CHAPTER I.

THE COLONIAL PERIOD.

THE colonists were farmers, and the farmer of that day was also blacksmith, mechanic, carpenter, cobbler, weaver and jack of all trades. Not only did the colonial farmer hew his own timber, build his own house, make his own furniture, construct his own rude implements, wear home-spun, eat of his own raising and drink of his own brewing; but the few things that he bought came mostly in exchange, and were as limited as were his wants and as simple as were his habits.

Among a people living thus it is small wonder that the revenue from any system of indirect taxation should but barely pay the cost of its collection. Indeed, the result of attempts to enforce the measures by which England sought to gain a revenue from the colonies was usually a net deficit; while the colonies themselves experienced great difficulty in raising money for their own affairs.1 Direct trade relations with other countries were limited, and in the case of some articles prohibited, by the British Navigation Laws; and though we hear much of a flourishing illicit traffic, we find that the colonial marine was engaged mainly in the fisheries, and that general commerce was small in amount and confined to few articles. Then again we are struck with the simplicity of the laws, the comparative independence of each official, the hatred of restraint and disregard of all rules, that made every officer a mild autocrat and every underling a sturdy insubordinate. As Professor Sumner has so plainly pointed out, the national

'Kalb states that after the seven years' war the colonies were all in debt. Life of J. Kalb by Frederick Knapp, p. 291.

2 Life of Hamilton.

characteristics of the pre-revolutionary and revolutionary times were by no means what we have since come to regard as American.

The revolutionists had unlimited time to talk vaguely on abstract matters of freedom, representation and government; they delighted to get together and discuss their wrongs and rights; but their knowledge of good administrative methods was slight, while their interest in governmental efficiency was not apparent. All their ideas were colored with extravagant notions of individual liberty. It is not strange, therefore, that we find them greatly lacking in administrative ability. They hated system, they hated restraint of any kind, and naturally proved anything but efficient administrative officers.

Various obnoxious English customs acts were passed from time to time, and more or less successful attempts were made to enforce them; but the manner of their enforcement seems to have been left largely to the discretion of the resident English officials, who were far from being exemplary administrators. The whole effect of these laws, instead of instructing the colonists in methods of revenue collection, was to familiarize them with methods of evasion, and to emphasize that almost universal desire to cheat the government, whose presence to-day, even among otherwise honorable people, is such a curious phenomenon in public ethics. Before the adoption of the Constitution, however, nearly all the colonies had imposed slight taxes upon imports. The methods of collection were in most cases prescribed with great looseness if at all; while the agents designated were usually local officers whose functions as collectors of imports were added to, and inextricably confused with, a multitude of other entirely inconsistent duties.

In order to obtain a general survey of the various systems in vogue in the colonies, it will be well to take a chief representative from each system-Virginia for the southern system, Massachusetts for the New England system, New York for the Middle States system. The conditions in these colonies were typical of all the others in the respective classes.

1. Virginia Customs Administration.

One of the earliest colonial customs laws that is recorded, aside from those laws imposing dues upon tonnage, which were almost universal, was that passed by the Council of Virginia in 1657-8.1 In the compass of some twenty lines it provides for the collection of ten shillings a hogshead on all tobacco raised by the sale of Dutch2 goods and exported in Dutch vessels; and that any person so required must make statement under oath of all goods brought in or tobacco exported. The commissioner of the county court was required to prevent fraud and to see that the Dutch made truthful statements to the governor's agent under penalty of double the amount involved. Tobacco being practically the sole export of the colony, this was in effect an import tax; but the first strict import duty was not laid till 1661,3 when rum and sugar were required to pay a certain impost and their unloading was forbidden except at appointed ports.

The primitive mode of collection is indicated by the act of October, 1670, which ordered that duties be paid in "money or good bills of exchange," and not as theretofore in goods; and it appears that at this time the county courts appointed the collectors. In 1691 due entry was required stating the amounts, etc., of dutiable goods on board. The duty was to be paid, or bond given for its payment, before the goods were allowed to be put on shore. In case of false entry a penalty of £100 was imposed for each offense.

