From the Archives: A National Treasure Rediscovered

Sometime in the mid-1970s, while Director Rex Davis was standing up ATF as an independent bureau, Public Information Officer Howard Criswell, Jr., presented him with an important document for ATF’s upcoming Bicentennial exhibit. Criswell had successfully bid on the document at an auction in New York City.

This document turned out to be a historic letter in which the first Treasury Secretary, Alexander Hamilton, describes the method for measuring the proof of distilled spirits for taxation. Hamilton’s letter was rediscovered during preparations to move to the new ATF National Headquarters.

Authentication

The process of confirming the authenticity of this long-forgotten manuscript shed new light on how Alexander Hamilton’s ideas presaged ATF. According to the authenticator, James Lowe, “As far as I have been able to determine, your Hamilton manuscript is unpublished, and from its content and date may be Hamilton’s first attempt to use duties on alcohol to collect revenue for the U.S. Government. I see it, by its very content, to be a document espousing principles and techniques upon which the Bureau of Alcohol, Tobacco, Firearms and Explosives, in its infancy, was being based, in other words, one of the “foundation” documents of the ATF.”

Founding Father

Alexander Hamilton was the first Secretary of the Treasury, serving under President George Washington. In 1790, his two “Reports on the Public Credit” successfully convinced Congress that the federal government should pay off states’ debts from the Revolution. Two later reports resulted in the creation of a national bank and federal protection of businesses. Hamilton also developed a plan for raising and collecting revenue.

Federalist Papers

Hamilton co-authored the Federalist Papers, a series of 85 essays published between 1787 and 1788. Considered a classic of political literature, the Papers outlined every federal department in place today.

ATF’s Roots in the IRS

Hamilton saw the liquor business and other “luxury” industries as revenue sources for payment of the American Revolution war debt. He pushed for a tax levy on “spirits distilled within the United States.” Despite strong opposition, Congress established the first internal revenue statute with the Act of March 3, 1791.

That’s where ATF comes in… flash forward about 50 years or so. In 1862, Congress created the Office of Internal Revenue within the Department of the Treasury specifically to collect taxes, including highly lucrative tariffs on imported distilled spirits and tobacco products.

By 1863, tax evasion and organized crime activities had become so widespread that Congress authorized the hiring of three detectives to assist in investigating and prosecuting alcohol tax evaders. This action was the first coordinated effort between tax collection and law enforcement; the three detectives were forerunners of today’s ATF agent (a story to be continued later).

Hamilton Revealed

This manuscript is a working draft of a “circular letter,” an official memo from the Treasury. It reveals one of Hamilton’s earliest efforts to raise money to pay off Revolutionary War debt by imposing duty on “distilled liquor” at customs points under his jurisdiction. The document includes handwritten corrections that Hamilton dictated to an aide. The final printed broadside version was distributed to customs collectors in every U.S. port.

It was a frequent practice for 18th Century printers to destroy original documents, no matter how important the author. Original manuscripts like this one—found in the ATF Historic Archives— are extremely rare. Very few of Hamilton’s original working drafts of circular letters to U.S. customs collectors have survived and those that have are the utmost rarity.

The Circular Letter

The manuscript is dated December 18, 1790, barely 14 months into Hamilton’s term as Secretary of the Treasury.

In this circular letter, Hamilton attempts to provide his customs officers with new tools to more efficiently do their jobs, introducing them to a new device that he wants them to use for assessing the proof of alcohol and spirits for taxation purposes. “You will have perceived by the Act of the last session {of Congress} entitled, ‘An Act making further Provision for the payment of debts of the United States,’ that, after the end of the present month, the duties on distilled spirits are regulated according to certain classes of proof to be determined by Dycas’s Hydrometer… Inclosed are directions for using the hydrometer {not present}… It may serve to aid the officers to be informed, that the first of the classes of the proof mentioned in the law, corresponds to gin; the second with St. Croix rum, the third with Antigua rum, the fourth with Jamaica spirits, the fifth with the usual strength of high wines, and the sixth or last with what is called alcohol.”

Hamilton also recommends a second type of measuring device to confirm readings on the Dycas’s hydrometer. “The success of it cannot fail to aid materially to the security and efficacy of the revenue…” However, he warns: “But it will not do to rely upon this till Experience, after a number of trials, shall have evinced the fact,” requesting, “You will of course communicate to me, from time to time, such observations concerning the matter as shall be suggested by the course of practice.” In a postscript he added, “You will also receive herewith {not present} a tin Cylinder which you will find useful for containing the liquor to be proved.” The Dycas system for assessing the proof of alcohol ultimately proved too inaccurate for its intended use and eventually had to be scrapped.

The signature of “Alex Hamilton” denotes the Secretary’s approval to formally print and distribute the circular letter.

The Story Behind the Story

Alexander Hamilton may have been a great statesman but he was not necessarily a well-liked boss. After reading the contents of the manuscript, historian and author Richard Brookhiser commented, “That’s my boy… he was a real micromanager and his personality was not of the tenor to neither win friends nor influence enemies.”

This leads us to his untimely death…

The Famous Duel

After the death of President Washington, the leadership of the Federalist Party became divided between John Adams and Hamilton. After Adams became President, Hamilton constantly advised the members of the Cabinet and endeavored to control Adams’s policy. On the eve of the Presidential election of 1800, Hamilton wrote a bitter personal attack on the President that contained confidential Cabinet information. Although this pamphlet was intended for private circulation, the document was secured and published by Aaron Burr, Hamilton’s political rival. Based on his opinion of Burr, Hamilton deemed it his patriotic duty to thwart Burr’s ambitions. Burr forced a quarrel and subsequently challenged Hamilton to a duel. The duel was fought at Weehawken on the New Jersey side of the Hudson River opposite New York City. At age 49, Hamilton was shot, fell mortally wounded, and died the following day, July 12, 1804. His death was generally deplored as a national tragedy.