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Tous les autres exemplaires origlnaux sont filmis en commenpant par la premidre page qui comporte une empreinte d'Impression ou d'illustration *. en termlnant par la dernidre page qui comporte une telle empreinte. Un des symboles suivants apparaftra sur la dernidre image de chaque microfiche, selon le cas: le symbols — »- signifie "A SUIVRE', !e symbols V signifie "FIN". Les cartes, planches, tableaux, etc., peuvent *tre filmis d des taux de reduction diffdrents. Lorsque le document est trop grand pour Atre reproduit an un seul cliche, il est filmi d partir de Tangle sup6rieur gauche, de gauche d droite, et de haut en bas, en prenant le nombre d'images nicessaire. Les diagrammes suivants illustreni la m6thode. 1 2 3 1 2 3 4 5 6 _J 1 I ^/^ n CONSULAR SEALING OF CARS. The Honorable The Secretary of the Treasury of the U. S.: In yonr commnnication to the United States Senate, under date of August 5tli, 1890, you state as follows: "I am informed that since tlie completion of the Cana- dian Pacific Kailway, goods arriving at Vancouver, British Columbhi, from Asiatic ports destined to the United States, have been placed in the cars of tiiat company, which were then sealed by the United States Consul at that port, and forwarded to their destination in the United Stat '' " I find that this practice has been acquiesced in by this Department in so far that the customs officials at the fron- tier ports of arrival have respected the consular seals, and allowed the cars to go forward without entry and examina- tion of their contents if the seals were found intact." '' I am of the opinion that it was the intent of the law to confine the privilege of the consular seal to cars contain- ing merchandise of the contiguous country, and that such privilege does not extend to cars containing imported mer- chandise landed in the contiguous country for transit to the United States." " In this view of the law it is in contemplation to restrict the privilege to cars containing merchandise of the con- tiguous country." While in this communication but one railway and one foreign port is mentioned, it is plain that the general ques- tion of consular sealing involves all ports and all railways of contiguous countries, Mexican and Canadian alike. This, in so far as the purpose and intent of the law itself ^i 1 5^ is concerned, while in so far as the merits and effect of its present construction by the Department are concerned, American interests, both railway and mercantile, ought equally to be considered. \ With all due respect and deference to your lionorable self, permit me to say that I am compelled to differ with the Department in its construction of the law, and hope to throw such light upon the merits of the case that the prac- tice which has so long obtained may not be disturbed. In order to simplify the consideration of this question, I will proceed to discuss it under the following propositions : 1st. The law of 1864 was not designed to restrict the con- sular sealing privilege to the products of contiguous coun- tries. 2d. If there is' a reasonable doubt as to the construction of the law, the doubt should be resolved in favor of the American interests which have developed in reliance upon a construction which has been in force for twenty-six years. 3d. Our present and prospective railway and commercial relations with Mexico and the Central and South American Republics do not warrant a change of construction. 4th. Until Article 29 of the Treaty of Washington with Oreat Britain is terminated in accordance with the provi- sions thereof, it would be a breach of good faith to change the construction of the law in reference to the British Pos- sessions. In considering the first proposition we discover that the sections of the Revised Statutes under which the consular sealing privilege is authorized are found in Title Thirty-four, headed, "Collection of Duties," Chapter Eleven, headed, " Provisions Applying to Commerce witli Contiguous Coun- tries." Now this heading is simply a convenience for classi- fication, adopted by the Commissioners of Revision, and has necessrrily no weight in the construction of the statutes brought within it. The opinion of the commissioners can neither add to, nor take from the meaning of a statute, nor in any way limit or control it. This proposition requires no argument in its support, since it is placed beyond all contro- versy by Section 5600 of the Revised Statutes themselves, which reads as follows : "The arrangement and classification of the several sections of the revision have been made for the purpose of a more convenient and orderly arrangement of the same, and therefore no inference or presumption of a legislative construction is to be drawn by reason of the title under which any particular section is placed." It has long been settled by the courts that commerce necessarily involves tr>>nsportation, and this construction may properly bring these sections within the classification of the commissioners. I have, however, never heard it seriously contended, either in or out of court, that the word " commerce," so far as it relates to the articles transported, covers only those which are the growth or produce of the country with which the com- merce is carried on. The every-day experience of com- mercial life is so utterly opposed to such a restriction