Alexander Hamilton Papers

To Alexander Hamilton from Tench Coxe, 25 July 1792

From Tench Coxe

Treasury Department
Revenue Office, July 25th. 1792.


Agreeably to your desire I have the honor to in-close to you a draught of a supplementary arrangement of the Business of the Revenue,1 and of the compensations to the Officers employed in the supervision, inspection and collection thereof, grounded upon the plan delineated in the act of the President of the 15th. day of March 1791.2 In transmitting this draught for your modification and for submission to the President, I take the liberty to recapitulate3 the reasons in support of these supplementary regulations, which occured in the several Conferences, which I had the honor to hold with you upon the Subject.

You will remember Sir, that the 16th. Section of the Act of the 8th of May last “concerning the duties on Spirits distilled in the United States”4 prescribes two limitations to the aggregate amount of the allowance for compensations to the officers and for the expences of collecting the revenue: first that it shall not exceed seven and one half pr. Centum of the total product of the duties on distilled Spirits, that is as well imported as distilled in the United States, and Secondly that it shall not exceed the Annual Amount of seventy thousand dollars. In regard to the first limitation the allowances (by reason of the second) cannot be extended so far as it would permit, so that, it would be unnecessary to advert to the first, were it not necessary to give perfect satisfaction to the President, that it does not fall short of the second. The paper (A)5 exhibits the sum to which the duties on foreign distilled Spirits, actually imported in 1791, would have amounted had the duties been as high as they were the year following June 1791. In offering this document for the acceptance of the President, I have no difficulty in assuring you Sir, that the quantity of foreign distilled Spirits imported in the year following the 30th: of June 1791 has exceeded that imported in the whole year 1791, but the returns for the last quarter, not being received from the Collectors of the Customs it is not possible to exhibit a regular document to prove the fact. The paper B. exhibits the present state of the returns, and information by letter, concerning the duties on Stills and on Spirits distilled in the United States. The amount of these two documents is 1,124,856 Dollars & 74 Cents, seven & one half pr. Centum on which is 84,363 Dollars & 40½ Cents. For the more perfect satisfaction of the President on this point, the estimate in paper C, for the current year has been prepared in conformity with your Judgment on the information from the Supervisors, which I had the honor to lay before you: also the paper D, which shews that the quantity of distilled spirits imported in a year nearly preceeding 1791 was greater than that in paper A, the basis of the Calculation.

Proceeding upon the Idea that the limitation of seventy thousand Dollars in the proviso to the 16th. Section is that, which is to operate: I beg leave to call your attention to Estimate (E)6 which is conformed to that sum. This paper will be found to comprize the substance of the arrangement which the President was pleased to establish on the 15th of March 1791. The remainder of its contents are the supplementary ideas, which were suggested by yourself, or which occured in the course of the several Conferences upon the subject.

After reminding you of these preliminary circumstances, I will proceed with the draught which for the sake of perspicuity is subdivided under numerical Heads, as is the sequel of this letter.

1st. The detached situation of the Eastern Shore of Maryland in regard to the Residence of the Supervisor,7 the difficulty of communicating with him in Winter, the number and wealth of the inhabitants, the disinclination to the Revenue on distilled Spirits, which has been expressed by some of the distillers in its three Southern Counties, the extent of the Supervisors Survey, which will contain seven Counties, if the President should deem it expedient to erect a third survey, and the number of ports in the district which are twenty five are the considerations, which occur in favor of creating another survey. The postponement of the appointment with the provision for the temporary execution of the duties by the Supervisor, has arisen from a doubt whether the Power of appointment to any district or survey which may be now erected, did not expire at the end of the last session of the legislature. The power to fill offices during the recess of the senate appears to be applicable, only to such as are established by law, or the constitution.8

2. The simplicity and consequent facility of settlement, which it will give to the revenue accounts induce a desire that one of the means of increasing the Supervisors emoluments, if any Increase shall appear to the President to be necessary, should be a permission to charge their Commission on the gross revenue collected within their respective spheres of duty. It is probable that great perplexity will arise from confining it to an allowance on the monies received. The limitation of this addition to the beginning of the current (revenue) year has arisen from a presumption, that a retrospective arrangement less expensive to the United States might satisfy the publick policy and equity. This draught will be found to proceed upon that Idea. An additional act of the President will be necessary for the antecedent year, if it shall be deemed proper to exercise the retrospective power. The expediency of granting the allowance, which is the object of this head (No. 2) will be more easily decided upon when the allowances to the Supervisors, as exhibited in the estimate (E) shall have been represented in detail for the collective consideration of the President.

