the names of parties to whom moneys have been paid, their positions in the public service, the nature of the services rendered, and amount paid to each." In his report to Congieas on 16th February, l'^86, page 39, the Secretary of the Treasury, commenting upon the legislation on revenue HubjectSi then before, or to come be- fore the llouse, wrote ts follows, in opposition to the form in which section 4, above referred to, proposed to revert to the moiety system : — " Section fourth : It is with some diffidence that I interpose any ob- jection to the fourth section, which proposes that one-half of the pro- ceeds of fines, peufllties or forfeitures Ehall be dfposited in the Treasury, Eubject to the joint order of the Secretary of the Treasury and the Secretary of State, who are authorised to distribuie this fund in their discretion ' to meritorious officers of the Customs or Consular service, who shall huve been iastrnmental in the detection or punishment of frauds upon the revenue ' If this section should become a law, there will, I fear, be a practical difficulty in the practical execution thereof at the distant ports, by a tribunal sitting at Washington. No work could be more vexing for an executive cffi( er than the distribution of such a fund. Any such law, if deemed necessary and onacted by Congress, should as did the law of 1789,' define exactly wh*t portion of the pro- ceeds of a forfeiture shall be piid to a sciz: ing officer, and what portion ehall be paid to an informer, or to informers by whose information the seizure was made and the forfeiture accoropU-hd. Under the law of 1799, such questions were judicial questions determined by the court when called upon to distribute the proceeds of the forfeiture p*id into the registrar of the court. The facts, being local, sh-^uld be judicially examined in the same place where they arose, and be dispoced. of, if need be, by contentious litigation. The Bill (S.B. No. "1153) pro- poses not only to revive the moiety system, but to revive it in a most objectionable form." 45 This did not pass, but an aunual HUtn of about $150,000 was voted'arid placed at the disposal ot the Secretary of tbo Troa* 8ury to reward oflicers in his own diHCrelion. These are opinions from all portions of the United States bearing testimony to the ill-ett'eots which followed the repeal of the Moiety Act, so far as honest traders and the ]>rotection of the revenue weio concerned. 1 place them upon record in order that they may be road by those who desire to refer to them, and it anyone desires to verify the extracts, I would refer him to the official record ; he will find it in Mr. Man- ning's report "Secrelfiiy of Treasury on Collection of Duties," in 1885. Hod. members may hay, and with a good deal of force — if the consensus of opinion in the United States on behalf of the wholesale merchants and the manu- facturers, and the Special Agents ^vhoee duty it Ia to carry out the law, is of the character which I have pointed out, and which Mr. Manning puts upon record in his report — how is it that thoy have not changed the law ? The same reasons have prevailed which influence many politicians in thia country. There ii a certain class who can always raise hor- nets* nests about the ears of those who endeavor to enforce the laws of the land, and for political reasons there have not been re-enacted in the United States, those aids to the uni- form and efficient collection of revenue, which their officers, after many years' experience, have proved should be re-en- acted. But in the United States they place in their estimates every year about 8150,000 to ba distributed among those whom they call " meritorious officers." I question very much the propriety of a system of that kind. If the head of a Department had a largo sum placed at his disposal to be distributed among those ofiicers who do their duty pro- perly, as he view it, others who might do ithe work infin- itely better, but against whom the person distributing the money might have a prejudice, would be excluJed from participating in benefits which their servicas deserved. It 'vould bo highly dangerous, not only to the honest man who rs endeavoring to perform his duties, but also in this, that it would place temptions to which they should not be sub- jected, rn the way of those who had the disposal of the money. I have here also a letter written b}- Charles bl. Fol- » ger, Secretary of the Treasury of the United States, which I commend to the antimoiety agitators. It is as follows : — " TrKASDRV DsPAIirMKNT, •' OrPiCB 0? TUB Seckitary, ^ " Washlngtom, D.O., 28th March, 1884. »• To the Preaident : " Respectfully referring to the resolution of the House of Represeata- tirea of 15th Jaauarj, IbSl, req jeatlng the President to forward to the ' i il 1 1 fhl Iif| 46 House iDformation, includinfir rrportg from coneula and others, roncern* ing the undervaluation, falpe clM9-ificHti(>n, and other irregular prac- lices, in the importation of toreigo mfrrhaodise, and to recommend what leffiBlatiou, if auy, is needed to prevent euch frauds on the re- venue, Ihttve the honor to Bubmit copiea of reports numbered 1 to 184, incluaive, taken from the files of this department, (3overiug the informa- tion desired. To these should bo added reports and decisions numbered 1 to 78, incluiive, relative to the undervaluation of wool and woollea jams, coDtfiined in House fix. Doc 101, hertwlth submitted. " These papers eeera to furnish conclnsive evidence of general and ex- tensive undervaluation of imported merchandise subj -ct to oi va/or«»i duties. They show that this evil has been steadily growing; aiuce the paaeage of the Liw approved 32nd June, 1874, entitled : " An Act to amend the 'Justoms revenue laws and to repeal moieties." This law, while providing for rewards to officers who may seize smuggled goods, withdrew the stimulus previously given to vigilant activity tjy Customs ofiFicers in detecting undervaluation and