"The purpose of what I now desire, is with the aid of these precedents, to digest a general and uniform plan.".
During the Revolutionary War, it was a widely understood defect in the Articles of Confederation that the Federal government was virtually powerless to raise monies. A main goal of the new U.S. Constitution was the correction of that defect, and with the support of advocates like Alexander Hamilton and James Madison, it established...
During the Revolutionary War, it was a widely understood defect in the Articles of Confederation that the Federal government was virtually powerless to raise monies. A main goal of the new U.S. Constitution was the correction of that defect, and with the support of advocates like Alexander Hamilton and James Madison, it established a means to fund the country by authorizing Congress to collect taxes to raise revenue. This revenue would come mainly from tariffs and tonnage duties on goods coming into the U.S., which would be collected at customs houses at the ports of entry. On July 4, 1789, an act was passed formalizing this, allowing for the collection of import duties. The Collectors of these customs houses were appointed by President George Washington, and were men of substance who could be relied on (for example, Signer of the Declaration of Independence William Ellery was the first Collector in Newport, R.I.). In September of 1789, in one of the first substantial Acts of Congress passed and signed by President Washington, the U.S. Treasury was formed. That same month, Alexander Hamilton became the first U.S. Treasury Secretary. This put in place an agency to handle the nation's finances.
Hamilton felt that the chief problem facing the nation in 1789 was its war debt. He believed that to create confidence in the new government, and establish its credit, it would have to assume responsibility for all of the debt contracted by both the Continental Congress and state governments during the Revolution, and pay it at full face value. In 1790, he issued his first Report to Congress so stating, and the measures of his report were adopted on July 26, 1790. It now became imperative to put into place a specific, uniform system nationwide to both collect the revenues and to assure their delivery to the U.S. Government.
Hamilton turned to creating just such a system, one that would stand the test of time. The customs houses scattered in the many port towns throughout the states were the front lines, assessing and measuring cargo, determining value, and collecting the taxes. Hamilton wanted to bring those scattered establishments under the full control of the U.S. Treasury, and create one system that would emanate out from the Treasury, and not have the local tails wagging the national dog. He did so in a now-famous letter, listed among just a handful of letters of his that helped create and re-structure the U.S. Treasury apparatus. It shows Hamilton doing what he did best – leading, organizing, gathering information, creating a functioning system, and doing so with speed. In many ways, this echoes the work he did elsewhere, both in creating his first Report to Congress and in developing a plan to bolster U.S. manufacturing.
Circular Letter Signed, as Secretary of the Treasury, on Treasury Department letterhead, September 30th 1790, to an un-named Collector. "Sir, I request you to furnish me as soon as may be with the Forms of Reports, Entries, Oaths, Bonds, Certificates and other documents and papers that shall have been adopted by you, in the execution of the several Laws which concern your office. This will of course not include those papers or proceedings, for which forms have been sent from this Department. Any papers of the nature above described remaining in your Office, which were used in the Custom House of your State, and any foreign papers of the same kind that you may have collected from time to time, may be transmitted. The purpose of what I now desire, is with the aid of these precedents, to digest a general and uniform plan of Custom House Documents, which will conduce to order, facilitate business and give satisfaction. I am, Sir, Your Obdt. Servt. A Hamilton." Docketed on verso by the recipient.
In his book "A Synopsis of the Commercial and Revenue System of the United States," Robert Mayo breaks down the letters relating to the Treasury, differentiating between the Construction and early Improvement of the system (concerning which 6 letters were written by Hamilton), from Treasury communications concerning Supervision of the system (which amounts to nearly 2,000 letters). This is one of those early 6, relating the standardization of the policies of Treasury, making one system function with the Treasury Department as its guide.
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