Part 9

Customs was a small army of men whose collection of duties symbolized an issue which threatened to touch off a civil war long before Abraham Lincoln entered the White House. More recently it was an angry maid exposing a distinguished judge and Hollywood stars caught in a tangled web of intrigue. It was, unfortunately, also a thief who rocked the country with a scandal, and weak-willed men who could not resist the temptation of an underworld bribe.

The Customs Service is and was a thing of many parts, involving the lives and fortunes of many people. And that is the reason for this story.

A TIME OF CRISIS

The problem of tariffs is one with which governments have contended from the beginning of recorded history.

The Old Testament mentions customs duties and indicates that in those ancient times a well-established system of duties existed. In the early chapters of Ezra is to be found the story of Cyrus, a king of Persia, who permitted the captive Israelites to return to Jerusalem from Babylon in order to rebuild the city and their temples. But there were those who opposed the return of the Israelites. The scriptures say these opponents “weakened the hands of the people of Judah, and troubled them in building, and hired counsellors against them, to frustrate their purpose.”

This dispute carried over into the reign of King Artaxerxes, who succeeded Cyrus. Those who opposed the Israelites returning to Jerusalem wrote the king a letter in which they said, “Be it known now unto the King, that, if this city is builded and the walls finished, they will not pay tribute, custom, or toll....” But the king searched the records and found that there was precedent for imposing a tribute or a customs toll. He replied to the letter, “And I decreed, and search hath been made, and it is found that ... there have been mighty kings also over Jerusalem, who have ruled over all the country beyond the river; and tribute, customs, and toll was paid unto them.”

The New Testament indicates that Matthew was a collector of customs at the city of Galilee. It says that Jesus called Matthew from “the receipt of customs.”

The first recorded history of customs being collected in England is found in the code of laws enacted by King Ethelred in 979 A.D. The law read, “Every small vessel arriving at Billingsgate shall pay to the tax gatherer one obolus; if of greater tonnage and mast rigged, one denarius. If a ship shall arrive and anchor there, four denarii shall be paid to the tax gatherer. Vessels laden with timber shall pay one log to the tax gatherer.”

In the Magna Charta is found the following: “Cap. XXX. All Merchants, if they are not openly prohibited before, shall have safe and sure Conduct to depart out of England, to come into England, to tarry in and go through England, as well by land as by water, to sell and buy, without any manner of evil tolts, by the old and rightful customs, except in time of war. xxx”

The collection of customs on the North American continent was first made by the Dutch in 1651 when the governor ordered that all imports from foreign countries entering the harbor at New York should pay a duty. The method of collecting was later outlined in a document which reads as follows:

Instructions for Mr. Cornelius Van Ruyven, collector of the customes in ye City of New York, by order of Colonell Francis Lovelace, governour, May 24, 1668.

You or your clerk are to be daily at ye Custome House from nyne untill twelve at noone. There to receive ye customes both in and out, as the Merchants shall come and enter, ye Merchant is to make foure Bills and sign them with his hand, writing his name on them, and ye same time, when you have signed ye Warrant, or one of ye Bills, you are to demand ye Custome, either in kinde at 10 P Cent inwards or double ye vallue of its first Cost in Holland, in Beaver. And likewise outwards for Peltry you are to receive 10½ P Cent according to ye vallue in Beaver, for Tobacco one half penny for Per pound which is noe more than all Englishmen doe pay. xxx You to tell ye Merchante you are not to give credit. xxx If they do not like your propositions, you are not to pass their Bills. xxx

And Lastly pray lett ye Books be kept all in English and all Factoryes and Papers, that when I have occasion to satisfy myself I may better understand them.

When the city came under British rule in 1664, the system of tariffs set up by the Dutch was continued. Almost one hundred years before the Boston Tea Party and the beginning of the Revolution, there was an uprising in New York against the British collection of customs. Religion played a role in this rebellion, which was touched off when England’s Catholic King James II was succeeded by the Protestant William of Orange and his wife Mary.

When the news of King James’ overthrow reached New York, a Captain Jacob Leisler, who had lived in New York for about thirty years and was a deacon in the Reformed Dutch Church, decided that he would not pay customs duties to a king’s representative who was himself a Catholic. Leisler was in the business of importing liquors and other merchandise into New York. One of his vessels came into the harbor on April 29, 1689, loaded with wine from Europe. Leisler refused to pay the $100 customs duties. He argued that the collector, named Plowman, was a Catholic and was not qualified to receive the customs under the new Protestant regime in Britain. Leister’s stand threw the city and military officials into a dither. There was a hastily called meeting of the counsellors, alderman and military officials in the city to discuss this development. The majority ruling was that the system of collecting duties would continue as it had in the past until other orders were received from William of Orange.

