In the wake of the American Revolution, if you had asked a citizen whether his fledgling state would survive more than two centuries, the answer would have been far from confident. The problem, as is so often the case, was money. Left millions of dollars of debt by the war, the nascent federal government created a system of taxes on imported goods and installed custom houses at the nation’s ports, which were charged with collecting these fees. Gradually, the houses amassed enough revenue from import merchants to stabilize the new government. But, as the fragile United States was dependent on this same revenue, the merchants at the same time gained outsized influence over the daily affairs of the custom houses. As the United States tried to police this commerce in the early nineteenth century, the merchants’ stranglehold on custom house governance proved to be formidable.
In National Duties, Gautham Rao makes the case that the origins of the federal government and the modern American state lie in these conflicts at government custom houses between the American Revolution and the presidency of Andrew Jackson. He argues that the contours of the government emerged from the push-and-pull between these groups, with commercial interests gradually losing power to the administrative state, which only continued to grow and lives on today.
About the Author
Gautham Rao is assistant professor of history at American University. He lives in Maryland.
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Custom Houses and the Making of the American State
By Gautham Rao
The University of Chicago PressCopyright © 2016 The University of Chicago
All rights reserved.
Custom Houses, Negotiated Authority, and the Bonds of Empire, 1714–1776
On the evening of March 5, 1770, a scrum broke out between royal soldiers and a "motley rabble of saucy boys, negroes and mulattoes, Irish teagues and out landish Jack tars" on King Street in Boston. In the chaos of the moment, one shot was fired, and, quickly afterward, a few more followed. Five colonists were killed. But for Paul Revere, the facts of the Boston Massacre did not speak for themselves. Some needed beautification, especially the protagonists. It would not do for "the American cause to be represented by a huge, half-Native American, half-African American, stave-wielding, street-fighting sailor" like Crispus Attucks. The bad guys also needed a touch-up. Revere arrayed the redcoats in a tidy phalanx and gave each soldier a cold-blooded grimace (fig. 5). He also added two signs to teach distant readers what these murderous soldiers were defending: "Custom House" and, directly above it, "Butcher's Hall." Revere had erased Attucks to dignify the mob. He distinguished the custom house to villainize the enemy.
By the time Revere set to work in 1770, the British imperial custom house had become a backdrop of the gathering revolution. Since 1756, British Treasury officials had been pressuring colonial customs agents to strictly enforce new taxes and commercial regulations. Colonial merchants, sailors, and others fiercely resisted these actions. Their tool of choice was the mob, and from the outbreak of the Seven Years' War to the first shots of the War of Independence, mobs around the custom house were an all-too-frequent sight on the waterfront. Colonists also possessed subtle weapons, such as lawsuits and informal social pressure. "For there was scarce a port in America," recalled Commissioner of Customs Henry Hulton, "where an Officer had endeavoured to make a Seizure, or refused a complyance with the will of the People that he had not been tarred, & feathered."
Tar and feathers represented a new tactic, but colonists' other methods for resisting customs officers dated back to the seventeenth century. Until 1756, however, colonists made only sporadic use of these practices. By and large they did not need them. Prior to the Seven Years' War, customs officials in the colonies, under unremitting pressure from local men of the market, had consistently bent or broken the letter of the Navigation Acts and measures such as the Sugar Act. This lax administration was a universal feature of custom-house governance in eighteenth-century America until the American Revolution. Nor was it an accident. Imperial officials in London were well aware of the smuggling that flourished in North American ports. They knew of the great deal of slack between the laws and regulations of Parliament, the Treasury, the Board of Trade, and the Foreign Office, on the one hand, and on the colonial waterfront, on the other. Whitehall allowed local norms to determine "what were legitimate and what were illegitimate practices" at the custom houses and other imperial institutions.
For managers of empire like Robert Walpole, colonial smuggling ironically strengthened the bonds of empire. The colonial merchants who did business at the imperial custom house sought access to lucrative markets — both legal and illicit — in the West Indies and elsewhere. As they pressured customs officials to allow trade in prohibited goods or with prohibited ports, these colonial merchants consistently violated the basic terms of the British Navigation Acts. But in their pursuit of commercial gain at seemingly any cost, they enlarged the influence of the British Empire. And for metropolitan observers, it was increasingly clear that colonial commerce that ran afoul of the Navigation Acts siphoned supplies and capital from the rival Spanish and French empires. As colonial merchants negotiated the boundaries of custom-house authority in North America, and plied their technically prohibited commerce, they served the expansionist ends of the British Empire.
The American Revolution disrupted the system of custom-house governance that had taken root in the colonies since the Glorious Revolution. Around the time of the Seven Years' War, rival visions of empire called into question the quiet understanding that had structured legal relations between metropolitan authorities and colonial customs officials on the one hand, and colonial customs officials and colonial merchants on the other. As the colonies became viewed as an untapped source of revenue, Treasury and other officials stepped up their calls for colonial customs officials to tighten enforcement of customs and other laws. Parliament also created new forms of oversight and control in the colonies, so customs officials, to say nothing of colonists, more viscerally sensed imperial authority. By 1770, then, when Paul Revere memorialized the Boston Massacre, the custom house had become a universal symbol in the colonies for imperial excess.
