A Very Long, Detailed Letter of Treasury Secretary Alexander Hamilton, Clarifying a Key Act for Funding His Financial Program for the New Federal Government and Showing How He Wants His Orders Carried Out

11/06/1792. The law was designed to enforce tariffs on imported goods and tonnage duties, but had led to confusion on the part of port collectors A powerful demonstration of Hamilton's skill as manager, legislator and legal mind “This regulation concerning Manifests is considered as of real importance to the Revenue. It will tend, by early ascertaining the true condition of vessels, to prevent plans for smuggling being concerted, after their arrival within the United States, and will be a considerable restraint upon the use of opportunities, which may present between the time of arrival upon the coast, and the final entry at the port of destination. It is, therefore, expected that careful attention will be paid every where to its observance; with the qualifications, which have been indicated, to avoid any thing that might justly be deemed a grievance. This is the first time that we have seen this letter signed by Hamilton reach the public market, and it clearly shows his thought process and management skills at their best.In 1789, Congress passed the first Tariff Act, to both protect developing manufacturing industries at home as well as raise revenue sorely needed by the new Federal Government, by levying a five percent rate on all foreign goods arriving at U.S. ports. By 1790, Secretary of the Treasury Alexander Hamilton, calculating that the government needed close to $3 million to cover operating costs, and even more to pay down foreign and domestic debts, realized that there was no effective enforcement mechanism in place for collecting the tariffs. In order to establish such a mechanism, he proposed commissioning a fleet of vessels, called revenue cutters, to patrol the coast and offshore waters of the country in order to intercept contraband and ships looking to avoid the tariff.The result was the ""Act to provide more effectually for the collection of the duties imposed by law on goods, wares and merchandise imported into the United States, and on the tonnage of ships or vessels”. This was proposed by Hamilton in 1790, and it was enacted into law. Known as the Collection Law, it was designed to enforce tariffs on imported goods and tonnage duties, and was crucial for funding the new federal government and was a significant part of Hamilton's broader plan to establish a strong national economy. It also established the Revenue Cutter Service, the precursor to the U.S. Coast Guard.Section 9 of the new law required masters of United States vessels from foreign ports to have manifests of their cargo. A ""manifest"" is a document giving the details of a ship's cargo, required by law for imports. Section 10 provided for the forfeiture of the value of goods not included in the manifest; Section 12 provided a maximum penalty of five hundred dollars for failure to produce a manifest. The master of a vessel coming from a foreign port was required by Section 16 to make a report of his cargo within forty-eight hours and to deliver the manifest or manifests at the time of the report. This law resulted in confusion in the Customs offices and among commanders of the vessels, and Hamilton determined to clarify the situation by sending the Collectors of the Customs a detailed letter explaining the ship manifest requirements and emphasizing the need to collect revenue efficiently. While the contents of this specific letter are procedural, it is a clear example of Hamilton's broader vision and strategy as Treasury Secretary, which manifested in several key financial policies that year.Printed Treasury Department Circular, signed by Alexander Hamilton as Secretary of the Treasury, New York, June 11, 1792, to the Collectors of the Customs, being a detailed discussion about the Collection Law. “Some misapprehension having arisen in regard to the provisions concerning Manifests, contained in the 9, 10, 11 and 12th sections of the Collection Law, it becomes proper to enter into certain explanations—to convey the sense and expectations of this Department on the subject.“It occurs, in the first place, that these Manifests are only required, where vessels are owned in whole or part by Citizens or Inhabitants of the United States. There is therefore, no hardship imposed on persons, who, from situation, are likely to be ignorant of the law. Secondly, though nothing is said in either of the above enumerated sections, that would not be satisfied, if the Manifests were on board, and ready to be delivered upon the arrival of a vessel within four leagues of the coast of the United States, whether they were made out at the place of departure, or at sea; yet it is clear, from express words in the 16th section, that they ought to be on board at the time of the departure of the vessel from the foreign port or place, at which her cargo was taken in. The general design of the provision, equally with the words alluded to, require this construction. If, therefore, it appears that no Manifests were on board at the time of the departure of the vessel from the foreign port or place, where her Cargo was taken in, it will become the duty of the officers to enforce the penalties of the act (which are found in the 10 and 12th sections) subject to the powers of mitigation and remission, vested in the Secretary of the Treasury. Here will be room for a liberal attention to the difficulties which are natural to the first execution of new regulations.“The proviso to the 10th section is a further means of giving an accommodating operation to the regulation; taking care not to defeat the main design. If the Manifests have once been on board, and have been lost or mislaid without fraud or collusion; if they have been defaced by accident, or, if they are incorrect, through mistake, in each of these cases, the forfeiture is remitted, and the Collector is, in the first instance, the judge. If any circumstances, therefore, required by the 9th section, are omitted—if any parcels of the cargo should not be included in the Manifests—if, upon the whole, the omission can be fairly ascribed to misapprehension, inadvertence, hurry or mistake, there is latitude to avoid a rigorous enforcing of the provision; and it is incumbent upon the Collector to make reasonable and due allowances, having regard to the usual course of business.