Chapter II: Part 2

You or your clerk are to be daily at ye Custome House from nyne
untill twelve at noone. There to receive ye customes both in and
out, as the Merchants shall come and enter, ye Merchant is to
make foure Bills and sign them with his hand, writing his name on
them, and ye same time, when you have signed ye Warrant, or one of
ye Bills, you are to demand ye Custome, either in kinde at 10 P
Cent inwards or double ye vallue of its first Cost in Holland, in
Beaver. And likewise outwards for Peltry you are to receive 10½ P
Cent according to ye vallue in Beaver, for Tobacco one half penny
for Per pound which is noe more than all Englishmen doe pay. xxx
You to tell ye Merchante you are not to give credit. xxx If they do
not like your propositions, you are not to pass their Bills. xxx

And Lastly pray lett ye Books be kept all in English and all
Factoryes and Papers, that when I have occasion to satisfy myself I
may better understand them.

When the city came under British rule in 1664, the system of tariffs set up by the Dutch was continued. Almost one hundred years before the Boston Tea Party and the beginning of the Revolution, there was an uprising in New York against the British collection of customs. Religion played a role in this rebellion, which was touched off when England’s Catholic King James II was succeeded by the Protestant William of Orange and his wife Mary.

When the news of King James’ overthrow reached New York, a Captain Jacob Leisler, who had lived in New York for about thirty years and was a deacon in the Reformed Dutch Church, decided that he would not pay customs duties to a king’s representative who was himself a Catholic. Leisler was in the business of importing liquors and other merchandise into New York. One of his vessels came into the harbor on April 29, 1689, loaded with wine from Europe. Leisler refused to pay the $100 customs duties. He argued that the collector, named Plowman, was a Catholic and was not qualified to receive the customs under the new Protestant regime in Britain. Leister’s stand threw the city and military officials into a dither. There was a hastily called meeting of the counsellors, alderman and military officials in the city to discuss this development. The majority ruling was that the system of collecting duties would continue as it had in the past until other orders were received from William of Orange.

Leisler would have no part of this ruling. He told the assembly he would not pay the tax and he stalked out of the meeting room to discover he was not alone in his opposition to the customs duties. Other merchants saw an opportunity in this situation and joined his side. The result was that Captain Leisler and his friends organized an uprising against Lieutenant Governor Nicholson.

Leisler reached such a position of power that he drove out those in charge of the Customs service and appointed his own man, Peter DeLansy, as a collector. The British finally hanged Captain Leisler for his role in this revolt and in April, 1696, appointed the Earl of Bellomont as Governor General over New York and New England.

The Earl was not a man to brook any nonsense such as the nonpayment of customs to the royal treasury. He restricted the Colonies’ trade with New York and Albany and forbade the shipment of merchandise up the Hudson River unless duties were paid at New York.

The collectors appointed by the Earl of Bellomont had a rather difficult time of it. The merchants of New York were, to be charitable, unreliable when it came to the payment of customs duties. In fact, smuggling was a popular practice. In one instance a cargo of merchandise from the East Indies was ordered seized but the officers who went to make the seizure simply disappeared. Then it was learned that the sheriff himself was hiding the merchandise in his own home.

From the viewpoint of King George III’s counsellors, the actions of the Americans in smuggling and otherwise evading the payment of the customs duties were no less than thievery from the treasury of Great Britain. Such nonsense had to be stopped. And so it was that, after Canada came under British control in 1763, the British adopted a tougher policy toward the Colonies. In 1764 the Parliament passed the Sugar Act, which called for the payment of duties on lumber, food stuffs, molasses and rum brought into the Colonies. This in itself was enough to enrage the American merchants, but then the Sugar Act was followed by the Stamp Act in the same year. This act required revenue stamps to be purchased on all imports. The receipts were to be used to help defer the cost of British troops stationed in the Colonies. In short, the Americans were to pay to have British troops quartered in their towns and cities. When news of the passage of the Stamp Act reached New York, more than 200 merchants gathered for a protest meeting at Burn’s Tavern. They signed an agreement not to import goods from England.

Judge Robert R. Livingston wrote at the time: “England will suffer more by it in one year than the Stamp Act, or any other, could ever recompense. Merchants have resolved to send for no more British manufactures, shopkeepers will buy none, gentlemen will wear none; our own are encouraged, all pride in dress seems to be laid aside, and he that does not appear in homespun, or at least a turned coat, is looked upon with an evil eye.”

The U.S. Customs Service came into being on July 31, 1789, in a time of crisis. It was an organization put together by Congress and President George Washington to save the struggling young central government from financial collapse through the collection of duties on imports.

The formation of Customs thus became the first step to be taken by the original thirteen states toward a practical, working partnership after the adoption of the Constitution. For in agreeing to a uniform tariff, to be collected by the central government through its Customs Service, the states voluntarily gave up an important state’s right which each had guarded jealously--the right to collect and retain its own customs duties.

For this reason, August 5, 1789, is an important though little-known date in history. On this day Captain James Weeks sailed his brigantine, _Persis_, into New York Harbor with a miscellaneous cargo of merchandise from Leghorn, Italy. The cargo was assigned to Mr. William Seton, who paid the Collector of Customs a total of $774.71 in duties--the first payment of duties destined for the Treasury of the United States.

