Smuggling, the Navy, and the Customs Service, 1763–1772

THE Royal Navy had been authorized and required as early as the Navigation Act of 1660 to seize and bring to trial any vessel violating the acts of trade. But our story really begins one hundred years later. It was in 1763 that the naval commanders in the North American waters were actually commissioned Customs officials and given a share of their confiscations. Making the officers of naval vessels also officers of the Customs service and letting them share in the booty changed the whole approach to smuggling. This new approach created problems of its own.

For one thing, the Customs officials found the Navy rather selfish new bedfellows. Consequently, the Customs officers fought back to maintain their established position. Then, too, the Navy elaborated a system of using small schooners to stifle smuggling. Again the Customs officials reacted by setting up their own small cutter.

The earnest smuggler now had two systems working against him: the Navy and the Royal Customs Service. He did not always escape the simple traps set for him, but surely often enough to laugh at both the Navy and the Customs officers.

It is this complicated triangular tag match with the smugglers, the Navy, and the Customs service, each tangling with the other in their efforts to make money that is the subject of this paper.

The story really begins in 1763. The French and Indian war was hardly over before the officers of the naval vessels in North America were given deputations as Customs officials.1 Besides, the Treasury and the Privy Council were urging the Navy directly to attend to the suppression of the clandestine and prohibited trade with foreign nations.2 By November of that year Lord Admiral Colville at Halifax was including this admonition in his instructions to his commanders: “As the prevention of illicit trade [he wrote] is one of the principal duties of your station, you are to keep your ships and boats in constant readiness for attending such service.”3

All of this might have been considered fairly routine: urge the Navy to suppress smuggling. What really made a difference was the act passed by parliament in this same year of 1763.4 This act gave the naval vessel making a seizure one-half of the net proceeds of any consequent condemnation. The Privy Council by an order of 1 June 1763 set up the complicated formula for dividing these spoils between the officers and the seamen.5 One might consider this a species of peacetime privateering.

Up until this time [1763], it was the Customs officials who shared in the proceeds of condemnations. Now the Navy was going to skim the cream off the top. After all, with their vessels hovering at the entrance of the harbors it was easy for the Navy to capture the obvious smuggler. This meant some loss of income to the local Customs officials. What was a Navy gain was a Custom House loss.

More importantly, it was not the loss of a few pounds of condemnation proceeds. It was a change of atmosphere and attitude. After all, the bulk of a Customs Collector’s income came from fees—fees collected from contented merchants. There were fees for entry and fees for clearing; fees for loading and fees for unloading; fees for a bill of health and fees for a register; fees for bounty certificates and fees for bonds; fees for a general bill of lading and fees for a particular bill of lading, etc.6 These emoluments could be anywhere from five to ten times the Collector’s salary. Hence the Customs Collectors were not anxious to harass the merchant by libeling vessels for smuggling when he could rarely obtain a condemnation. It was far better to keep the merchants in a happy frame of mind and concentrate on the certainty of fees rather than bother with the uncertainty of condemnations.

Now enter the Navy. They receive no fees whatsoever. Their entire supplemental income derives from what vessels are seized and condemned. Hence, they are more concerned in seizures than in keeping the merchants happy and contented. It is hardly any wonder that there was to be conflict between the Navy and local Customs officials. One of these conflicts occurred in New York.

On Friday, 2 December 1763 off Sandy Hook, Captain John Brown in his Majesty’s ship Hawke intercepted the merchant vessel New York. The merchant vessel was searched and found to be carrying illegal goods. She was seized and sent into the city under a prize crew from the British naval vessel.

Captain Brown of the Royal Navy asked the Customs Collector in New York to take care of the court procedure by prosecuting the merchant vessel for smuggling illegal goods. This meant, of course, that the Navy would receive its share of any condemnation but the Customs official nothing at all. The Collector replied that he could not prosecute on behalf of the Navy unless so directed by the Commissioners of Customs in London or by his immediate superior John Temple, the Surveyor General in Boston. The Collector did offer, however, to take over the whole case and prosecute for the Customs service if the Navy would call off its boarding party—and hence, of course, surrender its claim to any of the proceeds of the possible condemnation.7 This the Navy would not do.

