It is frequently not convenient for an importer to pay the duty upon an invoice of foreign goods immediately upon their arrival. He may have imported the goods to meet a demand several months later. He imports the goods when he can get them or when he can buy them to advantage, and holds them until the demand for them arises. Many foreign articles, such as the laces of Switzerland or the rugs of Persia are made in the cottages or homes of the people. These are bought up by middlemen who go about collecting them, brought down to the seaport and there disposed of to American buyers who purchase for our market. Such purchases must be shipped to America at once. Even in countries where the factory system prevails it is often necessary for our merchants to place their orders far in advance of the demand. This of necessity requires large capital, and as the duty is a considerable item, it is a great convenience to merchants to be able to leave the goods in the hands of the Government without payment of the duty until they are needed for sale.

A bonded warehouse is one designed especially for the storage of imported goods awaiting payment of the duty by the importer. Such warehouses are frequently owned by private individuals, but are constructed under the supervision of the GovBonded Warehouses ernment and are fire-proof. They are under the absolute control of the Government and are isolated from other buildings. A Government officer known as storekeeper is in charge of each warehouse. He is held responsible for the records and safe-keeping of the contents. No goods can be delivered from the warehouse without a written permit from the Collector of the port, which must be presented to the store-keeper. He checks all goods into the warehouse, and when a permit for delivery is presented, he checks out the goods needed by the importer. Goods may be left in a bonded warehouse three years without payment of duty.

Bonded warehouses are, for convenience, divided into several classes. Class 1 consists of warehouses owned or leased by the Government and are known as General Order Stores. This class is the receptacle for all unclaimed, abandoned or seized merchandise, the owners of which have not complied with the law. Class 2  is for the special and exclusive use of the firm or corporation owning it. It is usually located near the business house of the firm, and contains no goods except theirs. It is in charge of a government storekeeper and subject to the same restrictions as other warehouses. Its entrances and exits are separated and its keys are held by the store-keeper who checks the receipt and delivery of goods. Class 3  is for the general storage of goods in bond. Any importer can store his goods in Class 3 warehouse.

When the goods are landed at a port of entry the merchant to whom they are consigned gets notice of their arrival, and if he does not desire them for immediate consumption he enters the goods for the bonded warehouse, or if they are in a warehouse at some port, he enters them for re-warehousing, gets a permit to transport them to the warehouse near to his business home, and without paying duty transports them to his home port and places them in a bonded warehouse, almost as convenient to him as his own store, and there he may allow them to remain until his customers call for them. When the goods are received at the bonded warehouse the storekeeper inspects the condition of the packages, opens an account with that merchant and enters the number of the bond on his book with the number of cases and marks on the same, to await the pleasure or wants of the owner.

A merchant may withdraw a portion of an importation by paying the duties upon the goods covered by that consular invoice. Usually merchants have their foreign orders made up into convenient consular invoice quantities, so that in case it is desired to withdraw a special class of goods, it is not necessary to pay the duties on a large quantity of other goods. All goods not withdrawn from the bonded warehouse in the three years, are considered abandoned, and are sold at public sale.

An American manufacturer may bond his factory to the Government* so that it will be possible for him to import raw materials, manufacture them into a finished product, and ship this to a foreign country without the payment of any duty upon the raw material. His factory would then be called a manufacturing bonded warehouse, and would be subject to the same regulations as other bonded ware-houses.

♦He may furnish the Government with a bond as security, and submit to the regulations.

Private Warehouses.

Ordinary warehouses are denominated free, or private, to distinguish them from bonded warehouses. The Government has no control over them. They are for general storage purposes, or for that of imported goods on which the duties have been paid. Manufacturers frequently have occasion to store up their products to meet the demands of the season when such goods are salable. Wholesale houses frequently carry in addition to their regular stock, large quantities of merchandise in store, especially when confident of a rise in price. Goods seized under writs of replevin or attachment are stored awaiting judicial sale. Furniture and valuables are stored awaiting shipment or use, etc. Free or private warehouses are owned and conducted by private individuals as a business. The rates are less than in bonded warehouses, as the business is free from Government restrictions, and are based generally upon the space occupied in cubic feet. The warehouse receipt given by a private warehouseman is an assignable instrument and may be used at the bank as collateral security for money borrowed, or in many instances warehousemen make advances to the extent of one-half or three-fourths of the value of the property stored, charging interest at ruling rates. Perishable goods, of course, do not find their way into bonded or private warehouses. They are placed in cold storage.