BORDER GUARD

Also by Don Whitehead:

THE FBI STORY
JOURNEY INTO CRIME

Don Whitehead

BORDER GUARD

THE STORY OF THE UNITED
STATES CUSTOMS SERVICE

McGraw-Hill Book Company, Inc.
New York Toronto London

BORDER GUARD

Copyright © 1963 by Don Whitehead. All Rights Reserved. Printed in the United States of America. This book or parts thereof may not be reproduced in any form without written permission of the publishers.

Library of Congress Catalog Card Number: 63-12134

First Edition

69947

For Ruth and Gene Neilsen

CONTENTS

1
A SLIGHT CASE OF CONSCIENCE

One of the most serious problems confronting the Customs Service in this century is the control of the illegal importation of narcotics. Some of the difficulties involved in handling dope smuggling can be seen when it is realized that these drugs are being sent from all over the world, by every means of international transportation. The comparatively small number of Customs agents rely on patience, diligence and intelligence, and they are doing a remarkable job. Since this problem is so important, and so typical of the job the Service does, we will begin with the story of one successful case.

On the night of May 17, 1955, seventeen-year-old Truls Arild Halvorsen sat in an office in the Customs House in Boston, Massachusetts, blinking back the unmanly tears that threatened to spill down his face. He kept trying to swallow the dry lump of fear in his throat, but it wouldn’t go away. And he had to concentrate hard to remember the answers to all the questions being asked of him by the men sitting about the room.

He was a tall, handsome youth. His blond hair was cropped in a crew cut. His eyes were as blue as the waters in the fjords of his native Norway which he had left for the first time only a little more than a year before. That was when he had shipped out as a seaman aboard the MS Fernhill.

He remembered the day he left home his father had said, “We are very proud of you, son.” His mother had wept as she clung to him. His friends had gathered to shake his hand and wish him good luck on his first voyage. He had felt grown up and proud and excited—ready to cope with anything the future might bring.

But now ... now he sat, a virtual prisoner, answering questions about his role in the plot to smuggle narcotics into the United States. It was a nightmare he wished he could forget, but he knew he never could. The men around him were members of the U.S. Customs’ Special Racket Squad out of New York City, whose job it was to run down smugglers.

He heard the big, soft-voiced man sitting across the desk from him—the agent named Dave Cardoza—say, “Let’s go over the story again, Halvorsen. This time it’s for the official record. Tell it just as you did before—exactly what happened.”

Halvorsen swallowed once more and nodded. He didn’t need a translator to understand what Cardoza was saying because he spoke excellent English as well as German.

“Will you state your full name?”

The youth replied: “Truls Arild Halvorsen.” And the recording began.

Q—What is your position on the ship?

A—Ordinary seaman.

Q—What vessel are you on?

A—The name of the ship is the Fernhill.

Q—How long have you been employed aboard the Fernhill?

A—Three trips, about fifteen months.

Q—How old are you, Mr. Halvorsen?

A—I am seventeen and a half years old.

Was it possible this had begun only a few weeks ago? It had begun that day in Hong Kong when he met the Chinese stranger aboard the Fernhill and, like a fool, he had listened to the man’s talk about making easy money. That was when he should have walked away.

But he hadn’t walked away. And that’s why he was now in this strange room in Boston with these men who asked so many questions....

Q—Mr. Halvorsen, on the 15th of March, 1955, where was your ship, the Fernhill?

A—It was in Hong Kong.

Q—And did you have any conversation with a visitor to the ship?

A—Yes, I was talking to him.

Q—Will you explain what conversation you had and with whom it was?

A—The man was a tailor and he said to me that he wanted to talk about some business down in my cabin.

Q—Had you ever met him before?

A—No.

Halvorsen recalled that he had talked to the Chinese tailor about the price of a suit. Several tailors had boarded the Fernhill to solicit orders as soon as the ship dropped anchor. Most of the ship’s crew had placed orders for suits, but Halvorsen had decided the price was more than he could afford. It was after this that the tailor—a well-dressed man of medium height with a wart on the lobe of his left ear—whispered to Halvorsen that he would like to talk to him alone in his cabin.

Q—What did he say when he talked about this other business of smuggling?

A—He asked me if I wanted to make some money.

Q—What did you say?

A—Yes, I said.

Q—Then what did he say?

A—He said, “I can give you opium[A] if you will take the opium to San Francisco.” He said that if I would do this for him he would pay me $1,200 American.

Q—What did you say then?

A—I was not sure if I wanted to do it or not, but I did not say no.

[A] In the transcript of Halvorsen’s story, the young seaman referred to the narcotics sometimes as opium and at other times as cocaine and heroin. The narcotics in each case was heroin, a derivative of opium highly favored by drug addicts in the United States.

The tailor then wrote an address on a slip of paper—No. 54 Cameron Road—and pressed it into Halvorsen’s hand. “If you decide you want the money, come to this address at seven o’clock tonight.”

By six o’clock that evening, Halvorsen had reached a decision. The sum of $1,200 sounded like a small fortune to the boy who had never in his life had more than a few dollars at one time. It was more money than he could save in many months at sea—enough to buy an interest in a fishing boat back in Norway.

Halvorsen dressed in his best blue trousers and white shirt for the trip ashore. When he left the Fernhill he carried a briefcase which the Chinese had suggested he bring along. He hailed a rickshaw at the ferry slip near the Peninsula Hotel, and gave the address on Cameron Road. Then he sat back to enjoy the gaudy, East-meets-West sights of Kowloon as the coolie trotted through streets swarming with Chinese, most of them refugees from Red China.

After he stepped from the rickshaw and paid the driver, he stood uncertainly at the curb looking about for the number 54. A Chinese came up to him and said, “You looking for Number Fifty-four?” Halvorsen said he was, and the man said, “You follow me.”...

Q—Where did he take you?

A—He took me inside the house and into a corridor. We turned right and there was a door. He knocked on the door.

Q—Was the house No. 54, Cameron Road, ground floor, Kowloon, Hong Kong?

A—Yes.

Q—Was there any number or anything written on the door of the corridor?

A—I don’t remember.

Q—Then what happened?

A—Somebody opened the door and said, “Please, come in.” He took my hand as in welcome. He said, “I am glad to see you,” or something like that and in the room was the Chinese tailor I saw on the ship and another man....

Halvorsen remembered sitting with the three Chinese at a small, round table. The room was dimly lit and dingy. One of the men offered him whiskey but he refused and instead asked for a glass of beer. A woman padded into the room and placed a bottle of beer on the table. And then he was aware that a Chinese girl was standing near him. But when he glanced at her, he was blinded momentarily by a flash of light and so startled that he started to rise from his chair.

The wart-eared tailor laughed and said, “Don’t worry. It was only a flash from a camera. We need a photograph to send to our man in San Francisco so he will be able to recognize you when you arrive with the packages.”

One of the Chinese, a short, fat man in shirt sleeves, took a slip of paper from his pocket and scrawled on it the words, “San Francisco.” He tore the paper in half, handing one part to Halvorsen. “You keep this half,” he said, “and we will send the other to our man in San Francisco. When you meet him, you give him your half of the paper and he can match the two halves to make sure you are the right man.”

“Where will I meet him?” Halvorsen asked.

The man wrote on another slip of paper “Lew Gar Kung Saw, 854 Clay Street, San Francisco.” He handed it to Halvorsen and said, “You deliver the packages of heroin to this man at this address. When you make the delivery, he will pay you twelve hundred dollars. Okay?”

Halvorsen nodded. “I guess it’s okay,” he said. Then he gave them the itinerary of the Fernhill. He told them the ship was scheduled to arrive in Boston on May 16. If possible, he would leave the ship there or in New York and travel by bus to San Francisco to make the delivery, after which he would return to Norway.

The fat Chinese left the room, and when he returned he was carrying ten cotton bags filled with heroin, each of them weighing about half a pound. He placed them in Halvorsen’s briefcase....

Q—What happened then?

A—Then he asked me if I saw the bags. I said, “Yes.” He said that was what I was going to take ashore and he said, “You have to keep it on your body.” And he showed me a white silk sash.

Q—Did he tell you how to use that white silk sash?

A—Yes. He said I was first to fold it double and put it around my waist and then I could put the white bags down in the folds of the sash. He said I should keep maybe two bags in front, two bags in the back and the others strapped to my legs.

After the Chinese put the heroin in the briefcase, Halvorsen left the house on Cameron Road. He returned to his ship and placed the briefcase in a ship’s locker. He explained to the officer in charge that it contained souvenirs.

