5THE DARK YEARS
Slavery was the issue which exploded into the Civil War in 1861, but twenty-eight years before the first shot was fired on Fort Sumter, the nation was on the edge of open war over a dispute involving the Federal government’s right to force the collection of customs duties.
The spirit of revolt flamed high in South Carolina in 1832–1833. It was fed, too, by sympathy in Virginia and Georgia and other agricultural states which bitterly opposed the system of protective tariffs as being oppressive to the farm states.
Did the central government have the Constitutional right to force the collection of duties in a state which opposed such collections? No! said the “Nullifiers,” who favored striking down the Federal tariff laws. They insisted that any state had the right to withdraw from the Union if it so desired.
The Nullifiers gained control of the government of South Carolinaand a call was issued for a convention to meet and abolish by formal state action the collection of duties. There also were loud demands from some state leaders for mobilization of South Carolina troops to oppose any Federal intervention. Customs officers, more sympathetic to the state of South Carolina than to the Union, refused to collect duties. This convention call was the aftermath of a previous convention at which a grim resolution was adopted saying in part: “The state looks to her sons to defend her in whatever form she may proclaim toResist.”
The tariff collection issue became so divisive that reports reached President Jackson in August and September, 1832, that the loyalty of army officers in command of Federal troops at Charleston was suspect.
It was reported to Jackson that in event of Federal “aggression” against South Carolina to enforce tariff collection and oppose secession, these officers were ready to surrender their troops to the state rather than fight to protect the Charleston forts. These same reports said overtures had been made “perhaps not without success” to switch the allegiance of the naval officer in command at Charleston, in order to prevent a Federal blockade of the port.
Jackson advised his Secretary of State, Edward Livingston, that “the Union must be preserved, without blood if this be possible, but it must be preserved at all hazards and at any price.” He changed the garrison at Charleston and sent Maj. Gen. Winfield Scott to take over the command. He warned Secretary of War Lewis Cass that a surprise attack would be made on the Charleston forts by South Carolina militia and directed that such an attack must be “repelled with prompt and exemplary punishment.”
While taking these precautions, Jackson argued that if the doctrine of nullification of customs duties by the states were ever established, then every Federal law for raising revenue could be annulled by the states. He denied the right of secession, declaring that “to say that any state may at pleasure secede from the Union is to say that the United States is not a nation.”
The controversial tariff laws had been a national issue long before Jackson entered the White House in 1828. The major issue in the Presidential campaign of 1823–1824 revolved around tariffs and the use of Federal funds for such internal improvements as roads, harbors, and like projects. The leading candidates for thePresidency that year were John C. Calhoun of South Carolina, Henry Clay of Kentucky, John Q. Adams of Massachusetts, William H. Crawford of Georgia, and finally, Andrew Jackson—with Jackson and Adams emerging as the showdown antagonists.
Adams won the election when Henry Clay threw his support to the New Englander. Under the leadership of Clay and Daniel Webster a high-duty system of tariffs was adopted, which was termed the “Act of Abominations” by its opponents.
When Jackson entered the White House in 1828 the tariff issue was still the most important and also the most divisive issue of the day. In January, 1830, Senator Robert Y. Hayne of South Carolina launched a strong attack in the Senate against the excessively high tariffs. The young Senator sought a coalition between the West and the South, the agricultural areas, to oppose the duties favored by the industrial states.
Hayne’s argument rested on the states’ rights questions which were to plague the nation for many years to come. Hayne contended that “no evil was more to be deprecated than the consolidation of this government.” He argued for the right of any state to set aside “oppressive” Federal legislation, including tariffs.
Daniel Webster picked up the argument against Hayne. He contended that “the Constitution is not the creature of the state government. The very chief end, the main design, for which the whole constitution was framed and adopted was to establish a government that should not ... depend on the state opinion and state discretion.” He said it was folly to support a doctrine of “liberty first and union afterwards,” and he spoke the famous line: “Liberty and union, now and forever, one and inseparable.”
By 1832, the South Carolina Nullifiers were openly led by Vice President Calhoun. The extremists were in control in South Carolina to push events toward the crisis which forced Jackson to rush back to Washington from Nashville. The state’s legislature proclaimed that any effort by Federal authorities to collect the duties after February 1, 1833, would cause South Carolina to secede from the Union.
