ORIGIN OF TARIFFS.

Auckland Star, Volume LXII, Issue 38, 14 February 1931, Page 7 (Supplement)

ORIGIN OF TARIFFS.

A HISTORICAL SURVEY.

HOW PROTECTION DEVELOPED

ANCIENT AND -MEDIEVAL.

Tho United States' new tariffs, coming at the time of the Empire Free Trade campaign in Britain, arouses interest in the origin of tariff systems and ' their development in various countries. No one knows when or where the first tariff was imposed or the first Customs duties collected. The collection of a toll or duty from goods brought into a city or a country • became important with the development of trad© to a considerable volume. Although Babylon, one of the earliest civilisations of which we have a record, had a highly organised social system with a minute code of laws relating to deeds, leases, mortgages, taxation and the like, it is not known what part Customs played in the affairs of the Government. A country's revenue in those days was chiefly from a tithe of the livestock and crops of its citizens. Greece Had Both Import and Export Duties. When Greece held the most important place in the world, duties on commodities. mo.ving in trade had come to be an accepted tax. Export prohibitions had also come in to use, chiefly as defence measures in time of war or as protective means to prepare against war. Thus at times wheat could not be exported from Attica, and Greek ships that brought wheat from the Black Sea ports for re-export were compelled to leave one-tliird their cargoes in Greece. Another feature of the Greek system was the establishment of foreign trading stations by certain cities which monopolised their trade. Both export and import duties were charged by Athens; and this taxation alike of outbound and inbound commerce was common among all the early tariff systems. Rome had little commerce in its early days and allowed commodities .to come and go freely. When expansion set in and trade grew, the Government began to mould economic currents, often by direct methods. Some commercial rivals, such as Carthage and Corinth, were destroyed. Other conquered countries were divided into districts, and Customs houses were set tip at the dividing lines. Both exports and imports were taxed. Rome's tariff system was probably closer to those in use to-day than any previous ones. The types of duties were the same that enter into current tariff discussions, specific and ad valorem. A specific duty is a charge per unit, so much for each yard or pound or dozen of the commodity taxed. An ad valorem duty is a percentage of the value of the commodity. In the early days of the Roman Empire the most common ad valorem rate was 5 per cent. Later it was raised to 12J- per cent. Venice, the great trading republic of the Middle Ages, carried on the Romantariff theories and went further. Her object was to obtain a monopoly in the handling of Eastern goods and to regulate by duties the trade with the West and North. Tariffs Changed Trade Route to Asia. The Mameluke rulers of Egypt held a strategic position in regard to Eastern trade during the Middle®Agcs, and put on as heavy duties as the traffic would bear. As a result of the tolls imposed by them and by tribal chiefs in Arabia, Indian goods increased 300 per cent in price between India and Europe. In the end the Mamelukes defeated their purpose. The Mongols,,who gained control of an overland route farther north, charged lesser duties, and the trade flowed over the new route. After Vasco da Gama found the ocean path to the East both the Egyptian and the overland route gave way to the cheaper, duty-free water route. About this time Marco Polo, travelling in China, found that duties were charged there in the realm of the great Khan. He found duties collected at city boundaries as well as at provincial frontiers. These duties ranged from 3 1-3 to 10 per cent. In medieval Europe, tariffs became a nightmare to struggling traders. Every petty prince and feudal lord set up his toll gates and customs houses and took a share of the merchant's wares. After the feudal kings took over the barons' privileges, there was a movement away from the collection of duties in every small area, but progress was slow, and in some countries, such as France and Germany, provincial customs continued to be levied. It is almost universally recognised now that tariffs should be imposed by national units, and that they should apply to imports, not exports. In early ages tariffs constituted a minor factor in national 'taxation. To-day they are in most countries the most important source of national revenue.