From Hong Kong, the Fernhill steamed to Djakarta, Indonesia, where Halvorsen hurried ashore with several crew members for a look at the city. After a time he wandered away from the others. He was alone, sipping a glass of beer in a bar near the Hotel Des Indes, when a Javanese approached and stood beside him.

“Have you got anything you would like to sell?” the Javanese said. “Any clothes or shoes? I can get you a good price.”

Halvorsen looked at the man, a middle-aged Javanese with a jagged scar running from his left eyebrow to his chin. He said stiffly, “I’m not interested in small stuff.”

The Javanese slid into a chair beside the youth. “You mean you’ve got something else you would like to sell?” he asked.

Halvorsen nodded, trying to appear casual and matter-of-fact.

“Maybe we can do business,” Scar Face said. “What have you got to sell?”

Halvorsen said, “What would you pay for a pound of heroin?”

The Javanese was impressed. “You can get heroin? You are not fooling me?”

“I’m not telling a lie,” Halvorsen said. “How much for a pound?”

Scar Face said, “If it’s pure stuff, I’ll take two pounds and pay you ten thousand dollars American money.”

$10,000 for two pounds of heroin! Halvorsen was so startled that he blurted: “That’s too much. Five thousand would be enough. I’ll have to get the stuff from the ship.”

Scar Face said, “You wait here. I’ll be back.” And he hurried from the bar.

In less than five minutes he was back with two other men, one of them dressed in a police uniform. They took Halvorsen to the dock, where they boarded a police launch which carried them to the Fernhill. Halvorsen took Scar Face to his cabin and told him to wait there.

Then he went to the ship’s locker and removed two bags of heroin and brought them back to his quarters. The Javanese opened one of them. He took a pinch of the white powder and tasted it. “It looks and tastes like it’s pure stuff, but I don’t know. I’ll have to get a doctor to make a test.”

This precaution seemed reasonable enough to Halvorsen. He handed the two bags to the Javanese, who concealed them under his coat. They returned to the police boat which carried them back to the pier. And then he and Scar Face got into a car and drove to the outskirts of the city, where the car swung into a driveway beside a white frame house.

“This is the doctor’s house,” Scar Face said. “You wait in the car.” He carried the two bags into the house.

In a few minutes Scar Face came back to the car. “The doctor says it will take time to test the heroin. I can’t get the money until he makes the test. I’ll bring it to you tomorrow.”

With appalling innocence, Halvorsen said, “I guess that’s okay.” And as Scar Face drove him back to the waterfront, they agreed to meet on the pier the following morning.

The next day Halvorsen went ashore to meet Scar Face. He waited at the agreed meeting place for more than two hours. Slowly it dawned on him that he would never see Scar Face again. He had been duped. It was then that young Halvorsen felt more than chagrin. He felt enormously ashamed. He wondered why he had ever permitted himself to become involved in something so dishonorable as smuggling narcotics.

He felt, too, a growing, bitter anger toward the wart-eared tailor and his friends in Hong Kong and the scar-faced Javanese. He wondered how he could atone for this sin. And after a while he decided the best thing to do was to seek advice from someone older.

When the Fernhill reached Singapore, Halvorsen hurried to the home of a Norwegian minister whom he had once met in Baltimore. The youth poured out his story to the churchman. “What shall I do?” he asked.

“It is a bad business, my son,” the minister said. “Let me go to the American Consulate and ask their advice. Perhaps they can help us.” When the minister returned from the Consulate, he shook his head. “They can do nothing,” he said, “because the matter is out of their jurisdiction. They said it would be best if you would take your story to the police agency called the FBI when you reach the United States.”

But when Halvorsen reached his ship, he thought of his friend in New York City, the Rev. Leif Aagaard, pastor of the Norwegian Seamen’s Church, 33 First Place, Brooklyn, in whose home he had spent the previous Christmas. On April 11, 1955, he wrote the Reverend Aagaard a long letter:

Dear Aagaard:

Let me get right to the matter. When we were in port in Hong Kong (March 15) I chanced to get in conversation with a tailor who came aboard to take orders. After the usual talk about everyday things he asked if he could get a word with me in private in my cabin. It proved he wanted me to smuggle four pounds of cocaine from Hong Kong to Frisco. I was to get $1,200 from the man I was to deliver the goods to in Frisco. I said Yes!

He gave me an address in Hong Kong where I should come the same evening. There I was to get the necessary information as well as the cocaine. I arrived at the specified time. There a flash photo was taken of me in order that the contact in Frisco could identify me. I also received one half of a letter that was torn in two parts. The photo and the other half was to be sent to Frisco. The half which I retained was to serve as my pass in order to get in contact with these men. I also was given the name and address of the man I was to deliver the cocaine to in Frisco. Afterwards I received eight[B] small sack-like bags made of cotton, each containing one-half pound. They were placed in a brief case which I should bring them aboard in. I did everything they instructed me to do and locked it in my cabin, later to hide it in a safe place. I had, at that time, all intention of doing this rotten job. Later, however, when I had had the time to think more clearly about these things I cursed myself for having wanted to take part in such dirty things. I came to the conclusion that I would throw it all overboard, but at the same time a thought struck me that perhaps I could be of help to the American authorities by getting these people jailed in Frisco. When we arrived in Singapore I contacted Rossebo whom I knew from the time I was ashore in Baltimore. I told him the whole story and he promised to get in contact with the American Consulate there, and in a discreet manner try to find out about same. Now it was found, however, that they could not give any direct answer as to what the American authorities might do to me as a smuggler. They were very much interested, but said that that type of smuggling was something that came under FBI.

Will you now be so kind as to do me the favor of presenting the entire matter before the FBI in New York and say that I am placing myself entirely at their disposal in the case. Let as few as possible in on this. I am afraid that the persons I am dealing with on this are no small fry. I will now seal the goods and declare it on the manifest as four pounds of camphor. This I am doing so as not to have the ship and the captain mixed up in this affair, if it should get that bad. Now I ask that you or the authorities who will handle this matter send me a discreet telegram before May 10, which will assure me that I can safely count on avoiding any trouble from the authorities as a result of my smuggling. If I do not receive the telegram within the specified date, I will throw everything overboard and remove every trace of everything that might implicate me. In case you do not want to have anything to do with the matter, please advise me as soon as possible. Fernhill is scheduled to arrive in Boston May 16th.

Well, now I hope that you will not judge me too harshly and that all will be well again.

Warmest regards to you and your family.
Truls Arild Halvorsen

[B] Actually, Halvorsen received ten sacks—but he could not bring himself to admit to Aagaard that he had been swindled of two of the bags in Djakarta.

When the Reverend Aagaard received the letter, he was shocked and dismayed. He remembered young Halvorsen well because the youth had come to his church in Brooklyn when his ship made port there. Aagaard had become so fond of the boy that he had invited him to his home the past Christmas for dinner with his family. He knew he was an intelligent youth and had never before been involved in wrongdoing.

The pastor got in touch with the Norwegian Consul General, Thor Brodtkorb, and the two men arranged a meeting with Supervising Customs Agent Lawrence Fleishman at his office at 21 Varick Street. At this meeting Aagaard and Brodtkorb reviewed the entire case as it had been told to them in the letter by Halvorsen.

After a further discussion with the U.S. District Attorney, it was agreed that if Halvorsen would turn over the narcotics to the master of the Fernhill while the vessel was still on the high seas, then young Halvorsen would avoid prosecution for possession of narcotics—simply because the narcotics would not be in his possession. It was agreed also that if Halvorsen were cooperative there would be no prosecution for conspiracy to smuggle narcotics into the country. The master of the vessel was to be held blameless in this case, since he had known nothing whatever of the smuggling plot, and there were to be no penalties assessed against either him or his vessel once the narcotics were turned over to the Customs officers.

As soon as it was learned that the Fernhill had cleared from Suez on its way through the Canal to the Mediterranean, a cable was dispatched to Halvorsen: ALL IN ORDER HERE. GIVE IT TO THE CAPTAIN.

A representative of the steamship company dispatched a message in international code to the captain of the Fernhill saying:

International signal book code only for the Captain. Confidential. Halvorsen will hand over packages. Keep them safe until arrival Boston. Cooperating with authorities here. Everything in order. Immunity on condition that you handle in accordance herewith. You must not discuss this with anybody else. Wire us following message in code to me: Have acted as per your instructions.