other fraudulent practices, and, at the same time, erected a barrier to the succetisful prosecution, ia the courts, of this class of frauds " This was done by reversing the rule presoribed by section 909 of the Revised {Statutes, under which the burden of proof, in case of seizure, rested upon the claimant of the goods, and requiring the Gov- ernment to show affirmatively the fraudulent intent of the importer. The jury must bring in a distinct and separate finding upon this ques- tion. If no such intent on the part of the person entering the goods is found, no matter bow great the undervaluation perpetrated by the foreign mannfacturer, who is the owner of the goods, no fine, penalty, or foifeiiure can be imposed. " Siuce the passnge of this Act, the Qovernmenthas almost uniformly tailed to obtain verdicts in litigated cases, however strong the evidence of fraud adduced upon the trial. " Whatever may h»ve been thought as to the need of protecting the rights of individuals by the enactment of this law, it is clear that its result has been to render the Qovernment almost powerless to enforce the revenue laws in ca.ses of fradulent undervaluation by foreign manu- facturers or unscrupulous importers, and to work great injury to the interest of importers who refrain from engaging in this dishonest prac- tice. •' Besides the serious loss to the revenue consequent upon undervalu- ation, as indicated in these reports, the practice nas a demoralising in- fluence upon our trade with loreigu countried. Ihe lack of safeguards against it ofiers a premium to diibhoneBty, and makes it impossible for an honorable manufacturer or dealer in Europe to compete with his less conscientious rival for the American trade, and the honest American merchant is precluded from importing lines of goods thus undervalued. When Euch practices go unpunished the foreign shipper is practically enabled to make his own tariff, stibject only to the contingency of hav- ing the rate increased by the appraiser's advance upon his invoice raluation. " It thus happens that when Congrsss enacts that the rate of duty on certain goods shall be 60 per cent, ad valorem, it is found that perhaps only 30 or 40 per cent, is actually (aid, according to the boldness and skill of the shipper and his American agent in falsifying market values and deceiving the appraising officers. "It is no reflection upon the integrity or ability of appraising officers to eay that they are unable, unaided by penal laws, to cope with this evil. The most skilful expert cannot be depended upon to fix values with absolute correctness ; and where, as is now the case with many classes of imported goods, the true market values are studiously con- cealed by European manufacturers, in order that no proper criterion for 4T ftppraisenifnts may be obtained, tbe difficultiei confroatiDg the appraii- era are w«ll nigh ioBuperable. "Responsibility f«." a correct Taluation should be placed upon the consignee who makes entry, and the fact that the invoice and entry are f'alee should be deemed preBumptive evidence of fraudulent intent, sub- jecting the goods to forfeiture unless innocence can be shown. "So long as the ad valorem system exists, cijuality and uniformity in its administratiuKi can only be secured by providing adeq'iate moans to preventuudtTvaluttioua ^:iuch means are not to bo fouud in existing law^s. "I submit herewith a draft of a Bill, the passage of which would, in my opinion, go far towards remedying the evili^ com])lalned of. " Very respectfullv, "UBAa. "J. FOIiOER, Seeretdry. AUDITOR GRNERAL 8 REPORT AND AWARDS MADE TO SBIZINQ 0KFI0ER8. I propose now to deal with those enormous sums which my hon. friend says have been j)aid to our own oQioorH, and while I am not sarprisod that he should have drawn the deductions which he did from the Auditor General's Report, I have to infoi in him that that is not a safe indication, either of the amount of the seizures or of the money paid for seizures made during the year tor which they appear in the Public Accounts or Auditor Greneral's Report. Before doing ^that it may be of interest for those who have paid any at- tention to this question to know what has been done in the way of seizures and the distribution of penalties since (Confederation. I promised the hon. member for Northum- berland (Mr. Mitchell) that I would point out to him that during the time he was assisting in adminietering the affairs of this country seizures were made and the moieties were distributed under the same system that has been car- ried out during the time I have been in ofiSce. Mr. MITCHELL. Will the hon. gentleman also remark the fact that every time he has had a Customs Eill before this House I pointed out the evil of that system and tried to get it removed, but without success ? Mr. BOWELL. I do not kdow that such fact has any- thing to do with the question. Mr. MITCHELL. I think it has. Mr. BOWELL. It perhaps has this to do with it : that it the system is so iniquitous as the hen. member says it is, he should have remedied it when he was in office. If it is wrong now it was wrong from 1868 to 187i. Mr. MITCHELL. Granted. Mr. BOWELL. Then I take it for granted that the system being of the character which my hon. friend has re- I 'I 41 1 1 48 preHontod it to bo, ho did not do his duty when he was a mombor of tho r n^A this latter sum thoro warjloct^ L fh ^^^^^ ^O. and of noecHHity for detaifinrHnif. M m'"' ^^ \^'^' '^'^^ ^^ ^^o The statement Is as follows :— Year. Total Cufl. torn 8 Revenue Collected. Seizure Receipt!. 1868.. 1869> 1870» 1871.. 1872.. 1873.,, 1874.., 1875... 1876„. 1877., 1878„. 1879., 1880., 1881.... 1883... $ 8,624,318 8,370,764 9,411,443 11,870,563 12,727,066 13,044,941 14,448,898 16,386, lis 12,868,042 12,576,935 12,819 932 12,962,342 14,164 668 18,529,793 21,744,16: 9,164 10,180 16,460 25,169 36,037 16,863 9,616 17,380 16,J98 13,804 21,683 26,398 35,535 67,625 54,110 Expenditure for A wards to OflBcera, Expenws, Re- funds, Ac. 6,104 7,340 11,906 14,364 24,019 11,915 6,363 11,455 9,664 7,482 7,794 16,896 16,992 29,647 36,236 ism'he'J^^P^rifl,^/-!