Having won their independence from England in 1783, the 13 states faced crushing debts. One of the first acts of the first Congress, convened in 1789, was to pass bills establishing a national Customs service and to set tariffs. Between 1789 and 1800, the federal government took in $5,717,000. Of this, $5,020,000 (88 percent) was derived from Customs Service collections.

Soon, however, Customs responsibilities would go far beyond revenue collection.

Philadelphia, Pennsylvania- Arch Street Landing in the 1790's (Engraving property of Atwater Ken Museum in Philadelphia).

Embargo
As the nation and its economy grew, so did U.S. trade with other countries. But in 1793, a war between France and Britain triggered blockades of Europe as each country tried to interrupt the other's trade. These blockades made it difficult for American ships with American cargo to deliver their goods. America, desperate for the income generated by trade, repeatedly sought to evade the blockades resulting in many skirmishes. Plus, the British navy was stopping vessels on the high seas looking for supposed deserters. The British often made mistakes, taking American seamen and impressing them into British naval service.

Finally, all came to a head in 1807, when the British ship Leopard fired on the U.S. frigate Chesapeake, damaging it badly.

The American public had had enough: the right to export American products without losing ships and men had to be defended.

Seeking to avoid a costly war, President Thomas Jefferson tried applying economic pressure. Since the European wars had created a huge demand for American goods, Jefferson concluded that cutting off that flow of goods would force England and France to modify their maritime policies. The result was the Embargo Act of 1807.

Customs, as the only real federal presence in port cities, was called on to enforce the embargo. While this had the impact of strengthening Customs importance—implementation required more personnel and Customs expanded its theater of operations to include Canadian and Florida land borders and the river systems of the growing west-it also put the agency in the middle of a hostile political struggle.

Brass one-gallon measure used at the ports of entry in the early 19th century.

By using an embargo to punish Europe, Jefferson enraged the North, whose economic health depended on overseas trade. Customs collectors who enforced the embargo found themselves increasingly isolated and unpopular in their hometowns. But if they relaxed their enforcement, they were subject to criticism from Washington and removal from their posts. In any event, the embargo proved unenforceable. Merchants evaded it by misleading Customs about the final destination of their goods, usually claiming they were headed for Canada or another American port. Customs simply did not have the means to verify these claims, and so was unable to be effective even when trying to support Washington. In the end, the embargo forced no concessions from Britain or France; the stalemate led to the War of 1812.

Slave Trade Ban
While the embargo frustrated the North, two other federal actions increased tensions between Customs and communities in the South.

First Federal Hall - at Wall and Nassau Streets, New York City, where the Fifth Act of the First Congress of the United States was signed on July 31, 1789, creating the first federal customs collection districts.

The first was the ban on the importation of slaves, declared in 1808. It fell to Customs to enforce this ban.

States Rights
The second federal initiative that increased tension was the Tariff Acts of 1828 and 1832. While the industrial North supported these protectionist tariffs, they were devastating to the Southern economy because they significantly raised the prices of imported manufactured goods on which the non-industrialized South depended.

Alexander Hamilton, first Secretary of the Treasury.

South Carolina took drastic steps to overrule Washington. In 1832, a state convention adopted an ordinance nullifying the tariffs and the State legislature passed a law implementing the ordinance by providing for armed resistance against any attempt to collect the duties.

A constitutional crisis was in full swing, and Customs was once again caught in the middle.

This time, however, the key Customs collector in the port of Charleston was a staunch defender of federal authority. In the end, Collector James Pringle was able to diffuse the crisis by enforcing tariff collections with a "light touch" while slowly removing all Customs employees in the customhouse whose sympathies were to the state.

Consumption entry for the second vessel to enter the Port of New York after the establishment of the Customs Service.

Once the state loyalists were gone, Pringle quietly secured additional Customs facilities on an island in the outer harbor. These facilities were secretly populated under President Andrew Jackson's orders with men and 4,000 muskets. Soon after they were in place to enforce the collection of tariffs, South Carolina realized that it was not in a strong enough position to defy Washington, and the "nullification" of tariffs was repealed.

A courageous and loyal Customs officer was able to diffuse a heated situation, but only for a while. Less than 30 years later tensions would finally explode, launching the United States into a Civil War.

Timeline

1789
- First presidential election

- Revolutionary War hero General George Washington elected

- Constitution is adopted

- First Congress assembles

- 12 amendments proposed to the Constitution, 10 of which become the Bill of Rights (1791)

- Congress passes three laws creating and structuring the United States Customs Service. The last of these, passed July 31, establishes 59 customs districts in 11 states

- Congress establishes a Department of Customs

1790
- Customs collections total $2 million

1791
- Bill of Rights ratified

1807
- Congress passes the Embargo Act prohibiting export of American goods to Europe

1808
- Official embargo on importing slaves

1812
- War with Great Britain over trade and impression of American seamen

1816
- Inspectors' pay raised from $2 to $3 a day

1828
- Tariff of 1828 passed, raising tariffs on manufactured goods as high as 30%

1832
- South Carolina precipitates Constitutional crisis by adopting an ordinance to nullify the Tariffs of 1828 and 1832.

1833
- South Carolina agrees to permit Customs collectors to continue collecting duty

1835
- Revolutionary War debt laid to rest