On May 5 the Fernhill’s skipper radioed:

The packages have been placed for safekeeping in the safe until arrival Boston according your instructions. Receiver has photograph of Halvorsen and first half of papers of introduction. Receiver’s address Lew Gar Kung Saw, 854 Clay Street, San Francisco. Consignor Shing Kee and Co., 54 Cameron Road, ground floor, Kowloon, Hong Kong. Signed, Captain Carlson.

Eleven days later Customs Agents Dave Cardoza, Oscar Polcuch and Edward Finnegan boarded a launch on the Boston waterfront and were carried into the harbor to meet the Fernhill. They were greeted by Captain Carlson, who took them to his cabin and handed over to them the sacks of heroin. Then he summoned Halvorsen to his cabin and introduced him to the agents.

Cardoza said, “I understand, Halvorsen, that you are willing to cooperate with us in breaking up this smuggling ring.”

“I’ll do anything I can to help, sir,” Halvorsen said. “I’m sorry I ever got mixed up in this.”

“We need your help,” Cardoza said, “and you have nothing to worry about if you do as we say.” He warned Halvorsen that a member of the smuggling ring might approach him when he went ashore in Boston—and he must do nothing to create any suspicion.

Cardoza drew a rough map of the waterfront and showed it to the youth. “You will get off the ship at this point,” he explained. “Walk over to this corner and wait for a bus. When the bus comes along, get aboard and take a seat as near the driver as possible. If anyone approaches you about the heroin, tell them it is still aboard the ship and make arrangements to meet them later. But don’t worry. Finnegan and I will be on the bus with you. Get off the bus at this street and you’ll see a restaurant on the corner. Go in and order a glass of milk—and sit there until we come for you. Is this clear to you?”

“I understand,” Halvorsen said. “I’ll do as you say.”

Cardoza instructed Agent Polcuch to hide the sacks of heroin under his jacket when leaving the ship and to take them to the Customs Bureau’s laboratory at 408 Atlantic Avenue for an analysis. “Tell them it’s a rush job, Oscar, and we would like to know the results as soon as possible. They can reach us at the Customs House this afternoon.”

It was almost noon when Halvorsen walked down the gangway alone and strolled over to the bus stop. The youth boarded the bus and did not even glance at Cardoza and Finnegan when they brushed by him. No one spoke to him on the bus nor did anyone approach him as he sat in the restaurant sipping a glass of milk.

Cardoza and Finnegan lounged in the doorway of a building opposite the restaurant, from where they could see Halvorsen seated at a table. When it seemed apparent that no one had followed him from the waterfront, they took Halvorsen to the Customs House for questioning. The longer they talked to him, the more certain they were that he was telling the truth.

During the afternoon, Cardoza received a telephone call from Acting Chief Chemist Melvin Lerner at the Bureau’s laboratory. “The stuff is heroin, all right,” Lerner said. “It’s a very high grade. What do you want us to do with it?”

“Make the usual report,” Cardoza said, “and hang onto those sacks until we decide what to do next. We may need them in making a case against the buyer. And thanks.”

The questioning of Halvorsen continued until after midnight. When the session was over, the penitent young man knew that his personal nightmare was nearing an end and that there was a way to atone for what he had done. The whole sorry mess could be washed out by helping the Customs agents trap the receiver in San Francisco—the man named Lew Gar Kung Saw.

Agent Finnegan accompanied Halvorsen from the Customs building to the Fernhill and left him. It was agreed he would remain aboard the ship until it reached New York harbor. By that time a decision would be made on the next move.

On May 23, one week after the arrival of the Fernhill in Boston harbor, Agents Cardoza, Polcuch and Finnegan met with their chief, Lawrence Fleishman, at their headquarters at 21 Varick Street in New York City. Fleishman was a lean man with graying hair who had been doing battle with gangs of smugglers, crooked importers, and international con men for almost thirty years. Long ago he had lost count of the number of crooks he had helped send to prison, and the millions of dollars involved in these cases. But he had never lost his enthusiasm for matching wits with those he called “the bastards.”

At this moment, Halvorsen was seeing the sights of New York in company with a young Customs agent. He had been taken from the Fernhill when the ship reached New York harbor and he had registered in a midtown hotel to wait for the next move in the game.

Fleishman said of Halvorsen: “The kid can never make the delivery in San Francisco alone. He’s too nervous and it is too risky. Polcuch had better go with him. We’ll rig up a story that Polcuch is Halvorsen’s shipmate and that they have been working together on the deal.”

Fleishman told them it wasn’t practical to use the original eight sacks of heroin as a decoy in trapping the receiver in San Francisco. He agreed with officials in Washington that there was too much danger of the heroin being lost or stolen and being put back into the illicit market. Also there was the difficulty of obtaining legal clearances for transporting that amount of heroin across the continent.

“We’ll have to ask the laboratory to find a substitute to put in those bags,” Fleishman said. “It will have to be something that looks, feels and tastes like heroin. We can blow this whole case if we’re not careful.”

Fleishman knew the San Francisco receiver would become suspicious if Halvorsen didn’t show up soon. He picked up the telephone and asked his secretary to call the chief chemist in the Bureau’s Boston laboratory....

When Acting Chief Chemist Melvin Lerner put down the telephone after talking to Fleishman, he sent word to the laboratory that he wished to see Chemist Paul Leavitt. Lerner was a tall, brown-haired young man who had been with the Bureau for fourteen years.

Lerner called for Paul Leavitt because this remarkable man had an uncanny sense of taste—and if anyone could find a material which tasted like heroin, it was he. Leavitt could identify accurately an enormous number of materials simply by tasting them, an odd sort of sensory skill which he had had since childhood. It had been a valuable asset in the laboratory, where he had spent almost forty years as a chemist.

The problem was to find a light, white, powdery substance with the same bulk and weight as heroin and the same bitter taste. The taste was particularly important because it was characteristic of narcotics buyers to taste heroin before accepting it in any large amount.

When Leavitt came into the office, Lerner outlined the problem that had been dumped into their laps and he gave him the details of the Halvorsen case.

“How much time do I have?” Leavitt asked.

Lerner said, “It’s a rush job, Paul. They want it in New York on the first plane tomorrow—in the same cotton bags which are out there in the vault. We’ll have to remove the heroin from the bags and refill them with a substitute material.”

Leavitt knew that sacks filled with milk sugar or ordinary sugar would never fool a veteran trafficker in narcotics because the sugar would weigh ten times more than heroin. The substitute had to have the same bulk density as heroin.

For hours the chemist worked on the problem, testing different materials, but each of them was either too dense or did not meet the specifications in appearance or taste. It seemed that the agents in New York had tossed the laboratory a problem that simply could not be solved in so short a time.

Leavitt was still in the laboratory late in the evening pondering the problem when he remembered that several months earlier the laboratory had made a routine test of a white, light, powdery, silica compound produced by the Johns-Manville Company as a filter agent. Somewhere in the laboratory there was a sample of this product.

Leavitt found the sample in a storage room. He also found the product had the bulk density, weight and appearance of heroin. The remaining step was to make the stuff taste like the narcotic—give it the same bitter flavor.

At last Leavitt found the solution in a mixture of quinine and strychnine added to the filter powder in just the proper proportions. The amount of strychnine he used was in safe limits, even if a man should swallow a large amount of the stuff.

The following morning, Lerner supervised the job of emptying the sacks of heroin and filling them with the harmless substitute. He took the sacks to his secretary, Miss Alfhilde Norrman. “I’ve got a job for you, Alfy,” he said. “Can you re-sew these bags so no one can tell they’ve been tampered with?”

“I think so,” Miss Norrman said. Using the same threads with which the bags had been sewn in Hong Kong, Miss Norrman stitched them shut. She was careful to insert the needle in the old thread-holes left in the material. When the job was finished, the eight sacks appeared exactly as they were when young Halvorsen accepted them from the fat Chinese.

Less than twenty-four hours after Fleishman’s call to Lerner, the sacks of phony heroin were on their way to New York by plane. The following day, Agent Polcuch and Halvorsen flew to San Francisco, where they checked into a seaman’s hotel near the waterfront. After dinner, they carried the brief case containing the heroin substitute to the Greyhound bus station and checked it in a locker.

That same evening they met with agents from the San Francisco Customs office to make plans for the delivery of the sacks to Lew Gar Kung Saw—a name that meant nothing to the San Francisco agents, who knew every suspected narcotics trafficker on the West Coast. Very likely the name was an alias.