^^^ ™ instituted, and in figures are as folTow°;i ^PPO«nted, after which the !i fiO Year. Total CuBtoma Revenue Collected. Seizure Receipts. 1 Reported by Special Agents' Branch. • p^eported by Financial Inspector. Expenditure tor Awards to OiBcers, &o. 1883 $ 23,207,826 20,212,156 19,180,986 19,497,114 22,523,587 22,264,820 $ 73,052 110,7^9 127,046 222,030 134,002 98,361 $ 3,180 21,728 37,933 88,720 16,388 17,906 $ 47,276 74,494 84,166 136, 68» 115,602 93,069 1884mi *••••• ••• •• "8,481 25,636 27,060 1885 1886 1887- 1888 Now, it would appear that a much larger amount was paid totho officers ior seizures during the pant year than is really the fact. Some of the moneys resulting from seizures have been in the Treasury lor years, sometimes one, sometimes two, sometimes three years, and for this reason : When there is a contested case, the money cannot be distributed until the case is settled, and in many cases, after the decision oi the Department has been given, the parties upon whom the penalties have been icflicted, pay without going into court, but ask for time. Scores and scores of cases are re- opened many months after the decisions have been rendered, and opportunities given to parties to put in a defense, and to show that the seizure was not justifiable. The result has been that money which has lain in the Treasury for one or two years, is not finally disposed of for two or three years longer. I will give some examples of this. The amount awarded to officers and informers, etc., appears by the Auditor General's Keport to have been, in 1886-87, $82,924.86. Of this amount $24.70 had been in the Treasury since 1879-30, $344.80 since 1881-82, $7 1.04 since 1882-83, $96.43 since 1883-84, $3,360.92, since 1884-85, $36,699.06 since 1885-86, and $42,329.91 only was received during 1886-87, in which year the cases were finally settled and the money disposed ot. It will thus be seen that of the moneys expended this year, $40,596.95, or about 50 per cent,, was placed in the Treasury during the six preceding years to 1886-87. Then I may call the attention of the House to the fact that out of the money which has been ^ 'aced to the credit of seizures, large remissions are made in consequence of the penalties being largely reduced ; and to this fact I : i 51 would invite the consideration of the hon. member for North Norfolk, who Haid that the head of the Department always sustained the actions of his officers, whether they were right or wrong. There was remitted in 1886-S7 no less than $28,430.21. This money was actually received as follows i In 1883-81, $35; in 1885-86, 87,8iJ4.26 ; and in 1886-87, 620,50(1.95. I give you that as an illustration. I have a number of other illuritrations of the same kind, as well as the details of the division of moneys which has been made daring the period in which I have been in office. I might say that in like manner, when we turn to 1887-88, when hon. gentlemen opposite, taking the Public Accounts as their guide, have boon so shocked at the largo amounts that have been paid to the officers and apparently so little left in the Treasury, I find that in- stead of c'ly 85,292 remaining in the Treasury out of a total of $98,391 received on account of seizures, the facts are as follows : The amount awarded to officers and informers was $58,683, or $21,241 less than in the preceding year, and tho money from which such awards were paid was actually re- ceived as follows: In 1882-83, $14; in 1883-84, $153; in 1884-85, $2,055, in 1885-86, $5,352, in 1886-87, $21,451, and in 18b7-S8, $29,658. In this year, as in 1886-&7, it will be observed that about 50 per cent, of tho sum distri- buted was received during the three preceding years. I must alsj point out that in 1887-88 the remissions amounted to $26,781, which was actually received as fol- lows: In 1883-84, $400, in 1884-85, $1,969, in 1886-87, $9,539, and in 1887-88, $14,873. Hereagain, if we assume, as is fairly reasonable, that the $7,605, paid out in 1887-88 for expenses and law costs, were taken from the receipts of the year, we establish tho fact that there remained at the credit of the Receiver General not $5,292 as hon. gentlemen opposite would make it appear, but there actually was still lodged in the Treasury at the end of that year, of the pro- per receipts of the year, no less a sum than $,'16225. It is not necessary that 1 should weary the House by reading the details of the parties to whom this money was phid. Mr. MITCHELL. That would be interesting too. Mr. BOWELL, Then I will put it on record so that the hon. gentleman can read it f.t his leisure. As making clearer the varying results of the efforts of the seizing o^icers, I will now place the House in possession of tt^ following statement, giving tho annual incomes of the officers more prominently connected with seizures, and 4i _ I JiM P I 1 Jll 62 giving also tho average annual income of such officers for the past tbree years : : OOMPARA.TIVB StATEMKNT ' • Showing total annual, and average annual incomes of officers who made seizures in years 1885-86, 1883-37 and 1887-88, and who received from all sources more than $1,200 per annum. Ambroase, J. D. L Baker, Blackwood, T. P Blackwood, D Bonness, J. D Benson, W. .. .. Brookfieid, E. W Clark, Thos Douglass, Jno Faulkner, G Frye, Geo ~< >.. Flynn, P h .... Uerow, B. E...^ Grose, J. A Hatchette, J ........... ,... Hamilton, H Heifernan, T. A Hilton, J. F Hunter, R Lanthier, A Lewis, Jno Moir, A Malheson, G. N Mackenzie, A. I Murray, Hugh Milne, A. R MacLaren, J. S McLean, Thos , McMichael, S. W O'Keeffo, P. J O'Hara, W. J Patterson, Thos ., Sargant, Thos , Stephenson, J Thompson, J Van Ingen, W. H Watters, A. L watterB, T. J...... ...... Warren, R. Q. Wolff, J. F Wyllie, A. A ..