The disruption of imperial governance would prove to be brief. By 1789, when the new federal government of the United States began operating its own custom houses, merchants and federal customs officials would again find ways to negotiate the limits and possibilities of the federal government's authority at the custom houses. The founders would of course look to the meaning of the American Revolution to make sense of the world in which they lived. But in imperial customs law and administration during the American Revolution there was also a more specific cautionary tale about how not to govern an empire.
The Fiscal-Military Revolution and Its Discontents
Empire had preoccupied English monarchs, and had increasingly defined English political culture, since the unification of England and Scotland in 1603. The "fiscal-military revolution" provided a governmental framework to operate and expand the empire. This revolution "radically" increased taxation, drastically enlarged military capacity, and generated a bustling bureaucratic administration "devoted to organizing the fiscal and military activities of the state." The transformation of the English state was particularly noticeable in the realms of taxation and commercial regulation and especially at the custom houses, where the number of employees rose from 1,313 in 1690 to 2,205 in 1782–83. England, now armed with the power to tax, could guarantee revenue to defray the costs of war and expansion.
A key step in building the English fiscal-military state was granting the Treasury central control over revenue collection. In practice, central control meant a hierarchy of bureaus, at the top of which sat the Treasury Board and its subordinate Board of Customs Commissioners. From their perch in the dazzling Long Room atop the London custom house, the commissioners directly supervised prosaic revenue and regulatory activities at English custom houses. Waterfront operations were equally impressive. On busy days, over 800 customs officials swarmed around the London custom house — tidewaiters on board vessels awaiting inspection; inspectors supervising the tidewaiters; watchmen along the quays guarding against unauthorized unlading; hundreds of weighers and gaugers on the wharves handling unloaded commodities; surveyors and landwaiters overseeing activities on the wharves. The customs establishment was also active beyond London. In "outports" such as Bristol, custom houses operated under the supervision of a collector, with up to several dozen subordinate officers. From the Long Room, through London, and along the English coast, this apparatus was "one of the pillars of the mercantilist state."
The chief business of these customs officials was to enforce the Navigation Acts of 1660, 1663, and 1673, which taxed imported goods to discriminate against foreign commerce and protect English commerce. Procedure at the custom house was fairly routine. Each manifest would account for each and every commodity on board a vessel, save for the ship's "stores" of victuals. From the manifest, officials calculated duties and demanded payment of what would become the state's revenue. The manifest and other shipping papers also described the vessel's port of origin and destination. Through these measures, England would guarantee its mercantilist monopoly on shipping by ensuring that vessels remained on their stated course. If a ship's crew violated these rules — or myriad subsidiary rules — customs officials were to place into collection bonds that merchants and ship captains had entered into before setting out to sea.
England's new customs system notched some remarkable achievements in the century following 1690. First, the custom houses collected hundreds of millions in revenue. Likewise, commercial regulations, in tandem with military policy, advanced England's geopolitical interests. The Treasury routinely directed customs agents to be "faithfull & diligent" about preventing trade with France during periods of conflict with France. The custom house was the center of operations for "procuring and pressing seamen" to fill the ranks of England's increasingly powerful navy. Customs officials also inspected vessels to ensure that commodities produced for the export market actually went abroad, and conversely, that goods produced for domestic consumption were not illegally exported. By 1763, the enforcement of these policies contributed to England's dominance in the European struggle for global dominion.
England's new and reformed fiscal-military institutions required a commensurately new cultural infrastructure to structure relations between citizens and the state. This project spanned the long eighteenth century. Prior to the Glorious Revolution, James II pursued a centralized, absolutist state along French lines in which the monarch possessed "absolute sovereignty in his own dominion." His victorious opponents patterned their "centralized and interventionist" state on a Dutch model. The reconstruction of relations between state and citizen during the fiscal-military revolution was nonetheless turbulent, as local populations protected customary norms of equity and justice from the increasingly interventionist state. The poor, for instance, lodged massive resistance against central governmental land policies. As E. P. Thompson explains, government policies triggered "grievances" among the people that "operated within a popular consensus as to what were legitimate and what were illegitimate practices in marketing, milling, baking, etc." Their resistance was "grounded upon a consistent traditional view of social norms and obligations" and "of the proper economic functions of several parties within the community." This was "the moral economy of the poor." If the state committed "an outrage to these moral assumptions," it would provoke "direct action" by the people.