When news of this proclamation reached Jackson, he ordered seven revenue cutters and a warship dispatched to Charleston. Maj. Gen. Winfield Scott set his men to work preparing harbor defenses against attack from the land. The situation was at thestage where only recklessness was needed to set off a conflict. At this time Jackson wrote a friend that “no state or states has the right to secede ... nullification therefore means insurrection and war; and other states have a right to put it down....”
Jackson issued a proclamation warning the citizens of South Carolina not to follow the Nullifiers, whose “object is disunion.” He warned that “disunion by armed force is treason” and that those who followed this path must suffer the “dreadful consequences.” The proclamation spread excitement throughout the country. Many men volunteered for military duty in case of a conflict. Several state legislatures met to denounce nullification. But in South Carolina Robert Y. Hayne—who had resigned from his Senate seat to become governor of the state—issued his own proclamation in which he vowed to maintain South Carolina’s sovereignty or else to perish “beneath its ruins.” Hayne called for the organization of “Mounted Minute Men,” which, he said, would permit him to place “2,500 of the elite of the whole state upon a given point in three or four days....”
The only concession held forth by Jackson in this cold war was his approval of a bill for introduction in the House which would call for a reduction of tariff rates. His willingness to go along with this measure did not eliminate the threat of a shooting conflict.
While holding an olive twig of compromise in one hand, Jackson held a sword in the other. He sent a request to Congress asking authority to use Federal troops if necessary to collect the customs. Even as the cheers and curses sounded over this move, Jackson sent a letter to Gerald R. Poinsett, a Unionist leader in South Carolina, outlining his plans to use strong measures to enforce Federal authority. No doubt he intended his letter to reach the hands of the Nullificationists. He said should Congress fail to act on his request for authority to use military force, and should South Carolina oppose with armed force the collection of the customs duties, then “I stand prepared to issue my proclamation warning them to disperse. Should they fail to comply I will ... in ten or fifteen days at fartherest have in Charleston ten to fifteen thousand well organized troops well equipped for the field, and twenty or thirty thousand more in their interior. I have a tender of volunteers from every state in the Union. I can if need be, which God forbid,march 200,000 men in forty days to quell any and every insurrection that might arise....”
Not only would he take these measures against South Carolina, Jackson added, but if the governor of Virginia should make any move to prevent Federal troops from moving through the state against South Carolina then “I would arrest him....” The President also was prepared to call on Pennsylvania, New York, Virginia, North Carolina, Ohio, Tennessee, Alabama, Georgia and South Carolina to furnish 35,000 troops to carry out his orders.
Jackson’s request of Congress for authority to use troops in forcing the collection of customs was immediately called the “Force Bill.” To the extremists it was known as the “Bloody Bill.” Vice President John Calhoun said darkly that if the bill should pass then “it will be resisted at every hazard, even that of death.”
It was at this point that the Great Compromiser, Henry Clay, moved to seek the solution which would avoid bloodshed and perhaps civil war. He introduced in the House his own bill to lower tariffs by 20 per cent over a period of ten years. The Clay bill was pushed through Congress along with the Jackson Force Bill and both were sent to the President for his signature. Jackson won his demand for authority to send troops to South Carolina to put down any move toward secession or nullification of the tariff laws, and he signed the compromise tariff bill even though it was, in a measure, appeasement of the Nullificationists. Clay’s tariff bill was a face-saving measure for South Carolina. The head-on conflict between Federal and state forces was averted—at least for the time being.
In Jackson’s administration there was one man whose name appears mostly in the footnotes of that turbulent period, but it is a name that deserves special mention in this chronicle. The man was Samuel Swartwout, Collector of Customs in New York City during Jackson’s two terms in the White House. He rates special mention and a shadowy niche in American history because he was the first and only man to steal a million dollars from the Treasury of the United States. In fact, he stole $1,250,000.
Swartwout was a young man when he plunged into New York politics. He was a dark-haired, personable man who made himself useful by running errands for the political bosses until he reached a position of backroom fixer and schemer with no small amountof influence. He was the bluff, hearty type who made friends easily. And while he never was a central figure in the making of history, he was one of those men whose names continually cropped up in the affairs of the men who did make history in his time.
Swartwout was a protege and confidante of Aaron Burr during the period of Burr’s shady adventure in the West when he was accused of treason in an alleged plot to establish an empire in the southwestern United States. And when Jackson’s star began to rise as a Presidential candidate, Swartwout attached himself to the cause of the Tennessean.
Many of Jackson’s friends and followers resented Swartwout’s close association with Jackson because they regarded him as a doubtful character smeared by the tar of the Burr affair. But when Jackson entered the White House in 1828, Swartwout was among the honored guests at the celebrations.
