In the late 1820's, the United States under both Adams and Jackson saw a rise in duties and tariffs, but because of smuggling these taxes often went uncollected. Not only were many merchants avoiding paying these tariffs, but some merchants were bringing into the countries "goods" that were outright banned such as opium from China and slaves from Africa. In 1829, Secretary of the Treasury Samuel D. Ingham reported a few deficiencies in the coasting trade law that made it difficult to crack down on the smuggling and were contributing to the loss of tariff revenue. President Jackson urged Congress to consider some recommendations from his Secretary so long as they did not infringe on personal liberties or disrupt "lawful business".
The focus of the report from the Secretary Ingham was on the Coastal trading law that govern the transit of goods between ports within the territorial limits of the United States. The first issue raised was that under the current law merchants were able to ship goods between U.S. ports without providing a manifest or providing proof that the required duties on foreign goods had already been paid. All a merchant had to do is find one port where they could slip the foreign goods past the customs officers, and they would be able to transport them to any other port in the United States without being subject to further inspection. The current law did allow a customs officer to board a coasting vessel and demand her manifest, but the owner of the vessel was under no obligation to submit the manifest. It was basically an honor system which was ill-suited to properly secure against fraud.
The second concern Secretary Ingham raised was that the current legal requirements for selling illicit cargo that had been suspected of smuggling were way too restrictive. Quite often, the cargo seized could not be sold until they were libeled and condemned in a U.S. court even though owners usually fled the scene leaving no one left to claim the goods. This was a problem, because the federal government had to store the cargo until it could be sold. The cost of storing and caring for the goods often amounted to an amount greater than the proceeds of the articles when sold. This not only meant a loss of revenue for the United states, but also a loss of reward for the officer who seized the goods. The officers not only loss their reward, but also any incentive to be vigilant regarding the seizure of goods suspected of being smuggled into the United States.
To address these issues, Secretary Ingham proposed a few modifications to the Coastal Trading laws. First and foremost, he recommended abolishing the requirement that the goods be libeled and condemned in a U.S. court. Ingham suggested that instead that after a reasonable notice is given, the goods should be sold, and a portion of the proceeds should be given to the officers as a reward. The cost of this reward would more than repay itself with an increased revenue collected resulting from an increase in the vigilance of the officers. Ingram also suggested that the authority of the officers be expanded to allow them to seize goods found on land within a reasonable distance from the coast, navigable rivers, canals. Ingham recognized that this would unavoidably subject the "fair trader" to some inconveniences, but this would by counterbalanced by the protection that against the impact to the industry of trying to very rigorously execute our current laws.
Here are the words from President Andrew Jackson's 1829 State of the Union address summarizing Secretary Ingham's report. It is worth noting that Jackson expanded and focused on the need to avoid any "infringement of individual liberty" or disruption in "fair and lawful business". These two seemed to be more important to him than stopping the smuggling itself.
"It is worthy of notice that the laws for the collection and security of the revenue arising from imposts were chiefly framed when the rates of duties on imported goods presented much less temptation for illicit trade than at present exists. There is reason to believe that these laws are in some respects quite insufficient for the proper security of the revenue and the protection of the interests of those who are disposed to observe them. The injurious and demoralizing tendency of a successful system of smuggling is so obvious as not to require comment, and can not be too carefully guarded against. I therefore suggest to Congress the propriety of adopting efficient measures to prevent this evil, avoiding, however, as much as possible, every unnecessary infringement of individual liberty and embarrassment of fair and lawful business."
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].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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