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The Beacon of Liberty, Vol. II, Issue 11

The Beacon of Liberty, Vol. II, Issue 11

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Published by Matt Erickson
The Beacon of Liberty, Volume II, Issue 11 continues the look into the constitutional requirements to lay and collect taxes, duties, imposts and excises
The Beacon of Liberty, Volume II, Issue 11 continues the look into the constitutional requirements to lay and collect taxes, duties, imposts and excises

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Categories:Types, Research, History
Published by: Matt Erickson on Aug 25, 2012
Copyright:Public Domain

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Seeking additional funds to support the build-up of a strong, central government, the Federalist-controlledCongress enacted four Acts laying Duties upon domesticitems between June 5
th
and June 9
th
of 1794. The first Act (I Stat. 373), imposing a Duty upon carriages used forthe conveyance of persons, was discussed in the previousissue of 
The Beacon of Liberty 
.On June 5
th
, 1794, Congress enacted the second of 
the four: "
 An Act laying duties on licenses for selling Wines 
and foreign distilled spirituous liquors by retail 
" (I Stat. 376).
Every person who dealt in the selling of wine (outsideof its original importation cask or box) in less quantitiesthan thirty gallons at any one time was declared in Section1 to be "a retail dealer in wines".Every person who dealt in the selling of foreigndistilled spirituous liquors in less quantities than twenty gallons at one time was deemed to be "a retail dealer inforeign distilled spirituous liquors".Doctors using such wines or spirits for medicinal
purposes (and druggists or chemists making such medicines)
 were exempted from the Duty, as were properly-licensed"keepers of taverns, inns or houses of entertainment" whosold such wines and hard liquors for on-site consumption.Section 2 required the purchase of a $5 license foreach grouping of drink (wine and foreign distilled spiritsrequired separate licenses) for each retail store. Section 7continued the Act in force for two years, until the end of the next session of Congress (later Acts continued it). Also on June 5
th
, 1794, Congress enacted "
 An Act laying certain duties upon Snuff and Refined Sugar 
" (IStat. 384).This Act laid a Duty of eight cents for every pound of 
snuff  
(powdered tobacco which was inhaled [sniffed]through the nostrils) manufactured for sale within theUnited States. Section 2 of the Act also laid a Duty (of two cents per pound) on all sugar refined within theUnited States.This Act maintained the severe punishments for themanufacturers and refiners who failed to follow therequirements set forth in the Act as also faced by importers in earlier importation Acts.
Section 4
,pertaining to the snuff manufacturers (Section 5 similarly pertained to sugar refiners), stated, in part:
"And if any such manufacturer shall omit to makeany such entry or report, or to give any such bond asis herein before directed, he or she shall forfeit andlose every mill, together with the mortars and otherutensils thereto belonging, which he or she shall haveor keep, for the performing of any process, matter orthing, in or about the manufacturing of snuff, and shallalso forfeit and pay the sum of five hundred dollars, tobe recovered with costs of suit."
 A June 9
th
, 1794 Act ("
 An Act laying duties on property sold at Auction
", I Stat. 397) was the last of thefour closely-enacted statutes imposing internal Duties; itlaid Duties upon numerous items sold by auction. Auction-houses were viewed by supporters asdefinitive fortresses of the free-market; as places whereconsumers were rewarded with large quantities of low-costgoods from around the world; where the middle-men andtheir high, fixed-cost business structures were bypassed.Opponents viewed auction-houses as cut-ratebusinesses which sold inferior (usually imported) productsin a manner which supported fraud and speculation.
Volume II: Issue 11
Clause Discussed:
 Article I, Section 8, Clause 1
Concept Discussed:
• Domestic Duties
Distributed by:FoundationForLiberty.org
w
 
ww.FoundationForLiber
 
t
 
 y.org
1500 Highway 2
Copyright 2003, 2005 by Beacon of Liberty, LLC.
Leavenworth, WA 98826
www.BeaconofLiberty.org
 