of the meaning of the word, that I have no hesitancy in saying that any intelligent court would take judicial notice of the fact, as I also think the Treasury Department will do. Since com- merce necessarily involves transportation, and the trans- portation in question here is Canadian, the commerce must be Canadian whether the articles carried are or are not, and Canadian commerce being that of a contiguous country, must be entitled, under any construction of the law, to the sealing privilege provided in Section 3102 of the Revised Statutes. A careful investigation of all the sections of Chapter 11 will, I think, fail to reveal any intent in the statutes bear- ing on this question to limit their operation to t\\e j^^oduots of any country contiguous or remote ■enumerating the districts as those adjacent Section 3095, after i m and Mexican borders, provides that, except into these dis- tricts, "no merchandiso of foreign growtii or manufacture" sliall be imported except as before provided, etc. There is no requirement of contiguous origin here. Section 3096 says, "All persons may import any merchan- dise of which the importation shall not be entirely prohib- ited " into the aforesaid districts, etc. This is a portion of the Act of March 2, 1799, and has never been amended. /Su7'ely, we look in vain for any limitation here. Section 3097 provides for reporting to the collectors of customs, of the vehicles "containing merchandise subject to duties." Nothing said about the origin of the mer- chandise. Section 3098 provides that the manifest sworn to by the importer shall contain "a full, just and true account of the kinds, quantities and values of all the merchandise so brought from such foreign territory." No questions asked as to where it originated. This is Section 1 of the Act of March 2, 1821, and provides also for inspection at the first port of arrival of " merchandise subject to duty," curried by any person coming from any foreign territory adjacent to the United States. Sections 3100 and 3102 compose Section 1 of the Act of June 27, 1864, which is entitled an Act to prevent smug- gling and for other purposes. This Act modified the Act of March 2, 1821, b}' removing the obligation of inspection at the first port of arrival, and authorized consular sealing for this purpose. There is no evidence of any intent to modify or change the character of the merchandise subject to loth acts. The words of the Act of 1821 are " merchandise subject to duty," and those of the Act of 1864 are "all merchandise, and all baggage and effects of passengers, and all other articles imported into the United States from any contiguous foreign country." This latter Act is still in force, and nowhere, from the Act of 1799 to date have we discovered any restraints or privileges concerning imported goods, dependent upon the jplace of their growth or pro- duction. 1 feel justified in going a step further and claiming that the Act of 1864 was directed more especially against the products of remote than of contiguous countries. At the time of the passage of this act the Reciprociiy treaty with Canada was in full force and effect, having been put in operation by the proclamation of the President of the United States on the 16th day of March, 1855. This treaty was by its terms to continue in force " ten years, and further until the expiration of twelve months after either of the high contracting parties shall give notice to the other of its desire to terminate the same." The joint resolution of Congress giving notice of the terminatic;i of the treaty was adopted January 18, 1865, and the treaty was duly termi- nated in 1866. Article 3 of the Reciprocity treaty is as follows : " It is agreed that the articles enumerated in the schedule hereto annexed, being the growth a7id produce of the aforesaid British Colonies, or of the United States, shall be admitted into each country respectively free of duty, ?5 SCHEDULK. Grain, flour and breadstuffs of all kinds. Animals of all kinds. Fresh, smoked and salted meats. Cotton, wool, seeds and vegetables. Undried fruits, dried fruits. Products of fish and of all other creatures living in the water. Poultry, eggs. Hides, furs, skins, or tails undressed. Stone or marble in the crude or unwrought state. Slate. ' |V'f ift4 H Pl • '• 1^1 1 Mt ; : BlJ* w^ ''^ * i B- " 1 i ^ tt 1 F " V 4 r ^ W J^J Itfti m ^' |;^ ;■ ta^ 6 Butter, cheese, tallow. Lard, liatns, inamires. Ores of metals of all kinds. Coal. Pitch, tar, tiirpotitine, ashes. Timber and lumber of all kinds, round, hewed, and sawed, unmanufactured in whole, or in whole or in part. Firewood. Plants, shrubs and trees. Pelts, wool. Fish oil. Rice, broom corn and bark. Gypsum ground or unground. Hewn or wrought or unwrought burr or grindstones. Dyestuffs. Flax, hemp, and tow, unmanufactured. Tobacco unmanufactured. Rags. These articles comprised substantially all the products of the contiguous British Provinces in 1854, certainly all such products which would be likely to be imported into the United States in carloads uuder a seal. It must be borne in mind that Canada produced few or no manufac- tured goods until the adoption of the so-called National Policy, which was inaugurated subsequent to the termina- tion of the treaty. An act therefore to prevent smuggling, passed in 1864:, while the treaty was in force and two years before its termination, could