We have already learned in studying taxes that governments have many expenses which are met almost entirely by taxes on property and on incomes. One of the ways in which our Federal government obtains money to pay its expenses is by levying a tax or tariff on certain goods imported from other countries. This tax is known as an import or custom duty. Duties are of two kinds, specific and ad valorem.

A specific duty is one levied at a specified sum per yard, gallon, pound, etc.

An ad valorem duty is one levied at a certain per cent of the cost of the goods.

Duties are collected at customhouses, located at all ports of entry.

The schedule of duties known as the tariff is fixed by Congress. The government makes certain allowances for leaks, weight of barrels or bags, etc.

The allowance made for the weight of bags, barrels, or cases in which goods are shipped is called tare.

The allowance made for loss of liquids from barrels, casks, etc. in shipping is called leakage.

The allowance made for the loss of liquids from bottles broken in shipping is called breakage.

The weight after allowance has been made for tare, leakage, or breakage is called the net weight.

Duties are reckoned on net weights.

The schedule of duties contains a list of duties levied on all kinds of imported goods. Some goods are admitted free of duty (as, bananas, coffee, salt, etc.); some goods are subject to a specific duty only; some to an ad valorem duty only; others to both a specific and an ad valorem duty.

[Without pencil]

1. What is the duty on 100 lb. of raisins at 2¢ per pound? 2. If the tariff law requires a duty of ¢ per pound on lemons, what is the duty on 200 lb. of lemons?

3. What is the duty on 500 lb. of plums, if the duty is 10¢ per bushel, each bushel weighing 50 lb.?

4. If the duty on oxalic acid is 11⁄2¢ per pound, what duty must be paid on 50 lb. of oxalic acid?

5. What duty must be paid on 10 bags of brown Japan rice, each containing 100 lb., if the duty is § a pound?

6. The duty on velvet ribbon is 40%. What duty must be paid on an importation of $500 worth of velvet ribbon?

7. If the duty on sardines is 25%, how much duty must an importer pay on $400 worth of sardines ?

8. A merchant imports $100,000 worth of cut diamonds. If the duty is 20%, what duty does he pay?

9. The duty on razors is 55%. What duty must be paid on an importation of $1000 worth of razors?

10. The tariff on cigar holders is 60%. How much is the tax on $250 worth of cigar holders?

Check all work to test the correctness of your answers.

The following is a list of some articles frequently imported by merchants in this country, with the tariff (tax or duty) imposed by the tariff law in operation in 1920:

[With pencil]

Using the rates of duty given on page 233, find the duty on importations of :

1. $5000 worth of toys.

2. $12,500 worth of woolen fabrics.

3. 600 quarts of olive oil.

4. 280 lb. of chocolate confectionery.

5. 2 tons of vanilla beans.

6. $5600 worth of silk cloth.

7. 500 lb. of ground paprika costing 50¢ a pound.

8. $450 worth of perfumery.

9. $650 worth of knit underwear.

10. $4500 worth of laces.

11. $8000 worth of toys.

NOTE. Unless otherwise directed, use the approximate normal value of foreign money.

12. Mr. Spalding imported knives and forks from England at 15s. a dozen. What was the cost in United States money for 25 doz., including duty?

13. Mr. Maurice imported silk from Lyons, France, listed at 6 fr. a meter. How much did he pay in United States money for 150 m. of such silk, including duty?

14. Mr. Romano is an importer of Italian foodstuffs. Last week he imported 50 gal. of olive oil, listed at 8 lire a gallon, and 500 lb. of macaroni, listed at 25 lire per 100 lb. What was his total cost in United States money, including duties?

15. An importer bought artificial flowers in France for 5000 francs. What was his cost in United States money, including duty?

16. A department store imported 200 doz. linen handkerchiefs costing 18s. a dozen. What was the total cost in United States money?

17. A clothing manufacturer imported from England 4800 yd. of woolen cloth, costing 5s. a yard. What was the total cost in United States money?

18. A fruit dealer imported the following:

10 boxes of raisins, 36 lb. each, at 20¢ per pound

20 boxes of lemons, 40 lb. each, at 3¢ per pound

Find the total cost.

19. An importer bought linen handkerchiefs invoiced at 1000 fr. After paying the duty he sold all at a profit of 50%. How much did he get for the handkerchiefs in United States money?

20. A. L. Wild and Company, importers and jobbers, sold a quantity of lace they imported from Switzerland, invoiced at 5000 fr., at a profit of 25%. What was the selling price in United States money?

21. Howard Brothers imported perfumery invoiced at 1000 fr. They sold it for $400. What per cent profit did they make? (Do not forget to include the duty.)

22. Cotton velvet invoiced at 2000 fr. was imported by A. R. Hughes and sold for $840. What was the per cent of profit? 23. George Atwood imported brushes invoiced at £50 and later sold them at a profit of 50%. What was the selling price?

24. A tobacco concern imported 15,000 cigars invoiced at $75 per M., weighing on an average 12 oz. per box of 50 cigars. Find the total cost.

25. Study the tariff schedule on page 233 and prepare a set of five problems on importations of silks, laces, and linens.