From this latter perspective, upstanding localbusinessmen were given the proverbial boot andreplaced by charismatic charlatans who preyed uponunsuspecting consumers who acted in a frenzy of competitive bidding. Personal service, honesty, stability,and local investment were said to be replaced by 
caveat emptor 
policies and
laissez-faire 
doctrines whichallegedly punished the un-informed. An inadequate comparison today to the inherentstruggle between auction-houses and local merchants of yesterday would be the national, "big-box" discountstores versus the local "mom-and-pop" shops
1
. Even
though the local shops may have better service, reputation,or even goods, the volume merchants, with their extensive
supplies of low-priced goods, tend to drive out of business all those who cannot find a competitive niche.
In either century, small retailers simply had a difficult
time competing against the discount-priced, volume
retailers who offered a wide selection of low-priced goods.
Two rates of Duty were imposed by Section 1 uponitems sold by auction. The rate of Duty of twenty-fivecents for every hundred dollars of purchase money wasimposed upon "lands, tenements or hereditaments, andof any utensils in husbandry, and farming stock, shipsand vessels" sold by means of an auction.Duties of "one half of a dollar" on every hundreddollars of purchase money were laid on "all other goods,chattels, rights and credits whatsoever…except as hereinafter excepted".Since the purpose of the Duty (besides that of raising revenue, of course) was to help level the playing field between auction-houses and normal businessestablishments (to curtail that viewed as morally-dubious), auctions due to reasons of distress wereexempted.
Section 1
stated the exception:
"
Provided always 
, That nothing in this actcontained shall extend to any sale or sales byauction, of estates, goods or effects, made pursuantto, or in execution of any rule, order, decree,sentence or judgment...made in virtue, or by force ofany distress for rent, or other cause, for which adistress is allowed by law;or made in consequenceof any bankruptcy or insolvency…or made inconsequence of any general assignment of propertyand effects, for the benefit of creditors."
 Auctions held at the direction of executors oradministrators settling estates of deceased persons werelikewise exempted. Further exceptions were alsoprovided for items:
"made of the produce of the land, upon the landwhere such produce was raised;or made of anyfarming utensils, stock or household furniture, bypersons removing from the place of their formerresidence, where the amount of each sale of suchfarming utensils, stock or household furniture shallnot exceed two hundred dollars;or made pursuant tothe directions of any law of the United States, or ofeither of them, touching the collection of any tax orduty;or disposal by auction of public property of theUnited States or of any state;nor to any such sale orsales by auction, of ships, their tackle, apparel andfurniture, or the cargoes thereof, which shall bewrecked or stranded within the United States, andsold for the benefit of the insurers or proprietorsthereof."
Section 1 imposed the responsibility of payment of the Duties upon the Auctioneer, who was required to belicensed under Section 2 of the Act. Section 9 allowedthe Auctioneer a one percent commission "for histrouble" (this commission was the Auctioneer's handling fee for collecting the Duty; his fee for selling the itemsthemselves would be much higher). A few years later, the last of the domestically-oriented Duties of the eighteenth-century was enacted.
2
"
 An Act laying Duties on stamped Vellum, Parchment and Paper 
" (I Stat. 527), enacted on July 6, 1797, waspainfully reminiscent of the British Stamp Act of 1765.
Section 1
of the 1797 Act imposed Stamp Duties,reading (in part):
"
Be it enacted by the Senate and House of Representatives of the United States of America, in Congress assembled 
, That from and after the thirty-first day of December next, there shall be levied,collected and paid throughout the United States, theseveral stamp duties following, to wit:For every skinor piece of vellum, or parchment, or sheet or piece ofpaper upon which shall be written or printed any oreither of the instruments or writings following, to wit:any certificate of naturalization, five dollars:anylicense to practice or certificate of the admission,enrolment or registry of any counsellor, solicitor,
attorney, advocate or proctor in any court of the United
States, the sum of ten dollars;any grant or letters
patent under the seal or authority of the United States,
except for lands granted for military services, fourdollars;any exemplification or certified copy of anysuch grant or letters patent, two dollars;any charter-
party, bottomry, or respondentia bond, one dollar;any
receipt or other discharge for or on account of anylegacy left by any will or other testamentaryinstrument, or for any share or part of a personalestate divided by force of any statute of distribution,the amount whereof shall be above the value of fiftydollars, twenty-five cents…any policy of insurance orinstrument in nature thereof, whereby any ships,
B.O.L. Volume II:Issue 11:Page 21. Here discussing only the inherent competition, not insinuatingany defect in the personal integrity of the box-store owners ormanagers, nor does the comparison relate to the earlier salesmechanism (bidding auction-vs.-retail offering of goods for sale).
Stamp Duties
 
