DRAWBACK is a term used to signify the sum paid back on the re-exportation of goods, upon the importation of which an equal sum has already been paid as duty. A drawback is also allowed on the exportation of articles which are subject to excise duties. The object of this repayment is to enable the exporter to sell his goods in foreign markets nnbnrthened with duties ; and it is clear that if duties are required to be paid on the first importation, no transit trade can possibly be carried en unless drawback is allowed by the government. Payments of this nature are to principle essentially different from bounties, which enable the exporter to sell his goods at less than they cost ; but a drawback does not interfere with the natural cost [Bounry.] Previous to the establishing of the warehousing system in this country in 1803, and when the payment of duties on all foreign and colonial merchandise, with the exception of tobacco and East India goods, was required on the first importation, drawbacks were in all cases allowed upon re-exportation. This course was injurious to trade, because of the larger capital which was necessarily em ployed, and it was prejudicial to the revenue because it gave rise to numerous and ingenious fraudulent expedients, by means of which greater sums were re ceived for drawback than had been ori ginally paid by the importers ; besides which, the machinery required for the collection and repayment of duties was more complicated and expensive than would otherwise have been necessary.
The amount of customs' duty collected in Great Britain before the passing of the Warehousing Act in 1803 was usually from twice to three times as great as the sum paid into the exchequer, the greater part of the receipts being absorbed by drawbacks, bounties, and charges of man agement.
The only articles upon which drawback was paid at our Custom-houses, and the amount of repayment in 1844, were as follows :— The drawback on timber is not indeed a payment made on its re-exportation, but an allowance upon such quantities as are used in the mines. The quantities of thrown silk, sugar, and tobacco entitled to drawback had already paid duty pre vious to their undergoing a manufacturing process, and drawback on wine is only paid when exported in bottles, for trans ferring it to which from the cask it was, until lately, necessary to pay the duty. .n 1830 the sum paid for various draw backs amounted to 3,300,0001. ; and in 1836 to 781,1541. The reduction has been obtained by totally repealing many duties, and by affording greater oppor tunity of exportation from the ware houses.