The naval captain then appealed to John Temple, the Surveyor General in Boston. He found not only that the Surveyor General supported the Customs official in New York but was also a bit nettled by the Navy’s assumption of authority:

I did not imagine [he wrote] an officer of his majesty’s customs [even in the navy] would have arrived in the northern district of America, and have entered upon the service without acquainting me of the same. I must now desire, sir, that you will send me by return of the post, copy of your instructions from the board of customs, together with the limits of your station, and a certificate from the governor before whom (in my absence) you took the oaths to qualify for acting as an officer of his majesty’s customs.8

The Navy was not deterred. On 19 December 1763, Captain Brown filed a libel on his own behalf in the Vice-Admiralty court in New York against the merchant vessel. But on 30 May 1765 Judge Richard Morris declared in favor of the merchants and ordered Captain Brown to pay their costs in the suit.

Long before the trial was brought to this conclusion, however, Brown himself was arrested on the complaint of the merchants. He was given parole on condition that he did not leave New York until the case was settled. On 15 November 1764 he was ordered to sea in H.M.S. Hawke to patrol the coast for smugglers. As this would take him out of New York—and perhaps interfere with smuggling—he was promptly rearrested.

During all this time Captain Brown constantly appealed to the other Crown officials—especially the officers of the Customs—for help and assistance. This help was refused. Even the senior naval officer in the harbor would give no assistance.

This lack of cooperation—or rather hostility—in the Crown officials led to some sharp rebukes from home.

To John Temple, the Surveyor General, the Commissioners of Customs in London wrote: you are to give orders to the Customs officers to notify you when any officer of the Navy is arrested for acting as an officer of the revenue. We empower you to have the Customs officials enter into bail for such naval officers

and in all cases, where the interest of the revenue is so essentially concerned, you must exert yourself in support of the officers [of the Navy] who will otherwise be deterred from doing their duty; and you must repeat our directions to the [Customs] officers of the several ports within your district, that they aid and assist the officers of the Navy acting in their duty as officers of the revenue, to the utmost of their power.9

To the collector and comptroller of the customs in New York the commissioners wrote

We think the Collector…ought to have bailed him [Captain Brown] and not suffered him to be committed to goal.

The reasons assigned in your letter of ioth of December are frivolous.…We direct you immediately to give bail to these actions which have been brought against Captain Browne [sic].1

The decree of Justice Morris against Captain Brown was appealed. The High Court of Admiralty in England ultimately reversed the decision.2 But the damage had been done. The hostility between the Navy and the civil officials—especially the Customs officers—had broken out in the open. The fight over spoils was hardly helping the collection of the revenue or the suppression of smuggling. Similar disputes broke out in other colonies.

Despite the disputes, one might consider peacetime privateering a rather routine approach to smuggling. It simply encouraged his Majesty’s vessels of war to make seizures in return for a share in the spoils. The next move by the Navy to stop smuggling involved something different.

On 4 January 1764, the Admiralty in London sent orders to Lord Colville in Halifax, commander of the North Atlantic fleet, to purchase six schooners or sloops to help in the suppression of smuggling.3 These schooners were not intended as vessels of war. Their prime and almost only purpose was to prevent illicit trade. Hence, they were small and drew little water for close pursuit into creeks and coves. Since they could be worked from the deck, they could also be used in the wintertime when it was too cold to man the yards on large square-riggers.4 Three of the vessels were purchased in Boston (at the worse time of the year, Colville complained) and three were purchased in Halifax. Of the Halifax vessels the two schooners were made at Chester. These vessels were Hope, St. Lawrence, Magdalen, Chaleur, St. John, and Gaspee. Chaleur and Gaspee were sloops; the others schooners.5

Their commanders—all lieutenants—had already been sent over by the Admiralty. After a month in New York, the six lieutenants with six servants, six clerks, and some able seamen arrived in Halifax on 11 May 1764.6 But lieutenants and clerks were not enough; inferior officers and seamen were needed. Each vessel carried a complement of thirty men. Colville sent four of these vessels out to look for seamen. He had great hopes for recruits because, he reported, the novelty and hope for spoils tempted even him to sign on.7 Two of the vessels immediately got themselves into trouble.