«.., 1885-83. $ 5,696 1,324 1,593 1,291 2,460 2,399 1,212 1,887 2,«I0 1,392 1,916 1,126 1,600 8,256 1,431 2,280 1,200 1,883 1,885 1,377 2,500 1,908 1,969 1,836 1,000 1,972 8.496 1,400 1,626 1,547 6,094 1,267 1,505 1,992 1,852 1,286 7,131 6,417 800 6,609 1,420 1886-87. 3,007 1,300 2,784 1,272 1,432 2,031 1,200 1,726 2,836 1,2C0 3,669 2,005 1,594 1,861 1,400 1,700 1,248 1,800 1,624 1,284 2,600 1,800 1,444 1,981 2,266 3,682 2,117 1,861 9,482 1,419 7,231 1,363 1,602 1,800 1,300 1,653 2,228 7,840 1,827 2,086 6,239 1887-88. $ 3,061 1,987 1,805 2,272 1,742 2,638 1,273 1,700 2,321 1,223 3,329 1,634 1,660 3,102 1,676 1,772 1,708 1,841 2,067 1,234 2,881 1,976 1,492 1,751 1,228 7,656 2,179 1,852 7,621 1,841 3,641 1,300 2,413 1,846 1,374 2,461 1,286 2,050 1,605 1,600 1,100 Average Annual Income. $ 3,921 1,637 2,061 1,278 1,878 2,366 1,228 1,764 2,389 1,272 3,268 1,666 1,651 4,406 1,469 1,917 1,385 l,8i3 1,866 1,298 2,627 1,893 1,636 1,856 1,498 4,303 4,264 1,704 6,243 1,60 J 6,666 1,307 1,840 1,879 1,609 1,806 3,548 5,102 1,411 3,098 1,263 63 From the foregoing statement it is clear that during the past three years 13 seizing officers received an average income of over 81,600 and less than $2,000 ; Ihat 4 others received in the same way over $2,000 and less than $3,000 —while 7 officers realised between $3,000 and $4,500. For reasons already given, it mu;jt be admitted by all ■who impartially consider the subject, that up to this latter limit the remuneration i^ only reasonable, — and wo have then left for consideration only 3 officers, whose average receipts during the past three years have exceeded $4,500. It is with reference to the appnrent receipts of such officers that 1 bhould explain the fact, that while some particular officers appear to be, and really are the Seizing Officers, — and pofisibly the discoverers of the fraud— and those to whom, if successful, the award is paid — it may nevertheless be the case that they have called in the assist- ance of other officers, to whom they would naturally have to pay such amount out of their award, as they might con- sider the aid to have'been worth. In this way, though such principal officers would appear in the Public Accounts as the recipients of the full amount for which they as Seizing Officers had signed, — the actual portion of such amount which they might have retained for their own share — supposing thoy required and utilised the assistance of other officers — would be considerably loss than the amount actually paid over to them by the Department, For this reason the large payments to those three officers should in fairness be viewed as subject to considerable diminution. Judging by the outcry which has been raised by gentlemen opposite, one would suppose that all Customs officers were amassing wealth as the result of sharing in Customs seizures. I regret to be obliged to show that ray hon. friends on the other side of the House, in their anxiety to make out a case, are striving to create in the public mind an impression which the facts do not in any way war- rant. I will therefore briefly lay before the House sum- mary analyses of the seiz ne awards made during the past two years. They are as follows : — Akalysib of Seizure Awards to Customs Offi.'era in year 1886-87 : Total number of permanent Customs Officers employed in tlio Dominion 1,100 Total number who participated in seizure awards 101 Total amount awarded as Customs officers' shares $47,956 99 Number of participants in receipt of salaries up to $600 39 Average receipts from seiiures per ofl&cer in this class $205 00 Total amouut awaraed in this eiass.''. $7,982 56 J il ( ll !i 64 Number of participants in receipt of salaries over f600 and op to $1,000 2T Avi-rage receipts from seizures per officer in this class 5il6 00 Total amoant awarded ia this class $5,848 97 Number of participants in receipt of salaries over $1,000 and up to $1,400 , 15 Average receipts from seizures per officer in this class $246 CO Total amount awarded in thia class $3,679 87 Number of participants in receipt of salaries over $1,400 and up to $1,300 10 Average receipts from seizures per officer in this class $1,402 00 Total amount awarded in this class $14,017 86 Number of participants in receipt of salaries over $1,600 and up to $1,800 ...... t Average receipts from seizares per officer in this class $1,954 00 Total amount awarded in this class $13,677 62 Number of participants in receipt, of salaries over $1,800 and up to $2,000 . 3 Average receipts from seizures per officer iu this class $916 70 Total amount awarded in this class m. $2,750 12 Analysis of Seizure Awirds to Customs Officers in year 1887-88: Total number of permanent officers employed in the Do- minion 1,100 Total number who participated in seizure awards 119 Total amonnt awaraed as officers' shares » ■. $39,427 47 Number of participants in receipt of salaries up to $600 43 Average receipts from seizures per officer in this class $128 00 Total amount awarded in this class ^ $>,524 00 Number of participants in receipt of salaries over $600 and up to $1,000 - 30 Average receipts from seizures per officer in this class. $195 00 Total amount awarded in this class $5,861 00 Number of participants in receipt of salaries over $1,000 and up to $1,400. 