In 1829, Andrew Jackson shared the recommendations of his Secretary of the Treasury, Samuel D. Ingham to build public Customs Warehouses and to shorten the terms of credit offered to merchants on their duties owed. Secretary Ingham reported in his report on finances that year that the government was taking a great risk on allowing long terms of credit and for allowing merchants to use private warehouses to store goods offered in deposit for security.
Ingham reported that terms of credit being offered were overly complicated and extended for too long of a time. When teas were imported from China or Europe and stored as security, the importer was given two years to pay the duties, but if the tea was delivered for consumption than credit was only extended for 8 months if less than $500 and 12 months if more. Creditors had 9 months to pay duties on salt, 12 months for wine. For most products from Europe, installments were required with one-third of the duties payable in 8 months, 10 months, and 12 months. but for products from the West Indies, it was 9 months, 10 months and 18 months. Ingham concluded that the difficulty in collecting these duties especially from China and other areas beyond the Cape of Good Hope were the chief cause of revenue loss. To remedy this situation, Ingham suggested that the system be simplified and a term of six, nine and twelve months be adopted as a "fair average of existing credits". Ingham argued that in the cases where the terms of credit are shortened, the impact on prices would be insignificant and could be offset could be offset by lowering duties on imports from countries south of the equator.
In addition to reducing the terms of credit, Ingham also suggested that the federal government provide customs warehouses where goods offered for security would have to be received and stored. The current system allowed the importer to store them in private stores that were usually rented out by the collectors. Since these were private warehouses, access to the goods for inspection was very limited and allowed for significant abuse by the merchants. Ingham's proposal was to erect warehouses at the public expense at each of the main ports where products can be stored and conveniently placed under the guard of the federal government. The moderate charge for storage would offset the cost of building the warehouses, while the increased control would eliminate the fraud that was rampant in the use of private warehouses to store goods offered in deposit for security.
In Andrew Jackson's first State of the Union Address, he shared these proposals with Congress and asked them to consider the legislation to both shorten the long credits and construct public warehouses.
"In the collection of the revenue the long credits authorized on goods imported from beyond the Cape of Good Hope are the chief cause of the losses at present sustained. If these were shortened to 6, 9, and 12 months, and ware-houses provided by Government sufficient to receive the goods offered in deposit for security and for debenture, and if the right of the United States to a priority of payment out of the estates of its insolvent debtors were more effectually secured, this evil would in a great measure be obviated. An authority to construct such houses is therefore, with the proposed alteration of the credits, recommended to your attention."While I could not find any specific act to build custom-houses and warehouses at each major port, there were line items in a Congressional appropriations bill of 1830 for "finishing the custom-house and warehouse at Portland, Maine" (An Act making appropriations for the support of government for 1830) and for "the erection of a custom and warehouse at Mobile" (An Act for the re-appropriation of certain unexpended balances of former appropriations)
References
Presidency.ucsb.edu. (2018). First Annual Message | The American Presidency Project. [online] Available at: https://www.presidency.ucsb.edu/documents/first-annual-message-3 [Accessed 29 Oct. 2018].Acts passed at the second session of the twenty-first Congress of the United States. (1831). Washington: William A. Davis, printer, pp.382 and 298.
Hamilton, A. (1837). Reports of the secretary of the Treasury of the United States, prepared in obedience to the act of the 10th May, 1800. Washington: Printed by Blair & Rives, pp.13-16.
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