3. In submitting a proposition for an Increase of the Emoluments of the Supervisors, it occured, that it was more easy to excite their attention and Vigilance and to animate their exertions by an addition to their Commissions (at least in part) than to their salaries. On the Necessity for the increase itself, no remark is offered here, because it will rest upon the reasons which apply to the entire compensation of each Supervisor. It will be observed that no addition to the Commissions of the Supervisor in Massachusetts, Rhode Island and Virginia9 is proposed, because their Salaries appearing comparatively low they seemed to be cases admitting of an addition to that part of the compensation. An addition to the Commissions of the Supervisors of Massachusetts and Rhode Island, where a great deal of Revenue is and will be collected in a small compass (five Counties of the two districts) did not appear necessary, and it occured further that a very small addition to the rate of duty (even a quarter pr. Centum) would occasion an increase of Compensation beyond what the services performed appeared to require.

4th. The reasons have already been submitted for prefering to increase the Salaries of the Supervisors of Massachusetts, Rhode Island & Virginia, rather than their Commissions. The reasons for any increase in these Cases remain to be particularized. The great Number of ports in Massachusetts, and the quantity of Revenue collected there, which is estimated to be double that of any State communibus annis and which indeed is greater than that of any two districts seemed to recommend the advancement of the Supervisor’s Salary, and it appeared the more worthy of the President’s consideration, because of the objections stated to an Increase of his Commissions. The same remarks apply in a proportionate degree in the Case of Rhode Island: as also in the Case of Virginia except that in regard to the quantity of Revenue, which however is and promises to be very considerable, and is collected often in small Sums, in the most extensive of all the districts. It is also worthy of Remark that Richmond, whither his zeal for the public service has induced the Supervisor to remove, is a place of greater expence, than Boston, Providence or probably, Philadelphia in a permanent view.

The Moderation of the comparitive compensations to the Supervisors of New York, Maryland and South Carolina,10 the extent and population of those districts considered relatively with the most of the others, and the expence of living in the Metropolis of each where their respective Supervisors reside, particularly of the latter district, were11 the reasons, which occured for suggesting a small addition in the form [of] salary over and above the addition submitted in the shape of Commission.

5th: The Number of Counties in the proposed Survey (No. 3) in the district of Maryland being twice as great, as that in the second Survey, no reason occured against an equality of compensation. The greater Number of ports would appear to recommend more, but as the Revenue will be less, and as all the Inspectors of Virginia and Pennsylvania have the same compensations and there is no appearance of dissatisfaction among them, it is to be presumed, that the person on whom the President may confer the appointment to the third Survey will also be contented.

6. The suggestion in regard to the Inspector of the second survey of South Carolina12 proceeded as you will remember, sir, from a representation of the Supervisor that discontentment had arisen in the mind of the Inspector on account of the distinction made between him and his colleague.13 This is the only instance of a difference in the compensations to the Inspectors of surveys in the same or even in adjacent districts, excepting the Case of the three Inspectors on the Seacoast Surveys of North Carolina,14 which I conceive to have been merely experimental should a new arrangement of that district on the receipt of more perfect information, be made by the President, which appears to merit consideration, the case of the Inspector of survey No. 2 in South Carolina will stand alone: It may be further observed that, if that district should distill in proportion to its ability the United States may gain from the Commutation of the Commission (one pr Cent in lieu of two) a part of what may be added to the Salary.

7. The suggestion of the addition of the duty on stills employed in Cities, Towns and Villages to the class of duties to be collected at four pr. Centum arises from an alteration in the original system made by the last Act of the legislature.15 Stills under 400 gallons, in Cities, Towns and Villages are now subject only to the duty on their capacity, which not being more difficult to collect than the duty on spirits from domestic materials no reasons of weight in regard to them occur for the advance of commissions which appears to be necessary in regard to country stills. The idea of an increase of the duty upon stills not in Cities, Towns and Villages, and country Stills to five pr. Cent arises in part from the opinions of the Supervisors, that it is necessary to increase the compensation for that service, from a comparison of the service and compensation with those of a Collector of state taxes on property, from a consideration of the value of labor and industry of other kinds in the United States, and of the expences of living.

