cloth or other fabric of cotton, wool, or other material; not the maker of the thread used exclusively in its manufacture. (§ 69.)

See CLOTH; EXEMPTIONS; FABRICS, supra.

§ 2. The Purchaser.

Where contracts for the manufacture or purchase of manufactured articles were made in good faith before the passage of the act, the taxes on the articles are to be paid by the purchaser (§ 69). And the commissioner decides that upon manufactures produced since August 31, 1862, and delivered under contracts of sale made prior to July 1, the manufacturer must pay the duty upon such goods, without regard to the fact of such contract. But the manufacturer may collect of the purchaser the amount of taxes paid, on satisfactory proof to the commissioner that the contract was made prior to July 1, and in good faith between the parties and towards the Government, and that the taxes properly assessed upon such goods have been actually paid by the seller. (Com'r Boutw., N. Y. Trans., Oct. 30, '62.)

This rule is modified by section 12 of the act of March, 1863 (p. 242, infra), which exempts from taxation fermented liquors, distilled spirits, refined coal oil, and cotton and woolen fabrics manufactured or produced prior to September 1, 1862.

ARTICLE 2. THE DUTY, HOW AND UPON WHAT ESTIMATED. § 1. The full Value.

The ad valorem tax is to be paid on the cash value of the goods sold-i. e., when sold on time, the legal rate of interest is to be deducted. (Com'r Boutw., N. Y. Trans., Oct. 30, '62.) The goods must pay tax upon their value in the market, at the time they are sold or removed to another than agent. (Id., N. Y. Trans., Nov. 17, '62.) Goods in process of manufacture September 1, 1862, are liable to the duty on their whole value. (Id., N. Y. Trans., Nov. 17, '62.)

See Decision No. 79, in Appendix V., page 307.

§ 2. The increased Value.

The clause of section 75, imposing the three per cent tax on all manufactures of cotton, wool, silk, &c., contains a proviso ❝ that, on all cloths dyed, printed, bleached, manufactured,

or prepared, the said duty or tax of three per centum shall be assessed only upon the increased value thereof."

Under this provision, white cloths may be dyed and printed; brown cloths may be bleached; oil-cloth, Indiarubber cloth, or enameled cloth, may be manufactured, or prepared, and the manufacturer be liable to taxation for the increased value of his product, over the value of the basis or primary manufacture on which the tax shall have been previously paid. This construction appears to give reasonable and adequate scope to the language employed; and this proviso, being an exception to the general policy of the law, which is to tax such distinct manufacture at its full commercial value, no broader construction can properly be made. It refers only to such preparations of cloth by which the cloth itself remains intact; if, however, the cloth is cut, so as to be made into garments, then the tax must be paid on the full value. (Com'r Boutw., Decis. No. 5.)

Thus, the tax on enameled and rubber cloth is assessed upon the increased value of the cotton cloth of which it is made, even though no duty has been paid on such cotton cloth.

By the amendatory act of March 3, 1863 (§30, p. 264), cloths of the above-mentioned kind, manufactured into fabrics, which were removed from the factory prior to September 1, 1862, or which have been, or shall be, imported, are dutiable on their increased value, whether any duty on the unprepared cloth was paid or not. And whenever the duty has been assessed upon the full value of cloth manufactured prior to September 1, 1862, or which was imported prior to March 3, 1863, and has been prepared into fabrics since September 1, 1862, the duty so paid is to be refunded by the commissioner of internal revenue.

Oil-dressed leather, and deer skins dressed or smoked, manufactured into gloves, mittens, or other articles, on which a duty shall have been paid before so manufactured, are dutiable upon the increased valuation. (§ 75.)

The tax on diamonds and emeralds, when previously cut and prepared for setting, will be assessed only on the value of the setting. (Com'r Boutw., Decis. No. 39.)

Bar, hoop, and sheet iron.-It is specially provided that bars, rods, bands, hoops, sheets, plates, nails and spikes, manufactured from iron upon which the duty of $1.50 per ton has been paid, shall be subject only to a duty of fifty cents per ton

in addition. Bar iron, used for stoves and hollowware, or for bridges, buildings, or other permanent structures, is chargeable with no additional duty beyond the specific duty of $1.50 per ton. (§ 75.)

See IRON, supra, and Decision on p. 314, infra.

§ 3. Manufactures used in the Construction of other Manufactures.

The general principle of the excise law is, that each particular manufacture is taxed for its value, though materials used in its production are, in themselves, manufactures on which a duty has been previously paid. (Com'r Boutw., Decis. No. 1.)

This principle is greatly modified by the late amendments, and, as the law now stands, all articles manufactured of materials upon which either internal or import duties have been paid, or upon which no duty is imposed, are exempt from taxation as distinct manufactures when their increased value does not exceed five per cent, ad valorem. (Act of March 3, '63, § 29, page 263.)