It was agreed Polcuch should carry a concealed radio transmitting device to the building on Clay Street. Two agents would be hidden in a small delivery truck parked on the street to record the conversation with the receiver. They would come to help Polcuch and Halvorsen if trouble should develop.

If possible, the receiver was to be lured to Polcuch’s room at the seaman’s hotel to accept delivery of the sacks. Two agents would be concealed in an adjoining room to help with the arrest in case more than one man were involved.

At 10 A.M. the following day, May 27, Polcuch and Halvorsen left their hotel and took a taxi to San Francisco’s Chinatown. They stepped out in front of a four-story building which appeared to be a Chinese rooming house. They walked up three flights of stairs without encountering anyone. On the fourth floor they saw a Chinese man walking down the hallway.

Halvorsen said, “Can you help us?” He showed the Chinese the note bearing the name of Lew Gar Kung Saw. The Chinese pointed to the end of the hallway. The room appeared to be a clubroom. There were lounging chairs, a large sofa, and several tables with chairs. At one of the tables sat an elderly Chinese reading a Chinese-language newspaper. The man looked up as Halvorsen and Polcuch entered.

Halvorsen handed him the slip of paper and said, “We’re trying to find this man. We were told to meet him here.” The Chinese glanced at the name and nodded. He told them to sit down and then he went to a wall telephone, where he began dialing several numbers. He seemed to be having trouble locating Lew Gar Kung Saw.

Polcuch glanced at Halvorsen and winked. “Nervous?” he said in a low voice. Halvorsen grinned for the first time in days. “Yes,” he said, “aren’t you?”

Polcuch nodded and lit a cigarette. “You’re doing fine. Just keep it up and everything will be all right.”

Polcuch knew how the kid felt. No matter how many times you played this game, you never knew what was going to happen next. One false move and you blew the whole case, often without knowing why. Halvorsen was old enough to know the dangers. Now that the pressure was on, he was handling himself even better than Polcuch had reason to expect. His hands trembled a bit, but that was the only sign of inner excitement and fear. He hoped the boy would be as steady later as he was now. He had been coached on what to say and what to do under every possible contingency—but this was tricky business even for a veteran agent.

Perhaps the best of the agents were good because they had something of the ham actor in them. Day after day they were called on to assume false identities and to act the part of an underworld character in the drama of the hunters and the hunted. The only difference between this sort of acting and the theater was that this was not to amuse or to entertain the audience. A part was played to protect the people and the Treasury of the United States from thieves, looters, corrupters and chiselers. If you made one false move or spoke one unconvincing line, then the curtain came down. The play was over.

There was the time when one veteran Customs undercover agent worked his way into the confidence of a gang of big-time narcotics dealers whose operation was a multi-million-dollar business. He gave up his own identity and his own life to play the role of a narcotics dealer. He played his part so well that he gained the confidence of the man suspected of being the mastermind of the operation in New York.

Then came the day when it looked as though the weeks of acting would pay off. The man who was Mr. Big agreed to sell the agent a large supply of heroin. That evening they met in an East Side bar and had a few drinks before going to the place where the delivery was to be made. The agent insisted on paying for the drinks and then they walked outside to hail a taxi. Suddenly Mr. Big mumbled something about having forgotten an important date.

“We can’t get the stuff tonight,” he said. “I’ll see you later.” Mr. Big ducked into a taxi and that was the last time the agent was ever able to get within shouting distance of his man.

What had happened? What had gone wrong? Where had the agent made the false move that blew the case? He reviewed every word that had been said and every move he had made without finding a clue. He never knew the answer until months later when Mr. Big finally was trapped by other agents. He was asked why it was that he had walked out on the undercover agent that night at the East Side bar.

Mr. Big said, “We had two or three drinks at the bar that night and everything was fixed to get the stuff. Then this guy insisted on picking up the tab. He gives the bartender a sawbuck and when he gets the change he leaves a two-bit tip. Hell, I know right then he’s a government man because only a government man would leave a lousy two-bit tip. That’s when I checked out.”

Polcuch knew as small a slip by him or Halvorsen could wreck the case. While the Chinese was making the telephone calls, he left the table and strolled over to the window looking out on Clay Street. He saw a panel truck parked near the entrance and knew the agents were inside.

At last the elderly Chinese hung up the receiver and came to the table. He said, “You come back at twelve o’clock.”

Polcuch and Halvorsen left the building and whiled away the time looking in shop windows. When they returned to the clubroom the Chinese man was still engrossed in his newspaper. He saw them enter the room, and went immediately to the telephone and dialed a number. There was a brief conversation in Chinese, after which the old man said, “In five minutes he come. You wait.”

They sat at the table waiting, and at 12:35 a well-dressed Chinese entered the room. He wore a neat brown suit and a figured brown tie. He looked to be a man about fifty years old, and on one pudgy finger he wore a diamond ring. He smiled as he walked over to shake hands with Polcuch and Halvorsen.

Halvorsen held out the slip of paper bearing the name Lew Gar Kung Saw. “Are you this man?” he asked. The Chinese glanced at it and said, “Yes, yes. That’s my name.” But actually, agents learned later, his real name was Lew Doo—long suspected of being a trafficker in narcotics.

Lew Doo produced the photograph of Halvorsen and after that the half of a torn slip of paper bearing the words “San Francisco.” He matched his half with the half handed to him by Halvorsen.

“Have you got the stuff with you?” he said.

“No,” Halvorsen said. “It’s in a locker at the bus station. Have you got the money?”

The Chinese showed them a wallet stuffed with currency. Halvorsen said, “You come to my hotel and bring the money. We’ll get the opium and do business there.”

Lew Doo exclaimed, “No! No! This place is safe. I do business here all the time. The hotel room is no good.”

Halvorsen said, “We can’t go walking around the street carrying that stuff. We might get caught.”

“Don’t worry,” Lew Doo said. “It’s safer here.”

Polcuch sensed it would be a mistake to insist on going to the hotel room. He said, “Maybe the guy’s right, Truls. This place looks safe enough. Let’s do what he says.”

Halvorsen agreed with apparent reluctance. And then the youth said, “I want the money we spent for bus fares, too.” He explained to Lew Doo that it had cost $138 to come from New York by bus and he thought this money should be repaid.

Lew Doo made no protest. He agreed to pay the extra money. Halvorsen and Polcuch left the place and headed for the waterfront in a taxi. When Polcuch was certain they were not being followed, he gave the driver the name of their hotel.

Polcuch explained the situation to the agents at the hotel. It was agreed they would go to Clay Street and conceal themselves near the entrance to No. 854, where they could see the clubroom windows. They were not to make a move until Polcuch signalled from the windows or called for help over the concealed radio transmitter. While it appeared Lew Doo was working alone, he might have confederates with him when they returned to the clubroom. It was best to have help near in case there was trouble.

From the hotel, Polcuch and Halvorsen went to the Greyhound bus station and took the brief case from the locker. They returned to No. 854 at approximately 2 P.M., and Halvorsen was carrying the brief case when they walked into the clubroom where Lew Doo was sitting alone.

The Chinese said, “Let me see the stuff.” He took out a sack and examined it closely, even to the stitching. He pulled a penknife from his pocket and slit a small hole in the bag. He poured out a pinch of the powder and tasted it—and then he nodded in satisfaction.

Lew Doo lifted the other sacks from the brief case and said, “I paid for ten bags and you have only eight. Where are the others?”

Polcuch tensed. This was a critical moment—and the question he had been waiting for the Chinese to ask. He glanced at Halvorsen.

“I’m sorry,” Halvorsen said evenly, “but two of the bags got wet on the ship and we had to throw them overboard. The stuff was ruined.”

For several seconds Lew Doo stood and looked first at Halvorsen and then at Polcuch as though trying to read their minds. Polcuch, the veteran, knew the entire case was hanging by a thread. If Lew Doo backed out now, the mission was a failure. If he didn’t take the final step and hand over the money, there wouldn’t be enough solid evidence to hold him for twenty-four hours. It was now—or perhaps never.

Suddenly the Chinese shrugged and the muscles around his eyes relaxed. He reached into his pocket and pulled out his wallet. He counted out $1,338 onto the top of the table and then began placing the sacks into the briefcase.

