WAREHOUSING SYSTEM is a Cus toms regulation, by which imported arti cles may be lodged in public warehouses at a moderate rent, without being charge able with duty until they are taken out for home consumption, and are exempt from duty if re-exported. This regula tion gives valuable facilities to trade, is beneficial to the consumer, and ultimately to the public revenue. Where no such system exists, the merchant must either pay the duty on every article as soon as it is landed, or must enter into a bond with sureties for payment at a future time. If he pays at once, he is obliged to advance a large capital, on which in terest must be charged to the consumer until the goods be sold ; or he must effect an immediate sale, perhaps at an inadequate profit, or even at a loss, in order to raise the funds necessary to pay the duty. If he wishes to defer the pay ment until the market shall offer an ad vantageous sale, he may find it difficult to induce persons to become his sureties, and, when he has succeeded, he may in volve them in ruin. The result of these difficulties is that none but wealthy capi talists can import articles on which heavy duties are charged, and the trade in such articles is limited, to the injury of the consumer. The immediate payment of customs duties also obstructs the carry ing trade of a country, by making the re exportation of articles more troublesome as well as more expensive.
The first British statesman who a remedy for these evils was Sir Robert Walpole, in his celebrated Excise scheme, in 1733. His object was to unite the Excise laws with those of the customs as regarded wines and tobacco, and to charge a small duty immediately on importation, and the remainder on being removed from the Excise ware houses for home consumption. Speaking of tobacco, he thus explained his pro posal :—" If the merchant's market be for exportation, he may apply to his ware house-keeper, and take out as much for that purpose as he has occasion for, which, when weighed at the custom-house, shall be discharged of the three farthings per pound with which it was charged upon importation; so that the merchant may then export it without any further trou ble. But if his market be for home con sumption, that he shall then pay the three farthings charged upon it at the custom-house upon importation ; and that then, upon calling his warehouse-keeper, he may deliver it to the buyer, on paying an inland duty of 4d. per pound to the proper officer appointed to receive the same." Walpole clearly foresaw the ad vantages of his scheme to the carrying trade. "I am certain," he said, "that it will be of great benefit to the revenue, and will tend to make London a free port, and, by consequence, the market of the world." This wise plan, unfortunately for English commerce, was not permitted to be carried into effect.
The advantages of the warehousing sys tem were most forcibly pointed out by Dean Tucker in 1748, in his Essay on the Advantages and Disadvantages which respectively attend Great Britain and France with respect to Trade,' and after wards by Adam Smith, in his Wealth of Nations ;' but it was not established before 1803 (43 Geo. HI. c. 132). The act by which warehousing is now regulated is the 8th & 9th Viet c. 91. The lords commis
sioners of the treasury are empowered to determine the ports at which goods may be warehoused, and the warehouses in which particular descriptions of mer chandise may be The various regulations and restrictions under which warehousing is conducted, and the ports to which the privilege is extended, are fully explained in Ellis's Customs, Laws, and Regulations,' vol. ii., pp. 2411 377, edition 1841 ; and Yearly Journal of Trade,' for 1846, by Charles Pope.
The main objection to Sir Robert Wal pole's scheme was that the warehousing was compulsory ; but, under the existing law, it is at the option of the importer. Amongst other pnvilges enjoyed by the merchant, he may remove any merchan dise from one port to another, either by sea or inland carriage, to be warehoused again. The revenue is said to have sus tained little or no loss in these removals, and it naturally becomes a question, Why should warehousing be confined to sea ports ? It is obvious that the power of warehousing on the spot must be a great convenience to the merchants and traders of inland towns, and no reason can be assigned for not conceding it, except inse curity to the revenue. But if goods may be removed with safety from London to Hull, they could be removed with equal safety from Liverpool to Manchester, or from Hull to York. Government would incur no expense in erecting warehouses, as they would be provided by private capitalists, in the same manner as the docks and warehouses in Loudon, Liver pool, and other ports. A committee of the House of Commons reported, in 1840, "that the privilege of having bonding warehouses may be conceded to inland towns, under due restrictions and regula tions, with advantage to trade and safety to the revenue ;" and by act 7 & 8 Viet. c. 31, the privilege was conferred upon Manchester; but no other inland town has obtained a similar concession.
The advantages of warehousing have been understood in various foreign coun tries as well as in England. So long since as 1664, M. Turgot established it in France ; but it was discontinued in 1668, except for merchandize imported from the East and West Indies and Gui nea, or exported thereto. In 1805 the system was re-established in a more ex tensive manner, but was confined to cer tain sea-ports, until 1832, when it was ex tended to several of the principal cities in the interior. Warehousing both at the ports and at certain inland towns is permitted in Holland. In Belgium, Den mark, and other commercial countries, the system has also been adopted. In the United States of America, its adoption was recommended not only on account of its importance to trade, but for a novel reason —its republican tendency. The presi dent, in his message of December, 1842, said that, without such a system of pay ing the duties, " the rich capitalist, abroad as well as at home, would possess, after a short time, an almost exclusive monopoly of the import trade, and laws designed for the benefit of all would thus operate for the benefit of the few—a result wholly uncongenial with the spirit of our insti tutions, and anti-republican in all its ten dencies."