Leisler would have no part of this ruling. He told the assembly he would not pay the tax and he stalked out of the meeting room to discover he was not alone in his opposition to the customs duties. Other merchants saw an opportunity in this situation and joined his side. The result was that Captain Leisler and his friends organized an uprising against Lieutenant Governor Nicholson.

Leisler reached such a position of power that he drove out those in charge of the Customs service and appointed his own man, Peter DeLansy, as a collector. The British finally hanged Captain Leisler for his role in this revolt and in April, 1696, appointed the Earl of Bellomont as Governor General over New York and New England.

The Earl was not a man to brook any nonsense such as the nonpayment of customs to the royal treasury. He restricted the Colonies’ trade with New York and Albany and forbade the shipment of merchandise up the Hudson River unless duties were paid at New York.

The collectors appointed by the Earl of Bellomont had a rather difficult time of it. The merchants of New York were, to be charitable, unreliable when it came to the payment of customs duties. In fact, smuggling was a popular practice. In one instance a cargo of merchandise from the East Indies was ordered seized but the officers who went to make the seizure simply disappeared. Then it was learned that the sheriff himself was hiding the merchandise in his own home.

From the viewpoint of King George III’s counsellors, the actions of the Americans in smuggling and otherwise evading the payment of the customs duties were no less than thievery from the treasury of Great Britain. Such nonsense had to be stopped. And so it was that, after Canada came under British control in 1763, the British adopted a tougher policy toward the Colonies. In 1764 the Parliament passed the Sugar Act, which called for the payment of duties on lumber, food stuffs, molasses and rum brought into the Colonies. This in itself was enough to enrage the American merchants, but then the Sugar Act was followed by the Stamp Act in the same year. This act required revenue stamps to be purchased on all imports. The receipts were to be used to help defer the cost of British troops stationed in the Colonies. In short, the Americans were to pay to have British troops quartered in their towns and cities. When news of the passage of the Stamp Act reached New York, more than 200 merchants gathered for a protest meeting at Burn’s Tavern. They signed an agreement not to import goods from England.

Judge Robert R. Livingston wrote at the time: “England will suffer more by it in one year than the Stamp Act, or any other, could ever recompense. Merchants have resolved to send for no more British manufactures, shopkeepers will buy none, gentlemen will wear none; our own are encouraged, all pride in dress seems to be laid aside, and he that does not appear in homespun, or at least a turned coat, is looked upon with an evil eye.”

The U.S. Customs Service came into being on July 31, 1789, in a time of crisis. It was an organization put together by Congress and President George Washington to save the struggling young central government from financial collapse through the collection of duties on imports.

The formation of Customs thus became the first step to be taken by the original thirteen states toward a practical, working partnership after the adoption of the Constitution. For in agreeing to a uniform tariff, to be collected by the central government through its Customs Service, the states voluntarily gave up an important state’s right which each had guarded jealously--the right to collect and retain its own customs duties.

For this reason, August 5, 1789, is an important though little-known date in history. On this day Captain James Weeks sailed his brigantine, Persis, into New York Harbor with a miscellaneous cargo of merchandise from Leghorn, Italy. The cargo was assigned to Mr. William Seton, who paid the Collector of Customs a total of $774.71 in duties--the first payment of duties destined for the Treasury of the United States.

Captain Weeks’ payment was a modest one, but at least it was a prop under the financially shaky young government. And for the next 124 years--until the income tax amendment to the Constitution was adopted in 1913--the Federal government’s primary source of revenue was to be the money collected by Customs on merchandise and materials brought into the United States from abroad.

Until they were bound together by the Constitution, the thirteen states were not a nation. They had fought for more than six years for freedom from political, economic and military domination. They had struggled through incredible hardships, physical and financial. They had won their victory. But they were not a nation.

Throughout the struggle, they were linked together in a loose confederation in which each state was entirely independent of the others. The move toward confederation came on September 5, 1774, when state delegates gathered in Philadelphia to organize the congress known as the Continental Congress. Each state was represented by one delegate, and each delegate had one vote. Peyton Randolph of Virginia was elected president of the Congress--and it is to be noted that he was not referred to officially or unofficially as the President of the United States.

The members of this Congress hammered out the Declaration of Independence and signed it on July 4, 1776. But not until two years later were the Colonies joined together by a formal agreement, the Articles of Confederation and Perpetual Union Between the States. In these Articles the Colonies called themselves the United States of America, but they remained a union of independent states. Having gone to war to free themselves from a strong central government with an autocratic ruler, the Colonies distrusted centralized authority and each was jealous of its sovereignty.