Captain Weeks’ payment was a modest one, but at least it was a prop under the financially shaky young government. And for the next 124 years--until the income tax amendment to the Constitution was adopted in 1913--the Federal government’s primary source of revenue was to be the money collected by Customs on merchandise and materials brought into the United States from abroad.

Until they were bound together by the Constitution, the thirteen states were not a nation. They had fought for more than six years for freedom from political, economic and military domination. They had struggled through incredible hardships, physical and financial. They had won their victory. But they were not a nation.

Throughout the struggle, they were linked together in a loose confederation in which each state was entirely independent of the others. The move toward confederation came on September 5, 1774, when state delegates gathered in Philadelphia to organize the congress known as the Continental Congress. Each state was represented by one delegate, and each delegate had one vote. Peyton Randolph of Virginia was elected president of the Congress--and it is to be noted that he was not referred to officially or unofficially as the President of the United States.

The members of this Congress hammered out the Declaration of Independence and signed it on July 4, 1776. But not until two years later were the Colonies joined together by a formal agreement, the Articles of Confederation and Perpetual Union Between the States. In these Articles the Colonies called themselves the United States of America, but they remained a union of independent states. Having gone to war to free themselves from a strong central government with an autocratic ruler, the Colonies distrusted centralized authority and each was jealous of its sovereignty.

The result was that the central government was reduced to the status of a pleader for money. It had no power to levy taxes directly. It could only appeal to the states to contribute to the expenses of the central government in proportion to the assessed value of their land. As a matter of fact, whenever the central government did ask the states for funds, as likely as not the states simply ignored the request.

In 1781, during the final months of the exhausting revolution and while the outcome still was in doubt, the central government was in need of $9 million for operating expenses. The Congress thought it possible to raise this amount by borrowing $4 million and then asking the states to contribute the additional $5 million. But the states responded to the urgent appeal with only $442,000. North and South Carolina, Georgia and Delaware contributed nothing. At times it seemed that if the British didn’t defeat the Revolution, an empty treasury would.

During and after the American Revolution, the tariff situation was an unholy mess. Each state had its own tariff laws, with the exception of New Jersey, which had none. The states often set up tariff barriers against each other, sometimes for protection and sometimes for reprisal. The dickering amongst them was continual and the maneuvering for advantage fierce.

On one occasion, New York, Connecticut and New Jersey plunged into a three-way fight that to later generations might seem little more than hilarious comedy--but there was nothing comic about it at the time for those involved. It began when the New York legislature reached the conclusion that the Connecticut Yankees and the New Jerseyites were taking too many dollars out of New York City, and giving too little in return.

It was true that Connecticut merchants supplied most of New York’s firewood, for a tidy profit. And the farmers of New Jersey were sending boatloads of chickens, eggs, vegetables and fruit across the river, selling them, and taking back dollars. The imports from Connecticut and New Jersey were running ahead of the exports to these two states by too great a margin--or so the gentlemen in the New York legislature figured. The legislature passed a tariff law which imposed a tax on every stick of Connecticut wood and each New Jersey egg, chicken, duck, goose and cabbage brought into the city. The chicken peddlers from New Jersey had to get clearance papers and pay taxes on each pullet or hen, each basket of eggs and each head of cabbage. Stovewood had to be measured and counted at the Customs House and taxes paid on the spot.

Naturally this state of affairs irked the New Jersey folk, whose legislature promptly looked around for a means of retaliation and, in so doing, spotted the City of New York’s lighthouse standing on Sandy Hook. It was solemnly agreed by a majority that this lighthouse should not stand out there flashing an untaxed warning to ships headed for the New York Harbor. And so the legislature voted to place an $1,800-a-year tax on the lighthouse.

In Connecticut, the merchants were no less aroused than the farmers of New Jersey. It was agreed that a boycott of New York products was justified. Whereupon the merchants formed themselves into an association dedicated to the proposition that no loyal Connecticut merchant would either buy or sell anything in the City of New York. Any member who violated the agreement was subject to a fine.

Again, the British in 1783 decided that only British vessels would be permitted to handle cargoes in the West Indian trade. This proclamation so enraged New Yorkers that they retaliated by laying a double duty on all cargoes arriving in British vessels. New Hampshire, Rhode Island and Massachusetts were equally incensed--and declared that no cargoes could leave their harbors if carried in a British ship.

But these tremors of righteous outrage did not stir the Connecticut Yankees. They saw the situation as holding the promise of fat profits. The ships of Great Britain were invited to use Connecticut ports, duty free. And then Connecticut further enraged its neighbors by imposing a tariff on goods coming into the state from Massachusetts.

Virginia and Maryland also were having their troubles. Virginia owned the lighthouses on both sides of the Chesapeake Bay entrance and demanded fees from every vessel entering the bay. Maryland, on the other hand, claimed the entire width of the Potomac River, citing old land charters to the effect that even if a vessel were tied to the Virginia shore, it still was in Maryland waters.

Connecticut, on the basis of a royal charter of 1662, laid claim to the Wyoming Valley, which Pennsylvania regarded as her own. The two states were on the verge of open war before cool heads prevailed and Pennsylvania’s claim was recognized as the more valid.

With such discord between the states, even in time of war, the winning of the Revolution and the survival of the Union approached the miraculous.

