A Short History of the Customs Agency and Smuggling

Smuggling is a way of life in Salem. It stretches back to the 17th century. The Daniel’s House on the corner of Daniels and Essex Street was built in 1667 and is connected to one of the older tunnel systems in town. Richard Derby’s wharf was probably connected to the old colonial fort on Winter Island.  Avoiding the Customs Official either British or American was a way of life.

Daniels House is one of the earliest homes in Salem which is connected to the tunnels.
Daniels House

They were not alone in this practice. Most of the American coast was involved. In fact the majority of New England seaports have tunnels running from the ocean. In1680 Gov. Andros  imposed duties on commerce on Delaware River spurring an increase of smuggling. By 1699 British Vice-Admiral Robert quarry writes,”Apprehend 4 Pyrates at Cape May. I  might have with ease secured the rest of them and the ship too had not the local officials entertained the Pyrates, conveyed them from place to place, furnished them with provisions and liquors, gave them intelligence, and sheltered them from justice. All the persons I have employed are abused and affronted and called enemies to the country for disturbing and hindering honest men.”. In New York City it cost a hundred pounds per man for Gov. Fletcher to ignore the smuggling. Captains of the ship had to pay a higher fee… Pirate Captain Tew often frequented his carriage about town.

Then in 1733 England passed the Molasses Act. This taxed non-British imported molasses 6% per gallon. Soon afterwards James Otis in NJ had said, “a very small office in customs can raise a man to fortune sooner than a post in government.”. Sometimes you could not count on bribery, so you had to have some tricks up your sleeve. One trick was to be granted a receipt for taxes paid on 8 barrels in one port, load up 72 more in another, then ad a ‘y’ to the eight on the receipt before selling the cargo in the last.

George Greenville

In 1760 George Greenville who was appointed by the penniless King George III to fill his coffers at the expense of the American colonies. The 1651 Navigational Act was enforced once more forcing any colonial ship to sail to a British port to be taxed before sailing to its final destination. Before this Greenville realized it cost the Royal Navy 8,000 pounds a year to collect 2,000 pounds in duties. He figured 700,000 pounds were lost each year from the American sea trade. Plus they hired customs agents from impoverished Scotland to collect the tax who were happy with their pay, bribes were not needed.

By 1764 in NJ ports were moved up river and to islands not charted to avoid taxation. The British would pay sailors to lead the them up the Mullica River to find the smugglers, but the sailors would only get them lost in the winding river full of branches and islands and jump ship. Customs agents were treated even worse in Salem. Tidewaiter James Rowe and Robert Wood were tarred and feathered on Common in 1769 and wheeled through town in a cart.

Now during the Revolutionary War the Salem merchant was able not only to bring goods into port customs free, but also to rob the British on the high sea. 67  Privateer ships in Salem with 10,000 men sailing them harassed the British merchant fleet. Elias Hasket Derby had 158 shares in these boats.  A life of a privateer made Elias Hasket Derby the first millionaire in the country along with many others in Salem.  He built a second mansion next to his first brick mansion on Derby Street just to store all of the stuff he confiscated from the British. His tunnels from these homes to his cousin’s home on Essex Street would inspire his son to expand the tunnels throughout town in 1801.

In 1778  733 ships were reported in England captured at a loss of 10 million Pounds by the privateers. American records from 1776 to 1782 state 1,200 ships captured with a loss to the English of 20 million pounds. Almost 20 times more than Greenville’s original complaints in 1760.

Portrait of Elias Hasket Derby Junior the man who built tunnels in Salem.
Elias Hasket Derby Jr.

Now Salem had experienced too much of a good thing. by the end of the war their was so many new fortunes  made and they wanted to keep them. It was a period of jubilee and they did not want it to end. Washington and Adams was very lenient of seaport merchants in the new nation. Duties were low. Then Jefferson removed the Federalist from his throne and the Democratic-Republican held sway. In his first year Jefferson imposed new custom duties in 1801. He had asked all of the local militias to help collect it. Now in Salem the local militias who were the grandfather to our National Guard units were the private bodyguard to the wealthy privateer or corrupt politician. Not only did they not help collect the duties, they actually helped Elias Hasket Derby Junior bury the tunnel dirt in the five ponds in the common. Junior had 159 subscribers pay to dig a new series of tunnels in town under the disguise of a park beautification program.

Custom House and Derby's privateer Warehouse
Custom House and Derby’s privateer Warehouse

In fact Elias Hasket Derby Junior’s grandfather’s house was connected to the tunnels. So when they raised his home to erect the new Custom House on the location, the site came with tunnels already attached to the basement. The previous building built by William Gray on Central Street was also connected to the tunnels. Maybe all of them in town were? The new Collector of Customs was one of those subscribers. Joseph Hiller was also the head Mason of the Essex Lodge in which the Derby’s were members of.  Other subscribers included other custom officials  like Surveyor of Ports Bartholomew Putnam , Inspector of Customs Henry Tibbets, Deputy Collector C. Cleavland, Inspector of Customs Elijah Haskell, Officer in the Custom House James Cheever, Secretary of the Navy and Custom Collector of Marblehead Benjamin Crowninshield, Revenue Agent Penn Townsend, and Revenue Cutter Captain Henry Prince Junior. You remember what Otis said about a small office in customs could do to one’s fortunes… The funny thing was that Benjamin Crowninshield was called up to New Londonbery NH to testify about the honesty of his friend who was the Collector of Customs in that town. New Londonbery was the town Elias Hasket Derby Junior moved to after leaving Salem. Also, who would want to collect honest customs in a town in which not too long ago they tarred and feathered custom officials?

Appointments to customs depended on political alignment. These appointments tended to be lost when the other political party took over the White House. That is how Hawthorne lost his patronage as a writer for working for the custom agency when the Whig Party won in Washington. On a side note Herman Melville took a job in customs in NYC when he was loosing money as an author. His grandfather Thomas was a Custom Officer in Salem from 1789-1814.

Six years after Elias Hasket Derby Junior extended the tunnels;  from  1807 to 1808 there was a 50% drop in tonnage of customs collected reported the Collector of Customs in Salem.  (Digest of Duties, 2 Vols. Manuscript Peabody Essex Museum). Now that was on hell of a dent made from Mr. Derby’s tunnels.

In time smuggling was not stopped in Salem from honest custom agents and personal, but shallow ports. The trade moved to Boston. It probably would of continued on to the modern day if the ports were deeper. So today our tunnels serve as sewers and conduits for our utilities and we are only left with their stories. A loss to us all.

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