Customs Drawback Certificate W/ Revenue

Submitted for your inspection is an 1867 Drawback Certificate (not mine, though I have an example). These are actually quite scarce and how they made their way out of the U.S. Treasury after being paid is something of a mystery. But then, there are plenty of similar mysteries.

These were an obscure type of federal bond. In 1861, Congress passed an act increasing import/export duties, in order to fund the war effort. This, however, put Union manufacturers at a competitive disadvantage in international trade. U.S. Customs required cash up front on imported materials, but some American companies simply remanufactured the material into other products then exported it (in this case raw sugar into refined sugar). The solution was to enable a "drawback" on the import taxes paid, refunding the money a month after the products were exported. The taxes continued for a period even after the war had ended.

But here's my question: This example has a 5¢ Certificate revenue affixed, yet this is a federal security. My understanding is that government transactions like this were exempt from paying any revenue tax. Was this an error? This is the only example I've seen that has a revenue attached.

Greg,

I also have one of these with a 5¢ stamp attached. Yes, these drawback certificates should have been exempt from the tax. But as we see there were different interpretations by those who were asking for a drawback.

Would your certificate happen to be for refined sugar? I'm wondering whether the tax only applied to sugar. Or if maybe it was rescinded after 1867. I don't find any revenues on later dates. I did find an example of an earlier variety, also with a revenue stamp and also for sugar.

Greg,

You are drawing conclusions from a very small sample. Attached is my stamped document similar to your first image. Mine is for imported linseed made into linseed cake. So this did not apply solely to sugar.

These are certificates and so the relevant tax is general certificates, not bonds.

There are drawback certificates from other locations than New York. Here is one from Boston. it is also for raw sugar manufactured into refined sugar.

One should consult the government documents that cover these to ascertain why they were subject to the tax that we see with the presence of the stamps.

My copy is very close in time with Ron's. Also for sugar.

@revenuermd, can you point me to a reference that would spell out the usage applications for the Certificate stamps?

Also, if you look above the vignette it states "No. of Bond" with the serial #. So, technically, these were bonds and represented debt of the federal government.

Greg,

Mike Mahler has published two books that are essential reading for understanding the use of the first issue revenues: (1) "United States Civil War Revenue Stamp Taxes," which is a compendium of statutes, decisions, rulings and correspondence, and (2) "A Catalog of United States Revenue Stamped Documents of the Civil War Era by Type and Tax Rate." A search through the first of these is essential for understanding how Internal Revenue's interpretation of the law changed over time. Page 64 in the second book illustrates our drawback certificates under the category of General Certificates and thus the 5¢ stamp which we see attached.

I guess I'll add these to the post and maybe someone has more information on them. These are two proofs from the Smithsonian's collection of Bureau of Engraving and Printing (BEP) Certified Proofs, housed in the National Museum of American History. One is from the 1870s, when the BEP was shifting all work in-house that had previously been done by private banknote firms. The second is from the 1880s, when the drawback certificate seems to have undergone a name change, though the function of this new certificate appears to be the same.

I don't believe either of these proofs represent the final design, but I have yet to see issued examples. Does anyone know whether such things exist?