Benjamin Helm Bristow to George S. Boutwell, 23 December 1870

December 23, 1870. Hon. George S. Boutwell, Secretary of the Treasury. Sir: I have considered the questions propounded to the Attorney General by your letter of the 25th of October (H. B.J.) and concur with the Solicitor of the Treasury in the opinion that the excise imposed on malt consumed in Canada, but not on that article when exported here, does not form a part of the dutiable value of such merchandise imported into the United States, and upon which it has not been paid. The basis upon which the value of merchandise is estimated for the purpose of imposing duties is "the actual wholesale price, or general market value," at the time of exportation, in the principal markets of the country from which it is exported. The "wholesale price, or general market value" evidently means the wholesale price generally paid in the markets of the country for the merchandise in question, when sold under similar circumstances, including that of its intended exportation. It is perfectly well-known that in all countries which have established, as we have, the Bounded Warehouse system, merchandise is almost always sold in bond, when sold in large quantities, or for the purposes of exportation again; and its wholesale price, or general market value, is, according to mercantile usage, the price or value of the article, with all local duties unpaid. If local duties or excises need not be paid by the purchaser, for exportation of merchandise, it is difficult to see upon what theory such duties or excises can be considered as entering into its price or value when exported. The case is very different from that of an importation of merchandise which has increased value since it was bought; in which case the importer is required to pay a duty on this increased value. Such increased value is founded on the fact, and, indeed is caused by the fact, that the importer could not replace such goods for the price he originally paid for them; whereas, in the present case, so far as the local excise is concerned, he can. If the importer desires to replace the malt in case it should be lost, or to buy more, he need not take into consideration the local excise at all. If that be increased, it would not increase the price for him; if abolished, it would not reduce it. In other words, the excise, in this case, and the duties in the case of goods sold in bond, would not affect the value, whether increased, reduced, or done away with. It cannot, therefore, be said to enter into the "wholesale price, or general market value," of goods bought for exportation. I am of Opinion that the decision in Caldwell's case is clearly right; that it would not be reversed in the Supreme Court—and that, therefore, no appeal should be taken therein. I return you the papers which accompanied your letter. I remain, Very respectfully, B. H. Bristow, Solicitor General, and acting Attorney General.