24 Average receipts from seizures per officer in this class $299 44 Total amount awarded in this cla's $7,187 00 Number of participants in receiptof salaries over $1,400 and up to $1,600 II Average receipts from seizures per officer ia t^is class $1,300 00 Total amount av7arded iu this class $14,321 00 Number of participants in receipt of salaries over $1,600 and up to $1,800 T Average receipts from seizures per officer in this class $573 00 Total amount awarded in this class •< $1,013 00 Number of participants in receipt of salaries ovor $1,800 and up to$i,000 3 Average receipts fn lu seizires per officer in this class $714 00 Total amount awarded in this class $2,142 0* Number of participants in receipt of salaries over $2,000 and up to $2,500 1 (J, Lewis, Surveyor, Montreal.) Amount of hij receipts from seizures $331 00 Total amount awarded iu this class $381 00 65 These analyses are worthy of careful perinal, for the reason that they mirror very fairly the relative value to the country of the diflPorent graie^ of Customs officials. Taking the year 188H-87, it will bo observed, primarily, that only 101 out of the total force of 1,100 permanant officials, derived any benefit from seizures. Then wo trace with moderate accuracy, the preventive work of the lower grade officials who, in the regular course of events, come in direct contact with the ordinary smu^e;lor. Wo find that one-third of the whole number of officers who shared in ficiKuros were men whose salaries do not exceed $600 per annum, and to these men one-sixth of the whole awards to officers was paid, — th3 approximate average addition to their salaries being $205 each,— thus making their average annual incomes range from 8600 to $305. We then come to ^^e next higher grade, — men whose salaries are between T'tiOO ind $1,000 — principally clerks and landing waiters, of "^ ''^o :; possibly greater intelligence may be expected. We tiad that they number 27 out of the 62 officials who remain as participants after the lowest grade men have been dis- posed of. It appears that by this class one-eighth of the whole amount awarded has been secured, and the approxi- mate average addition to their individual salaries has been $216, — thus making the smallest average salary among them $816, and the largest $1,216. Next in order come those officers whose salaries range from $1,000 to $1,400, and they number 15 out of the 35 partici- pants yet unsatisfied. This grade of officers had divided among them one-thirteenth of the whole 3um awarded, which increased their salaries, on an approximate average, by $245, thus making the toinimum remuneration about $1,215, and the maximum $1,645. We have now only 20 officers left as participants, and of this number there are ten who form a group with salaries from $1,400 to $1,600. This group received $14,000 of the total of $47,967 awarded, which makes an average addition to their salaries of $1,402, Approximately this made the minimum salary among them $2,800 and the maximum $3,000. It should bo remarked that this particular grade embraces nearly all the Apprais- ers in the service, — men who are supposed to be specially informed in their several lines of busineos, and capable of fixing the proper values of goods, and so checking frauds, which less well informed men would allo^v to pass. Most of them have been active business men, — and, granting that they possess the requisite qualifications for their posi- tions, it cannot bo argued that the maximum average sum Ill • ,l! 66 received by this grade is anything but a fair reraaneration for their services. In this group are also included the Supervising Special Agent, and the Financial Inspector, whoso services in the correction of fraudulent practices have been especially valuable to the Dominion. Next come 7 officers whoso salaries range from 81,000 to $1,800, and among them was distributed slightly more than one-fourth of the total awards, — giving an ap- proximate average addition to their salaries of $1,954, and thus raising the approximate average minimum and maxi- mum remuneration to $3,554 and $3,154 respectively ; in this group is included the Departmental Aocountant, who was mainly instrumental during this particular year, in bringing to light and correcting some most serious and long continued systems of defrauding the revenue. Finally, we have left three officers with salaries over $1,800 and up to $2,000. The result of their efforts in the prevention of fraud was not quite so advantageous to the country as in the two preceding groups; and the additional remuneration received by them was consequently smaller. Applying here the average of awards wo find that the approximate average additions to salaries was $916 70, and consequently the approximate average minimum remuneration in this grade would be about $2,716, and the maximum $2,916. The analysis of the year 1 887-88 shows that the awards to officers were lees than in 1886-87 by the sum of $8,529.52^ and they were participated in by about the sajne number of men, and in nearly the same average ratio for the three lower grades of officers as in year 1886-87— say those receiving up to $600 per annum, those over $600 and up to $1,000, and those over $1,000 and up to $1,400. Among those officers receiving over $1,400 and up to $1,600, the approximate average individual share of seizure awards was reduced by $102 as compared with 1886-87, and the number of officers participating was one greater in 1887-88. In the group receiving from $1,600 to $1,800, though the number participating in the two years was the same, the approximate average individual shares were re- duced to $573 as against $l,95t in the year 1H86-87; while in the grade whose salaries range from $1,800 to $3,000 with the same number of participants in both years — the individual average was $202 loss than in 1886-87. The TO LAW-llREAKBRS ONLY ARK TAXKD FOR REWARDS CUSTOMS 01 FI0KR8. -. . There is an important point in connection with the distri- bution of moieties, which appears to be lost sight of by those jj^iii m 57 -who coodemn the system ; and that is the fact that the eums paid to oflSicers who detect frauds, as a reward for their vigil- ance, is not taken oat of the public revenue of the Dominion, bnt from diehonest offenders against the laws of their country who are fined for their oflFonces; so that if the reasoning of the gentlemen opposite moans any- thing, it is that no incentive should bo 'given to Customs ofiBcials to detect frauds, punish the offenders, and thereby protect the honest importer and dealer, I have pointed out these facts in order that the House may not be misled in reading the Public Accounts or the Auditor General's reports in reference to the distribution