Merchants in Philadelphia and then in Boston decided to follow the lead of the New York merchants. Orders went out to English shippers not to ship more goods to America as long as the Stamp Act was in effect. In this tempest the seeds of revolution were broadcast, and it was a tempest that would not subside until the Colonies had won their freedom from Great Britain.

Despite the jealousies and the conflicts between the Colonies during and after the war, the people realized that only in unity could there be any real hope for survival. This realization moved leaders among the thirteen states to call the Constitutional Convention of 1787. And here it was they hammered out the Constitution which was to become the foundation for the United States of America and a blueprint for freedom.

The Convention met in New York City on May 14, 1787. The delegates chose George Washington as presiding officer of the Convention. The document produced at this convention by no means won the unanimous approval of the representatives from the various states. There were disagreements and reservations to the Constitution. A total of sixty-five qualified delegates were certified by the states to attend the Convention but ten of these did not attend. When the document was completed there were only thirty-nine who actually signed on September 17, 1787. Sixteen failed to sign, and some of those who did sign had reservations. This document was sent by George Washington to Congress, and Congress sent it to the various legislatures for their consideration.

The greatest fear at the time was that a central government would become too powerful. Having thrown off the yoke of one oppressive government, the Colonies wanted no part of another.

Washington reflected these fears when he sent the newly drafted Constitution to Congress. He was sensitive to the fact that the states would have to surrender some rights if they hoped to have an effective central government. In a letter to the president of the Congress, dated September 17, 1787, he said in part:

... It is obviously impractical in the Federal government of these
States to secure all rights of independent sovereignty to each,
and yet provide for the interest and safety of all. Individuals
entering into society must give up a share of liberty to preserve
the rest....

The Constitution went into effect on March 4, 1789, and Congress acted with remarkable swiftness on measures which would insure the financial stability of the young government. On April 8, 1789, James Madison arose in the House of Representatives and said:

I take the liberty, Mr. Chairman, at this early state of the
business, to introduce to the committee a subject which appears to
me to be of the greatest magnitude; a subject, sir, that requires
our first attention, and our united exertions....

The deficiency in our treasury has been too notorious to make it
necessary for me to animadvert upon that subject. Let us content
ourselves with endeavoring to remedy the evil. To do this a
national revenue must be obtained; but the system must be such a
one, that, while it secures the object of revenue, it shall not
be oppressive to our constitutents. Happy it is for us that such
a system is within our powers; for I apprehend that both these
objects may be obtained from an impost on objects imported to the
United States.

After some discussion Madison proposed a resolution to impose a flat fixed duty on rum, liquors, wines, molasses, tea, pepper, sugar, coffee and cocoa, with a percentage tax on all other imported articles, the tax to be based on the value of the imports at their time and place of importation. The resolution also recommended a tonnage tax on all vessels doing business at American ports.

Madison’s resolution touched off a fight between those who favored free trade and those who favored heavy duties to protect the interests of their particular region. There were those who wanted a heavy tonnage tax on vessels so that the American shippers would be given an advantage over foreign vessels. There were those who wanted to protect industries in their own states from the European competition. Congressmen from the agricultural states leaned heavily toward free trade.

Thomas Fitzsimons of Pennsylvania came forward with an amendment to the Madison resolution in which he asked that the duties be placed not only on the imports suggested by Madison but also on beer, ale, porter, beef, pork, butter, candles, cheese, soap, cider, boots, steel, cables, cordage, twine, malt, nails, spikes, tacks, salt, tobacco, snuff, blank books, writing, printing and wrapping paper, pasteboard and cabinet ware, buttons, saddles, gloves, hats, millinery, castings of iron, leather, shoes, slippers, coaches, chariots, carriages, nutmeg, cinnamon, cloves, raisins, figs, currants, and almonds.

Madison argued that his proposal was only a temporary one and that as far as possible the trade should be free. He said, “If my general principle is a good one, the term commerce ought to be free, and labor and industry left at large to find its proper object, the only thing which remains will be to discover the exceptions which did not come within the rule that I have laid down....”

It was Madison’s belief that the cheapness of land in the United States, compared with the cost of land in other nations, gave this country a great advantage in agricultural trade. He said that so far as manufacturing was concerned, “Other countries may and do rival us.” But then he added, “We may be said to have a monopoly in agriculture; the possession of the soil, and the lowness of its price, give us as much a monopoly in this case, as any other nation or other parts of the world have in the monopoly in any article whatever; but with this advantage to us, that it cannot be shared nor injured by rivalship.”

Nevertheless, while favoring free trade, Madison conceded that if America did leave her ports entirely free then the country would suffer. He said, “If America was to leave her ports perfectly free, and make no discrimination between vessels owned by her citizens and those owned by foreigners, while other nations make this discrimination, it is obvious that such policy would go to exclude American shipping altogether from foreign ports, and she would be materially affected in one of the most important interests.”

Despite sharp and often bitter differences, the young Congress was aware that sectional interests were secondary to the absolute necessity for action in collecting revenue. Within a short time it had put together the first Tariff Act. It was titled “An Act for laying a duty on goods, wares and merchandise imported into the United States.” And on July 4, the thirteenth anniversary of the signing of the Declaration of Independence, President Washington signed into law the act which was the second to be passed by the Congress.

