Warehousing Act
Encyclopedia
The Warehousing Act of 1846 was a commercial law that allowed merchants to warehouse their imports into the United States
and thus delay tariff
payments on those goods until a buyer was found. It established the bonded warehousing
system at American ports and spurred the influx of commerce, particularly in New York City
.
The bonded warehousing
system was advocated by Adam Smith
and permits merchants to increase their shipping capabilities as they no longer had to carry large sums of cash on hand to make the revenue payments. Prior to the system, merchants often had to sell their cargo on short notice and at reduced prices to obtain the necessary funds for assessed duties.
The American Warehousing Act had as a direct model a similar system proposed in England
by Sir Robert Walpole
a century earlier and implemented in both London and Havana with much success in the early 19th century. Walpole's recommendation was rejected at the time but adopted into British law in 1803.
proposed the establishment of a bonded warehousing
system based on the one employed by Britain in his 1846 report to Congress. The bill was adopted following the Walker Tariff
of 1846 and implemented in 1847. During the Zachary Taylor
administration members of the Whig party
predicted the system would amount to failure and urged its repeal. The system quickly flourished however and produced a rapid increase in reexportation commerce through American ports. The impact was particularly strong in New York City
where an established warehousing industry facilitated its rapid implementation.
attempted to repeal it. An amendment to the Morrill Tariff in the Senate, adopted shortly before it passed, briefly preserved the Warehousing Act. The system was repealed when Congress returned only a few months later. A modernized version of the bonded warehousing system using the same principles was later restored by Congress at a later date. The current version, which operates on the same principles, was adopted in the Smoot Hawley Tariff of 1930 and remains in effect today.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
and thus delay tariff
Tariff
A tariff may be either tax on imports or exports , or a list or schedule of prices for such things as rail service, bus routes, and electrical usage ....
payments on those goods until a buyer was found. It established the bonded warehousing
Bonded warehouse
A Bonded warehouse is a building or other secured area in which dutiable goods may be stored, manipulated, or undergo manufacturing operations without payment of duty. It may be managed by the state or by private enterprise. In the latter case a customs bond must be posted with the government...
system at American ports and spurred the influx of commerce, particularly in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
.
The bonded warehousing
Bonded warehouse
A Bonded warehouse is a building or other secured area in which dutiable goods may be stored, manipulated, or undergo manufacturing operations without payment of duty. It may be managed by the state or by private enterprise. In the latter case a customs bond must be posted with the government...
system was advocated by Adam Smith
Adam Smith
Adam Smith was a Scottish social philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations...
and permits merchants to increase their shipping capabilities as they no longer had to carry large sums of cash on hand to make the revenue payments. Prior to the system, merchants often had to sell their cargo on short notice and at reduced prices to obtain the necessary funds for assessed duties.
The American Warehousing Act had as a direct model a similar system proposed in England
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
by Sir Robert Walpole
Robert Walpole
Robert Walpole, 1st Earl of Orford, KG, KB, PC , known before 1742 as Sir Robert Walpole, was a British statesman who is generally regarded as having been the first Prime Minister of Great Britain....
a century earlier and implemented in both London and Havana with much success in the early 19th century. Walpole's recommendation was rejected at the time but adopted into British law in 1803.
Adoption and implementation in the United States
United States Treasury Secretary Robert WalkerRobert Walker
-Creative arts:*Robert Walker , American actor*Robert Walker , English portrait painter*Rob Walker , Australian poet*Robert Joseph Walker , Australian Aboriginal poet*Robert W...
proposed the establishment of a bonded warehousing
Bonded warehouse
A Bonded warehouse is a building or other secured area in which dutiable goods may be stored, manipulated, or undergo manufacturing operations without payment of duty. It may be managed by the state or by private enterprise. In the latter case a customs bond must be posted with the government...
system based on the one employed by Britain in his 1846 report to Congress. The bill was adopted following the Walker Tariff
Walker tariff
The Walker Tariff was a set of tariff rates adopted by the United States in 1846. The Walker Tariff was enacted by the Democrats, and made substantial cuts in the high rates of the "Black Tariff" of 1842, enacted by the Whigs. It was based on a report by Secretary of the Treasury Robert J. Walker...
of 1846 and implemented in 1847. During the Zachary Taylor
Zachary Taylor
Zachary Taylor was the 12th President of the United States and an American military leader. Initially uninterested in politics, Taylor nonetheless ran as a Whig in the 1848 presidential election, defeating Lewis Cass...
administration members of the Whig party
Whig Party (United States)
The Whig Party was a political party of the United States during the era of Jacksonian democracy. Considered integral to the Second Party System and operating from the early 1830s to the mid-1850s, the party was formed in opposition to the policies of President Andrew Jackson and his Democratic...
predicted the system would amount to failure and urged its repeal. The system quickly flourished however and produced a rapid increase in reexportation commerce through American ports. The impact was particularly strong in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
where an established warehousing industry facilitated its rapid implementation.
Repeal and restoration
The American Warehousing Act remained in place until 1861 when the original version of the Morrill TariffMorrill Tariff
The Morrill Tariff of 1861 was a protective tariff in the United States, adopted on March 2, 1861 during the administration of President James Buchanan....
attempted to repeal it. An amendment to the Morrill Tariff in the Senate, adopted shortly before it passed, briefly preserved the Warehousing Act. The system was repealed when Congress returned only a few months later. A modernized version of the bonded warehousing system using the same principles was later restored by Congress at a later date. The current version, which operates on the same principles, was adopted in the Smoot Hawley Tariff of 1930 and remains in effect today.