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Home -> Orville Marcellus Powers -> Commerce and Finance -> Chapter L

Commerce and Finance - Chapter L

1. Chapter I

2. Chapter II

3. Chapter III

4. Chapter IV

5. Chapter V

6. Chapter VI

7. Chapter VII

8. Chapter VIII

9. Chapter IX

10. Chapter X

11. Chapter XI

12. Chapter XII

13. Chapter XIII

14. Chapter XIV

15. Chapter XV

16. Chapter XVI

17. Chapter XVII

18. Chapter XVIII

19. Chapter XIX

20. Chapter XX

21. Chapter XXI

22. Chapter XXII

23. Chapter XXIII

24. Chapter XXIV

25. Chapter XXV

26. Chapter XXVI

27. Chapter XXVII

28. Chapter XXVIII

29. Chapter XXIX

30. Chapter XXX

31. Chapter XXXI

32. Chapter XXXII

33. Chapter XXXIII

34. Chapter XXXIV

35. Chapter XXXV

36. Chapter XXXVI

37. Chapter XXXVII

38. Chapter XXXVIII

39. Chapter XXXIX

40. Chapter XL

41. Chapter XLI

42. Chapter XLII

43. Chapter XLIII

44. Chapter XLIV

45. Chapter XLV

46. Chapter XLVI

47. Chapter XLVII

48. Chapter XLVIII

49. Chapter XLVIX

50. Chapter L

51. Chapter LI

52. Chapter LII




The law of nations is a system of usages, customs and opin-
ions founded upon the general principles of right and justice
as understood in this enlightened age, and which has become

established by the great nations of the world,
international Thig systeni regu lates the conduct of nations

towards each other commercially as well as polit-
ically, and is binding upon all by common consent. The great
nations of Europe together with the United States, being, as we
have reason to believe, the most enlightened and just of the
world, as well as the most powerful, have established a code
of international law peculiar to themselves. Under this law
treaties are made and enforced, commerce between countries is
regulated and the rights of citizens abroad are protected.

Treaties are of three kinds, viz., treaties of commerce,
treaties of peace, and territorial treaties. Treaties of commerce
define and establish the rights and extent of commercial inter-
course. Every nation may enter into commercial treaties and
grant such special privileges to other nations as it sees proper.

It may grant special privileges to one nation over
Treaties another, or enter into special agreements as in the

case of reciprocity treaties. It may even refuse to
conduct any intercourse whatever with foreign nations, as was
the case when President Jefferson laid the general embargo on



trade in 1807, or it may reserve to itself such portions of its trade
as it deems proper. An instance of this may be seen in the
reservation of the coasting trade of the United States to our
own ships. Treaties of peace are made as a result of war. They
may provide for the payment of money, as indemnity, the cession
of territory or the granting of special privileges, such as coaling
stations, etc. Territorial treaties are in effect contracts made
between nations for the purchase or sale of domain. Such was
our treaty with France for the purchase of Louisiana, with Spain
for the purchase of Florida, with Mexico for the Gadsden pur-
chase, and with Russia for the purchase of Alaska.

In order to regulate foreign commerce, carry out the pro-
visions of treaties and protect the rights of citizens abroad each
nation exercises jurisdiction over its seamen, vessels and mer-
chandise in foreign lands. This is done through the consular
service. In every port of any consequence throughout the
world the United States is represented by one or more consular
officers. These are divided according to their
service" Tank an( ^ importance, into Consuls-General, Con-

suls, Vice-Consuls, Consular Agents and Commer-
cial Agents. They are appointed by the President, and their
compensation is fixed in one of three ways, viz.: (1) A fixed
salary. (2) A salary with permission to engage in business, and
(3) Fees, with permission to engage in business. Those who
receive a fixed salary and devote their entire time to the duties
of the office, embrace all of those officials who occupy posts in
the foreign cities with which the United States has extensive
trade relations. In this class of consulates the receipts from
fees are paid over to the government. Those consuls who are
allowed to engage in business occupy stations where the business
of the consulate does not engage their entire time, and those
who receive fees and are allowed to engage in business occupy
posts in which the duties of the office require but a small part of
the agent's time.


The duties of consular officers in foreign ports are numerous
and embrace the carrying out of treaty regulations; adjustment
in cases of disagreement between master and seamen; salvage
in cases or shipwreck; receiving reports of ship-captains on enter-
ing and leaving the port; sending to the home
government reports on the condition of trade;
granting of passports and protection of citizens;
care of property of deceased citizens; extradition of fugitive crim-
inals; certification of invoices of goods to be shipped to the
United States, etc.

This latter is one of the most common duties of a consul.
The invoices of all goods imported into this country must pass
through the hands of the American Consul at the port from
which they come.* If the goods are to be shipped from an in-
terior town or city they are forwarded with full particulars as
to their value, size, number, etc.; to a shipping or forwarding
agent in the seaport town who for a small commis-
sion abends to the details of shipment. The
shipper makes out an invoice, three copies.
These he takes to the office of the consul, and makes oath that
the prices, quantities, etc., are absolutely correct. The oath is
a precaution against fraud, for otherwise an American importer
and foreign merchant might enter into a collusive arrangement
for falsifying an invoice and making the price lower than it
really was, thus defrauding the Government out of a portion
of its revenue. The consul files one copy of the invoice at his
office; one copy he sends to the custom house where the goods
are to be entered for export and the third is given to the shipper,
together with the consul's certificate. The shipper then turns
the goods over to the agent of the steamship line, and receives a
bill-of-lading also made out in duplicate or triplicate. The ship-