Then Congress quickly set up the machinery for the collection of the tariff. This was done in the Fifth Act, “To regulate the collection of the duties....” The bill was sent to President Washington for his signature on July 31, which fell on Friday. On the following Monday the President sent to the Senate a list of about one hundred appointments to Customs offices. The Senate advised and consented to about half this list but on the following day gave the President an unexpected jolt. The Senate, without warning, refused to consent to the appointment of Colonel Benjamin Fishbourn to be Naval Officer (auditor) at the Port of Savannah. Fishbourn had served with distinction in Washington’s command during the Revolution and apparently had a spotless reputation in civilian life.

Washington did not make a fight over Fishbourn’s rejection even though the Senate action no doubt seemed to him to be a petty and totally unwarranted assertion of veto power. He did send a message to the Senate which called to mind later clashes between Chief Executives and Congress, pointing out that at least the Senate might have done him the courtesy of inquiring into his reasons for appointing Fishbourn.

Perhaps under different circumstances Washington would not have been so mild in his reaction to the Senate veto. But the need to establish an organization for collecting revenue was imperative, and Washington perhaps felt this was no time for a fight over executive and legislative prerogatives. The most pressing need was unity in the government.

And so was the Customs Service created to help bring financial stability to the nation at a critical time. Despite all the trials and difficulties, the Customs Service collected more than $2 million for the Treasury in its first year of operation.

3

A PRESIDENT IS BAMBOOZLED

There was little cause for gaiety in any part of the nation in the summer of 1808. Gloom hung over the country and particularly over Washington, where even the new capital building had not been completed and the problems of getting the young government firmly established sometimes seemed insurmountable.

The reason for the gloom was the worsening relations between the United States and Great Britain and the threat of American involvement in the brawling affairs of Europe, where the British were at war with the French.

In a desperate move to avoid being drawn into the conflict, President Thomas Jefferson had called the previous year for an embargo on all overseas shipping. He felt such drastic action necessary because British warships had been seizing American vessels headed for France. Even worse, the British had been forcing American sailors from the ships on the high seas and impressing them into British naval service by the hundreds.

Under these circumstances, Jefferson decided it would be better to withdraw American shipping from the seas and deny American supplies to the combatants, rather than risk plunging the nation into another war. His proposed embargo had been fought over bitterly in Congress. But in December, 1807, the Embargo Act had been passed and shipping had come to a halt. Even trade with Canada would be stopped with the enforcement of a land embargo--except for the commerce carried on by smugglers defying Federal Customs officers.

Now, seven months after the start of the embargo, the nation was in deep trouble. New England was practically paralyzed. Ships which had engaged so busily in world commerce a few months earlier stood rotting at the wharves. The number of unemployed was alarming. Businessmen who depended on overseas trade were going bankrupt. There was scarcely anyone in the country who did not feel the depressing effects of the embargo. The nation’s economy had sunk to its lowest point since the Revolution.

President Wilson was to say of this period: “The States themselves suffered from the Act more than the nations whose trade they struck at. America’s own trade was ruined.”

Onto this gloomy stage in mid-July, 1808, strode the so-called Chinese mandarin, Punqua Wingchong, and before two months had passed this Oriental fraud had half the country hooting with derisive laughter and the other half red-faced with rage.

Punqua Wingchong. It’s a name to remember in American history because he helped to bamboozle a President of the United States in one of the gamiest confidence games ever pulled against a trusting Chief Executive. But he was only the puppet; the man who pulled the strings behind the scenery was John Jacob Astor, the merchant prince.

The hoax began to unfold in June, 1808, when Astor and the Boston firm of J. & T. H. Perkins applied to the government for permission to send a ship to Canton to bring back certain property allegedly owned by the applicants. The government refused to lift the embargo for such a venture and as a matter of policy rejected the application.

The rejection would have discouraged the average merchant, but John Jacob Astor did not build his fortune by being an average man. Soon after the application was refused, Senator Samuel L. Mitchill of New York was told a disturbing story. An anonymous informant advised him that a distinguished Chinese mandarin, who divided his time between New York City and Nantucket, was the unfortunate victim of the shipping embargo. It was said that the mandarin, Punqua Wingchong, had made the long and arduous voyage from Canton to collect several large debts owing to his grandfather’s estate. Then he had been caught by the embargo and had been unable to return to his homeland to participate in mourning rites for his venerable grandfather, who had died suddenly.

It was suggested to Mitchill that the situation was one which quite possibly could create ill feeling between the governments of the United States and China if Wingchong chose to blame the Jefferson administration for the predicament he found himself in, being a virtual prisoner in a foreign land. Wingchong was reputed to have considerable influence among the government class of China, and this influence could be used against American traders in the future if he were not permitted to return home.

The journals of the time were not clear as to whether the Senator ever met Wingchong face to face. In all likelihood he did not. But he was moved to such sympathy by the pictured plight of the hapless mandarin that he penned a personal appeal asking President Jefferson to intervene. The Senator had a distinguished background in science and literature and was a professor of natural history in the College of Physicians and Surgeons in New York City. It was later to be said that Senator Mitchill was “strangely deficient in that useful commodity called common sense,” but his motives seemed sincere enough when he wrote to the President on July 12, saying:

Sir:

Punqua Wingchong, a Chinese merchant, will be the bearer of this
note of introduction. He came to New York about nine months ago,
on business of a commercial nature, and has resided during that
time, part time, partly here and partly in Nantucket. Having
completed the object of his visit to the United States, he is
desirous of returning to Canton, where the affairs of his family,
and particularly funeral obsequies of his grandfather, require his
solemn attention.

