ADAM SMITH’S CUSTOMS AND EXCISE REFORMS

[Drop-head title:] ‘An act for repealing the several duties of customs and excise, and granting other duties in lieu thereof, and for applying the said duties, together with the other duties composing the publick revenue; for permitting the importation of certain goods, wares, and merchandize, the produce of manufacture of the European dominions of the French King, into this Kingdom; and for applying certain unclaimed monies, remaining in the Exchequer for the payment of annuities on lives, to the reduction of the national debt.’

London, Charles Eyre and Andrew Strahan, 1787.

Folio, pp. [2] title, 311-524, including tables; title with a large woodcut of the Royal device, engraved initials, and a woodcut device to the Act title; a few spots to title and minimal offsetting throughout, else a very good copy in contemporary half calf over marbled boards, spine ruled gilt with a gilt morocco lettering-piece, upper joint skilfully repaired, extremities rubbed; bookplate of the Maine Historical Society to front pastedown with release stamp.

£2750

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[Drop-head title:] ‘An act for repealing the several duties of customs and excise, and granting other duties in lieu thereof, and for applying the said duties, together with the other duties composing the publick revenue; for permitting the importation of certain goods, wares, and merchandize, the produce of manufacture of the European dominions of the French King, into this Kingdom; and for applying certain unclaimed monies, remaining in the Exchequer for the payment of annuities on lives, to the reduction of the national debt.’

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Rare first edition of the consolidation act that revolutionised British handling of customs and excise and the problem of smuggling, in line with Adam Smith’s 1776 recommendations.

Pitt had already ‘lowered duties on other goods (principally wines, spirits, and tobacco) between 1785 and 1789; rights of search and seizure and other powers of the revenue officers were strengthened, for instance by the Manifest Act of 1786. These measures markedly increased annual yields, discernibly reduced smuggling, and by 1792 had produced an overall increase in revenue of £1.5 to £2 million a year’ (Oxford DNB). His ‘Consolidation Act of 1787 replaced an enormous range of customs and excise duties – and some stamps – with new rates linked to a greatly reduced list of exchequer accounts formed into one consolidated fund, and established the priorities of expenditure claims upon the fund. He thus tackled a system acknowledged to be rigid, inefficient, and complex – in which negligence and fraud were rife from the administrative burdens involved and no clear view could be gained of the state of a large part of the nation’s revenue. Treasury account books soon slimmed from between sixty and seventy folios to about a dozen, and exchequer tallies were reduced from 1700 to some 200 a year. The idea had been in the air since the 1750s and recommended in 1782 – but it took a bold young chancellor to implement it. While the measure did not cover all aspects of government finance, being limited to receipts and issues of the exchequer, it was a vast and beneficial simplification, and anticipated the eventual reform of the accounts as a whole in 1857’ (ibid).

From 10 May 1787 all existing customs duties were replaced by a unified and itemised system whereby items for import were listed alongside a drawback figure of between 70-95% of the importation duty which could be claimed back by the importer if the goods were entered for exportation ‘and actually shipt’ within three years from their importation. The first part of the work (pp. 312-383) comprises a declaration of customs regulations; the second, and larger part (pp. 315-524) is taken up by exhaustive tables of duty and drawback amounts for all kinds of different products.

In 1778, two years after the publication of the Wealth of Nations, Adam Smith had taken up the position of customs commissioner in Edinburgh. In the fifth book of his magnum opus he had criticised the existing excise system and the new role he assumed ‘enabled him to make a practical contribution to the public finances by advancing proposals for improving the yield from duties … Anecdotes about William Pitt the younger deferring to Smith on the grounds that he was Smith’s pupil may have been embellished over the years, but there is some evidence that acceptance of free trade could be a conversion experience: Lord Shelburne confessed to having seen ‘the difference between light and darkness’ as a result of a coach journey to London with Smith (Smith, Essays Philosophical and Scientific, 347) … Eden’s efforts on behalf of freer trade climaxed with the Anglo-French trade treaty of 1786, where again Smith was cited in support’ (Oxford DNB). In 1776 one of Smith’s particular criticisms of the extant excise system had been the lack of clarity for the purposes of classifying imports; the itemised schedules of the 1787 act can be seen as a direct response to that criticism.

It is highly unusual to find a parliamentary act individually bound in a contemporary binding and the individual binding shows that its early owners recognised its importance. The work arrived with us in its original state; the repair was carried out at Quaritch.

ESTC locates UK holdings at Lincoln’s Inn and the National archives; COPAC adds the National Library of Scotland. ESTC locates only the Library of Congress holding in the USA; OCLC adds Yale.

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