THE main object of both the warehousing and drawback systems is to place a merchant selling in a foreign market in a position similar to that which he would occupy if there were no tariff. If either system helps him more than this, it is equivalent to a bounty. If he is penalized with imported goods it amounts to protection for the home manufacture of similar goods. If the goods are home produced and the drawback insufficient, the effect is the same as an export tax. Now whichever system operates the merchant has to face the costs of revenue restrictions and official control. If he warehouses his goods, the warehouse-keeper's charges must take into consideration such things as the larger capital outlay for special structural requirements, or the additional cost of clerical labour for keeping accounts for revenue purposes. With the drawback system there is the loss due to the interest on capital locked up in the duty paid, and the cost of clerical work in preparing and establishing drawback claims. As regards imported goods these costs usually have to be borne. Tobacco is the most important exception, for drawback rates take these costs into consideration. With some home-produced goods the merchant is reimbursed by allowances paid as well as drawback when the goods are exported.