This stranger is represented to me as a man of respectability and
good standing in his country; and is consequently entitled to a
corresponding regard and treatment in ours.

The chief object of his visit to Washington is to solicit the means
of departure, in some way or other to China, but he feels at the
same time a strong desire to see the chief executive officer of the
United States. He will be accompanied by Mr. Palmer, an inhabitant
of New York, who will aid him in stating his request and explaining
his meaning. This gentleman, in addition to many other valuable
qualities, possesses admirable skill in acquiring languages; and he
is perhaps already master of more living tongues than any person
among us--as an evidence of which he has already made considerable
progress in China.

While I recommend these two persons to the notice of the President
I beg leave to accompany the recommendation, with the highest
expression of my high and respectful consideration.

_Sam’l L. Mitchill._

Armed with the Mitchill letter and dressed in the finest of silks and brocades, Punqua Wingchong journeyed to Washington and no doubt created a stir of excitement throughout the city, where visitors from the Orient were not a common sight. Unfortunately, or perhaps otherwise, Wingchong and his companion, Mr. Palmer, found they could not deliver the letter to the President in person. Mr. Jefferson had left the city for a rest at Monticello.

The Mitchill letter was then forwarded to Monticello along with a note signed by Punqua Wingchong “praying permission to depart” from the United States with his retinue and his belongings in a vessel of his own choosing.

President Jefferson was moved by Wingchong’s appeal. Not only did he feel sympathy, but he felt the situation presented an opportunity to establish better relations between his government and the rulers of China, which was becoming an increasingly important customer in foreign commerce. On July 25, the President wrote to Secretary of the Treasury Albert Gallatin saying:

Dear Sir:

... Punqua Wingchong, the Chinese Mandarin, has, I believe, his
headquarters at New York, and therefore his case is probably known
to you. He came to Washington just as I had left it and therefore
wrote to me praying permission to depart for his own country with
his property in a vessel to be engaged by himself.... I consider
it as a case of national comity, and coming within the views of
the first section of the first Embargo Act. The departure of this
individual with good disposition may be the means of our making
our nation known advantageously as a source of power in China to
which it is otherwise difficult to convey information. It may be
a sensible advantage to our merchants in that country. I cannot
therefore but consider that a chance of obtaining a permanent
national good should outweigh the effect of a single case taken out
of the great field of the embargo. The case too is so singular that
it can lead to no embarrassment as a precedent....

(signed) Th. Jefferson.

Gallatin detected an odor of intrigue in the situation because Wingchong requested permission to make the trip to China in the _Beaver_, a “full-bottomed ship of 427 tons with a capacity for 1,100 tons of cargo,” and the _Beaver_ had been constructed especially for John Jacob Astor. Gallatin was well aware of the fact that scarcely a month had passed since Astor had been denied permission for a Canton voyage. But Jefferson had issued his instructions and Gallatin was a loyal lieutenant.

On August 3, 1808, Gallatin wrote to David Gelston, Collector of Customs in New York City, ordering him to make an exception and lift the embargo. His letter said in part:

Sir,

Punqua Wingchong, a respectable Chinese, who had with the leave
of his government come to the United States for the purpose of
collecting debts due to his father’s estate, having obtained
the special permission of the President of the United States to
engage a vessel to carry himself together with his attendants and
property to his native country, and having made arrangements for
that purpose with the owner of the ship _Beaver_ of 427 tons or
thereabouts; you would be pleased to permit that vessel to depart
for Canton on the following terms and instructions....

The conditions, previously outlined by Jefferson, were that the vessel could sail with equipment and provisions for crew and passengers. Punqua Wingchong was to be permitted to be accompanied by his “attendants” along with their baggage and personal effects and also about $45,000 ... “either in specie or in furs, cochineal, ginsang, or any other specie of merchandise of his choice.”

After giving these instructions to Gelston, Gallatin wrote a cautious letter to Jefferson saying that he had carried out his orders and Wingchong “has engaged Astor’s vessel to which we had on general grounds refused permission.” Then he added: “Had I had any discretion as to the application itself I would have hesitated; for I apprehend that there is some speculation at bottom; and every deviation from general rules is considered a favoritism and excites dissatisfaction.”

He also warned Jefferson that to lift the embargo for one vessel would open the way for others to make direct appeals to the President for special treatment. Jefferson did not agree with his Secretary. He insisted that important diplomatic and commercial benefits might accrue from the courtesies shown Wingchong and they were “likely to bring lasting advantage to our merchants.”

Gallatin was right. The uproar came when Collector Gelston authorized the voyage and workmen began swarming over the _Beaver_ to prepare her for the long sea voyage. With other vessels standing idle and deserted, such a burst of activity could hardly be kept secret along the waterfront. In all the United States, this lone ship was the only one being prepared for a voyage.

