DRAWBACK, in commerce, an allow ance made to merchants on the re-expor tation of certain goods, which in some cases consists of the whole, in others of a part, of the duties which had been paid upon the importation.
• Drawbacks were probably originally granted for the encouragement of the carrying trade, which, as the freight of ships is frequently paid by foreigners in money, was supposed to be a more cer tain source of wealth than other branches of foreign trade. They are granted, not only on foreign commodities which have paid a duty on importation; but also on the exportation of such home manufac tures as are subject to excise duties.
Upon the exportation of some articles of foreign produce, of which the quantity imported greatly exceeds what is neces sary for the home consumption, the whole of the duties which had been paid on importation are drawn back. Thus, while the American states were under the dominion of Great Britain; they had the monopoly of the tobacco of Mary land and Virginia, of which about 96,000 hogsheads were annually exported, while the home consumption did not exceed 14,000: to facilitate the great exportation which was necesaary in order to get rid of the surplus, the whole duties were drawn back,' provided the exportation took place within three years.
Drawbacks are paid by the collector of the customs at the port where the goods are exported, on producing a debenture,' authenticated by the proper officers, as the authority or voucher for the pay ment.
Drawbacks can never, it is probable, be injurious : for they can never turn to any particular employment a greater share of the capital of the country, halt would naturally go to that employment. They only prevent the natural tendency of capitals from being deranged by taxa tion. When the duties paid on the ex portation of sugar or tobacco are return ed on their exportation; the trade in those articles is only replaced on the situation it would have been in, if the articles had not been taxed.
A still more equitable arrangement than that of drawbacks is, to allow the mer chant, who imports any commodity which lie may probably wish to export again, to deposit it in the king's warehouses, giv ing a bond for payment of the duties, should he dispose of it for home con sumption. This is called bonding, and is allowed to a considerable extent.