Page:The American Cyclopædia (1879) Volume VII.djvu/31

EXCISE 23 has been fraud in tlie transaction to which the bill relates, which would have been a defence as between the original parties, the rule is that a lona jidc holder for value, is not affected thereby ; with however this limitation, that the bill has been received not only without knowl- edge of the fraud, but without such notice of the circumstances as should have induced sus- picion and inquiry. If the bill at the time of transfer has become due, this is in law deemed sufficient to call for inquiry, and the indorsee in such case takes the bill subject to whatever defence there would have been against the party from whom he received it. When a bill has been stolen or lost, and has been put into circulation again, a bonafide purchaser is en- titled to enforce it against all previous parties, provided there were no circumstances that should have led him in the exercise of ordinary prudence to inquire into the title of the party from whom he received it. It will in such a case be a question of fact whether due dili- gence has been used by the holder, and the burden of proof is imposed upon him, upon its being shown that the bill had been stolen or lost. The question in such case would be be- tween the person who had lost the bill or from whom it had been stolen, and the person who had received it after the theft or loss. The liability of the original parties is not affected. Bills of exchange are of two sorts, foreign and inland ; the former being drawn by a mer- chant in this country upon another residing abroad, or by a foreign merchant upon one re- siding here ; the latter when both drawer and drawee reside in the same country. The prin- cipal rules relating to bills of exchange grow out of mercantile usage respecting foreign bills; but by statute in England and the United States both are now put upon the same footing, with the exception only that damages are allowed upon foreign bills which come back protested for non-acceptance or non-pay- ment. By statute in England and the United States, promissory notes are made negotiable in like manner as inland bills of exchange. The same principles therefore, in respect to negotiability and the legal incidents thereof, apply to both. EXCISE, a term employed to designate a par- ticular form of taxation. Excise taxes or du- ties are distinguished from customs in being such as are imposed upon domestic commodi- ties, chiefly manufactures, such as glass, paper, spirits, &c., while customs are duties levied upon merchandise imported or exported. Both kinds are included under the common term imposts. Excise duties were first imposed in Great Britain by the long parliament in 1643, but a number of articles of foreign production were included in the act, as tobacco, wine, sugar, &c., which were charged with a duty in the hands of the retailer in addition to what had been paid on importation. Since that time they have been regularly continued, but with modifications from time to time as to the articles subject to the duty and the rate of charge. The articles of foreign growth and manufacture are now transferred to the de- partment of customs. At the present time excise duties are nearly all collected on fer- mented and distilled liquors and chiccory, though license duties are also classed with the excise taxes. For the year ending March 31, 1872, the excise duties collected in the United Kingdom amounted to 23,386,064, of which 6,670,955 were collected on malt, 12,274,- 596 _on spirits, and 3,781,979 for licenses. Excise duties have not been generally levied in the United States, but the national government has relied upon customs as its principal source of revenue. An excise duty on the manufac- ture of spirits during Washington's administra- tion led to what was called the whiskey insur- rection in Pennsylvania, which was soon sup- pressed, but the tax was not continued. Oth- ers were imposed in 1813, but repealed in 1817. After the breaking out of the civil war in 1861 it became necessary to resort to every available source of income, and an elaborate system of excise duties was established, de- signed in some form to reach nearly every spe- cies of manufacture. The most of these du- ties have successively been abolished, but those on spirits and tobacco are retained. For the purposes of comparison with the excise duties collected in Great Britain in 1872, the follow- ing figures are given. The duties collected on the manufacture and sale of distilled spir- its for the year ending June 30, 1872, were $49,475,516 36 ; on fermented liquors, $8,009,- 969 72 ; on tobacco, $18,674,569 26. The rela- tive advantage of excise duties and customs has been much debated. The latter are evaded to a large extent by smugglers, but the excise du- ties are also evaded, particularly in respect to spirits. This was strikingly illustrated in the United States, where it was found that a tax of $2 a gallon on the manufacture of whiskey produced less revenue than one of 50 cents. Excise duties are also objected to on the same ground with an income tax, namely, that they expose the manufacturer's private operations. Another objection that has tended to make them more obnoxious than any other is the ar- bitrary manner of enforcing them, which is felt to be an interference with private liberty and independence, which the common law has sed- ulously protected. It is supposed that in this matter of collecting its revenue the government considers itself entitled to dispense with all the ordinary protections to individual right and liberty, and to provide the most unjust and arbitrary proceedings at discretion. This was illustrated in a very remarkable manner in the recent case of Henderson, in which it was held by the majority of the United States supreme court that a lona fide purchaser of liquors stored in a government warehouse, who had paid in full all dues, might afterward have the liquors seized in his hands and forfeited to the government because a former owner had at