Alexander Hamilton, Citing the First Financial Act In United States, Works to Ensure That American Vessels Are Not Subject to the Same Tariffs As Foreign Ones

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.). Stephen Smith was named the Collector for the district of Machias, now part of Maine, one of the northern most ports in the United States. In 1776 Smith had been appointed truck master to the Indians by the Massachusetts Provincial Congress, his duties being to provision the Indians and keep them from taking an active part against the colonists in the Revolution. He also served as Captain of the militia, and in defense of the settlements in eastern Maine.

Vessels were constantly coming and going, some going from one domestic port or district to another, and others dropping or gathering goods for foreign trade. The treatment of tariffs and other taxes imposed on the trade of goods varied depending on whether those goods were carried by foreign or domestic vessels. Here, Hamilton clarifies a crucial point on that first collection act of July 1789, ensuring that American vessels trading on the U.S. coast or engaged in fishing, and which are charged duties on tonnage, are not charged the same as foreign vessels, and are properly reimbursed if they if they have been.

Letter signed, Treasury Department letterhead, August 20, 1790, to Stephen Smith. “The act of July last, imposing duties on the tonnage of vessels, provides for the restitution of the foreign duty which has been incurred by ships or vessels of the United States by reason of their not having a certificate of registry or enrollment and a license, when trading coastwise or engaged in the fisheries. This refund, is to be made in each instance, at the custom house where the duty was paid; and in such manner, that the American tonnage duty of six cents is to be retained for the United States; and the extra sum of forty four cents, to which foreigners only are liable, is to be repaid…”

We obtained this from a family in whose collection it had remained for many decades, and it has never before been offered for sale.