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.