The schooner St. John was sent to Newport harbor—which hardly seems a likely place for recruits for the Royal Navy. Lieutenant Thomas Hill reported little success. He claimed that the merchants had ganged up on his efforts and by threats and promises had prevented as many recruits as possible from enlisting.8

The real trouble started, however, when Hill began acting as a Custom House officer. He seized a cargo of ninety-three hogsheads of sugar and the brig Basto of Newport recently in from Montecristi. The owner had the lieutenant arrested, and he had to post bail. In a faint reflection of the conflict between the Navy and the Customs officials in New York, the Collector of the port reseized the vessel and the cargo on the excuse that Lieutenant Hill had failed to take the oath of office. In order to straighten this matter out, Hill set off for Boston to have a conference with John Temple, the Surveyor General.9

There are two accounts of what happened next: one from the newspapers and the other from Lieutenant Hill. The newspapers claimed that three men from St. John had been stealing hogs and poultry from the local farmers. Two of them had got safely back to their vessel but the third had been captured by the townspeople. When the water bailiff attempted to arrest the other two on board the vessel he was insulted and turned ashore. St. John, fearing the aroused populace, attempted to sail from the harbor and was fired on by the fort. The two delinquents were then sent ashore and properly committed to jail.1

On the other side, Hill claimed that St. John’s boat was sent ashore to capture a deserter (presumably the thief held by the town), but was set upon by the townspeople. They took the officer of the boat as hostage and pelted the crew with stones “which fell as thick as hail.” The men of St. John managed to get their vessel to the shelter of his Majesty’s ship Squirrel, but not without one of the shot from the fort going through her mainsail. The next day, the people of the town released the officer they held as hostage (presumably in return for the two accused thieves on board).2

All of this was reported home. The Ministry, of course, tried to find the culprits, but inquiries only fell unheard into that profound silence which was Rhode Island. Without names and proof the attorney general in England said nothing could be done.3

The second vessel which ran into difficulty on its recruiting voyage was Chaleur. This sloop arrived in New York on 4 July 1764 with little or no hope of recruiting men. There was always the Customs service, of course. On 11 July, Lieutenant Lougharne saw five vessels near the harbor. He suspected them of smuggling. So he sent his mate in the ship’s boat to investigate. He also gave the mate instructions to press men into the Navy—but no more than one out of five, he modestly added. The mate took one man from each of the five vessels.

The next day, 12 July, Lieutenant Lougharne unwisely went ashore. His boat was seized because the people claimed he was pressing fishermen. His claims of ignorance of their status and promises of their return availed naught. His boat was dragged to City Hall and burned. Although Lougharne gave information against the ringleaders and two were apprehended, nothing more seems to have been done—except Lieutenant Lougharne bought himself another boat for £11.13.4 sterling.4

When Chaleur and St. John returned to Halifax, Colville sent them both to cruise in the St. Lawrence for smugglers.5

Lieutenant Dugdale in Magdalen had as little success as the others in recruiting.6 It was not until Colville sent St. Lawrence and Hope to Newfoundland with pleas to Governor Hugh Palliser (a Navy man himself) for help in recruiting that he obtained any men. St. Lawrence returned 13 November 1764, having raised some thirty-three men.7

The schooners from which so much had been expected were having their troubles. By November 1764, Colville was writing discouraged notes back home. Good mates and midshipmen were not to be had, he said. Wages were no inducement “and the decisions of the judges of the Admiralty with the prejudices raised by the smuggling merchants of New York and New England against these vessels increases the discouragement.”8 The Navy began to realize that in handling smugglers it was dealing with professionals.

It was not all defeat. The schooners were to achieve a place in the Navy scheme of things. One can tell even from the names of the vessels that the original design was to have the schooners patrol the St. Lawrence and prevent the French from trading with their former colony and from the islands of St. Pierre and Miquelon.

In the fall of 1764, St. John and Chaleur were in the St. Lawrence river and were to winter at Quebec. Gaspee was to cruise the coasts of Nova Scotia. St. Lawrence and Hope were to watch the island of St. Pierre. Magdalen was at Canso harbor.9 In the winter Gaspee was to be sent to New York and Magdalen to New England.1 For the summer of 1765, St. John and Chaleur were to be in the St. Lawrence river; Magdalen in the gulf. St. Lawrence was to watch Cape Breton and St. Pierre. Only Gaspee was to range along the coasts of New England and New York.2

In the summer of 1766, Chaleur was to be in the St. Lawrence, St. John was to cruise in Chaleur Bay. Magdalen and St. Lawrence were to be off the coast of Cape Breton. It was here at Cape Breton on 26 June 1766 that St. Lawrence blew up and sank in six fathoms of water with the loss of four lives and many injured. Gaspee was sent home with dispatches.3 Larger vessels, of course, were stationed in the American colonies to stop smuggling; but this special task force of schooners originally concentrated on the Canadian coasts.