of these moneys, as it might appear that offloers received much larger amounts in one year, in comparison with the seizures made, than the law or the regulations would justify. The House will observe that where this apparently occurc, the facts are that, the seizures have been made some jears before, bnt the cases have not been finally disposeu of until much time has elapsed, I have very few more remarks to make on this question, which is a very important one to the commercial community. From experience, and, I think I can say without egotism, from close attention to the Department over which I preside, and to the effects which have been produced by a strict enforcement of the law without respect to parties, I am positive that the present system has tended to increase the revenue enormously, and that it has protected the honest importer and resulted in putting a stop, to a very large extent, to the frauds com- mitted on the revenue and the country. I know that those who have not been behind the pcenes and watched closely the operations of smugglers and the devices to which dis- honest importers resort, come to the conclusion that the law is wrong and its enforcement vexatious, and that those who administer it are guilty of offenses which in the old times would have been punished by transportation to Van Dieman's Land. I must also state that I find very few evidences in the newspapers to show that they deal with this question in other than a partisan manner. This is not a political question, but a moral one, which mast be dealt with to a greater or less extent, no matter who is in power. If the public would endeavor to estimate in their own minds the diflBiculties which present themselves in the enforcement of a Customs Act, particularly under a high tariff, I am sure there would be less condemnation of the Department and its officers. The only journal that has dealt with this question, as I consider, properly, is the tsr ii 11 Journal of Commerce, whose editor sooma to have trraspei \hQ difflcultioa that turround the enforcement of Customa la^AS under a high protootivo tariff. That paper has pointed out in a very torciblo manner, not only the difficulties which present thomsolvos in carrying ont the law, but the leniency which should be exercised by the officers whose duty it is to enforce the law. I find in its issue of the 1st of February of this year, in reply to some statements made by the president of the Board ot Trade of Toronto, the following remarks: " There is oua subject referred to io Mr. Darliog's apooch, ia respect of which it would be very difficult to carry out hia 8u;?ge3tioa. It would, we fear, be next to impossible to prove any pre-exiatent know- ledge on the part ot a special oiScer of the Oustoms coacerning fraudu- lent practices brought lo light, however long he may have been cogni- sant of the Ucts. And let him be evei so iiijalous and faithful in the discharge of his duties, the evidence is often of a me'-ely circumatantial nature, and, until he has completed the ch'iin, it would bs worse than useless to divulge it. The department is, doubtless, seldom or never without some iuformation of this kind, as furnishad by its special officers, and no action can be taken wthout its authority. At the time of the heavy dry goods seizures some two years ag>, the officers hai just completed the necessary evidence, and even then certain parties stood defiiut, knowing that complete proof as concerning themselves personally could not be adduced. Tke knowledge iu possession of tha department of more extensive manipulations was not sufficiently com- plete. The parties defied ail attempts at proof, and the Uovornment was obliged to content itself with administering • partial lesson at tha time, wiih putting a damper for a while, at least, to further attempts iu that line, and securing to honest importers a ftiir field far their buainess operations." In a subsequent issue the editor deals with this question again : — "There are a few in every community whose best efforts are in the direction of methods from which the ordinary business man naturally shrinks. Every town has one or two representatives of this class— men who almoPt invariably get the best of a bargain — who manage to make money in times when other men are eating into their capital — who always have some "pull" by which they are able to obtain their goods at a lower price than their neighbors and to undersell them at all srv aons. In ports of entry the wits of these men areever directed towards circumventing the Ou.-)toms officers. Iu large cities uo watchfulness is proof against them, for no sooner is one gap closed -one laak detected and stopped up — than a new one breaks out in some wholly unexpected quarter. These men will not be satistiid with fiiir profiCrS in a straight- torward way ; " excelsior " is the point they aim at, and to reach it they are studying day and night, in the home circle, in the warehouse, in the house of prayer." No doubt the editor had in his mind an individual who was, hypocritically, at the head of all the Christian institutions of fllontreal, while perpetrating the greatest frauds on the revenue, and not only on the revenue, but on his own part- ner, his brother, who was ill at. the time. The article con- tinues: . ♦ 69 "No law, no rule, no restriction, will arail against them. It is for the purpose of prevoutiag these keenwitted traftickerg from coinpetiaff unfairly with the iqiporter who honestly oljservea the law, and compel- ling them to contribute proportionately to the revenue or the country, that the Ouatoms Department ia ohlii^ed to maintftin that portion of its force which is least understood and appreciated, even by ajme of those for whose benefit it ia employed." Hon. gon demon may bo sure that the dinpo.silioa of that portjon of the business community who are inolinod to de- fraud the rcvenuo, will not in any way bo altered by the mere pa.ssage of laws of an