"Likewise the invoices of all goods exported from the United States must
pass through the hands of the foreign consul at the port in the United States
from which they are shipped.


per keeps one copy of the bill-of-lading, one copy is pinned to
the invoice and consular certificate and forwarded to the con-
signee at the port of destination; and in some instances one copy
goes to the ship's captain, as the "Captain's Copy."*

An important factor in foreign commerce, and one which ex-
porters frequently overlook, is the proper packing of goods for
export. This should be governed almost wholly by the condi-
tions to be met with in the country to which the goods are sent.
For mountainous countries without good roads, as for example,

South America, goods destined for interior towns
Packing Goods are transported upon the backs of mules over

rocky and tortuous roads, and hence must be
packed in boxes or bales that can be readily carried in this man-
ner, one-half the load being Upon each side of the animal.

Again the arrival of goods in the rainy season or in the dry
season would make a difference as to the method of packing,
but as a general rule all merchandise which would be injured by
water should be packed in boxes lined with zinc and oilcloth, or
waterproof paper, or if packed in bales should be covered with
oilcloth or tarpaulin beneath the outer coverings of the bale. As
far as practicable only one kind of goods should be packed in a
box or bale, otherwise there may be trouble in passing the goods
through the foreign custom house.

Houses engaged in foreign commerce use a distinctive mark
a trade-mark, of such a character or design as to be recog-
nized by the purchasing public in whatever country the goods

are offered for sale, as the mark of the American
Trade Marks manufacturer or exporter. We are told that the

"Mt. Vernon" brand of flour made by George
Washington was accepted abroad as of especial excellence, and
the same would be true to-day in regard to the value of a special

*When a bill-of-lading is made out to order it is transferable by en-
dorsement the same as inland bills. The bill has printed across its face
"Original," "Duplicate" or "Triplicate," one of which being honored by
delivery of the goods, the other two become void.


name or mark. Foreigners are often unable to discriminate or
judge of the merits of foreign manufactures, and knowing that
a certain brand has been tried and found satisfactory, they con-
tinue to purchase it. The United States has entered into agree-
ments with nearly all of the leading commercial nations with
regard to the protection of trade-marks, but in order to secure
this protection the trade-mark must be registered. Mere use,
however long continued, does not, as in this country, determine
the right tc the exclusive use of the mark.

An important element in foreign trade operations is the
banking feature. As previously explaired, one of the important
functions of banks is to supply the necessary capital to bridge

over the interval of time between producer and
Featunf consumer. This in the case of foreign trade is

necessarily considerable, since the producer or
manufacturer is situated perhaps thousands of miles from the
consumer, and weeks or even months are required before the
products reach their destination and are paid for. When goods
are shipped to a foreign customer in many cases no drafts are
drawn, the amount being simply charged in account to await
remittance by bank draft through due course of mail. In other
cases documentary drafts are drawn for the shipment C. I. F.*
and forwarded through the bank. Such drafts are usually pay-
able at sight or a given number of days after sight and the
shipping documentst attached are to be surrendered on payment.
If the draft has considerable time to run it is generally dis-
counted with a home banker.

Drafts drawn against foreign shipments are usually made pay-
able in the currency of the country in which they are to be paid.
Thus a shipment to Germany is payable in marks, to Mexico in
pesos, etc. The seller takes the risk of fluctuations in exchange,

*C. I. F. means cost, insurance and freight.

f The shipping documents here referred to consist of invoice, bill-of-lading
and insurance certificate.


and this is one of the disadvantages in selling to customers the
rate of exchange in whose country is not uniform.

The bank forwards the draft with documents attached to a
bank at the place where it is payable. The bank there presents
the draft lor payment or acceptance. If a time draft, the goods
are usually landed and warehoused by the bank,
Exchange until the draft is paid. In case the consignee

desires to withdraw a portion of the goods from
the warehouse he may arrange with the bank to do so by paying
a portion of the draft, the amount being endorsed thereon. At
maturity the draft is paid plus interest from its date until the
approximate time it will require a remittance to reach the point
of shipment in the United States, and also plus the storage
charges. The bill-of-lading and insurance certificate are de-
livered to the drawer when the draft is paid.

Within twenty-four hours after a ship touches a dock in
any port of the United States the captain or a duly authorized
officer must hand in to the Custom House the "Ship's Keport."
No goods can be landed nor even bulk broken until this formal-
ity is complied with.* This report is a document in
prescribed form giving the name and tonnage of
the vessel, name of the captain, number of the
crew, port from whence arrived, and a full and complete detailed
list of the entire cargo, the number of boxes, bales, barrels or
casks and their contents so far as is known, the names of the
shippers and the consignees. This report is made out in dupli-
cate. One copy is retained in the Custom House and the other
is sent to an officer at the dock where the ship is to unload,
who checks off the goods as they are discharged from the vessel.
The goods are now delivered to holders of bills of lading, upon
payment of the freight and duties or other charges, or if not
called for at once, are sent to bonded warehouses.

*This report is usually given to the custom house officer who comes
aboard, in many cases with the health officer.


When a vessel is completely loaded the master must, before
being allowed to sail, receive his clearance papers from the
port authorities. The permit to sail is based upon
the captain's report of cargo and passengers, pay-
ment of dockage, pilotage, seamen's wages, etc.
When these are satisfactory, permission is given to sail.

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