Jackson’s friends were concerned when it became known that the New Yorker had easy access to the office of the President and was seen coming and going as though he were one of Jackson’s intimate advisers—which he wasn’t. The concern became dismay when rumors spread that Swartwout had come to town seeking from Jackson the nomination as Collector of Customs for New York City, a post of no little prestige and political influence in those days. Jackson’s Secretary of State, Martin Van Buren, was so upset by the reports that he refused to admit Swartwout to his office or to enter into correspondence with him.
Jackson must have felt he owed a political debt to Swartwout because on April 25, 1829, during a recess of Congress, he handed the New Yorker the political plum he had been seeking. Swartwout continued in the office until March 29, 1838, with never any public suspicion that he was involved in thefts of money collected by the Customs House in New York. Only when the records were checked by his successor was the discovery made that his accounts were short by $1,250,000.
The scandal which followed broke like a storm over the young Customs Service. Demands were made in Congress for safeguards to prevent any such future looting of the Treasury. Enemies of Jackson attacked the “spoils system” of appointments and centered much of their assault on Customs.
As for Swartwout, he had foreseen the storm that was to come.He had bade his friends farewell and boarded a ship for Europe several weeks before the shortages in his accounts were discovered. He was in France, safely out of reach of the law, when the scandal broke—and he didn’t bother to return.
By 1849, the Customs Service spanned the continent. It reached the coast of California in the person of John Collier, who was appointed as the first Collector of Customs for San Francisco just as the state was clearing the way for entry into the Union. Collier reached San Francisco on November 13, 1849, after a perilous trip across the country. He arrived at the beginning of the gold rush to find the city and the customs situation in a state of disorganization and confusion.
Collier was overwhelmed by the amount of business being carried on in San Francisco, by the number of vessels arriving and leaving the harbor, by the smuggling which was going on, and by the high prices he found in the city. He advised Secretary of the Treasury W. M. Meredith in a long, rambling letter: “I am perfectly astounded at the amount of business in this office.... The amount of tonnage ... on the 10th instance in port, was 120,317 tons; of which 87,494 were American, and 32,823 were foreign. Number of vessels in the harbor on that day, 10th instance, 312, and the whole number of arrivals since the first of April, 697; of which 401 were American, and 296 foreign. This state of things, so unexpected, has greatly surprised me....”
He found that Customs clerks were being paid from $1800 to $3000 per annum but that the salaries were not particularly attractive in a city gripped by the get-rich-quick fever. Flour was selling for $40 per barrel and pork for $60. Board was $5 a day and a room with a single bed was $150 a month. Wood was $40 a cord and prices for other necessities were equally shocking to a man as obviously thrifty as Collier.
Collier moved into the Old Spanish Custom House to set up shop. It was a dark and gloomy building. The roof leaked. Some of the doors were off the hinges. There was no vault in which to place the money he collected. He confided to the Secretary that “owing to the rates for rents, I am afraid to lease a building. One for myself, containing four rooms, two below and two above, without fireplaces, was offered to me on yesterday at $2400 a month....”
He continued: “To enforce the revenue laws in this district, and to cut up and prevent smuggling, which has been and is now carried on to a great extent, it seems to be necessary that an additional cutter should be sent out or that theEwing, now in this port, should be assigned to that duty.”
In a later letter to the Secretary, Collier wrote: “... San Francisco ... must become to the nation what New York is to the Atlantic.... It is impossible to estimate the extent to which her commerce may reach. It is now large and it will be constantly on the increase. These facts are stated for the double purpose of putting you in position of what may be anticipated from duties, and of impressing upon Congress the necessity of doing something—doing much for California, and that without delay. The responsibilities that rest upon the Collector, in the absence of any legal tribunal, any legal adviser, to which he might resort for redress or advice weigh heavily upon me.”
The troubles experienced by Collier and other early-day collectors along the borders of the growing nation were soon to be submerged in the conflict between the states. At the outbreak of the Civil War most Southern Customs officers simply resigned and accepted appointments to similar posts in the Confederate government.
President Lincoln ordered a blockade of the South on April 19, 1861. At that time the United States naval fleet consisted of only 42 ships carrying some 555 guns. Of this total many were tenders and store ships and among them were old fashioned sailing ships and frigates. For a time, business went on as usual in the Southern ports.