Polcuch picked up the money and counted it. His hand darted beneath his jacket and he pulled a snub-nosed revolver from a shoulder holster to cover the startled Lew Doo. “Don’t move,” Polcuch ordered. “I’m an agent of the U.S. Treasury Department. You are under arrest.” Slowly he backed to the window overlooking Clay Street and signalled to the agents below. Within a few seconds they came pounding up the stairs and into the room. But there was no fight in Lew Doo.

Lew Doo was charged with conspiracy to violate the narcotics laws of the United States. He pleaded not guilty, but he was convicted and sentenced to four years in prison. In Hong Kong, British police raided the room on Cameron Road and smashed the ring operating from the Crown Colony.

This was the end of the ordeal for Halvorsen, the young man who had brought himself to a halt on the edge of a chasm of crime. But it was a happy and prosperous ending because the U.S. Customs Bureau awarded him a check for $1,000 for his role in helping smash the smuggling ring.

* * * * *

The case of Truls Arild Halvorsen is only one of countless thousands of smuggling cases recorded in files which now are gathering dust in the archives of the Customs Bureau, the oldest agency in the Federal government.

The Bureau of Customs—or the Customs Service, as it is often called—is the nation’s border guard. For more than 170 years it has had the primary responsibility for policing the foreign trade, collecting tariff duties on imports, and exposing conspiracies which would defraud the Treasury of the United States.

The Customs Service was organized hurriedly in the first days of the Republic, when the original Thirteen Colonies voluntarily surrendered certain rights to the Federal government in order to “form a more perfect Union.” One of the most important of these rights was the collection of duties—for without this income the new-born government could not have existed.

The need for revenue was so great in the nation’s beginning that Congress rushed through legislation authorizing a Customs Service even before the organization of the Treasury Department. And when Alexander Hamilton assumed his duties as the first Secretary of the Treasury, he found the month-old Customs Service already at work collecting revenues. The Service was incorporated into the Treasury Department as a division of the Secretary’s office, and it continued as a division until 1927 when it was given the status of a bureau, directed by a commissioner appointed by the President.

Since the day in July, 1789, when George Washington submitted to the Senate the first list of Customs collectors, the nation’s overseas trade has grown from a mere trickle to a multi-billion-dollar flood. The administration of the Bureau has become more complicated and its operations more diverse as the commercial intercourse between nations has grown.

In size, the Customs Bureau is one of the smaller Federal agencies, having approximately 8,500 employees. But being the senior service in the Federal government, its past is a mirror of the nation’s history. It is a history tinged with violence and intrigue, because there has never been a time when its agents were not engaged in a running war with smugglers—from Jean Laffite and his band of cutthroats in the bayous of Louisiana to the criminals who direct today’s multi-million-dollar traffic in contraband.

Because it deals with commerce and travel, the operations of Customs touch every man, woman and child and every item of merchandise entering this country—from the tourist returning from Zamboanga to the aardvark headed for a zoo.

Customs has been damned as a nuisance and a bumble-headed bureaucracy. It has been praised as one of the most efficient and necessary units in the Federal government. Despite its long history, few Americans know anything about Customs beyond the fact that they must submit to an irritating baggage examination by an inspector upon arriving home from abroad.

What is Customs? Why was it organized? What are its duties? And why is it necessary?

Customs is a slender, dark-haired expert sitting in a small room in New York appraising the value of a treasure in diamonds. It is a chemist in a laboratory checking the quality of a foreign import—and its dutiable value—and arriving at a decision which may mean life or death for an American business in a highly competitive market. It is an inspector at an airport or on a pier examining the luggage of passengers to be sure they have complied with the law.

Customs is a tall man with a wind-burned face lying in the mesquite above the Rio Grande, watching patiently for the smuggler of heroin or marijuana he knows is coming his way. It is a burly man lowering himself into the dark hold of a ship to check the cargo and to search for contraband. It is a man giving an expert appraisal of the antiquity of a tapestry or the authenticity of a painting to be certain an importer is not being defrauded. It is a man checking the contents of a mountain of parcels arriving from overseas.

Customs is a man explaining to a tourist what he can do to save time and avoid trouble in his travels. It is volumes of complex rulings by the courts and laws passed by Congress governing the huge import-export trade. It is a lawyer standing in a courtroom arguing that an import is subject to much higher duties than its importer claims.

In the long years past, Customs was James Madison standing in Congress and urging his fellows to adopt a tariff act quickly in order to save the government from financial ruin. It was a band of men slipping through the bayous in search of Jean Laffite and the mountain of loot he was smuggling into New Orleans.

Customs was a small army of men whose collection of duties symbolized an issue which threatened to touch off a civil war long before Abraham Lincoln entered the White House. More recently it was an angry maid exposing a distinguished judge and Hollywood stars caught in a tangled web of intrigue. It was, unfortunately, also a thief who rocked the country with a scandal, and weak-willed men who could not resist the temptation of an underworld bribe.

The Customs Service is and was a thing of many parts, involving the lives and fortunes of many people. And that is the reason for this story.

2
A TIME OF CRISIS

The problem of tariffs is one with which governments have contended from the beginning of recorded history.

The Old Testament mentions customs duties and indicates that in those ancient times a well-established system of duties existed. In the early chapters of Ezra is to be found the story of Cyrus, a king of Persia, who permitted the captive Israelites to return to Jerusalem from Babylon in order to rebuild the city and their temples. But there were those who opposed the return of the Israelites. The scriptures say these opponents “weakened the hands of the people of Judah, and troubled them in building, and hired counsellors against them, to frustrate their purpose.”

This dispute carried over into the reign of King Artaxerxes, who succeeded Cyrus. Those who opposed the Israelites returning to Jerusalem wrote the king a letter in which they said, “Be it known now unto the King, that, if this city is builded and the walls finished, they will not pay tribute, custom, or toll....” But the king searched the records and found that there was precedent for imposing a tribute or a customs toll. He replied to the letter, “And I decreed, and search hath been made, and it is found that ... there have been mighty kings also over Jerusalem, who have ruled over all the country beyond the river; and tribute, customs, and toll was paid unto them.”

The New Testament indicates that Matthew was a collector of customs at the city of Galilee. It says that Jesus called Matthew from “the receipt of customs.”

The first recorded history of customs being collected in England is found in the code of laws enacted by King Ethelred in 979 A.D. The law read, “Every small vessel arriving at Billingsgate shall pay to the tax gatherer one obolus; if of greater tonnage and mast rigged, one denarius. If a ship shall arrive and anchor there, four denarii shall be paid to the tax gatherer. Vessels laden with timber shall pay one log to the tax gatherer.”

In the Magna Charta is found the following: “Cap. XXX. All Merchants, if they are not openly prohibited before, shall have safe and sure Conduct to depart out of England, to come into England, to tarry in and go through England, as well by land as by water, to sell and buy, without any manner of evil tolts, by the old and rightful customs, except in time of war. xxx”

The collection of customs on the North American continent was first made by the Dutch in 1651 when the governor ordered that all imports from foreign countries entering the harbor at New York should pay a duty. The method of collecting was later outlined in a document which reads as follows:

Instructions for Mr. Cornelius Van Ruyven, collector of the customes in ye City of New York, by order of Colonell Francis Lovelace, governour, May 24, 1668.

You or your clerk are to be daily at ye Custome House from nyne untill twelve at noone. There to receive ye customes both in and out, as the Merchants shall come and enter, ye Merchant is to make foure Bills and sign them with his hand, writing his name on them, and ye same time, when you have signed ye Warrant, or one of ye Bills, you are to demand ye Custome, either in kinde at 10 P Cent inwards or double ye vallue of its first Cost in Holland, in Beaver. And likewise outwards for Peltry you are to receive 10½ P Cent according to ye vallue in Beaver, for Tobacco one half penny for Per pound which is noe more than all Englishmen doe pay. xxx You to tell ye Merchante you are not to give credit. xxx If they do not like your propositions, you are not to pass their Bills. xxx

And Lastly pray lett ye Books be kept all in English and all Factoryes and Papers, that when I have occasion to satisfy myself I may better understand them.

When the city came under British rule in 1664, the system of tariffs set up by the Dutch was continued. Almost one hundred years before the Boston Tea Party and the beginning of the Revolution, there was an uprising in New York against the British collection of customs. Religion played a role in this rebellion, which was touched off when England’s Catholic King James II was succeeded by the Protestant William of Orange and his wife Mary.