8. It appeared to be sound policy to connect as far as possible the Compensation for each service with the act of performing it. The suggestion under the 8th. head was therefore adopted. It will serve as a mean of defraying little expences for which a precise provision would be Difficult to devise, and it will accrue principally in those places for which the two lowest rates of Commissions have been suggested.

9th: The compensation for gauging liquors is by “the Collection law” eight cents per Cask.16 This it is believed is more, than it will be at this time necessary to allow in the Business of the Revenue on spirits distilled in the United States, even in cases where a gauger (not being an officer of Inspection) shall be employed. It is presumed that a compensation of six Cents will be sufficient to procure qualified persons. In cases wherein the Collector shall also gauge, a compensation, which with that for marking will make up the sum of five cents is expected to be a desirable object to those officers. The safety of the revenue will be exceedingly promoted by the employment of Collectors, who can guage, and this additional Compensation for that operation will probably induce those employed to acquire the Knowledge, which is easily attainable by a person otherwise qualified for the office.

10. The allowance for measuring stills appears to be recommended by the reason first mentioned under the eig[h]th head. It will be very inconsiderable in Cities, Towns and Villages wherein no collector will probably obtain from it more than five or six dollars pr. Annum. The benefits of it will accrue principally to the Collectors in the Country, who will derive little advantage from the compensation for marking and certifying, and to whom some mean of defraying travelling expences appears necessary. The operation of ascertaining the capacity of a still by measuring the Water with which it must be previously filled and of marking both the head and body will be work attended with some labor, and appears to merit compensation.

11. In the present State of the law and of the Business an authority in the Supervisors (duly limited) to reward active, firm and vigilant collectors, and to induce an acceptance of the office by men of respectability and worth where the revenue is small or uncertain, and expences unavoidable, is a measure which appeared to merit the Presidents consideration. In a scene so various and extensive as the United States it seems very difficult to devise a complete arrangement to meet a system so new in this country, and for the first time made general, without a deposit of some discretionary power. In the apportionment of the Number of these compensations, which is suggested, it will be perceived that the extent of Country in each district over which the distillation is diffused, was the consideration that principally influenced.

12. The second Section of the act17 requires that there should be at least one office of Inspection in every County. Circumstances may here-after evince that more will be necessary in some places to enable the distillers to make the requisite entries and obtain licences with reasonable convenience. It has appeared from experiment that the business of Collection does not require in some places more than one Collector to two and others to three Counties. The Collectors house will serve for an office of inspection in the county wherein he may reside, but auxiliary offices of Inspection (under such Collector) will be necessary in the other one or two in which he does not reside. Where little Revenue accrues the sum of twenty dollars will probably be a compensation sufficient to induce an acceptance by some fit person: and where much revenue accrues an addition for his own Emoluments may be made by the Collector. The Number of Counties in each district and the Number of Collectors appointed (so far as is Known) principally governed the appointment of the auxiliary officers suggested in the draught.

The preceeding observations relate to the Business of the Revenue on stills employed and Spirits distilled in the United States. Under Head

13. Will be found some ideas relative to the compensation of the Inspectors of the Revenue for ports, and the persons deputed by them, whose duties comprehend not only foreign distilled spirits, but the several species of wines and teas. The legislature has deemed it expedient to apply to those articles, which are charged with some of the highest duties, the precautionary measures of marking and certifying, and to pass them under the care of the officers of the Revenue: Considerable trouble and expence of clerkship, stationary and office rent, having arisen out of this new duty on the port officers, some compensation was conceived to be due to them on the score as well of policy as equity. It appears to be a recommendation of this suggestion that it connects the compensation in every instance with the service performed.