The first protest came from a group of Philadelphia merchants who wrote to Secretary Gallatin on August 10 suggesting that “avarice and perjury” were being used to obtain the special dispensation for the voyage of the _Beaver_. As for Punqua Wingchong, the merchants said they were satisfied he was an impostor “and an insignificant instrument in the hands of others.” He was unknown to Philadelphia traders who had been stationed in Canton as agents for years. At best he was only a petty shopkeeper without credit and not a wealthy member of the mandarin class, they insisted. It was pointed out to the President that the mandarins of China never left their own country.

New York newspapers, getting wind of the _Beaver_’s voyage, described Wingchong as “a Chinaman picked up in the port,” “a common Chinese dock loafer,” “a Lascar sailor,” and even as “an Indian who had been dressed up in Astor’s China silks and coached to play his role in the affair.”

The New York _Commercial Advertiser_ on August 13 said in a page-one story:

A first rate merchants’ ship, which will be navigated by about
30 seamen, is preparing for sea, and is expected to proceed on a
voyage to Canton, in a few days, under special permission from the
President of the United States.

The ostensible object of this voyage is to carry home a person who
is said to be a Mandarin of China.

It is, however, well known that the person for whom permission has
been obtained, is no Mandarin; is not even a licensed or security
merchant;--that his departure from China was contrary to the laws
of that country; that if he arrives in China he will be put on
shore privately, and that the obscurity of his condition in life
affords him the only chance he has of avoiding punishment.

It is also believed that the owner of the ship would not accept all
the property of all the Chinese in this country as a compensation
for the voyage, and it is known that he has offered to contract for
bringing home goods or freight....

Neither Gallatin nor the President retreated before this barrage. Gallatin wrote the Philadelphia merchants that their plea had come too late and besides he had no authority to detain the _Beaver_. He delayed his reply until September 17--the same day on which the _Beaver_ sailed.

Six days later, Jefferson admitted that he had no means of judging whether the charges by the Philadelphia merchants were true or false. He said he acted as he did because of “the application having come to me grounded on his character as a settled fact.” He added “nor are the jeers of the Federalists any proof of the contrary.” Then he made the rather lame statement that if the _Beaver_ had not yet sailed perhaps “she should be detained till the facts ... are inquired into.”

But the _Beaver_ was gone. She was to return a year later with a cargo of teas, silks, and other valuable merchandise which allegedly brought Astor a net profit of $200,000.

* * * * *

The December embargo on shipping had been followed in March by the Land Embargo, which became effective just before Lake Champlain was free of ice and open for normal navigation. The Land Embargo came as a shock for the people of northern and northeastern Vermont. Over the years they had developed a brisk trade with Canada, shipping timber, potash, coal ashes, and other exports into Canada in return for Canadian merchandise. The embargo had the effect of shutting off this lucrative trade for the Vermonters.

The Act was not popular with the citizens or with most Customs officials along the border and as a result there was lax enforcement. Smuggling operations reached such proportions that Customs Collector Jabez Penniman wrote to Secretary of the Treasury Gallatin, complaining that he could not enforce the law unless the Federal government supplied troops.

Penniman’s communication spread alarm in Washington. Gallatin personally carried the letter to the White House to discuss emergency steps with the President. Jefferson called in Senator Robinson and Congressman Witherell of Vermont to obtain their advice. The Vermonters told him that the smuggling could not last for long, probably no longer than early May. Then the Richelieu river would subside from its spring flood stage and would not be navigable for the big rafts used to carry smuggled timber and other products.

Despite the assurances from Robinson and Witherell, Jefferson was convinced that strong Federal action had to be taken immediately, to set a precedent if for no other reason. The President directed Gallatin to authorize Collector Penniman to equip and arm “such vessels as might be necessary” to put down the smuggling. Penniman also was authorized to engage crews for these vessels “voluntarily, by force of arms, or otherwise, to enforce the law.” Then if further aid were necessary, the Secretary of State was to authorize the United States Marshal to form a posse to “aid in suppressing the insurrection or combination.”

These measures would seem sufficient to discourage any normal smuggler. But, apparently caught up in the enthusiasm of stamping out the evasion of the Embargo and the payment of Customs duties, the President went even further. He declared that in case the armed vessels and the posses should not be able to do the job, then the Secretary of War was to move Federal armed forces to the scene. The Secretary himself was asked to go to Vermont “and lend the aid of his counsel and authority.” Also the aroused President informed Secretary Gallatin that he was going to have two gunboats built at Skenesborough (Whitehall), New York, to halt the flow of illegal traffic between Vermont and northern New York and Canada.

Many Vermonters were surprised and indignant at the President’s use of the word “insurrection” to describe the situation. But in May, 1808, the good citizens of Vermont (and those not so good) were thrown into further uproar by a Presidential proclamation which appeared without warning in _Spooner’s Vermont Journal_. It said information had been received by the White House that “sundry persons are combined or are combining and confederating together on Lake Champlain and the country thereto adjacent, for the purpose of forming insurrections against the authority of the laws of the United States, for opposing the same and obstructing their execution.” The President sternly warned against any person engaging directly or indirectly “in any insurrection” and he ordered “such insurgents and all concerned in such combinations, instantly and without delay to disperse themselves and retire peaceably to their respective abodes.”