When the news of King James’ overthrow reached New York, a Captain Jacob Leisler, who had lived in New York for about thirty years and was a deacon in the Reformed Dutch Church, decided that he would not pay customs duties to a king’s representative who was himself a Catholic. Leisler was in the business of importing liquors and other merchandise into New York. One of his vessels came into the harbor on April 29, 1689, loaded with wine from Europe. Leisler refused to pay the $100 customs duties. He argued that the collector, named Plowman, was a Catholic and was not qualified to receive the customs under the new Protestant regime in Britain. Leister’s stand threw the city and military officials into a dither. There was a hastily called meeting of the counsellors, alderman and military officials in the city to discuss this development. The majority ruling was that the system of collecting duties would continue as it had in the past until other orders were received from William of Orange.

Leisler would have no part of this ruling. He told the assembly he would not pay the tax and he stalked out of the meeting room to discover he was not alone in his opposition to the customs duties. Other merchants saw an opportunity in this situation and joined his side. The result was that Captain Leisler and his friends organized an uprising against Lieutenant Governor Nicholson.

Leisler reached such a position of power that he drove out those in charge of the Customs service and appointed his own man, Peter DeLansy, as a collector. The British finally hanged Captain Leisler for his role in this revolt and in April, 1696, appointed the Earl of Bellomont as Governor General over New York and New England.

The Earl was not a man to brook any nonsense such as the nonpayment of customs to the royal treasury. He restricted the Colonies’ trade with New York and Albany and forbade the shipment of merchandise up the Hudson River unless duties were paid at New York.

The collectors appointed by the Earl of Bellomont had a rather difficult time of it. The merchants of New York were, to be charitable, unreliable when it came to the payment of customs duties. In fact, smuggling was a popular practice. In one instance a cargo of merchandise from the East Indies was ordered seized but the officers who went to make the seizure simply disappeared. Then it was learned that the sheriff himself was hiding the merchandise in his own home.

From the viewpoint of King George III’s counsellors, the actions of the Americans in smuggling and otherwise evading the payment of the customs duties were no less than thievery from the treasury of Great Britain. Such nonsense had to be stopped. And so it was that, after Canada came under British control in 1763, the British adopted a tougher policy toward the Colonies. In 1764 the Parliament passed the Sugar Act, which called for the payment of duties on lumber, food stuffs, molasses and rum brought into the Colonies. This in itself was enough to enrage the American merchants, but then the Sugar Act was followed by the Stamp Act in the same year. This act required revenue stamps to be purchased on all imports. The receipts were to be used to help defer the cost of British troops stationed in the Colonies. In short, the Americans were to pay to have British troops quartered in their towns and cities. When news of the passage of the Stamp Act reached New York, more than 200 merchants gathered for a protest meeting at Burn’s Tavern. They signed an agreement not to import goods from England.

Judge Robert R. Livingston wrote at the time: “England will suffer more by it in one year than the Stamp Act, or any other, could ever recompense. Merchants have resolved to send for no more British manufactures, shopkeepers will buy none, gentlemen will wear none; our own are encouraged, all pride in dress seems to be laid aside, and he that does not appear in homespun, or at least a turned coat, is looked upon with an evil eye.”

The U.S. Customs Service came into being on July 31, 1789, in a time of crisis. It was an organization put together by Congress and President George Washington to save the struggling young central government from financial collapse through the collection of duties on imports.

The formation of Customs thus became the first step to be taken by the original thirteen states toward a practical, working partnership after the adoption of the Constitution. For in agreeing to a uniform tariff, to be collected by the central government through its Customs Service, the states voluntarily gave up an important state’s right which each had guarded jealously—the right to collect and retain its own customs duties.

For this reason, August 5, 1789, is an important though little-known date in history. On this day Captain James Weeks sailed his brigantine, Persis, into New York Harbor with a miscellaneous cargo of merchandise from Leghorn, Italy. The cargo was assigned to Mr. William Seton, who paid the Collector of Customs a total of $774.71 in duties—the first payment of duties destined for the Treasury of the United States.

Captain Weeks’ payment was a modest one, but at least it was a prop under the financially shaky young government. And for the next 124 years—until the income tax amendment to the Constitution was adopted in 1913—the Federal government’s primary source of revenue was to be the money collected by Customs on merchandise and materials brought into the United States from abroad.

Until they were bound together by the Constitution, the thirteen states were not a nation. They had fought for more than six years for freedom from political, economic and military domination. They had struggled through incredible hardships, physical and financial. They had won their victory. But they were not a nation.

Throughout the struggle, they were linked together in a loose confederation in which each state was entirely independent of the others. The move toward confederation came on September 5, 1774, when state delegates gathered in Philadelphia to organize the congress known as the Continental Congress. Each state was represented by one delegate, and each delegate had one vote. Peyton Randolph of Virginia was elected president of the Congress—and it is to be noted that he was not referred to officially or unofficially as the President of the United States.

The members of this Congress hammered out the Declaration of Independence and signed it on July 4, 1776. But not until two years later were the Colonies joined together by a formal agreement, the Articles of Confederation and Perpetual Union Between the States. In these Articles the Colonies called themselves the United States of America, but they remained a union of independent states. Having gone to war to free themselves from a strong central government with an autocratic ruler, the Colonies distrusted centralized authority and each was jealous of its sovereignty.

The result was that the central government was reduced to the status of a pleader for money. It had no power to levy taxes directly. It could only appeal to the states to contribute to the expenses of the central government in proportion to the assessed value of their land. As a matter of fact, whenever the central government did ask the states for funds, as likely as not the states simply ignored the request.

In 1781, during the final months of the exhausting revolution and while the outcome still was in doubt, the central government was in need of $9 million for operating expenses. The Congress thought it possible to raise this amount by borrowing $4 million and then asking the states to contribute the additional $5 million. But the states responded to the urgent appeal with only $442,000. North and South Carolina, Georgia and Delaware contributed nothing. At times it seemed that if the British didn’t defeat the Revolution, an empty treasury would.

During and after the American Revolution, the tariff situation was an unholy mess. Each state had its own tariff laws, with the exception of New Jersey, which had none. The states often set up tariff barriers against each other, sometimes for protection and sometimes for reprisal. The dickering amongst them was continual and the maneuvering for advantage fierce.

On one occasion, New York, Connecticut and New Jersey plunged into a three-way fight that to later generations might seem little more than hilarious comedy—but there was nothing comic about it at the time for those involved. It began when the New York legislature reached the conclusion that the Connecticut Yankees and the New Jerseyites were taking too many dollars out of New York City, and giving too little in return.

It was true that Connecticut merchants supplied most of New York’s firewood, for a tidy profit. And the farmers of New Jersey were sending boatloads of chickens, eggs, vegetables and fruit across the river, selling them, and taking back dollars. The imports from Connecticut and New Jersey were running ahead of the exports to these two states by too great a margin—or so the gentlemen in the New York legislature figured. The legislature passed a tariff law which imposed a tax on every stick of Connecticut wood and each New Jersey egg, chicken, duck, goose and cabbage brought into the city. The chicken peddlers from New Jersey had to get clearance papers and pay taxes on each pullet or hen, each basket of eggs and each head of cabbage. Stovewood had to be measured and counted at the Customs House and taxes paid on the spot.

Naturally this state of affairs irked the New Jersey folk, whose legislature promptly looked around for a means of retaliation and, in so doing, spotted the City of New York’s lighthouse standing on Sandy Hook. It was solemnly agreed by a majority that this lighthouse should not stand out there flashing an untaxed warning to ships headed for the New York Harbor. And so the legislature voted to place an $1,800-a-year tax on the lighthouse.

In Connecticut, the merchants were no less aroused than the farmers of New Jersey. It was agreed that a boycott of New York products was justified. Whereupon the merchants formed themselves into an association dedicated to the proposition that no loyal Connecticut merchant would either buy or sell anything in the City of New York. Any member who violated the agreement was subject to a fine.

Again, the British in 1783 decided that only British vessels would be permitted to handle cargoes in the West Indian trade. This proclamation so enraged New Yorkers that they retaliated by laying a double duty on all cargoes arriving in British vessels. New Hampshire, Rhode Island and Massachusetts were equally incensed—and declared that no cargoes could leave their harbors if carried in a British ship.

But these tremors of righteous outrage did not stir the Connecticut Yankees. They saw the situation as holding the promise of fat profits. The ships of Great Britain were invited to use Connecticut ports, duty free. And then Connecticut further enraged its neighbors by imposing a tariff on goods coming into the state from Massachusetts.

