CUSTOMS, in political economy, or the duties, toll, tribute, or tariff, payable to the king upon merchandise exported and imported, form a branch of the perpetual taxes. See TAX.

The considerations upon which this revenue (or the more ancient part of it, which arose only from exports) was invested in the king, were said to be two: 1. Because he gave the subject leave to depart the kingdom, and to carry his goods along with him. 2. Because the king was bound of common right to maintain and keep up the ports and havens, and to protect the merchant from pirates. Some have imagined they are called with us customs, because they were the inheritance of the king by immemorial usage and the common law, and not granted him by any statute; but Sir Edward Coke hath clearly shown, that the king's first claim to them was by grant of parliament 3 Edw. I., though the record thereof is not now extant. And indeed this is in express words confessed by statute 25 Edw. I. c. 7. wherein the king promises to take no customs from merchants, without the common assent of the realm, "saving to us and our heirs the customs on wool, skins, and leather, formerly granted to us by the commonalty aforesaid." These were formerly called hereditary customs of the crown; and were due on the exportation only of the said three commodities, and of none other; which were styled the staple commodities of the kingdom, because they were obliged to be brought to those ports where the king's staple was established, in order to be there first rated, and then exported. They were denominated in the barbarous Latin of our ancient records, customa, (an appellation which seems to be derived from the French word coutum or coutum, which signifies toll or tribute, and owes its own etymology to the word couf, which signifies price, charge, or, as we have adopted it in English, coft); not consuetudines, which is the language of our law whenever it means merely usages. The duties on wool, sheepskins or woollens, and leather exported, were called customa antiqua et magna, and were payable by every merchant, as well native as stranger: with this difference, that merchant-strangers paid an additional toll, viz. half as much again as was paid by natives. The customa parva et nova were an impost of 3d. in the pound, due from merchant-strangers only, for all commodities as well imported as exported; which was usually called the aliens duty, and was first granted in 31 Edw. I. But these ancient hereditary customs, especially those on wool and woollens, came to be of little account, when the nation became sensible of the advantages of a home manufacture, and prohibited the exportation of wool by statute 11 Edw. III. c. 1.

Other customs payable upon exports and imports were distinguished into subsidies, tonnage, poundage, and other imposts. Subsidies were such as were imposed by parliament upon any of the staple commodities before mentioned, over and above the customa antiqua et magna: tonnage was a duty upon all wines imported, over and above the prifage and butterage aforesaid: poundage was a duty imposed ad valorem, at the rate of 12d. in the pound, on all other merchandise whatsoever: and the other imposts were such as were occasionally laid on by parliament, as circumstances and times required. These distinctions are now in a manner forgotten, except by the officers immediately concerned in this department; their produce being in effect all blended together, under the one denomination of the customs.

By these we understand, at present, a duty or subsidy paid by the merchant at the quay upon all imported as well as exported commodities, by authority of parliament; unless where, for particular national reasons, certain rewards, bounties or drawbacks, are allowed for particular exports or imports. The customs thus imposed by parliament are chiefly contained in two books of rates, set forth by parliamentary authority; one signed by Sir Harbottle Grimston, speaker of the house of commons in Charles II.'s time; and the other an additional one, signed by Sir Spencer Compton, speaker in the reign of George I., to which also subsequent additions have been made. Aliens pay a larger proportion than natural subjects, which is what is now generally understood by the aliens duty; to be exempted from which is one principal cause of the frequent applications to parliament for acts of naturalization.

These customs are then, we see, a tax immediately paid by the merchant, although ultimately by the consumer. And yet these are the duties felt least by the people; and if prudently managed, the people hardly consider that they pay them at all. For the merchant is easy, being sensible he does not pay them for himself; and the consumer, who really pays them, confounds them with the price of the commodity; in the same manner as Tacitus observes, that the emperor Nero gained the reputation of abolishing the tax of the sale of slaves, though he only transferred it from the buyer to the seller; so that it was, as he expresses it, remission magis specie, quam vi: quia cum venditor pendere jubetur, in partem pretii emptoribus acrefecedat. But this inconvenience attends it on the other hand, that these imposts, if too heavy, are a check and cramp upon trade; and especially when the value of the commodity bears little or no proportion to the quantity of the duty imposed. This in consequence gives rise also to smuggling, which then becomes a very lucrative employment; and its natural and most reasonable punishment, viz. confiscation of the commodity, is in such cases quite ineffectual; the intrinsic value of the goods, which is all that the smuggler has paid, and therefore all that he can lose, being very inconsiderable when compared with his prospect of advantage in evading the duty. Recourse must therefore be had to extraordinary punishments to prevent it; perhaps even to capital ones; which destroys all proportion of punishment, and puts murderers upon an equal footing with such as are really guilty of no natural, but merely a positive offence.

There is also another ill consequence attending high imposts on merchandise, not frequently considered, but indubitably certain; that the earlier any tax is laid on a commodity, the heavier it falls upon the consumer in the end; for every trader, through whose hands it passes, must have a profit, not only upon the raw material and his own labour and time in preparing it, but also upon the very tax itself, which he advances to the government; otherwise he loses the use and interest of the money which he so advances.

To instance in the article for foreign paper. The merchant pays a duty upon importation, which he does not receive again till he sells the commodity, perhaps at the end of three months. He is therefore equally entitled to a profit upon that duty which he pays at the customhouse, as to a profit upon the original price which he pays to the manufacturer abroad; and considers it accordingly in the price he demands of the stationer. When the stationer sells it again, he requires a profit of the printer or bookeller upon the whole sum advanced by him to the merchants: and the bookeller does not fail to charge the full proportion to the student or ultimate consumer; who therefore does not only pay the original duty, but the profits of these three intermediate traders who have successively advanced it for him. This might be carried much farther in any mechanical, or more complicated branch of trade.