scarcely have had special ref- erence to the products of a contiguous country the great mass of which, as a matter both of law and fact, could not he smuggled. The danger of the violation of our revenue laws did not therefore arise from the great mass of pro- ducts of the contiguous British Provinces, and the consular sealing of cars could neither guard nor expedite that traffic. Tlie real menace to our revenue laws must on the contrary have come from the dnt'nxhle for eujn merchandise, which, imported into those Provinces, might- be smuggled thence into the United States under cover of the llociprocity Treaty, but which, being i)hiced in sealed cars at the Can- adian port of arrival, could he tiius safely permitted to pass the frontier and bo forwarded without delay to the final port of entry. Is it not therefore a fair inference that the sealing privilege was more especially designed for use in the transportation in bond of the products of remote foreign countries than of those of contiguous foreign countries? Is not this inference further supported by the fact that ever since the passage of the Act of 1864 the merchandise imported at the port of Montreal, destined for American ports of entry, has been forwardedjn cars sealed at Montreal by the United States consul at that port, and in accordance with the regulations of the Treasury Depart- ment in force from that day to this ? In conversation recently with Consul-General Knapp at Montreal concerning this subject, he stated it as his opinion that nine-tentlis of the cars sealed at that port contained imported merchandise. His deputy, Mr. Gorman, who has had personal charge of the sealing of cars for the past seven- teen years, stated to me that at least eight-tenths of all the cars sealed during that period contained imported merchan- dise, and that the sealing of cars containing merchandise the growth or produce of Canada cut practically no figure in his duties, and never had done so during the past seven- teen years of his official life. He did not know, he said, when the sealing of cars began at Montreal, but it was long antecedent to the beginning of his official duties, and he simply carried along the work in the same manner and form as his predecessors had done. It is clearly evident, there- fore, that the Treasury Department, amidst all the diversity of opinions which might characterize six administrations of one party or arise from the complete transfer of power from 8 one party to another, has steadily construed the sealing privilej^o m applicable to the broad and inclusive descrip- tion of merchandise given in the Act of March 2, 1799, viz : " All merchandise the importation of which ia not entirely prohibited." During all these years, there is no evidence of complaint from any quarter that the revenue laws have bean, or are being put in jeopardy by this sealing privilege, nor have the treasury regulations governing it been disturbed. As an additional safeguard for the interests of our government, the same Act of 18G4 provides that the seal shall not pro- tect the goods from examination and inspection whenever, under its cover, any fraud upon the revenue shall be suspected. The oply interest that the United States Govern- ment, jt)wj9Waj^e/*«ona, as a national entity, can have in the use or non-use of the sealing privilege must necessarily arise from possible danger to its revenues, which, as we have already seen, is not and cannot be increased by its use. Unless there is some very grave and important reason for such action, ought not an executive department of the Government to hesitate to change the construction and operation of laws which it has authorized and acquiesced in for more than a quarter of a century ? Ought not such hesitancy to be confirmed in the presence of strong affirm- ative reasons against any disturbance of the status quo'i The use of the sealing privilege at V^ancouver is no innovation, and is not dependent upon any different construc- tion of the law than the privilege at Montreal, which latter, I think, must be seen to be indefeasible by law, by treaty, and by long continued use. Even if no American interests were benefited by the practice, but only those of foreign railways per se, is there not grave doubt of the right, as there certainly is of the policy, of the Department to overturn it by the arbitrary exercise of a discretion which has lain dor- mant since 1864: ? If the exigencies of the Government inako a change of policy necessary or desirable, would not, at this late date, the remedy be more properly a legislative one, by a repeal or amendment of the Act of 1804 ? The configuration of our borders makes dependent upon these Canadian routes and the competition afforded by them, vast American interests, represented not only by the mil- lions invested in American railways dependent upon them for connections with the seaboard, but by the millions invested in commercial enterprises along these connecting railways, enterprises established in New England, the West and the Northwest, in reliance upon the good faith of the Government to continue the methods which have largely contributed to make them possible. The practical and only efiEect of the sealing of cars containg imported merchandise at Vancouver and Montreal, is to expedite the forwarding of it from the frontier port of arrival in the Inited States to its