inhibilive or oven penal charac- ter. It is an axiom among legal men, and experience hus taught mere laymen, that cruel and brutal punishment, im- prisonment for long poriodH, and oven the death penalty, have not deterred the commistiiou of crimes in any measure proportionate to the severity of the sentence. It must, therefore, be conceded that unless the most effective machinery be adopted to enforce respect for and compliance with the Customs law, it will perforce, and because of the popular prejudice to which reference has already been made, soon become an abortive measure. When proper weight ia given to the arguments just advanced, and it is seen and understood that every consideration of public policy and regard for the commercial life of our most valuable business establiehments and industries, demands the consistent and impartial, though severe, administration of the revenue laws( I am impelled to believe that the intelligent efforts of the Government to ensure that result will be e irtily sup- ported by all those whu have the real good of our country at heart. These laws cannot be successfully enforced unless by the active co-operation of the vadous Customs officials throughout the country. A merely neutral or passive dis- cbarge of their duty would mean untold loss to the revenue and disaster to deserving and struggling business houses. jReMUNBRATION op customs officers in CANADA AND UNITED STATES. Let us look to the schedule of salaries for Canadian Cus- toms officials, which is appended to the Civil Service Act, and wo shall find the balarios of the several grades of officers, who should be in a position to detect and prevent frauds, are as follows : — Scale of Salaries. Inspectors $1,600 to $2,500 Purveyors 1,200 to 2 500 Chief Clerks 1,200 to 2i500 Appraisers 800 to 2,000 Assistant Appraisers , « 600 to 1,500 60 ii i'»J r Scftle of Salaries. ClerkB 4C0 to 1,200 Tide Survcvorg 800 to 1,000 LandlDft Waiters » 400 to 1,000 Tide Waiters 400 to 600 Special Preventive Officers 600 to 1,200 Taking iho ports of Montreal and Kow York as the re- epectivo examples, we find that in all the officcB, except the very lowest, the salaries paid in New York are more than doable tho&o paid in the Customs service at Montreal. The most active officers in our service, holding the positions of appraisers, assistant appraisers and their immediate assist- ants, are men I'eceiving from $1,000 to $1,800, while in New York the same class of ofiBeials receive from (> 1,800 to 84,000. Taking the lower po'^itions throughout the United States Customs service, it is found that generally the same disproportion in salaries exists ; oar men being paid in about the proportion of $600 to $1,000 received by corresponding oflScers on (he other side of the border. This is notably the caEO at points where a river is the dividing line, as at Prescott and Sarnia. The duties of officers on both sides are aboat alike, and the cost of living varies but little, but across the border there are generally twice the number of men, at salaries much larger, as already explained. The right of Canadian officers to share in seizures is looked upon as being in some measure an offset to this in- equality, but it frequently happens that officers do not, in several years, derive any additional income from this source. For reasons which must be apparent to hon. gen- tlemen, it is exceedingly difficult for any Minister of Cus- toms, or Government, to ensure that men of proper value and intelligence shall hold in all cases the positicns of re- sponsibility aud importance. It is the truest economy, in the Customs tervice especially, to try and eecure for the really valuable and capable men, the highest possible re- muneration ; and as already explained, while t^e salaries BOW offered, coupled with the premium which is placed upon individual effort under our moiety system, enable us to secure and hold some good men, I am satisfied from intimate knowledge of the actuaUaots, that the withdrawal from such officers of the privilege of sharing in seizure awards would prove to be a signal misfortune to the country, and to honest men. Many of those hon. gen- tlemen who hold up their hards in deprecation of the sums paid to the most active and capable officers in the Customs 01 service, think it only riglit and proper that much greater Bums Bhould bo mudo annually by their ordinarily aucoess* ful buHinoss or professional Iriondw ; and while T admit that the routine work of the Costoraa Department requires men of only average ability, it can safely bo asflortod that for the administrative duties, and for the proper appraisement of goods, and dincovory and checking of ftauds, you must imperatively have officers whose intelligence in equal to that of the buflicess men with whom they have to deal. I have again to apologise to the House for the length of time I have taken, but I doomed it necessary to show as clearly as I could, that the charges made against the Cus- toms Department and its officials are not Jui^tified, that in fact the enforcement of the law has been in the interest of the honest trader by punishing severely those who violate it; and if I deserve condemnation in any way it is for not having enforced more rigidly the penal provisions of the Customs Act. I have given to the House three or four instances of the result of going into the courts before magis- trates to punish those who have violated the Act. In justice to one or two magistrates and judges, I must say that they have enforced the Act as it stands on the Statute- book, the foremost among those being the Chief Magistrate of the city of Windsor, in Ontario. For the benefit of the hon. member for Halifax (Mr. Jones) who seems anxious to know, I will say that this gentleman is a Grit, but has evidently a sense of his duty and oath of office. I will not say anything against the others to whom I have re ferred. They may have taken a different view of the law. In the Eastern