Customs duties regarded merely as a source of revenue depend upon the same principles exactly as those which underlie excises used for that purpose. The greater revenue is obtained with the least expense from a few simple duties upon important commodities.

Technically, customs duties are of two kinds, according as they are levied upon goods in bulk irrespective of their value, or the contrary. This technical distinction is of great importance in determining the incidence of these taxes. Duties levied according to the value of the imported commodities are known as ad valorem; those according to weight, bulk, or other unit of measurement, are known as specific. The latter fall most heavily upon the coarser or cheaper grades of commodities. Such a tariff is, therefore, regressive and contrary to the spirit of many consumption tax systems, which usually tax luxuries more heavily than other commodities.

¹ See the masterly treatment of the whole of this intricate subject by Lexis, ^u Handel," in Schönberg's Handbuch, 2d ed., Vol. II., XXL, sec. 77; also Conrad, in his Jahrbuch, XXXVII.; Cohn, " Zeitgescähfte und Differenzgeschäfte," in Hildebrand's Jahrbuch, VIL, p. 388 ; brought down to date in 1890 by Kandtorowicz.

But the great saving in expense, and the great ease of collecting and administering specific duties, go a long way in recommending them. Ad valorem duties demand more machinery of administration, as, for example, the certification of the consul in the place where the goods come from to the correctness of the invoice, a corps of appraisers, and a careful examination or inspection of all incoming goods. Little of this is necessary in the case of specific duties. Specific duties are now retained mainly for simple commodities of uniform value per unit, or for rough groups of articles, whose value is easily ascertained.

The watching of the frontier and the prevention of smuggling is one of the primary difficulties that have to be overcome in the administration of customs duties. Goods of high value and easily portable are not very well adapted to pay such duties, unless they can be obtained only from distant countries and are thus easy of identification. Whenever there is a heavy excise on any commodity there is generally a correspondingly heavy customs duty as well. Sometimes the imported commodity pays both the duty and the excise or a part of the excise.

The political or protective element in customs duties has been gradually retreating in importance, and the fiscal has correspondingly advanced. Stein¹ makes this the sole law in the history of customs duties.

¹ Vol. II, Part II, p. 377.

It would be best characterised as an advance of the fiscal interest, leaving the political or protective interests the same as before. The pressing wants of nations, and the fact that federal governments have been well-nigh confined to these taxes, has necessitated this advance.