Mr. Seward to Mr. Chase.
Sir: Referring to your communication of the 17th. July, in regard to certain provisions of the “act increasing temporarily the duties on imports, and for other purposes,” and more particularly the section of that act relating to the verification of invoices, I have now the honor to acquaint you that the instructions upon the subject embodied in circulars Nos. 17 and 29, (copies of which are herewith transmitted,) after having been submitted to the Treasury Department, were transmitted to all our consular officers for their instruction and guidance.
The department is quite aware of the frauds which have heretofore been perpetrated by a system of undervaluation and double invoices, one for the customhouse, and the other for the seller of the imported goods, for the prevention of which frauds various provisions were introduced into the acts of the 30th August, 1842, and the 10th of August, 1846, which were explained and enforced by the treasury circulars of the 11th, 26th, and 28th of November, 1846, and the 7th of August and 26th of December, 1848; and also, that the introduction into the act of the 17th of July, of the provision which requires all invoices to be authenticated by our consular officers abroad, was intended by the framers of that act to meet and correct the fraudulent devices which still continue to be practiced, greatly to the detriment of our revenue.
It has, however, been found, in executing the provisions of the act, that difficulties have arisen which were not anticipated at the time of its passage.[Page 1336]
The 17th section of the act requires the oath to an invoice to be administered by a consular officer of the United States, or, if there be no such officer in the district, by some officer duly authorized to administer oaths.
The difficulties in the way of the execution of, this provision are two-fold:
First. In very few foreign countries are our consuls authorized, by treaty stipulation or by the local law, to administer oaths.
Secondly. In scarcely any country are the local officers permitted to administer such oaths as are required by our revenue laws.
This you will more clearly perceive from a perusal of the despatches, herewith enclosed, of which a list is annexed.
In Great Britain, a consul of a foreign state, although authorized by the laws of his own country to administer an oath in verification of a document to be used in such country, would not be recognized by the English law as a person duly authorized to administer an oath, unless also authorized by some enactment of Parliament, of which there is none. Nor would an indictment lie for a false oath to an invoice administered even by a justice of the peace or a commissioner duly qualified to administer oaths, for the reason that the English law does not recognize such oaths as criminal acts.
In France, neither the consul of the United States nor any local magistrate can administer an oath to a French citizen, of the character required by our revenue acts, which would be held valid by a French court of law, unless—which is, perhaps, hardly probable—the case might be brought within the provisions of the 6th article of the consular convention with France.
In Prussia, we are informed by our consul at Aix la Chapelle, that it has always been known that an oath administered by a consul has no legal force.
In Sweden, such an oath has only a moral, and not a legal force.
In Italy, the Italian law does not recognize oaths of this nature, (mercantile oaths,) it matters not by whom administered.
In Germany, a consul is not authorized by any of the governments to administer oaths, although he is not prohibited from doing so, and no local magistrate is allowed to administer affirmatory oaths except in open court; hence it follows that the law of Germany, by which oaths are limited to the least number of cases possible, does not regard a false statement made upon oath before any foreign consul as perjury, but as simply a fraud, though aggravated by being perpetrated before an official person, and on a solemn occasion.
An examination of the law of other countries would disclose, it is believed, similar results.
It will thus be seen that some further legislation may be hereafter requisite, unless the objects which the government has in view in protecting the revenue can be accomplished by departmental regulation.
An examination of the revenue laws of other countries shows that it is the policy of foreign governments to limit, as far as possible, the number of cases in which oaths are required to be taken; and, as oaths of the character required by our revenue laws are neither known nor regarded as having legal force, it may be inferred that such oaths, when taken by subjects of foreign countries, not familiar with our laws, before our consuls or in our custom-houses, are regarded as mere forms, and without any authoritative or moral sanction.
May it not be well, then, to notice carefully the modes adopted by the older governments of Europe for the prevention of frauds in the collection of their revenues?
And, in this connexion, I beg leave to invite your attention to the memorandum of Mr. Drouyn de l’Huys, which accompanies the note of Mr. Dayton, our minister at Paris, in which he explains the system of “pre-emption” which is adopted in the French custom-houses; (by this term it is to be understood the government reserves to itself the right to take, on its own account, at the invoice price, any articles therein which it considers to be undervalued.)[Page 1337]
Mr. Drouyn de l’Huys observes, that “the adoption by the federal government of this system, eminently favorable to commerce, and at the same time efficacious against fraud, would be, in effect, the best means of remedying the inconveniences of false declarations of value, which it is difficult to prevent in requiring an oath deprived of legal sanction.” He concludes by observing “that the French and English governments, whom a long practice has permitted to appreciate the utility of pre-emption, have not hesitated to introduce it, by common consent, in 1860, into their conventional custom duty.”
A step in this direction was taken by the enactment of the provisions of the 18th section of the act of 30th August, 1842, and the instructions of the Secretary of the Treasury to collectors and appraisers, in accordance therewith, of the 28th November, 1846. To what extent the system is now in operation this department has no knowledge.
I may be pardoned also for suggesting that perhaps, in view of the difficulties indicated by our consuls at Belfast and Lyons, in their remarks on obtaining the true valuation of such articles as linens and silks, except by professional experts or individuals of long experience, such a change in our system of appraisement and home valuation as is indicated in an article in Hunt’s Merchants’ Magazine, volume 37, pp. 679–684, might be found worthy of consideration, especially as it is understood that it has heretofore attracted the favorable regard of the Treasury Department.
I will thank you, after making such use of the information therein as you think proper, to return the despatches which are herewith enclosed.
I should also be pleased to receive from you any suggestions which you may think best adapted to meet and overcome the difficulties which have arisen in executing the law of Congress to which I have invited your attention.
I have the honor to be, sir, your obedient servant,
Hon. S. P. Chase, Secretary of the Treasury.