The citizens of St. Albans for some reason must have felt that the President was aiming his shafts at them. At any rate, a town meeting was held in St. Albans at which it was “positively and unequivocally” the consensus that the conduct of the citizens of the district had never given President Jefferson cause to issue such a proclamation. It was the sense of the assembly that the President’s proclamation “must have been issued in consequence of erroneous and unfounded representations, made and transmitted to the executive department of the United States by some evil minded person or persons.” Then the citizens let their personal sympathies leak into the matter when they added that even if individuals “finding themselves and their families on the verge of ruin and wretchedness” had tried successfully to evade the embargo, nevertheless this did not justify the President in proclaiming to the world that the district was guilty of insurrection and rebellion.

People living along the Canadian border, whose livelihood depended on the trade with Canada, did not regard this trade as being the evil which Jefferson declared it to be. For them it was a matter of economic survival. Soon after the Land Embargo became a law, smuggling rings had begun operations along the border. Dress goods and other merchandise were carried to the border on the Canadian side, where it was picked up by men and transported through the woods into the United States. The contraband was hidden until such time as it could be taken by wagons or boats to the merchandising centers.

It was openly rumored that the merchants in Troy and Albany were hiring gangs to bring foreign goods into the country in this fashion. Some Customs officers tried to stop the traffic, though most were in sympathy with the smugglers. In one case a Customs officer leaped aboard a smuggling craft to seize the cargo and arrest the crew. He was carried across the boundary line, and then dumped unceremoniously overboard in water which, fortunately, reached only to his chin.

One method of getting Vermont goods across the border into Canada was this: dozens of wagons or sleds would be loaded with barrels of pork, flour, and other commodities. They would be driven to a hillside point on the American side of the border. A hut would be built in such a way that, when a stone was kicked from the foundation, the hut would collapse, the floor would tilt and the contents would roll down the slope of the hill into Canada, where men were waiting to receive it. Who was guilty of smuggling if barrels of merchandise, of their own momentum, suddenly rolled across the border into Canada?

Many Vermonters, however, applauded the action of the President and supported Customs Collector Penniman in his efforts to halt the illegal trade across the border. A group of citizens in Franklin County publicly applauded the action of the President and the Collector. They said that the lumber and potash merchants were determined to carry on their “nefarious schemes” of smuggling by armed force if necessary and that threats had been made to kill the Collector if he attempted to enforce the laws. There were hints also of a citizens’ agreement for an uprising if any troops should kill anyone in the process of law enforcement.

Soldiers were stationed along the border at Windmill Point on the western shore of Alburg under the command of Major Charles K. Williams, who later was to become Governor of Vermont. The Customs officers themselves had a twelve-oared cutter called _The Fly_, which they used near the outlet of the lake to intercept smuggling operations.

One of the most famous of the boats used by the smugglers was known throughout the area as the _Black Snake_. This boat was originally built for ferry service between Charlotte and Essex, New York. It was 40 feet long, 17 feet wide, and had seven oars on each side in addition to a sail. After being smeared with tar, the boat was almost invisible at night. It was said to have a capacity of 100 barrels of ashes, and for a single run across the border the owners received $5,000 to $6,000.

The _Black Snake_ would sneak into St. Albans Bay at night, take on a cargo of potash, and then slip through various creeks and inlets into Missisquoi Bay, across Cook’s Bay, and into Canada at a point about one mile north of Alburg Springs.

Customs officers tried without success for months to halt the operations of the _Black Snake_. At last, in August, 1808, government officials detailed Lt. Daniel Farrington, Sgt. David D. Johnson, and twelve infantry privates to board the Customs boat, _The Fly_. Their orders were to pursue the _Black Snake_ until its capture.

On the night of August 2, the _Black Snake_ moved into the Onion River to take on a cargo of potash. The commander of the craft was Truman Mudgett of Highgate, a burly, thick-chested man whose defiance of the Customs officers had made his craft famous.

Mudgett knew that _The Fly_ was in the area seeking his hiding place, and throughout the night he and his crew oiled and tested their rifles at their camp site on the bank of the river. They also test-fired their small artillery piece, a gun 8 feet long with a bore of 1¼ inches which fired fifteen 16-ounce slugs of lead. They had long poles for fending off a boarding party, 3-foot-long clubs, and baskets filled with stones the size of a man’s fist.

The poles were to be used first to prevent anyone boarding the _Black Snake_. If this did not succeed, then the crew were to use the clubs and stones. As a last resort, they were to defend themselves with the guns.

At daybreak on August 3, a lookout came racing to the camp to warn the smugglers that _The Fly_ was moving up the Onion River. Within a few minutes the revenue cutter came into view and closed on the _Black Snake_.

Mudgett shouted at Lieutenant Farrington: “I’ll blow the first man through who lays his hand on the _Snake_!”

Farrington coolly ignored the warning. He leaped from _The Fly_ onto the _Black Snake_ and ordered Sergeant Johnson to come aboard with six men and commandeer the outlaw craft.

“You’ll never get out of this river alive,” shouted Mudgett as he turned and ran back into the woods to rejoin his men.

Farrington sent four soldiers ashore to search for the crew of the _Black Snake_ and then he returned to the helm of the cutter and started downstream with his prize. They had gone about half a mile when the smugglers opened fire from behind an embankment above the river. Farrington ordered Pvt. Elias Drake to take the helm of the cutter, but as Drake reached for the helm a bullet tore through his head and killed him instantly.