“It has been suggested that it is impracticable to comply with some of the requisitions of the 9th section. That which respects the expressing of the marks and numbers of packages, in words at length, is particularly mentioned. On a review of these requisitions, understood as they ought to be, I do not perceive any real impracticability in any of them. That which requires the expression of marks and numbers, in words at length, is the most questionable of any, and it must be confessed, that where the numbers are unconnected, and the packages numerous, it might occasion a prolixity which would amount to an inconvenience; but where the numbers are in succession, the execution would be both simple and easy.For example— [here Hamilton cites examples of notation styles]“The marks would be expressed in both cases alike; because, on a reasonable construction, it cannot be intended that marks, consisting of letters, are to be expressed in words; still less, that mere characters, which have no absolute signification, shall be so expressed; as, in the example given, the +. The terms of every legal provision are to be taken in a reasonable and practicable sense, and so as not to involve impossibility or absurdity. If a literal execution be not practicable, it must be approached as nearly as is practicable, pursuing the general intent, and securing a substantial conformity.“A question occurs, as to the tenor of the oath prescribed by the 16th section, as it relates to the subject of Manifests. The Master or Commander of the vessel is, in the cases in which Manifests are required to be on Board, to deliver them to the Collector to whom he makes Report,—and to declare to the truth of them “as they ought to be in conformity to the directions of the act.” It is to be observed that the precise form of the oath is not prescribed in the law—and is, therefore, left to be devised by those who are to administer it. It is of course to be so framed as to include whatever is directed to be included in it, and no more; but where general terms are used, the particulars which they appear, from the law, to be intended to comprise may be substituted. It would be dangerous, and might lead to unintentional perjury, to oblige a Master or Commander to swear that the Manifests, which he delivers, are, “as they ought to be, in conformity to the directions of the Act.” The declaration ought, therefore, to express, in substance, that the Manifests, produced and delivered, “contain a true, just and particular account of the cargo, which was on board the vessel at the time of her departure from the foreign port, (naming it) from which she last sailed for the United States, and that all matters and particulars, therein expressed, are true.” What these particulars ought to be must be determined by the directions of the 9th section.“The evidence on which the law appears to rely, as to the fact of the Manifests being on Board at the foreign port of departure, is their being ready to be delivered, upon demand, at any time after the vessel arrives within four leagues of the Coast of the United States. This, however, would not exclude the admission of other evidence, if there should be any other.“It is observable, that the Act speaks of one or more Manifests, in reference to the same vessel. This is to give greater scope to conform to circumstances. A part of the Cargo may be taken in at one port, and a Manifest made out there; another part, at another port, and another Manifest made out there. Or a Master may have supposed her loading complete, and prepared his Manifest, and he may afterwards take in other articles, and have to make a supplementary one—or there may be reasons of commerce for not including all the Cargo in one Manifest. This regulation concerning Manifests is considered as of real importance to the Revenue. It will tend, by early ascertaining the true condition of vessels, to prevent plans for smuggling being concerted, after their arrival within the United States, and will be a considerable restraint upon the use of opportunities, which may present between the time of arrival upon the coast, and the final entry at the port of destination. It is, therefore, expected that careful attention will be paid every where to its observance; with the qualifications, which have been indicated, to avoid any thing that might justly be deemed a grievance.“If the Merchants are made sensible that a compliance is expected, (and pains should be taken to inform them of what is expected) they can, without inconvenience, cause it to be effected by proper instructions to their Masters and Correspondents. A Manifest can surely be as well made out before the departure, as after the arrival of a vessel,—inaccuracies, in both cases, are to be expected, and due allowances made for them. The 16th section of the Collection Law, considers the report of the Master as a distinct thing from the rendering of a Manifest. But in every case the Manifest may constitute the principal part of the report, which may be annexed to the Manifest, with a reference to it; specifying such other particulars, required to be in the report, as may not be expressed in the Manifest. This will be a perfect compliance with the provision, and will save trouble.”Thus Hamilton gives a detailed set of instructions on the operation of the law and how to maintain compliance with it. And it was all part of his broader plan to fund the government.Letters of Hamilton as Treasury Secretary are increasingly hard to find, and this is the first time that we have seen this circular letter signed by him reach the public market. It clearly shows his thought process and management skills at their best.