From Albert Gallatin
Treasury Department 7th August 1802
I have the honor to submit to your consideration the “regulations concerning the Mississipi trade” prepared in pursuance of the act of Congress of the 1st of May last. They were, at my request, digested by the Comptroller under whose immediate superintendence the customs are placed, and have been made, so far as practicable, conformable in their details with the general regulations of that establishment. On examination, I have approved the whole with one single exception, which will be easily distinguished, three lines and half being erased.
Of the principles there are but two on which any hesitation took place; the one, which was introduced on my suggestion, & contained in the 4th regulation prevents the extension of the priviledges (exemption of duty) to foreign goods imported from the Mississipi to the Atlantic ports. These can only be lead or spanish cotton which being first imported from Spanish Louisiana to Natchez and having there paid the duties should be re-exported to any such atlantic port. It is highly improbable that such re-exportation should take place, and if, in order to ensure an exemption of a double payment of duty to such as may take place, the present regulations were extended to that case, it would open a door to innumerable frauds by the importation of every species of Spanish produce from N. Orleans to the atlantic ports as having paid already duties at Natches.
The other is that of the 5th regulation which precludes coasting vessels employed in that trade from carrying any foreign goods whatever. The Comptroller apprehended much danger to the revenue from their admission to such trade, and, although I doubt whether that regulation may not substantially exclude coasting vessels altogether from that trade, yet, as they have been heretofore excluded & cannot complain of the proposed arrangement, the proposition is submitted with the others to your consideration.
The regulations when approved by you, will, with such alterations as you may direct, be transmitted to the several collectors of customs, and immediately carried into effect.
I have the honor to be with the highest respect Sir Your most obedt. Servt.
RC (DLC); at foot of text: “The President of the United States”; endorsed by TJ as received from the Treasury Department on Aug. 12 and “regulns commerce Missisipi” and so recorded in SJL. Enclosure not found.
Section 6 of the ACT OF CONGRESS of 1 May 1802 that established new revenue districts called for goods carried by U.S. vessels in the coastal trade “between the Atlantic ports of the United States, and the districts of the United States on the river Mississippi” who landed at New Orleans to be exempt from duties, provided the same goods would not be “subject to duty, or liable to seizure, if transported from one district of the United States, on the sea-coast, to another.” The act called upon the Treasury secretary, with the approbation of the president, to draw up regulations to enable the custom collectors to carry out the congressional mandate and, at the same time, to prevent “frauds on the revenue” (U.S. Statutes at Large description begins Richard Peters, ed., The Public Statutes at Large of the United States . . . 1789 to March 3, 1845, Boston, 1855–56, 8 vols. description ends , 2:182).
MY REQUEST: on 21 July, Gallatin wrote Steele that he found drawing up regulations for the New Orleans trade more difficult than he had thought, especially regarding “the exemption of duty on foreign goods landed at New Orleans.” A certificate confirming the collection of duties at the originating Atlantic port would suffice for vessels going to the Mississippi Territory. But if cargoes were landed and unloaded at New Orleans, the U.S. consul at the port must provide a certificate affirming the identity of the goods “to secure the exemption from duty.” The consul at New Orleans would also be called upon to determine whether transported cotton was grown in Spanish Louisiana or the United States. Gallatin asked Steele to “throw together all your ideas” for the regulations, “which you understand much better than I do” (Henry M. Wagstaff, ed., The Papers of John Steele, 2 vols. [Raleigh, N.C., 1924], 1:295–7).
The final regulations concerning the Mississippi trade—six sections in all, dated 26 Aug. 1802, and sent as a circular to the custom collectors on the 27th—probably differed only slightly from the draft Gallatin enclosed in this letter. Vessels descending the Mississippi were to present a manifest to the collector at Fort Adams specifying the cargo. If the cargo consisted of articles grown, produced, or manufactured in the United States to be transported by way of New Orleans to any U.S. port, a certificate would be issued exempting the cargo from duty. The 4TH REGULATION stated that articles produced outside of the U.S. and liable to duties were not entitled “to the benefits of these regulations.” The 5TH REGULATION stated: “Coasting vessels employed in this trade are to be restricted to the transportation of articles of the growth, produce or manufacture of the United States” (Gallatin, Papers description begins Carl E. Prince and Helene E. Fineman, eds., The Papers of Albert Gallatin, microfilm edition in 46 reels, Philadelphia, 1969, and Supplement, Barbara B. Oberg, ed., reels 47–51, Wilmington, Del., 1985 description ends , 7:508–9). After his correspondence with TJ, Gallatin expanded the designation of “consul” to “consul, vice-consul, or other authorized agent of the United States” at New Orleans (TJ to Gallatin, 14 Aug.; Gallatin to TJ, 19 Aug. 1802).