destination, where it is finally entered and cleared at the custom house. Take for illustration a shipment from Liverpool to Chicago or St. Paul via Montreal. A con- sular invoice accompanies the merchandise from Liverpool to Montreal. When the steamship reaches Montreal the merchandise is transferred directly to the cars placed on the wharf, under the supervision of the United States Consul who at the same time compares and checks it with the consular invoice as made in Liverpool. If found correct, he seals the car, makes out a consular manifest and certifies upon the back thereof that the car contains the imported merchandise described in the manifest. A bond^ is then given by the railway company to the Dominion Government, conditioned upon the exp(»"tation of the mer- chandise. A copy of the consular manifest last mentioned is then furnished to the conductor having the car in charge. Upon the arrival of the car at Port Huron or Detroit, or Sault Ste Marie, he shows the consular manifest to the Collector of Customs, and if the seals on the car are ^5, . '1 1 > i i i t' ;;' ii '■i It a E 1 10 found intact, it Is evidence to the Collector that no additional inspection or examination is necessary, and the car proceeds to der.tination witliout detention. A cnstoms certificate of its arrival there is returned to the Dominion Cnstoms Department at Montreal, and the bond gi\ jn for exporta- tion is cancelled. It is difficult to perceive wherein the interest of the United States Government in this ship- ment could have been affected m the slightest degree, either more or less, had it been the product of a Montreal facto.^y instead of a Liverpool factory. If the sealing privilege is withdrawn from the Canadian seaports, the inspection and examination of the merchan- dise and its comparison with the Liverpool consular invoice, which is so easily, safely and rapidly made while it is undergoing the necessary transfer from vessel to cars, must take place at the frontier port of arrival. A special unload- ing and reloadiiig of the cars must then be done in order to ; at the [Jnited States Government in precisely the same relation to the merchandise as if it had been sealed at the Canadian seaport. This at once imposes upon all connect- ing American railways a large exp^^nse for additional yard room, side tracks, freight platfcrms, freight sheds and labor. It compels the breaking up of trains and tliu extra switching of cars to and from the places of inspection and examin.vuicn. Preparations for the new order of things would becomo necessary at Rouse's Point, Ogdensburg and Morristown in jSTew York, Newport in Vermont, Detroit, Port Huron and Sault Ste Marie in Michigan, Neche in North Dakota, St. Vincent and very soon Duluth in Min- nesota. American importers, merchants and consumers throughout the wide regions affected would inevitably be subjected to an unnecessary and exasperating delay. When the imported merchandise comprised several carloads in one lot, as is frequently the case, the wreck, detention, or misdirection of a single car might subject the whole lot ta ^..- 11 snch delay at tlie frontier as to involve the merchants in serious damage and loss. Would they not be justified in asking out bono are all these new barriers to our traffic, when the United States Government would not and could not be a single iota the gainer by the system ? The aspect of this question is materially broadened when we turn our eyes to our southwestern border and contem- plate our future relations with Mexico, Central America and South America. A prominent American, largely inter- ested in Mexican railways, was recently elected President of the Gautemala Central K. E. Co., which is designed ta connect with his Mexican system and bring the products of Gautemala to this country. Shall we say to him and the merchants of that country, your products shall not come here under consular seal through Mexico because, forsooth, they are not the growth and produce of a contiguous coun- try ? An American railway company was recently organ- ized to build a line from Mazatlan, one of the best harbors on the Mi'xican Pacific coast, across Mexico to the Ameri- can border, and thence to Wichita, Kansas City and other points. Shall we say to this company and to the merchants of Ecuador, Peru, Chili, and the whole Pacific coast of South America, your products shall not be sealed by the United States Consrl at Mazatlan, when transferred from vessels to cars, because your countries are not contiguous to the United States? When the great Columbia Central Kailway shall be built, one of the best if not "the first fruits" of the Pan-American Congress, shall we say to our sister republics bordering that great highway, your products shall not pass through Mexico undc- consular seal to the United States, because your boundaries are not contiguous to our own? The rich tropical fruits with which you would fill our waiting hands saall lose their fiavor and sub- stance while awaiting ta/dy inspection on some American side-track at the frontier, but the competing products of 12 Mexico, a contiguous country, sliall go under consular seal swift!