Virginia and Maryland also were having their troubles. Virginia owned the lighthouses on both sides of the Chesapeake Bay entrance and demanded fees from every vessel entering the bay. Maryland, on the other hand, claimed the entire width of the Potomac River, citing old land charters to the effect that even if a vessel were tied to the Virginia shore, it still was in Maryland waters.

Connecticut, on the basis of a royal charter of 1662, laid claim to the Wyoming Valley, which Pennsylvania regarded as her own. The two states were on the verge of open war before cool heads prevailed and Pennsylvania’s claim was recognized as the more valid.

With such discord between the states, even in time of war, the winning of the Revolution and the survival of the Union approached the miraculous.

Merchants in Philadelphia and then in Boston decided to follow the lead of the New York merchants. Orders went out to English shippers not to ship more goods to America as long as the Stamp Act was in effect. In this tempest the seeds of revolution were broadcast, and it was a tempest that would not subside until the Colonies had won their freedom from Great Britain.

Despite the jealousies and the conflicts between the Colonies during and after the war, the people realized that only in unity could there be any real hope for survival. This realization moved leaders among the thirteen states to call the Constitutional Convention of 1787. And here it was they hammered out the Constitution which was to become the foundation for the United States of America and a blueprint for freedom.

The Convention met in New York City on May 14, 1787. The delegates chose George Washington as presiding officer of the Convention. The document produced at this convention by no means won the unanimous approval of the representatives from the various states. There were disagreements and reservations to the Constitution. A total of sixty-five qualified delegates were certified by the states to attend the Convention but ten of these did not attend. When the document was completed there were only thirty-nine who actually signed on September 17, 1787. Sixteen failed to sign, and some of those who did sign had reservations. This document was sent by George Washington to Congress, and Congress sent it to the various legislatures for their consideration.

The greatest fear at the time was that a central government would become too powerful. Having thrown off the yoke of one oppressive government, the Colonies wanted no part of another.

Washington reflected these fears when he sent the newly drafted Constitution to Congress. He was sensitive to the fact that the states would have to surrender some rights if they hoped to have an effective central government. In a letter to the president of the Congress, dated September 17, 1787, he said in part:

... It is obviously impractical in the Federal government of these States to secure all rights of independent sovereignty to each, and yet provide for the interest and safety of all. Individuals entering into society must give up a share of liberty to preserve the rest....

The Constitution went into effect on March 4, 1789, and Congress acted with remarkable swiftness on measures which would insure the financial stability of the young government. On April 8, 1789, James Madison arose in the House of Representatives and said:

I take the liberty, Mr. Chairman, at this early state of the business, to introduce to the committee a subject which appears to me to be of the greatest magnitude; a subject, sir, that requires our first attention, and our united exertions....

The deficiency in our treasury has been too notorious to make it necessary for me to animadvert upon that subject. Let us content ourselves with endeavoring to remedy the evil. To do this a national revenue must be obtained; but the system must be such a one, that, while it secures the object of revenue, it shall not be oppressive to our constitutents. Happy it is for us that such a system is within our powers; for I apprehend that both these objects may be obtained from an impost on objects imported to the United States.

After some discussion Madison proposed a resolution to impose a flat fixed duty on rum, liquors, wines, molasses, tea, pepper, sugar, coffee and cocoa, with a percentage tax on all other imported articles, the tax to be based on the value of the imports at their time and place of importation. The resolution also recommended a tonnage tax on all vessels doing business at American ports.

Madison’s resolution touched off a fight between those who favored free trade and those who favored heavy duties to protect the interests of their particular region. There were those who wanted a heavy tonnage tax on vessels so that the American shippers would be given an advantage over foreign vessels. There were those who wanted to protect industries in their own states from the European competition. Congressmen from the agricultural states leaned heavily toward free trade.

Thomas Fitzsimons of Pennsylvania came forward with an amendment to the Madison resolution in which he asked that the duties be placed not only on the imports suggested by Madison but also on beer, ale, porter, beef, pork, butter, candles, cheese, soap, cider, boots, steel, cables, cordage, twine, malt, nails, spikes, tacks, salt, tobacco, snuff, blank books, writing, printing and wrapping paper, pasteboard and cabinet ware, buttons, saddles, gloves, hats, millinery, castings of iron, leather, shoes, slippers, coaches, chariots, carriages, nutmeg, cinnamon, cloves, raisins, figs, currants, and almonds.

Madison argued that his proposal was only a temporary one and that as far as possible the trade should be free. He said, “If my general principle is a good one, the term commerce ought to be free, and labor and industry left at large to find its proper object, the only thing which remains will be to discover the exceptions which did not come within the rule that I have laid down....”

It was Madison’s belief that the cheapness of land in the United States, compared with the cost of land in other nations, gave this country a great advantage in agricultural trade. He said that so far as manufacturing was concerned, “Other countries may and do rival us.” But then he added, “We may be said to have a monopoly in agriculture; the possession of the soil, and the lowness of its price, give us as much a monopoly in this case, as any other nation or other parts of the world have in the monopoly in any article whatever; but with this advantage to us, that it cannot be shared nor injured by rivalship.”

Nevertheless, while favoring free trade, Madison conceded that if America did leave her ports entirely free then the country would suffer. He said, “If America was to leave her ports perfectly free, and make no discrimination between vessels owned by her citizens and those owned by foreigners, while other nations make this discrimination, it is obvious that such policy would go to exclude American shipping altogether from foreign ports, and she would be materially affected in one of the most important interests.”

Despite sharp and often bitter differences, the young Congress was aware that sectional interests were secondary to the absolute necessity for action in collecting revenue. Within a short time it had put together the first Tariff Act. It was titled “An Act for laying a duty on goods, wares and merchandise imported into the United States.” And on July 4, the thirteenth anniversary of the signing of the Declaration of Independence, President Washington signed into law the act which was the second to be passed by the Congress.

Then Congress quickly set up the machinery for the collection of the tariff. This was done in the Fifth Act, “To regulate the collection of the duties....” The bill was sent to President Washington for his signature on July 31, which fell on Friday. On the following Monday the President sent to the Senate a list of about one hundred appointments to Customs offices. The Senate advised and consented to about half this list but on the following day gave the President an unexpected jolt. The Senate, without warning, refused to consent to the appointment of Colonel Benjamin Fishbourn to be Naval Officer (auditor) at the Port of Savannah. Fishbourn had served with distinction in Washington’s command during the Revolution and apparently had a spotless reputation in civilian life.

Washington did not make a fight over Fishbourn’s rejection even though the Senate action no doubt seemed to him to be a petty and totally unwarranted assertion of veto power. He did send a message to the Senate which called to mind later clashes between Chief Executives and Congress, pointing out that at least the Senate might have done him the courtesy of inquiring into his reasons for appointing Fishbourn.

Perhaps under different circumstances Washington would not have been so mild in his reaction to the Senate veto. But the need to establish an organization for collecting revenue was imperative, and Washington perhaps felt this was no time for a fight over executive and legislative prerogatives. The most pressing need was unity in the government.

And so was the Customs Service created to help bring financial stability to the nation at a critical time. Despite all the trials and difficulties, the Customs Service collected more than $2 million for the Treasury in its first year of operation.

3
A PRESIDENT IS BAMBOOZLED

There was little cause for gaiety in any part of the nation in the summer of 1808. Gloom hung over the country and particularly over Washington, where even the new capital building had not been completed and the problems of getting the young government firmly established sometimes seemed insurmountable.

The reason for the gloom was the worsening relations between the United States and Great Britain and the threat of American involvement in the brawling affairs of Europe, where the British were at war with the French.

In a desperate move to avoid being drawn into the conflict, President Thomas Jefferson had called the previous year for an embargo on all overseas shipping. He felt such drastic action necessary because British warships had been seizing American vessels headed for France. Even worse, the British had been forcing American sailors from the ships on the high seas and impressing them into British naval service by the hundreds.

Under these circumstances, Jefferson decided it would be better to withdraw American shipping from the seas and deny American supplies to the combatants, rather than risk plunging the nation into another war. His proposed embargo had been fought over bitterly in Congress. But in December, 1807, the Embargo Act had been passed and shipping had come to a halt. Even trade with Canada would be stopped with the enforcement of a land embargo—except for the commerce carried on by smugglers defying Federal Customs officers.

Now, seven months after the start of the embargo, the nation was in deep trouble. New England was practically paralyzed. Ships which had engaged so busily in world commerce a few months earlier stood rotting at the wharves. The number of unemployed was alarming. Businessmen who depended on overseas trade were going bankrupt. There was scarcely anyone in the country who did not feel the depressing effects of the embargo. The nation’s economy had sunk to its lowest point since the Revolution.