Many in the South laughed at the idea of a blockade. One Southerner in a letter from Charleston, South Carolina, printed in the New YorkIllustrated Newson June 15, 1861, said:
We are now in the enjoyment of a very pleasant spring, and are now as quiet as a brood of chicks under the parent’s wing. For all that, however, our head men are not asleep. Everything is going nicely. You have heard, no doubt, old Abe has blockaded our port.A nice blockade indeed. On the second day a British ship, theA & Aran the gauntlet and got in safe. She leaves in a few days with a snug freight of $30,000. Today two vessels passed safely in, both British, I understand. A captain told me that one of them cancarry more cotton than theA & Aand that she is engaged at 5¢ a pound, which will give a freight of $35,000 to $40,000....
We are now in the enjoyment of a very pleasant spring, and are now as quiet as a brood of chicks under the parent’s wing. For all that, however, our head men are not asleep. Everything is going nicely. You have heard, no doubt, old Abe has blockaded our port.
A nice blockade indeed. On the second day a British ship, theA & Aran the gauntlet and got in safe. She leaves in a few days with a snug freight of $30,000. Today two vessels passed safely in, both British, I understand. A captain told me that one of them cancarry more cotton than theA & Aand that she is engaged at 5¢ a pound, which will give a freight of $35,000 to $40,000....
Under the guns of Admiral Farragut and the troops of General Butler, New Orleans remained securely in the hands of the Northern forces, shutting off this port to the Southern cause. After a short while Galveston fell to the Union and the flow of cotton and smuggled goods from this area was sharply reduced.
In England, the Liverpool firm represented by Thomas E. Taylor owned some fifteen ships which were engaged in blockade running. Among Taylor’s swiftest and most elusive runners was a steel vessel called theBanshee, one of the first—if not the first—ship built for the express purpose of evading the Union blockade for the Southern ports. Nassau, in the Bahamas, was the primary staging point where the blockade runners fueled and stocked for the run to the American coast.
The blockade had been underway for two years when Taylor brought theBansheeinto Nassau. Workers removed everything aloft except the two lower masts, and the ship was painted an off shade of white which the blockade runners had found made their ships almost invisible at night, even from a distance of only a few yards.
Moving cautiously out of Nassau, theBansheesailed along the Bahama shores and then began the run toward Charleston. From a crosstree in the masts, a lookout was rewarded with a dollar each time he sighted a sail on the horizon before it was seen from the deck. If someone on the deck spotted the sail first, then the lookout was fined five dollars. It was a system that encouraged alertness by the lookouts. As soon as a ship was sighted, theBansheeturned its stern to the stranger and waited quietly until the vessel was out of sight.
On the fourth day theBansheereached the American coast some fifteen miles north of Cape Fear and the mouth of the Charleston River. When darkness came she began easing cautiously toward the blockading Union ships, running as close to the pounding surf as the skipper dared. No lights were permitted, not even the glow of a lighted cigar. Tarpaulins covered the engine-room hatchways. And theBansheewas a gray ghost slipping silently through the water while the men aboard talked only in whispers. Occasionally the ship stopped for a seaman to take soundings.
Taylor later recalled one tense moment in these words: “... Suddenly Burruss (the pilot) gripped my arm—‘There is one of them, Mr. Taylor, on the starboard bow.’... A moment afterwards I could make out a long, low, black object on our starboard side, lying perfectly still. Would she see us? That was the question: but no, though we passed within a hundred yards of her, we were not discovered and I breathed again. ‘Steamer on the port bow,’ and another cruiser was made out close to us. Still unobserved, we crept quietly along, when all at once a third cruiser shaped herself out of the gloom straight ahead and steaming slowly across our bow.
“Burruss was now of the opinion that we must be inside the squadron and advocated making the land. So ‘ahead slow’ we went again, until the low-lying coast and the surf line became dimly visible.... It was a big relief when we suddenly heard Burruss saying, ‘It’s all right, I see the big hill!’...”
The Big Hill was near the Confederate-held Fort Fisher at the mouth of the Charleston River. As dawn came, theBansheewas sighted by the Union blockaders and they moved against her with guns blazing. But then theBansheeslipped under the protecting guns of Fort Fisher and safety.
The owners of theBansheemade 700 per cent on their investment before the ship was captured on her ninth round trip between Nassau and Charleston.
The blockade runners, British and Confederate, supplied the armies of Gen. Robert E. Lee with desperately needed arms, clothing and food supplies in the early years of the war. For a time the blockade appeared impotent, while Southern privateers harassed the shipping of the North and captured much booty at sea.