Commodore Samuel Hood arrived in Halifax on 7 July 1767. His first task was to purchase a schooner to replace St. Lawrence, which had blown up the preceding summer. By October 1767, he was complaining of the King’s Navy lying idle at the wharves in New York during the winter when smuggling was at its peak. Not only was it an expense for wharfage but desertion was more difficult to control. “I intend to put a stop to that practice for the future,” he claimed. He planned to station a sloop at Sandy Hook, accompanied by an armed schooner with another sloop at Rhode Island and another at Boston. By May 1768, he was asking for a much greater number of small vessels than were now employed in preventing illicit trade. As a result of his requests, two more schooners were added to the fleet: Halifax, which had been built in 1765 as a mail packet between Boston and Halifax, and Sultana, a vessel built by Benjamin Hallowell when he was still a shipwright.4

There were two events which reinforced this policy of Hood on the employment of the schooners against illicit trade. One was the seizure of John Hancock’s ship Liberty and the stationing of troops in Boston in 1768; the other was the transference of naval headquarters from Halifax to Boston in 1770. Both of these events demanded concentration of naval forces in Boston harbor. This, in turn, called for redeployment of all vessels, especially the schooners. It was this shift which brought the majority of the schooners south and Gaspee on its fatal cruise to Rhode Island in 1772.

Besides fighting with the Navy over the division of the spoils a great deal was also happening to the Customs service itself. The service by this time, 1767, was completely reorganized. Five Commissioners were appointed to reside in Boston and to run a profitable operation. The fatal decision had been made to obtain a revenue from the colonies. The Customs service was given all the tools necessary for the enforcement of the laws of trade: general search warrants, Vice-Admiralty courts, the Navy (unwelcome as it was in some instances), and, in 1768, the army. The Commissioners in Boston wanted more. They wanted their own ships, their own coast guard for seizing smugglers. They were not about to surrender coastal patrol—and the consequent spoils—to the Navy. If small vessels were to concentrate in American waters to stop smuggling they should be Customs vessels. Quite possibly as a reaction to the naval shift of schooners to the south, the Commissioners began their own fleet with the purchase of John Hancock’s Liberty.

Liberty was seized by the Customs officials in Boston at sunset on 10 June 1768. A riot broke out when the vessel was towed into the harbor to the shelter of the guns of his Majesty’s ship Romney. Liberty was libeled for landing goods before entry, and condemned for loading without taking out a bond. She was sold at auction for £102.15.½ and purchased for the Commissioners of Customs by Joseph Harrison, Customs Collector at Boston.5 The Commissioners now had the beginning of their coast guard—in competition to the schooners of the Navy.

The Customs Commissioners, however, did not have access to the Halifax naval yard and had to fit out Liberty themselves. They paid out of incidental expense some £980 to ready the sloop for service, plus some £371 for “maintenance.” Robert Hallowell, the brother of Benjamin, was paid most of the money for outfitting the vessel.6

With William Reid as her commander7 and Joseph Adams as her first mate, Liberty was ready to sail by the summer of 1769. She cruised in Long Island Sound watching both New York and New England. About 9 o’clock on the morning of Sunday, 16 July some three miles from the New London lighthouse, Reid discovered the sloop Sally in the company of the brigantine Thames. He immediately sent his boat to capture the sloop Sally and set off in Liberty after Thames. It was not until two o’clock that afternoon near Block Island that Liberty was near enough to fire a shot and bring her to. Liberty now brought both vessels not back to New London, Connecticut, their home port, but to Newport, Rhode Island. It was a disastrous move.

