WAREHLSINO SYSTEM is a customs' regulation, by which articles of import may be lodged in public warehouses at a moderate rent, not being chargeable with duty until they are taken out for home consumption, and being exempt from duty if re-exported. It affords 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 immediately 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 interest 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 payment until the market shall offer an advantageous sale, he may find it difficult to induce persons to become his sureties, and, when he has succeeded, he may involve them iu ruin. The natural result of these difficulties is, that none but wealthy capitalists can import articles on which heavy duties are charged, and a monopoly is thus established, to the great injury of the consumer. The immediate payment of customs' duties also obstructs the carrying trade of a country, by making the re-exportation of articles more troublesome as well as expensive.
The first British statesman who proposed 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 warehouses for home consumption. Speaking of tobacco, he thus explained his proposal :—" If the merchant's market be for exportation, he may apply to his warehouse-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 trouble. But if his market be for home consumption, that he shall then pay the three farthings charged upon it at the custom-house upon importation ; and that theu, 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 advantages of his scheme to he 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, unfor tunately for English commerce, Was not permitted to be tarried into effect.
The advantages of the warehousing system were most forcibly pointed nut by Dean Tucker in 1748, In his ' Essay on the Advantages and Disadvantages which respectively attend Great Britain and Frauce with respect to trade,' and afterwards by Adam Smith, In his ' Wealth of Nations; but it was not established before 1803 (43 Goo. Ill., C. 1321. The acts by which warehousing is now regulated are the 3 and 4 Will. IV.. cs 57 ; 4 and 5 1VilL IV., c. 89 ; and 6 and 7 Will. IV., c. 60; The main objection to Sir Robert Walpele's scheme was that the warehousing was compulsory, but, under the existing law, it is at the option of the importer. Amongst other privileges enjoyed by the merchant, he may remove any merchandise from one port to another, either by sea or inland carriage, to be warehoused again. A com mittee 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 regulations, with advantage to trade and safety to I the revenue. An Act (7 & 8 Viet, c. 31) conferred this privilege upon Manchester. Since then the power of appointing warehousing ports has been conferred on the Treasury by the Customs Consolidation Act of 1S33; and a similar power as to inland towns by the 23 & 24 Vict., C. 36.
The advantages of warehousing have been understood in various foreign countries as well as in England. So long since as 1664, M.
Turgot established it in France; but it was discontinued in 1668, except for merchaddise imported from the East and West Indies and Guinea, or exported thereto. In 1S05 the system was re-established in a more extensive manner, but was confined to certain seaports, until 1832, when it was extended 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, Denmark, and most other commercial countries the system has also been adopted.