It was during the early years in this century, too, that the Customs Service relinquished to the Internal Revenue Service its role as the prime collector of revenue in the Federal government.
This change was foreshadowed on December 19, 1907, when a tall, gangling Democratic Congressman from Tennessee arose from his seat in the House of Representatives in Washington, D. C., and called for the attention of Speaker Joe Cannon, the thin, wiry political leader who ruled the House with iron-fisted discipline.
“The gentleman from Tennessee is recognized,” the Speaker intoned dryly.
Then it was that Cordell Hull, a freshman Representative from the foothills of the Cumberland mountains, boldly introduced a bill calling for a Federal tax on all incomes. He long had felt that tariff duties bore too heavily on the consumers of the country and that the wealthy were not paying a fair share of the cost of their government.
Bold though it was, the Tennessean’s move created scarcely a ripple in the capital. The House droned on with its business. The newspapers hardly made mention of the bill or of the new Congressman. It was as though a rock had been tossed into a lonely mountain pool to sink rapidly from sight, leaving no trace after the first plop on the quiet surface.
But Cordell Hull’s action on that cold December day marked the beginning of a long and bitter fight which would end six years later with an amendment to the Constitution authorizing Congress to enact an income tax law. With the passage of this law, the Customs Service became a secondary producer of Federal revenue.
The reforms of these years, together with those which came in the Tariff Act of 1922, established Customs on its present base. It was a leaner and more efficient service which shouldered the increased burdens imposed by the outbreak of World War I.
During the war years, the Customs Service was responsible for the enforcement of the neutrality laws in shipping. Its officers acted also as local agents for the Bureau of War Risk Insurance, insuring vessels, cargoes and seamen against the hazards of war at sea.
When the United States entered the war on April 6, 1917, Customs agents moved quickly to seize seventy-nine German and Austrian ships in American ports. Customs officers enforced the import and export licenses issued by the War Trade Board.
Two years after the Armistice in 1918, the country was swept by the nostalgic longing for a “return to normalcy”—and Warren G. Harding was installed in the White House. But there was nothing normal about the 1920s for the Customs Service. Its agents were to become involved in fighting the greatest wave of smuggling the nation had known since the days of Jean Laffite.