}' and without delay to their destination. When this traffic begins, as it will at no distant day, I fear it will be difficult to defend such a construction of the Act of 1S64. In view of the foregoing reasons and facts, I respectfully submit that the undisturbed practice of the Treasury Department for twenty-six years ought not to be reversed, the only resulting benefit of which would be to make the United States government a quasi side partner with certain American railways in their tierce struggle for business with their Canadian competitors. TJie final objection to a change in construction arises under the treaty of Washington in 1871, between the United States and Great Britain. It is assumed that Article 29 cf this treaty is still in force. There would seem to be no reasonable ground for a contention to the contrary, nothwithstanding the position taken by the late President Cleveland in respect of it. I will not here argue the question. The reference in the article, for the time of its duration, to " the term of years mentioned in Article 33," very evidently is equivalent to the embodiment in Article 29 m extenso of the words designating the afore- said term of years, as set forth in Article 33, viz., "ten years from the date of coming into operation, and further until the expiration of two years after eitiier of the high con- tracting parties shall have given notice to the other of its wish to terminate the same." Such I believe to be the cor- rect interpretation of t'.e treaty, and it is the one adopted by the political party represented by the present administra- tion, as expressed through the opinions of its leaders in congress. Article 29 therefore will remain operative until the expiration of two years after notice given by one of the governments to the other of a desire to terminate it. This article provides for the reciprocal importation and exportation, free of duty, through the ports of either Canada % ^ I 13 or the United States of foreign merchandise moving to or from either country. The clear intent and meaning of this Article is to place upon an exactly equal footing the rail- ways and the citizens of both countries in using the facili- ties of either, in the importation and exportation of mer- chandise. For instance, it is a benefit to Canadian interests to have her seaports open to receive goods, etc., imported from abroad for the United States, and transported thence by her carriers to frontier ports of the United States. And the same is true of the United States m respect of her ports and the transportation by her carriers to the frontier ports of Canada. Which side makes the greater gain by this reciprocal arrangement I cannot state in figures, but it can be readily ascertained. Those who are well informed as to the details claim a large balance in favor of the United States. If, then, the Canadian government has a treaty right to continue this business, does not that right extend to a con- tinuance of the means and methods in force since the ratifi- cation of the treaty, and designed to render effective the facilities of the Canadian railways both for themselves and for the American interests dependent upon them ? Within this category must assuredly fall the privilege of consular sealing, which had been in operation for seven years when the treaty took effect, and which has continued to the pres- ent ti>ne! This, I submit, amounts to a practical construc- tion of the treaty, in other words, is a part of it ; and for our government at this late day to substitute for it a system which would require the examination -and transfer of all imported merchandise at the frontier ports, thereby seri- ously obstructing the business, might justly be construed into an unfriendly act, a substantial violation of the treaty. In respect to merchandise imported into Canada via sea- ports of the United States, there is a substantially similar method of doing the business. The only difference is that I I I 14 the merchandise is carrie(/ by the American railways to the Canadian frontier under the American customs seal, and is taken tlirou^h in the same cars to any interior port of entry in Canada, without inspection or examination, other than the substitution of a Canadian seal at the frontier if the Amer- ican seal is found intact. The two governments seem to have dealt with this mat- ter under mutual arrangement to give efficiency to the treaty provisions in question, so as to carry out in good faith the plain intent of the high contracting parties. I submit, moreover, that there is nothing in the situation, no controlling public interest, that will justify a disturbance of the existing system, even if it should be thought that it is not technically protected by the treaty. If such disturb- ance should resuH in correspondingly unfriendly action by the Dominion Government, and divert to Canadian ports and railways exclusively, the large tonnage now carried through American ports by American railways, the loss and injury to these latter transportation interests would be much more serious than to the Canadian interests which would be prejudiced by the contemplated action of the Treasury Department. It is a well known fact that, especially dur- ing the close of navigation, the great bulk of Canadian imports pass through American Atlantic ports and over American railways. There does not appear to be any suf- ficient reason for depriving these American lines of their large revenues from this traffic, for the contingent effect it may have upon the general competition between Amer- ican and Canadian trans-continental lines. ■It ,^-,''nitmM •smt