It is now quite evident that the financial necessities of the Government will require a modification of the tariff during your present session for the purpose of increasing the revenue.  In this aspect, I desire to reiterate the recommendation contained in my last two annual messages in favor of imposing specific instead of ad valorem duties on all imported articles to which these can be properly applied.  From long observation and experience I am convinced that specific duties are necessary, both to protect the revenue and to secure to our manufacturing interests that amount of incidental encouragement which unavoidably results from a revenue tariff.

As an abstract proposition it may be admitted that ad valorem duties would in theory be the most just and equal.  But if the experience of this and of all other commercial nations has demonstrated that such duties can not be assessed and collected without great frauds upon the revenue, then it is the part of wisdom to resort to specific duties.  Indeed, from the very nature of an ad valorem duty this must be the result.  Under it the inevitable consequence is that foreign goods will be entered at less than their true value.  The Treasury will therefore lose the duty on the difference between their real and fictitious value, and to this extent we are defrauded.

The temptations which ad valorem duties present to a dishonest importer are irresistible.  His object is to pass his goods through the custom-house at the very lowest valuation necessary to save them from confiscation.  In this he too often succeeds in spite of the vigilance of the revenue officers.  Hence the resort to false invoices, one for the purchaser and another for the custom-house, and to other expedients to defraud the Government.  The honest importer produces his invoice to the collector, stating the actual price at which he purchased the articles abroad.  Not so the dishonest importer and the agent of the foreign manufacturer.  And here it may be observed that a very large proportion of the manufactures imported from abroad are consigned for sale to commission merchants, who are mere agents employed by the manufacturers.  In such cases no actual sale has been made to fix their value.  The foreign manufacturer, if he be dishonest, prepares an invoice of the goods, not at their actual value, but at the very lowest rate necessary to escape detection.  In this manner the dishonest importer and the foreign manufacturer enjoy a decided advantage over the honest merchant.  They are thus enabled to undersell the fair trader and drive him from the market.  In fact the operation of this system has already driven from the pursuits of honorable commerce many of that class of regular and conscientious merchants whose character throughout the world is the pride of our country.

The remedy for these evils is to be found in specific duties, so far as this may be practicable.  They dispense with any inquiry at the custom-house into the actual cost or value of the article, and it pays the precise amount of duty previously fixed by law.  They present no temptations to the appraisers of foreign goods, who receive but small salaries, and might by undervaluation in a few cases render themselves independent.