Under Arthur, the Customs House became the center of such open and partisan political activity that it eventually led to conflict between Arthur and President Rutherford B. Hayes. Hayes championed a strong civil service with appointment of Federal employees on a basis of merit rather than political allegiance. The President asked Arthur to resign, and when he refused Hayes removed him from office in 1879.
But this Presidential rebuke by no means dimmed Arthur’s political star. Two years after his removal, he was elected Vice President of the United States, running with James A. Garfield. Garfield was fatally wounded by a disgruntled office-seeker, Charles J. Guiteau, only four months after his inauguration. He died on September 19, 1881, and Arthur took the oath as President. Ironically, once he was in the White House, Arthur became a supporter of a stronger civil service.
Reforms came slowly to the Customs Service in the years that followed the Civil War. But they came, spurred by the efforts of Hayes and then of President Grover Cleveland to establish a civil service and to break up a spoils system in which the “rascals” were thrown out of their jobs with every change in administration.
The demands for further Customs Service reforms were particularly loud in the early years of the twentieth century. One of these resulted in the formation in 1909 of the Customs Court of Appeals, to bring uniformity to the legal decisions governing the huge import trade and to speed up the hearing of Customs cases.
From the earliest days of the Republic, disputes over the appraising of imports had been carried to the U.S. Circuit Courts. The result was a continual conflict in judicial opinions which left importers and Customs officers confused. In 1908, the Secretary of the Treasury reported that the law had made “each of at least 120 judges a possible final judge of Customs appeals, a condition which experience has demonstrated will inevitably result in numerous irreconcilable conflicts of authority.”
In addition to the legal conflicts, the U.S. Circuit Courts had become jammed with Customs cases. It was not unusual for importers to have to wait almost five years to get a judicial settlement of their cases. But the creation of the Customs Court of Appeals by the 1909 Tariff Act removed most of the inequities and brought order out of the judicial chaos.
In this period, the reformers also centered their attention on the system which had permitted pork-barrel legislators to have their towns and cities designated as ports of entry with almost total disregard of the need for such services.
At Saco, Maine, the port’s receipts for fiscal 1910 amounted to $15, while expenses totalled $662—a cost of more than $41 to collect $1. At St. Mary’s, Georgia, the cost of collecting $1 in duties was more than $45. At Annapolis, Maryland, the government paid $309 to collect $3.09. And there were dozens of similar examples throughout the country. The major function of many ports of entry, it was evident, was to give jobs to the workers in the political vineyard.
Congressional investigators also found that the system of paying collectors, surveyors and other Customs officials was a fiscal nightmare—in which thirty-five different methods were used for compensating employees. For example, collectors along the Canadian border were permitted to charge ten cents for each entry blank they executed. Some of them were pocketing, legally, as much as $17,000 a year.
In 1912, Congress authorized the President to overhaul the Customs operation. The day before he stepped out of office, President William Howard Taft issued an executive order establishing 49 Customs districts to replace the existing 126 districts and 36 independent ports. Collectors were placed on a salary basis. Many of the political appointees were dropped from the government payroll.