President Wilson was to say of this period: “The States themselves suffered from the Act more than the nations whose trade they struck at. America’s own trade was ruined.”

Onto this gloomy stage in mid-July, 1808, strode the so-called Chinese mandarin, Punqua Wingchong, and before two months had passed this Oriental fraud had half the country hooting with derisive laughter and the other half red-faced with rage.

Punqua Wingchong. It’s a name to remember in American history because he helped to bamboozle a President of the United States in one of the gamiest confidence games ever pulled against a trusting Chief Executive. But he was only the puppet; the man who pulled the strings behind the scenery was John Jacob Astor, the merchant prince.

The hoax began to unfold in June, 1808, when Astor and the Boston firm of J. & T. H. Perkins applied to the government for permission to send a ship to Canton to bring back certain property allegedly owned by the applicants. The government refused to lift the embargo for such a venture and as a matter of policy rejected the application.

The rejection would have discouraged the average merchant, but John Jacob Astor did not build his fortune by being an average man. Soon after the application was refused, Senator Samuel L. Mitchill of New York was told a disturbing story. An anonymous informant advised him that a distinguished Chinese mandarin, who divided his time between New York City and Nantucket, was the unfortunate victim of the shipping embargo. It was said that the mandarin, Punqua Wingchong, had made the long and arduous voyage from Canton to collect several large debts owing to his grandfather’s estate. Then he had been caught by the embargo and had been unable to return to his homeland to participate in mourning rites for his venerable grandfather, who had died suddenly.

It was suggested to Mitchill that the situation was one which quite possibly could create ill feeling between the governments of the United States and China if Wingchong chose to blame the Jefferson administration for the predicament he found himself in, being a virtual prisoner in a foreign land. Wingchong was reputed to have considerable influence among the government class of China, and this influence could be used against American traders in the future if he were not permitted to return home.

The journals of the time were not clear as to whether the Senator ever met Wingchong face to face. In all likelihood he did not. But he was moved to such sympathy by the pictured plight of the hapless mandarin that he penned a personal appeal asking President Jefferson to intervene. The Senator had a distinguished background in science and literature and was a professor of natural history in the College of Physicians and Surgeons in New York City. It was later to be said that Senator Mitchill was “strangely deficient in that useful commodity called common sense,” but his motives seemed sincere enough when he wrote to the President on July 12, saying:

Sir:

Punqua Wingchong, a Chinese merchant, will be the bearer of this note of introduction. He came to New York about nine months ago, on business of a commercial nature, and has resided during that time, part time, partly here and partly in Nantucket. Having completed the object of his visit to the United States, he is desirous of returning to Canton, where the affairs of his family, and particularly funeral obsequies of his grandfather, require his solemn attention.

This stranger is represented to me as a man of respectability and good standing in his country; and is consequently entitled to a corresponding regard and treatment in ours.

The chief object of his visit to Washington is to solicit the means of departure, in some way or other to China, but he feels at the same time a strong desire to see the chief executive officer of the United States. He will be accompanied by Mr. Palmer, an inhabitant of New York, who will aid him in stating his request and explaining his meaning. This gentleman, in addition to many other valuable qualities, possesses admirable skill in acquiring languages; and he is perhaps already master of more living tongues than any person among us—as an evidence of which he has already made considerable progress in China.

While I recommend these two persons to the notice of the President I beg leave to accompany the recommendation, with the highest expression of my high and respectful consideration.

Sam’l L. Mitchill.

Armed with the Mitchill letter and dressed in the finest of silks and brocades, Punqua Wingchong journeyed to Washington and no doubt created a stir of excitement throughout the city, where visitors from the Orient were not a common sight. Unfortunately, or perhaps otherwise, Wingchong and his companion, Mr. Palmer, found they could not deliver the letter to the President in person. Mr. Jefferson had left the city for a rest at Monticello.

The Mitchill letter was then forwarded to Monticello along with a note signed by Punqua Wingchong “praying permission to depart” from the United States with his retinue and his belongings in a vessel of his own choosing.

President Jefferson was moved by Wingchong’s appeal. Not only did he feel sympathy, but he felt the situation presented an opportunity to establish better relations between his government and the rulers of China, which was becoming an increasingly important customer in foreign commerce. On July 25, the President wrote to Secretary of the Treasury Albert Gallatin saying:

Dear Sir:

... Punqua Wingchong, the Chinese Mandarin, has, I believe, his headquarters at New York, and therefore his case is probably known to you. He came to Washington just as I had left it and therefore wrote to me praying permission to depart for his own country with his property in a vessel to be engaged by himself.... I consider it as a case of national comity, and coming within the views of the first section of the first Embargo Act. The departure of this individual with good disposition may be the means of our making our nation known advantageously as a source of power in China to which it is otherwise difficult to convey information. It may be a sensible advantage to our merchants in that country. I cannot therefore but consider that a chance of obtaining a permanent national good should outweigh the effect of a single case taken out of the great field of the embargo. The case too is so singular that it can lead to no embarrassment as a precedent....

(signed) Th. Jefferson.

Gallatin detected an odor of intrigue in the situation because Wingchong requested permission to make the trip to China in the Beaver, a “full-bottomed ship of 427 tons with a capacity for 1,100 tons of cargo,” and the Beaver had been constructed especially for John Jacob Astor. Gallatin was well aware of the fact that scarcely a month had passed since Astor had been denied permission for a Canton voyage. But Jefferson had issued his instructions and Gallatin was a loyal lieutenant.

On August 3, 1808, Gallatin wrote to David Gelston, Collector of Customs in New York City, ordering him to make an exception and lift the embargo. His letter said in part:

Sir,

Punqua Wingchong, a respectable Chinese, who had with the leave of his government come to the United States for the purpose of collecting debts due to his father’s estate, having obtained the special permission of the President of the United States to engage a vessel to carry himself together with his attendants and property to his native country, and having made arrangements for that purpose with the owner of the ship Beaver of 427 tons or thereabouts; you would be pleased to permit that vessel to depart for Canton on the following terms and instructions....

The conditions, previously outlined by Jefferson, were that the vessel could sail with equipment and provisions for crew and passengers. Punqua Wingchong was to be permitted to be accompanied by his “attendants” along with their baggage and personal effects and also about $45,000 ... “either in specie or in furs, cochineal, ginsang, or any other specie of merchandise of his choice.”

After giving these instructions to Gelston, Gallatin wrote a cautious letter to Jefferson saying that he had carried out his orders and Wingchong “has engaged Astor’s vessel to which we had on general grounds refused permission.” Then he added: “Had I had any discretion as to the application itself I would have hesitated; for I apprehend that there is some speculation at bottom; and every deviation from general rules is considered a favoritism and excites dissatisfaction.”

He also warned Jefferson that to lift the embargo for one vessel would open the way for others to make direct appeals to the President for special treatment. Jefferson did not agree with his Secretary. He insisted that important diplomatic and commercial benefits might accrue from the courtesies shown Wingchong and they were “likely to bring lasting advantage to our merchants.”

Gallatin was right. The uproar came when Collector Gelston authorized the voyage and workmen began swarming over the Beaver to prepare her for the long sea voyage. With other vessels standing idle and deserted, such a burst of activity could hardly be kept secret along the waterfront. In all the United States, this lone ship was the only one being prepared for a voyage.

The first protest came from a group of Philadelphia merchants who wrote to Secretary Gallatin on August 10 suggesting that “avarice and perjury” were being used to obtain the special dispensation for the voyage of the Beaver. As for Punqua Wingchong, the merchants said they were satisfied he was an impostor “and an insignificant instrument in the hands of others.” He was unknown to Philadelphia traders who had been stationed in Canton as agents for years. At best he was only a petty shopkeeper without credit and not a wealthy member of the mandarin class, they insisted. It was pointed out to the President that the mandarins of China never left their own country.

New York newspapers, getting wind of the Beaver’s voyage, described Wingchong as “a Chinaman picked up in the port,” “a common Chinese dock loafer,” “a Lascar sailor,” and even as “an Indian who had been dressed up in Astor’s China silks and coached to play his role in the affair.”

The New York Commercial Advertiser on August 13 said in a page-one story:

A first rate merchants’ ship, which will be navigated by about 30 seamen, is preparing for sea, and is expected to proceed on a voyage to Canton, in a few days, under special permission from the President of the United States.