The poor were hardly the only group to assert themselves against the intrusion of central governmental institutions and the liberal rule of law. Waterborne commerce — on rivers within England, or on the high seas abroad — offered a lucrative marketplace in contraband to a wide range of middling laborers, sailors, and merchants. For these smugglers, the state's high duties on popular goods, such as tea, created a "vast world of pilfering and smuggling" — a shadow economy that would expand for much of the eighteenth century. As long as national borders have existed, of course, smuggling has existed in one form or another. But now smuggling took on a newly nefarious character because it constituted a crime, not just against the state, but more directly against the state's revenue. In 1796 one observer spied 2,500 "River Pilferers" in and around London's "docks and arsenals" who plundered 0.75 percent of the state's revenue. Scholars suggest that more was afoot than bands of secretive "pilferers." Rather, the expanded reach of the English fiscal-military state in turn "centralized and concentrated" smuggling operations that had previously been the domain of "petty dealers," merchant sailors, and other men of the lower sort.
Smuggling in eighteenth-century England embodied distinct strands of political culture. On the one hand, some smugglers struck a blow against the increasingly centralized state by committing a "social crime" — in effect a "rebellion" — against the laws of the realm. Some were Jacobites, or supporters of the deposed Stuarts. From Kent and Sussex, these smugglers advanced their material interests while strengthening the Jacobite movement. But smuggling could also serve the state. Smugglers who operated on England's coastal margins helped build the nation's commercial infrastructure and cohere a national marketplace.
No matter the network or sentiments that connected them, communities of smugglers badly outnumbered the small handful of officers who manned England's peripheral custom houses. The vast coastline — with its crags, inlets, and narrows — offered a welcoming geography for smugglers to land their goods. Sympathetic tradesmen and farmers could transport illicit goods to inland markets. Smugglers' mobility also vexed customs enforcement, for when one custom house tightened enforcement on its shores, the smugglers simply found a new mark. When the government imposed itself on one waterfront, the smugglers simply moved to another. The best the Treasury could do was to station vessels called "Revenue-cruisers" at the outports. But the smugglers then turned to "larger, faster, and more heavily armed vessels." Gradually, the smugglers' unrelenting enterprise created a wide gap between the letter and the reality of customs law. For one thing, outports became known for their "informality" in ignoring a vast illicit commerce. To cope with those officials who insisted on enforcing customs laws, smugglers turned to violence. Nor did the smuggling communities think murder too severe a "punishment" to mete out to a particularly incorrigible customs man.
The process that unfolded at custom houses at the early modern British outports was a negotiation between central governmental authority and local commercial communities. The central administration of the emerging English state considered the custom house a bulwark of central authority. But at the custom houses, a very different type of authority interjected itself into the workings of the state. Merchants, seamen, and other interested parties fought for and secured the ability to dictate the terms on which the state's laws would be enforced. Diverse, overlapping political ideologies, from Jacobitism to collective protest, informed their actions. The least common denominator of these ideologies, however, was "opportunism" to participate in the seductive commercial marketplace of credit and commodities. This was the moral economy of the custom house that accompanied the rise of the fiscal-military state in seventeenth- and eighteenth-century England. And it would quietly remain in tow as the custom house found its way to the outer reaches of the British Empire in North America.
Provincializing the Fiscal-Military Revolution
The English fiscal-military revolution was a means to the end of imperial expansion. The English Civil War had largely divided society between those who supported and those who opposed the Stuarts' absolutist vision of the state. Importantly, however, both the Stuarts and the reformers who replaced them shared expansionist aspirations. Thus, throughout the seventeenth century, through the interregnum and revolution, Great Britain charted and stayed true to the path of empire. It was an empire that was primarily maritime and commercial. Oceanic commerce, that is, carried British influence throughout an ever-expanding map of influence and sovereignty.
Commerce had not necessarily motivated the mass migration of English-speaking peoples to North America, but it would soon become a driving force in the growth of colonial prosperity. American colonists quickly discovered that the land they had taken by force and occupied into possession produced a bounty in great demand in Europe and the West Indies. By the mid-seventeenth century, the colonists enjoyed stable, lucrative commercial pathways with the metropole. Southern colonies, such as Virginia, staked their destiny on a single cash crop, tobacco. New England's fisheries yielded tons of codfish, although merchants in the region quickly diversified from fish into other markets. New England merchants also opened new channels of trade with the West Indies, exchanging an array of agricultural goods for plantation products such as rum and molasses. Throughout the colonies, commercial profits went to increasing agricultural production, which, in turn, brought commercial wealth of even greater magnitude.
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Table of Contents
A Note on Archival Sources xiii
Part I Revolution; Philadelphia, 1769
1 Custom Houses, Negotiated Authority, and the Bonds of Empire, 1714-1776 19
Part II Revenue and Empire; Bermuda Hundred, 1795
2 Political Economy and the Making of the Customs System 53
3 Negotiating Authority in Federalist America, 1789-1800 7;
Part III Revenue and Crisis: Baltimore, 1808
4 Commerce or War? 103
5 Jefferson's Embargo and the Era of Commercial Restrictions, 1807-1815 132
Part IV Reform: Boston, 1817
6 Dismantling Discretion, 1816-1828 161
Epilogue: Charleston, 1832 197