§ 394. “Shall be Taken to have been Collected.”
Notwithstanding the great difference between this and the preceding period as regards the mode of raising revenue, the alteration in the mode of distributing the surplus is very slight. The object is still the same—to give to each State credit for the revenue which it has contributed, and to charge each State with its fair share of the federal expenditure. Accordingly the provisions for debiting expenditure remain as before (see sec. 89, supra); but with regard to crediting revenue one further adjustment is needed. With free trade between the States, the State in which imports pay customs duty, or products pay excise duty, is not necessarily the State in which the goods are retailed or consumed; and, on the assumption that these duties are paid by the consumer—or at least by the people of the State in which the goods are retailed—it is necessary to make an adjustment in respect of goods which have paid duty in one State, but which afterwards pass into another State for consumption.
To obtain the necessary facts upon which to base this adjustment, it will be necessary, during the whole of this period, to keep an account of the passing from one State
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to another of all goods on which customs or excise duty has been paid. That this can be done with absolute completeness and accuracy is not to be expected; but small omissions will not seriously interfere with the efficiency of the provision—especially as they are likely to occur on both sides of the ledger, and so cancel one another. There will be no motive on the part of traders to evade observation, because no duty is chargeable to them; it is merely a matter of book-keeping entries for and against the several States.