While Lee was winning battles on the land, the Confederates could never gain mastery of the sea. The Union blockade could not be broken, and slowly the superior sea forces of the North strangled the commerce of the South, shutting off her armies from vital sources of supplies overseas.
Soon after the war began, it became evident to President Lincoln, to his Cabinet, and to members of Congress that the revenues collected by the Customs Service were not enough to finance the mounting costs of the massive conflict. The loss of tariff revenuesin the Southern states, the South’s raids on the shipping of the North, and the breakdown of normal commerce had reduced Treasury receipts drastically. The President was forced to seek new sources of revenue.
In this emergency, the administration turned for the first time to an income tax. Congress passed a law imposing a tax of 3 per cent on incomes between $600 and $10,000, and a tax of 5 per cent on incomes above $10,000. Later, the taxes on those two income brackets were raised to 5 per cent and 10 per cent.
The income tax collected throughout the struggle—and until the law expired in 1872—helped carry the nation through its money crisis. Then the collection of duties by the Customs Service once more became the country’s primary source of revenue.
But during most of the war and for many years afterward, the venerable Customs Service’s cloak of respectability was at best a tattered and stained garment. It had become, particularly in New York City, the symbol of the political spoils system which had been encouraged by that partisan old fighter, Andrew Jackson.
The office of the Collector of Customs at the Port of New York had become a prize second only in political prestige and influence to a Cabinet appointment. The man receiving this office was in a position to dole out lucrative jobs to hundreds of the party faithful, to collect tribute for his party’s campaign chest, and to use his influence in shaping the affairs of his city, county and state. To a lesser degree, the same situation existed across the country.
Under such blatantly political management, it was hardly surprising that the Customs Service in New York should become the target of bitter charges of graft and corruption. The charges became so loud and persistent in 1863 that the administration ordered an investigation into the management of the New York Customs House.
A report from the Treasury’s solicitor said in part: “As to the accessibility of many of those employed in the Customhouse to corrupt influences, the evidence is conclusive and startling.... The statements herewith submitted seem to justify the belief that the entire body of subordinate officers, in and about the Customhouse, in one way or another, are in habitual receipt of emoluments from importers or their agents.... It is shown that a bondclerk, with a salary of $1,000 per annum, enters upon a term of eight years with nothing, and leaves it with a fortune of $30,000....”
Until Congress slammed the door on such practices in a reform move generated in the 1870s, Customs officers were legally permitted to receive half of any fines and forfeitures resulting from the seizure of imports which had been undervalued or underweighed by an importer, even though the methods of determining dutiable value were complicated and subject to dispute.
However, the law encouraged collectors, appraisers and inspectors to seek out discrepancies in values and weights and to give themselves the benefit of any doubt. In one case, the great Phelps, Dodge & Co., metal importers, was charged with an attempt to evade duties by undervaluing a shipment worth $1,750,000.
The company’s attorneys argued in vain that there had been no attempt to defraud the government; that if a mistake had been made it was an honest error, and that even with the benefit of a doubt, the most that the government could fairly claim in unpaid duties was $1,600.
With the entire shipment subject to forfeiture, the company finally agreed to settle for $271,017.23—50 per cent of which was divided among the Customs officers. Records of the time showed that one of the Customs officials who received an award of $56,120 was Chester A. Arthur, who later would become President of the United States.
Arthur was active for years in Republican politics in New York City, working his way up through the ranks until he became a member of the New York State Republican Executive Committee. He was rewarded for his labors in 1871 with an appointment as Collector of Customs in New York City.
Under Arthur, the Customs House became the center of such open and partisan political activity that it eventually led to conflict between Arthur and President Rutherford B. Hayes. Hayes championed a strong civil service with appointment of Federal employees on a basis of merit rather than political allegiance. The President asked Arthur to resign, and when he refused Hayes removed him from office in 1879.
But this Presidential rebuke by no means dimmed Arthur’s political star. Two years after his removal, he was elected VicePresident of the United States, running with James A. Garfield. Garfield was fatally wounded by a disgruntled office-seeker, Charles J. Guiteau, only four months after his inauguration. He died on September 19, 1881, and Arthur took the oath as President. Ironically, once he was in the White House, Arthur became a supporter of a stronger civil service.