Townships, where cases have come before a gentleman who was formerly a member of this House, Judge Brooks, he did not hesitate to enforce the law strictly, a^. it was and is upon the Statute-book ; and the result of the enforcement of these clauses' there has been to deter, in a great measure, many of those who were carrying on a system' of smuggling in the Eastern Townships, from pur- suing their nefarious occupation. I have shown also, I think conclusively, that the repeal of the moiety system in the United Slates has not been productive of benefit to the morals of the importing community, or to the revenue of that country. I have quoted a large number of state- ments— and I could have quadrupled them — from merchants and officials, showing that the repeal of the Moiety Act of 1874 resulted in an increase in the violations of the revenue law of the United Stales, and I have also shown that our mer- chants who are protected by the enforcement of the law are 62 m notdlshutihfiod, but aro actually in favor of tho law ^: it BtandrtupoTi thoSlututo-book. Ono tvjdoneeof that istho tact that Of Hoon as ouo of tho Cu8tomH dotcotivoti had rofigned hin position on the Hluff, thoy petitioned to havo another placed in his position in order that tho laws might still bo enforcod. With thoflo facts before tho Government and before tlie HoQi^e, I am of opinion, thongh 1 may bo mistnk'^n, that tho honest merchants of this country, tho manufucturors of tho country who aro interested in/ seeing tho laws enforced, and more particularly tho importers who contribute a largo proportion of tho revenue, would be iijured by tho abolition of tho system which prev^ails at tho proHont moment. Be- lieving that to bo the case, I have not doomed it advisable in tho past to advise my colleagues to chango tho rules to any apjrcciable extent. 1 did go this far, at tho instance of tho Board of Trado of Montreal, in regard to whom my hon. friend from Chatoauguay (Mr. Uolion) said that their representations wero treated with contempt and were never lihtoncd to : at their instance, 1 did present the distribu- tion, among appraisers, of penaliies which wore imposoa for undervaluations which wore not necessarily fraudulent ; as I believed it to bo thoir du'.y under tho law to examine goods, and, if thoy wore undervalued, to carry out tho rules and regulations enforced by my predecessor, without any othor toward than their salaries. I put a stop to that, which ihey thought was a very important point, though 1 (luestion the propriety of it myself, after tho ex- perience of a year or two. I give that as an illustration that the representations of Boards of Trade and merchants who are interested, have not been tieated by the head of the Department or the Government, with the contempt which the hon. gentleman asserts. I shall deem it my duty in future, as long as I occupy this position, or any other posi- tion in the Government, whenever representations are mado which I consider to be in the interest of the public to carrv out, to recommend my colleagues to adopt a policy which will give efteot to such opinions. But there aro sug- gestions made very often which, when they aro consid- ered, and when you have the opportunity of a quiet conver- Bation with thoce who suggest them, aro seen by those gentle- men themselves to be improper orundersirablo to carry out. 8UMMAET OF ARODMENTa AGAINST THE LAW, PaOPOSKD CHANOB8 IN I have shown that a return to the moiety system proper in the United States, is only a question of time, and that to 63 abolish it in Canada would bo to do away with the incontive now exibting, and to loHficn the atjxioty 0/ officials to die- cover and lollow up fruudB, as ihey would not incur odlufu and ill-will in " 1 discharge of their ordinary routine duty, without being . warded lor it. Consequently, un- checked frauds would increase, and honept businebs men would Bufl'or all the more. Inwtoad of energetic and capable Customs otilcers paid by the dinhonost portion oi" the com- munity, ns at present, for ihcir succoHsful etforte in discover- ing and punishing irregularities, the public Treasury would bo depleted by the la^s of revenue which the proposed system would undoubtedly entail. It is, therefore, manifest that a continuance of the protont system is calculated in every way to conserve the interests both of honest business houses and of tho revenue of the country, it is beyond doubt the system which experience has proved to bo the best, and it should bo maintained. Mr. Speaker, I shall leave this question with the House, asking hon. members if, with those facts before them, they deem it advisable to vote for the motion which has been placed in your hands, the m^-st absurd portion of which, with all respect to my hon. friend (Mr. llolton), is that which declares that no condemnation of goods shall take place until there has been a public trial. If that wore to be adopted, wo would have to appoint an extra judge or two— one probably in each Province — to look after the seizures, unless you decide to abolish the moiety system, and allow everyone to bring into the country what goods he pleases ; becattte a judge would have to adjudicate upon 600 or 700 seizures per annum. That is about tho number we have to deal with, and many of them are of the most trivial character possible. For instance, a five-gallon can of coal oil is brought across the border, and, according to the proposition now made, that must bo held in durance vile, and I suppose we would have to put a Special OflSoer in charge of it to prevent evaporation taking place, or to prevent the oil being extracted and water put in, until a judge could adjudicate upon it. That is the proposition which hon. members will be asked to vote for. However, this motion being one condemning the Govern- ment, 1 expect that hon. gentlemen opposite will vote fc it, irrespective of the principles which it involves. A. SENISOAI^, SuperiBt«Ddent of Priuting.