By Wednesday evening, 19 July, the owner and master of Thames had arrived in Newport and got a mob together. At 7 or 8 o’clock, they surrounded Reid on the Long Wharf and used him as a hostage. They forced him to call his prize crew off the brigantine Thames and to order his men to shore from Liberty. At 11 o’clock that night, Reid was finally released. He hurried to the Customs Collector who advised him to call on the Governor for assistance. The Governor later claimed, of course, that he had long since gone to bed. This gave the mob a free hand. They dragged Liberty’s boats through the town and burned them in triumph. They freed Sally and Thames, and they destroyed Liberty.

When Reid had got enough courage together to visit Liberty at 4 o’clock the next morning, he found a scene of desolation. She was lying

on shore with her mast cut away by the deck, her sails and rigging all cut to pieces, two of her guns, all her swivels and small arms hove over board, her bottom scuttled, her two boats burned, my cabin tore all to pieces and all my furniture, clothes, papers and everything belonging to me destroyed.8

It was the beginning and the end of the Customs attempt to run a coast guard. Although the Commissioners of Customs in Boston constantly petitioned the Treasury for Customs vessels to patrol the coasts, they never again had a coast guard cutter of their own.9 The Navy, in turn, may have been rubbing salt into the wound by hiring Reid in the following year as master on one of its own schooners.1

Were all these precautions successful in suppressing smuggling? By 1770, the smuggler had to contend not only with the Navy and its schooners, and for a short time with the Customs coast guard, but the Commissioners in Boston had developed a whole network of informants. They had got instructions to the various British consuls to send word home as soon as they had information of any vessel sailing with illegal goods to America. In the fall of 1770 the network began to function. These were not just general alarms but names of specific vessels and cargoes: Speedwell was sailing with tea from Gottenburg for Philadelphia; Kitty was sailing with tea and linen for Boston; Mary Ann was sailing with tea and linen for New York; besides, there was Charlotte, Helen and Little Peggy, all bound for New York.

As soon as word arrived, the Navy immediately deployed its forces: St. John and Gaspee were sent to cruise at the entrance of the Delaware; Sultana was placed in Long Island Sound; Deal Castle at Sandy Hook; Senegal was to cruise from Boston to Martha’s Vineyard. All ports and Customs Collectors were alerted.

It was to no avail. New York reported that Charlotte had arrived two days previously—in ballast. Neither the Customs officers nor the Navy could find anything incriminating. Helen and Little Peggy had done business long before getting to New York. Boston reported that Kitty seemed to have come and gone unnoticed. Philadelphia gave a full account of Speedwell. Yes, she had arrived the very day before the Collector had been warned of the smuggled tea. The problem was that she had entered with a cargo of coal and salt from Liverpool. With all the incriminating evidence from London and Boston the Collector was not satisfied with this declaration. He insisted that the whole cargo be shifted, for he was certain that the tea was under the coal. So they shifted the whole cargo and found—nothing. The collector persevered and tried to make the members of the crew take an oath on what was the real cargo. But this was self-incrimination and the courts would not support him. Neither the Navy, nor the Customs officers, nor the courts could completely stop smuggling.2

How successful was the overall attempt to suppress smuggling? Obviously our Customs records are incomplete, and successful smuggling is never recorded. We do know this: in 1763, it was costing some £8,000 to run the Customs service in America. In return, it was collecting less than £2,000. By 1769, the Customs service was costing some £15,293 but was collecting at the same time some £34,389. The Ministry was now netting almost £20,000 a year.3 This is only half of what the Ministry had hoped for, but it was a profit.

Specific figures on smuggling are even more vague. We do know that from 10 October 1766 to 10 October 1767 the Navy was responsible for condemnations only at Newfoundland and the King’s share was only £191.10.4¾. The King’s share of the Customs officers’ condemnations throughout all the colonies for the same year was only some £261. This, of course, was during the period the schooners patrolled Canadian waters. Beginning in January 1768, however, receipts from condemnations increased. In 1770, seizures by officers of the Customs totaled £922; from the Navy £537. In 1772, the Customs officers took in £378 and the Navy £2,017. The Navy by this time had taken over the control of smuggling. Thus, in the nine-year period from 1768 to 1776, the Customs officials were responsible for £5,607 in condemnation of seizures; the Navy was responsible for £14,112—almost three times as much.4

The Customs service had improved, but the Royal Navy controlled the seas. Not all smugglers were captured. But three-quarters of those condemned were brought in by the Navy. The Customs service had failed to develop its own revenue cutters. The Navy had taken up the slack—and the spoils.