vessels or goods going from one district to anotherin the United States, or from the United States toany foreign port or place, shall be insured…anybonds, bills, single or penal, foreign or inland bill ofexchange, promissory note, or other note for thesecurity of money, according to the following scale,viz.on all bonds, bills, single or penal, foreign orinland bill of exchange, promissory note, or othernote, above twenty dollars and not exceeding onehundred dollars, ten cents;above one hundred andnot exceeding five hundred dollars, twenty-fivecents;above five hundred and not exceeding onethousand dollars, fifty cents;above one thousanddollars, seventy-five cents;
Provided 
, that if anybonds or notes shall be payable at or within sixtydays, such bonds or notes shall be subject to onlytwo fifth parts of the duty aforesaid."
Section 1 included the proviso exempting fromDuties any legacy left by any will or other testamentary instrument and also any part of a personal estate of a person dying intestate (without a will), which was to bedivided by force of any statue of distributions amongstthe decedent's wife, children, or grandchildren.Stamp Duties on legal writings act in similarfashion as a postage stamp. Just as a stamp is purchasedand affixed to an envelope when one wishes to send a letter though the postal system, so to were legaldocuments stamped
3
 when a person dealt withdocuments requiring such stamps. In either case, thecancelled stamp was proof that the amount owing hadbeen paid (which is purpose of the stamp itself).The July 6, 1797 Statute declared in Section 1 thatit would be effective "from and after the thirty-first day of December next" (1797). Due to widespread publicoutcry and strong resistance, however, Congress (onDecember 15, 1797, I Stat. 536) repealed the initialeffective date and directed that the stamp Duties wouldbe effective "from and after the thirtieth day of Junenext" (1798).Strong public resistance to the stamp Duties wereperhaps inevitable, considering America's distaste forthe stamp Duties imposed by Great Britain on the American colonies under the 1765 British Stamp Act.It was in response to this 1765 Act that the chargeof "taxation without representation" was leveled, andbecause of which the Sons of Liberty sprang into action.The March 22, 1765 Stamp Act
4
 was the Act in which the British Parliament attempted to tax the American colonies, not in an external manner
on theirimports, but internally, on items of domestic use.
The Stamp Act levied upon "every skin or piece of vellum or parchment, or sheet or piece of paper" on which numerous legal writings were written, variousStamp Duties from a half-penny to ten
 pounds.
5
Upon many different items in 1765 were levied a Stamp Duty. Legal processes in Court such as a plea (atthree pence) or petition (one shilling and six pence) were affected, as was a certificate of any degree from university (two pounds). A Stamp Duty of one shilling  was imposed upon a summons or subpoena. Tenpounds was the Duty for any license for an attorney topractice in any court.
B.O.L. II:11:33. Today a
stamp 
is generally thought of as a
noun
, as the namefor a small piece of printed paper which is capable of beingaffixed to another piece of paper such as an envelope or, decadesago, deeds and other legal documents.In earlier centuries, however,
stamp 
was often used as a
verb 
to describe the process of using a die to emboss a piece of paper by physical pressure to leave upon the paper a raisedimpression of the die. Many Notaries Public, educationalinstitutions and others still stamp paper (i.e., especially diplomasand other items meant for display) with raised impressions,though ink-stamps are now more prevalent. Other physicalmeans of stamping include the burning or cutting of a brand intoitems other than paper, such as on wood casks or crates. Inearly eras, wax seals were also used.4. http://www.yale.edu/lawweb/avalon/amerrev/parliament/stamp_act_1765.htm.
Volume #PageCongressSessionChapterDate ofEnactmentTitle of Act
I1991
st
III15March 3, 1791
An Act repealing, after the last day of June next, the duties heretofore laid upon Distilled Spirits imported from abroad, and laying others in their stead; and also upon Spirits distilled within the United States, and for appropriating the same.
I3733
rd
I45June 5, 1794
An Act laying duties upon Carriages for the conveyance of Persons.
I3763
rd
I48June 5, 1794
An Act laying duties on licenses for selling Wines and foreign distilled spirituous liquors by retail.
I3843
rd
I51June 5, 1794
An Act laying certain duties upon Snuff and Refined Sugar 
I3973
rd
I65June 9, 1794
An Act laying duties on property sold at Auction 
I5275
th
I11July 6, 1797
An Act laying Duties on stamped Vellum, Parchment and Paper 
I5975
th
II75July 14, 1798
An Act to lay and collect a direct tax within the United States 
United StatesStatutes atLargeEighteenth-century Acts imposing Internal Revenue
(Amendatory Acts omitted)
2. Listing of 18
th
-century Internal Revenue Acts:

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