With this important provision in view, the decisions of the commissioner on the law as it stood may be applied. The commissioner decides that, where a person makes castings only, he must pay the tax thereon. If, however, he manufactures castings, and uses them himself in the manufacture of other articles, the tax can only be assessed on the last. The right to levy the tax depends upon the fact of sale, or removal for sale or consumption. (Decis. No. 8.) See Decision on p. 314.

The tax on carriages, as a manufacture, is on full value when made, though made up of articles already taxed. (Com'r Boutw., N. Y. Trans., Oct. 27, '62.)

Clothing is a manufacture, to be assessed for its full value, though made up of cloth, silk, &c., upon which duty has already been paid.

Sandpaper is assessed for its full value when finished, though made of paper, glue, and prepared sand, upon all three of which duty has been paid. (Id., N. Y. Trans., Nov. 15, '62.)

Paper hangings, manufactured from blank paper, as a foundation, made elsewhere and duty paid thereon, must pay tax upon their actual value. If the blank paper is made in the same factory and used exclusively in the manufacture of paper hangings, it is not a distinct manufacture subject to the duty.

§ 4. Enumeration of Manufactures.

Section 75 contains an extensive enumeration of articles subject to specific and ad valorem duties. It is, however, to be considered that only a limited number of articles subject to taxation under the law are thus enumerated.

The enumeration is limited to articles produced, as distinguished from those which are manufactured; to those manufactures which are peculiar in character; to preparations which cannot be strictly classed either as productions or manufactures; and to manufactures, productions, and preparations on which congress saw fit to impose specific duties or exceptional rates of ad valorem duties. Following the enumeration is a provision sufficiently broad in language to include every variety and form of manufactures not otherwise specially provided

for.

To cover any omission, and to comprise every manufactured article, manufactures of the following articles, not otherwise specified, are subject to three per cent ad valorem duty : Bone, brass, bristles, copper, cotton, flax, glass, gold, gutta percha, hemp, horn, India rubber, iron, ivory, jute, lead, leather, paper, pottery, silk, silver, steel, tin, willow, wood, wool, worsted, zinc, and other materials.

§ 5. What constitutes a Manufacture.

In general. To make an article liable to duty as a manufacture, it must be known to the trade as a manufacture in itself, distinct from anything else, and salable generally to the public. Thus, for example, articles produced by job printers, lithographers, and engravers, which are made upon specified orders, not known as articles of commerce, are exempt from duty as manufactures. (Com'r Boutw., Decis. Nos. 42, 51, 71.) See Appendix V., Decision No, 79, p. 307, infra. See ENGRAVER, supra.

Carpets and curtains, when prepared by dealers in those articles, upon special orders, to suit specified rooms and windows, are not regarded as manufactures, nor liable to taxation as such. (Id., Decis. No. 37.)

Under the provisions of section 75 of the excise law, under which building stone is declared not to be a manufac ture, it is held that stone dressed for buildings, whether rough hewn or carved, is not subject to taxation, provided that arti

cles manufactured from stone, marble, or slate, such as fireplaces and mantle-pieces, even though designed for particular buildings, but which are of such nature that they might be introduced into the commerce of the country as articles of traffic, are subject to a tax of three per centum, ad valorem. Other manufactures of stone, marble, or slate, which are recognized as articles of traffic, are subject to a tax of three per centum, ad valorem. (Id., Decis. No. 56.)

Gravestones and monuments made to order from the rough material, from plans or designs, are not manufactures, and, as such, are exempt; provided that no monument or gravestone shall be considered as "made to order" which is wrought further than the block or slab before the order for it is given. (Ib.)

A maker of gangs of rigging, or parts of gangs, such as stays, guys, shrouds, or other such standing rigging as has a separate commercial name and value, must be considered a manufacturer. If he makes up his customers' materials, he must pay the tax, but may charge it in his bill for labor, and has a lien upon the rigging until the bill is paid. (Com'r Boutw., N. Y. Trans., Dec. 16, 62.)

What articles, therefore, may be considered manufactures within this rule, must be left to the ordinary judgment of the tax payer.

Exceptions. By the statute, certain articles which are manufactures, in the general acceptation of the term, are specifically exempted. They will be found enumerated under the head of EXEMPTIONS, supra, p. 92. Besides those there enumerated, there are other exemptions, as follows:

Materials for the manufacture of hoop skirts exclusively, and unfitted for other use, such as steel wire, rolled, tempered, or covered; cut tapes and small wares for joining hoops together. (Act of March 3, '63, § 29, p. 263.)

Thread or yarn, manufactured and sold exclusively for knitted fabrics, or for weaving or spooling, when the spinning or weaving for the manufacture of cloth is carried on separately, is not a manufacture within the act. The taxes are assessed on the cloth when prepared for use, the person so finishing or preparing it paying them (§§ 69, 75). In order yarns or threads may be exempted from duty as manufactures, the manufacturer must satisfy the assessor that such yarns or threads were manufactured and sold, or delivered, ex

that