As gunfire raked the cutter, Farrington ordered his men to lie flat in the boat. He grabbed an oar and maneuvered the craft ashore below the smugglers’ hiding place. Then he and his men leaped ashore and started to move against the smugglers.

They had advanced only a few yards when the attackers fired the blunderbuss artillery piece. Two men fell dead under the hail of lead, and Farrington was badly wounded. Sergeant Johnson rallied the men and succeeded in capturing all but two of the _Black Snake_’s crew. They were lodged in jail at Burlington, and later the two smugglers who escaped were rounded up.

Cyrus B. Dean, one of the smugglers, was convicted of murder and sentenced to be hanged. A crowd of ten thousand gathered in Burlington to witness the execution, and some historians say that Dean was the first man to die of capital punishment in Vermont. Others of the gang, including Mudgett, were convicted of manslaughter and sentenced to prison.

The smuggling did not stop when the United States went to war with Great Britain in 1812. The British army in Canada was willing to pay high prices for cattle and other provisions at that time. The Customs officers were almost helpless in trying to halt the traffic across the border. Huge herds of fat oxen and cattle were driven through the woods to the border and turned over to Canadians. The militia were called out to halt the traffic in cattle, but even the militia were unable to man all the crossing points along the border.

Customs officers seized cattle, horses, provisions of all kinds, merchandise, furs, and other articles from the smugglers. It also was found that some Vermonters were making contracts with the British to supply them with masts and spars for their naval vessels. And it was whispered that a prominent Vermont businessman was the backer of a smuggling gang which was selling materials to the British navy. There were gun battles between Customs men and the smugglers.

The War of 1812 had been underway for two years when Sir George Prevost, Governor General of Canada, wrote to Lord Bathurst in the British Foreign Office reporting that “two-thirds of the army in Canada are at this moment eating beef provided by American contractors, drawn principally from the States of Vermont and New York.”

Secretary of War Armstrong was informed by one of his generals that the only way that intercourse with the enemy could be halted was to line the border with troops--which obviously was impossible. The General reported: “Like herds of buffaloes they pressed through the forest, making paths for themselves. Were it not for these supplies, the British forces in Canada would soon be suffering from famine, or their government be subjected to enormous expense for their maintenance.”

The young Customs Service now had fought gun battles on land and “at sea” in an effort to enforce the law. This was a fight that still would be going on a century and a half later.

4

THE PIRATES OF NEW ORLEANS

On November 24, 1813, most citizens of New Orleans were chuckling over a new proclamation, bearing the signature of Gov. W. C. C. Claiborne, which had been posted on bulletin boards throughout the city. They were not so much amused because the Governor had accused a pirate of attacking a U.S. Customs officer (although this was amusing enough to many), but because Claiborne actually expected someone to take seriously his offer of a $500 reward for the capture of the pirate Jean Laffite.

Invade the pirate hideout in the swamps and capture Jean Laffite--or even his brother Pierre--for a mere $500? And Claiborne was naive if he thought that most of Louisiana’s politicians and merchants had any desire to halt the smuggling of pirated merchandise while a war was being fought against Great Britain. Any kind of merchandise was hard to obtain.

Two days after the posting of the proclamation, a wave of raucous laughter sounded in the coffee houses, taverns and drawing rooms of New Orleans. The laughter exploded over a proclamation posted throughout the city which was a parody of the Claiborne document. It offered a reward of $1,500 for the arrest of Governor Claiborne and his delivery to the pirate hideout at Grande Terre in the bayou country south of New Orleans. The proclamation was signed by Jean Laffite.

Laffite’s arrogance was no laughing matter to government officials in Louisiana and Washington. Not only were the pirates openly defying Federal and state authority, but a legitimate merchant had little chance to compete against those who purchased their goods at the pirates’ auctions. The auctions were held regularly on islands in the swamps near New Orleans. Hundreds of thousands of dollars’ worth of merchandise--captured on the high seas--could be bought cheaply and with no payment of Customs duties.

The enemies of the Laffites and their cutthroat crew were in the minority. Everyone knew--including Claiborne--that a majority of the people were sympathetic to the Laffites. The general view was that the pirates actually were performing a patriotic service when they attacked ships of the enemy countries, England and Spain, and then made their booty available to Louisiana citizens at ridiculously reduced prices.

Before Claiborne issued his proclamation, the general attitude of the citizenry was fairly summed up in a letter received by the _Louisiana Gazette_ and signed “The Agent of the Freebooters.” There had been a complaint against piracy and smuggling in the newspaper, and the freebooter (perhaps it was Jean Laffite) wrote a reply saying:

Gentlemen:

Your paper of Wednesday contained a letter written by some idiot
... (who) makes a great outcry against a few honest fellows of us,
who are using extraordinary exertions to punish the common enemy,
the British and their allies, the Spaniards.... Does he wish to
discourage our profession and put an end to trade altogether?...

Cannot the booby perceive that without us there would not be a
bale of goods at market; and does he not see, by the open manner
in which our business is done, that the government of the United
States has no objection either to the fitting out of our prizes
and the sale of their cargoes, without troubling ourselves about
the payment of duties; which I assure you we would find extremely
inconvenient when we sell so low for real cash in these hard
times....