Reforms came slowly to the Customs Service in the years that followed the Civil War. But they came, spurred by the efforts of Hayes and then of President Grover Cleveland to establish a civil service and to break up a spoils system in which the “rascals” were thrown out of their jobs with every change in administration.
The demands for further Customs Service reforms were particularly loud in the early years of the twentieth century. One of these resulted in the formation in 1909 of the Customs Court of Appeals, to bring uniformity to the legal decisions governing the huge import trade and to speed up the hearing of Customs cases.
From the earliest days of the Republic, disputes over the appraising of imports had been carried to the U.S. Circuit Courts. The result was a continual conflict in judicial opinions which left importers and Customs officers confused. In 1908, the Secretary of the Treasury reported that the law had made “each of at least 120 judges a possible final judge of Customs appeals, a condition which experience has demonstrated will inevitably result in numerous irreconcilable conflicts of authority.”
In addition to the legal conflicts, the U.S. Circuit Courts had become jammed with Customs cases. It was not unusual for importers to have to wait almost five years to get a judicial settlement of their cases. But the creation of the Customs Court of Appeals by the 1909 Tariff Act removed most of the inequities and brought order out of the judicial chaos.
In this period, the reformers also centered their attention on the system which had permitted pork-barrel legislators to have their towns and cities designated as ports of entry with almost total disregard of the need for such services.
At Saco, Maine, the port’s receipts for fiscal 1910 amounted to $15, while expenses totalled $662—a cost of more than $41 to collect $1. At St. Mary’s, Georgia, the cost of collecting $1 in duties was more than $45. At Annapolis, Maryland, the government paid $309 to collect $3.09. And there were dozens of similarexamples throughout the country. The major function of many ports of entry, it was evident, was to give jobs to the workers in the political vineyard.
Congressional investigators also found that the system of paying collectors, surveyors and other Customs officials was a fiscal nightmare—in which thirty-five different methods were used for compensating employees. For example, collectors along the Canadian border were permitted to charge ten cents for each entry blank they executed. Some of them were pocketing, legally, as much as $17,000 a year.
In 1912, Congress authorized the President to overhaul the Customs operation. The day before he stepped out of office, President William Howard Taft issued an executive order establishing 49 Customs districts to replace the existing 126 districts and 36 independent ports. Collectors were placed on a salary basis. Many of the political appointees were dropped from the government payroll.
It was during the early years in this century, too, that the Customs Service relinquished to the Internal Revenue Service its role as the prime collector of revenue in the Federal government.
This change was foreshadowed on December 19, 1907, when a tall, gangling Democratic Congressman from Tennessee arose from his seat in the House of Representatives in Washington, D. C., and called for the attention of Speaker Joe Cannon, the thin, wiry political leader who ruled the House with iron-fisted discipline.
“The gentleman from Tennessee is recognized,” the Speaker intoned dryly.
Then it was that Cordell Hull, a freshman Representative from the foothills of the Cumberland mountains, boldly introduced a bill calling for a Federal tax on all incomes. He long had felt that tariff duties bore too heavily on the consumers of the country and that the wealthy were not paying a fair share of the cost of their government.
Bold though it was, the Tennessean’s move created scarcely a ripple in the capital. The House droned on with its business. The newspapers hardly made mention of the bill or of the new Congressman. It was as though a rock had been tossed into a lonely mountain pool to sink rapidly from sight, leaving no trace after the first plop on the quiet surface.
But Cordell Hull’s action on that cold December day marked the beginning of a long and bitter fight which would end six years later with an amendment to the Constitution authorizing Congress to enact an income tax law. With the passage of this law, the Customs Service became a secondary producer of Federal revenue.
The reforms of these years, together with those which came in the Tariff Act of 1922, established Customs on its present base. It was a leaner and more efficient service which shouldered the increased burdens imposed by the outbreak of World War I.
During the war years, the Customs Service was responsible for the enforcement of the neutrality laws in shipping. Its officers acted also as local agents for the Bureau of War Risk Insurance, insuring vessels, cargoes and seamen against the hazards of war at sea.
When the United States entered the war on April 6, 1917, Customs agents moved quickly to seize seventy-nine German and Austrian ships in American ports. Customs officers enforced the import and export licenses issued by the War Trade Board.
Two years after the Armistice in 1918, the country was swept by the nostalgic longing for a “return to normalcy”—and Warren G. Harding was installed in the White House. But there was nothing normal about the 1920s for the Customs Service. Its agents were to become involved in fighting the greatest wave of smuggling the nation had known since the days of Jean Laffite.