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Alexander Hamilton Circular Letter Allowing a Tax Abatement on Duties for Distilled Spirits to Also Apply to Exported Spirits |
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In this circular, Secretary of the Treasury Alexander Hamilton makes several clarifications regarding reports from Treasury officials on exports, including procedures for liquor and molasses. After becoming the nation’s first Secretary of the Treasury in November 1789, Hamilton turned his attention to solving the new nation’s debt crisis and instituting policies that protected domestic businesses. In his December 1791 statement to Congress, Report on the Subject of Manufactures, Hamilton advocated aiding the growth of nascent industries through clear laws that encouraged and benefited domestic production.
In this circular, Hamilton clarifies that a Congressional act allowing for a decrease in duties charged on exported liquor for loss of product in the export process should be calculated at the end of each quarter and reported by the collectors. This allowance prevented distilleries from having to pay export duties on lost product. He also clarified that molasses fell under the provisions of a specific section of the 1789 “Act to Regulate the Collection of the Duties.” ALEXANDER HAMILTON.
Printed Circular Letter Signed “A. Hamilton,” August 27, 1792, New York. 1 p., 7½ x 6½ in., matted and framed to 16¼ x 15½ in.
Inventory #27716
Price: $12,000
Complete Transcript
(Circular.) Treasury Department,
August 27th, 1792.
Sir,
It would be of use in regard to the Return of exports, which is transmitted quarterly to this Office by the Collectors, if the exported articles were uniformly arranged in alphabetic order.
With a view to this, I enclose you a form of such an alphabetical arrangement, and request that for the future you will have the articles of exports inserted in the said Return, agreeably to that form; expressing the different quantities of each article as therein prescribed. In all other respects the form of the Return of Exports will remain as heretofore.
I have to desire that you will furnish me with a monthly abstract of all Licenses which shall be granted to coasting and fishing vessels in your district, to be forwarded after the expiration of every month. The annexed form will shew the particulars to be inserted. It is of course not required that copies or duplicates of Licenses should be transmitted to the Treasury, as has been done in some instances.
A difference of opinion between the Collectors and Supervisors has occurred in regard to the seventh section of the Act “concerning the Duties on Spirits distilled within the United States, &c.”[1] The true construction is, that the abatement of two per cent. for leakage, is to be made, on securing the Duty at the end of the quarter from the whole quantity distilled during the preceding three months—and hence it will be necessary that in cases of exportation, the Drawbacks on distilled Spirits be adjusted with an eye to this allowance.
A doubt has arisen on the 35th, or more properly the 36th Section of the Collection Law, whether molasses is to be considered as within the meaning of that Section. I am of opinion, it is, and that the allowance of two per cent. for leakage ought to be extended to that article.[2]
With great consideration, / I am, Sir,
Your obedient Servant,
A Hamilton
Condition: Creased at folds with minor separations; staining throughout, affecting text; paper loss at left and right margins; not examined outside of frame.
[1] “Sect. VII. And be it further enacted, That there be an abatement for leakage at the rate of two per cent. in every case in which the duty shall be payable by the gallon of the spirits distilled, to be allowed at the distillery where such spirits shall be made.”
This section applied to “all spirits which...shall be distilled within the United States, wholly or in part from molasses, sugar, or other foreign materials” at certain rates and “all spirit which...shall be distilled within the United States, from the materials of the growth or produce of the United States” at different rates based on the proof of the product.
2nd Cong., 1st sess., “An act concerning the duties on spirits distilled within the United States,” May 8, 1792.
[2] On July 31, 1789, the First Federal Congress passed “An Act to regulate the Collection of the Duties imposed by law on the tonnage of ships or vessels, and on goods, wares and merchandises imported into the United States.” Section 36 concerned lawsuits instituted for breaches of the act:
“Sec. 36. And be it further enacted, That all penalties accruing by any breach of this act, shall be sued for and recovered with costs of suit, in the name of the United States, in any court proper to try the same, by the collector of the district where the same accrued, and not otherwise, unless in cases of penalty relating to an officer of the customs; and such collector shall be, and hereby is authorized and directed to sue for and prosecute the same to effect, and to distribute and pay the sum recovered, after first deducting all necessary costs and charges, according to law. And all ships or vessels, goods, wares and merchandise, which shall become forfeit by virtue of this act, shall be seized, libelled and prosecuted as aforesaid, in the proper court having cognizance thereof; and the court shall cause fourteen days, notice to be given of such seizure and libel, by causing the substance of such libel, with the order of the court thereon, setting forth the time and place appointed for trial, to be inserted in some public newspaper, nearest the place of seizure, and also by posting up the same in the most public manner for the space of fourteen days, at or near the place of trial; and proclamation shall be made in such manner as the court shall direct; and if no person shall appear to claim such ship or vessel, goods, wares or merchandise, the same shall be adjudged to be forfeited; but if any person shall appear before such judgment of forfeiture, and claim any such ship or vessel, goods, wares or merchandise, and shall give bond to defend the prosecution thereof, and to respond the cost in case he shall not support his claim, the court shall proceed to hear and determine the cause according to law; and upon the prayer of any claimant to the court, that any ship or vessel, goods, wares or merchandises so seized and prosecuted, or any part thereof should be delivered to such claimant, it shall be lawful for the court to appoint three proper persons to appraise such ship or vessel, goods, wares or merchandise, who shall be sworn in open court for the faithful discharge of their duty; and such appraisement shall be made at the expense of the party on whose prayer it is granted; and on the return of such appraisement, if the claimant shall, with one or more sureties, to be approved of by the court, execute a bond in the usual form, to the United States, for the payment of a sum equal to the sum at which the ship or vessel, goods, wares or merchandise so prayed to be delivered, be appraised, the court shall by rule order such ship or vessel, goods, wares or merchandise, to be delivered to the said claimant, and the said bond shall be lodged with the proper officer of the court; and if judgment shall pass in favour of the claimant, the court shall cause the said bond to be cancelled; but if judgment shall pass against the claimant, as to the whole or any part of such ship or vessel, goods, wares or merchandise, and the claimant shall not within twenty days thereafter pay into the court the amount of the appraised value of such ship or vessel, goods, wares or merchandise so condemned, with the costs, the bond shall be put in suit. And when any prosecution shall be commenced on account of the seizure of any ship or vessel, goods, wares or merchandise, and judgment shall be given for the claimant or claimants; if it shall appear to the court before whom such prosecution shall be tried, that there was a reasonable cause of seizure, the same court shall cause a proper certificate or entry to be made thereof, and in such case the claimant shall not be entitled to costs, nor shall the person who made the seizure, or the prosecutor be liable to action, judgment or suit, on account of such seizure or prosecution. Provided, That the ship or vessel, goods, wares or merchandise be after judgment forthwith returned to such claimant or claimants, his or their agents. And provided, That no action or prosecution shall be maintained in any case under this act, unless the same shall have been commenced within three years next after the penalty or forfeiture was incurred.”
1st Cong., 1st sess., “An Act to regulate the Collection of the Duties imposed by law on the tonnage of ships or vessels, and on goods, wares and merchandises imported into the United States,” July 31, 1789.
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