In addition to the ideas detailed in the foregoing pages it was deemed necessary as you will re[me]mber, Sir, to examine into the result of the compensations that no officer, by the accumulation of particular compensations apparently reasonable, might receive emoluments disproportionate to his services: and altho’ this supplementary arrangement appears likely to induce the acceptance of the appointments by eligible persons, it is not apprehended that the compensations will prove extravagant in case of a novelty, considerable responsibility and of a nature requiring in a peculiar degree officers of worth and conduct.

It has been already mentioned, that the services of the year prior to the first instant, do not appear to require precisely the same Compensations, as those from and subsequent to that day. When your Engagements permit, that part of the business will be taken up in detail, after which it will be prepared for submission to the President.18 It appeared necessary to give a preference in point of preparation to this draught of a supplementary arrangement. For as it is expected that it will continue (in whatever form it shall be established) to operate during the pleasure of the President untill acted upon by the legislature. The Supervisors in several of the districts appear disposed to postpone the completion of the appointments of Collectors, untill the determination of the President shall be communicated to them.

I have the Honor to be, with the most respectful Attachment, Sir, Your most Obedt. Servt.

Tench Coxe,
Commissr. of the Revenue.

The honorable,
the Secretary of the Treasury.

LC, RG 58, Letters of Commissioner of Revenue, 1792–1793, National Archives.

1See enclosure to this letter.

3For one of Coxe’s earlier communications concerning this matter, see Coxe to H, July 9, 1792.

41 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 270–71. For this section, see Robert Ballard to H, May 31, 1792.

5Of the enclosures mentioned in this letter only the one marked “E” has been found.

6“Estimate E,” dated July 25, 1792, and signed by Coxe, is printed in ASP description begins American State Papers, Documents, Legislative and Executive, of the Congress of the United States (Washington, 1832–1861). description ends , Finance, I, 173–75.

7George Gale was supervisor of the revenue for the District of Maryland.

8The concluding proviso of Section 4 of “An Act repealing, after the last day of June next, the duties hereto-fore laid upon Distilled Spirits imported from abroad, and laying others in their stead; and also upon Spirits distilled within the United States, and for appropriating the same” reads as follows: “That if the appointment of the inspectors of surveys, or any part of them, shall not be made during the present session of Congress, the President may, and he is hereby empowered to make such appointments during the recess of the Senate, by granting commissions which shall expire at the end of their next session” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 200 [March 3, 1791]).

9The supervisors of the revenue for Massachusetts, Rhode Island, and Virginia were Nathaniel Gorham, John S. Dexter, and Edward Carrington.

10The supervisors of the revenue for New York, Maryland, and South Carolina were Richard Morris, George Gale, and Daniel Stevens.

11In MS, “where.”

12Benjamin Cudworth was inspector of Survey No. 2 in South Carolina.

13Silvanus Walker was inspector of Survey No. 3 in South Carolina.

14The inspectors of Surveys No. 1, 2, and 3 in North Carolina were James Read, John Daves, and Thomas Benbury. Coxe is referring to the 1791 arrangement under which these three inspectors received a higher commission than was allowed to the inspectors of the two remaining surveys in North Carolina. No salary was paid to the inspectors of the first three surveys, however, since they also served as officers of the customs. See H to the Senate and the House of Representatives, October 31, 1791.

15“An Act concerning the Duties on Spirits distilled within the United States” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 267–71 [May 8, 1792]).

16This is stipulated in Section 53 of “An 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” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 171–72 [August 4, 1790]).

17Section 2 of “An Act concerning the Duties on Spirits distilled within the United States” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 268).

18On September 12, 1792, Coxe forwarded to H the draft of an arrangement for one year’s retroactive compensation to officers of the revenue (Coxe to H, September 12, 1792). The arrangement was signed by the President on October 1, 1792 (Washington to H, October 1, 1792), dated October 29, 1792 (Coxe to H, October 20, 1792, note 2), and included in a report to Congress submitted by the President on November 22, 1792 (ASP description begins American State Papers, Documents, Legislative and Executive, of the Congress of the United States (Washington, 1832–1861). description ends , Finance, I, 171–75). In this report the President included his arrangement of August 4, 1792, for the current year, as well as the retroactive arrangement for the year which had ended June 30, 1792. “Statement E,” enclosed in the letter printed above, and “Statement A,” enclosed in Coxe to H, September 12, 1792, were also included in this report of November 22, 1792.

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