No changes of importance took place in the import laws of

1 Henning, Statutes at Large, Vol. I., p. 469.

2 Dutch was interpreted to mean all foreigners.

3 The different authors of the Statutes at Large agree in calling this merely a penalty for not unloading at the prescribed places, but the wording of the Statute certainly warrants the statement of the text, which is further confirmed by the quaint heading of the bill—“ Whereas excessive abuse of rum hath by experience bin found to bring diseases and death to diverse people and the purchasing thereof made by the exportation and unfurnishing the country of its owne supply and staple articles, be it enacted," etc.

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this colony until the revolution taxed its strength and compelled it once more to turn to this source for revenue. In October, 1779, "an act for raising a supply of money for the service of the United States" levied a tax of two and a half cent. ad valorem on all goods "imported and bought to be sold again." This curious piece of legislation did not tax goods on their importation, but on their subsequent sale-the tax to be paid by the purchaser; the "vender to render account upon oath to the commissioners of tax" of every such sale exceeding £1000, within one month after it was made, under penalty of triple the duties thereon. These commissioners were empowered to examine every such purchaser on oath as to how much of the goods were "bought to sell again," and how much for his or his family's consumption, and the tax decided to be due thereon was to be collected by the sheriff in the same manner as other taxes. The "venders" of goods at retail were compellable to testify under oath as to the amount of their sales, and to pay an assessment on their stock in trade. Penalties in triple the amount of duties were stipulated throughout the bill, and suits brought to recover penalties had preference over private suits.

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It is not surprising that this remarkable enactment was superseded a year later by another act which, in addition to tonnage dues, laid specific duties on wines, liquors, sugar and molasses, and upon "all imported dry goods except salt, munitions of war and iron from Maryland, * one per centum upon the value to be ascertained by the cost thereof at the port where laden. or put on board by the captain or owner of the vessel importing the same," to be paid in specie at the port of importation by the captain or owner and collected by the "naval officer." In case of non-payment, concealment or delay, the vessel was to be forfeited. A curious. provision of this act, and one which puts our colonial legislators in a somewhat ludicrous light, is the clause providing "as an encouragement to captains and masters" to make a true

and faithful "return of dutied goods," that they should be allowed to import for each 100 tons burden of their vessel "200 pounds worth of goods at first cost duty free."

In November, 1781, on the recommendation of Congress, that body was empowered by the legislature of Virginia to levy a five per cent. duty, and to appoint collectors and make needful regulations [not repugnant to the state laws and constitution] for the collection of the same. The operation of the act was to be suspended until like action was taken by the other states. Entry was to be made within ten days, and the duty paid in cash, or bond given for six months. The ship master was to pay all duties, and was to be reimbursed by the owner of the goods in case they were imported by a person other than the shipowner. A limited provision was made for what we should call shipment in bond from one county to another; and the usual fines and penalties were prescribed. By this law false entry subjected the wrong doer to a fine of £100, but in May, 1783, this was changed to £200 and forfeiture of the goods so entered. Again in October, 1783, following its recommendations of the preceding April, Congress was empowered to collect certain duties under conditions similar to those of the act of 1781, with the added provision that the Governor was to appoint collectors, who were, however, to be removable by Congress.

It is needless to say that none of these later acts went into effect; the states failing to agree and some absolutely refusing to act at all.

2. Massachusetts Customs Administration.

In Massachusetts, in the earliest times, the collection of imports, like the collection of excises, was farmed out under the supervision of commissioners. The general import tax of November, 1668,2 was also to be administered by a body of

1 Numerous references throughout the Records of the Massachusetts Bay Colony. Vol. IV., Pt. II., p. 410; Vol. V., p. 51.

2 Ibid., Vol. IV., Pt. II., p. 410.