British Commissioner of Customs Henry Hulton recalled that prior to the Revolutionary War, “[T]here was scarce a port in America where an Officer had endeavoured to make a Seizure, or refused a complyance with the will of the People that he had not been tarred, & feathered” (19–21). Fast forward to 1797, when, in spite of Alexander Hamilton's admonishments to enforce customs bonds against merchants with “exact punctuality,” the Charleston custom house had accumulated $580,000 in unpaid bonds, a mess that would take decades to sort out (88–89). Fast forward again to 1804 and 1805, when United States merchants expanded their trade with freed people in the newly independent Haiti, flagrantly avoiding custom house authority and violating United States policy in antagonizing France; or again to 1808, when James McCulloh, Collector of the Customs in Baltimore, was on the docks frenetically pushing merchant ships out to sea before Thomas Jefferson's embargo could be announced.

Gautham Rao's colorful history of custom houses in the early republic is a welcome addition to a venerable body of historical scholarship examining the making of the United States as a nation state through the lens of specific state agencies. Custom houses were crucial to state-making because they were responsible for collecting the vast majority of federal government revenue. Customs revenue was the linchpin of Hamilton's plan for the public credit and remained the basis for federal finance through the Civil War. However, Rao's emphasis is not so much on national policy but on the delicate balance custom house officials achieved in implementing policy while appeasing skeptical and powerful merchants. Rao concludes that, prior to 1816, custom houses held, at best, a “negotiated authority;” that is, authority negotiated heavily with local merchants where the merchants often appear to have an upper hand. At times in the account, the “state” seems to be simply hanging by the coat-tails of the merchants, happy with whatever breadcrumbs they agree to give, and yet, somehow, improbably, the revenues add up. Hamilton's public credit plan remains solvent, and the United States ends up on a sound financial footing.

As Frederick Dalzell emphasized in his dissertation of 1993 entitled “Taxation with Representation: Federal Revenue in the Early Republic,” the United States Customs Bureau faced a profound challenge in the Founding Era, that is, according to Dalzell, “wresting substantial amounts of revenue from a citizenry that was notoriously wary of government power generally and taxation specifically.” The nation was recovering from a war for independence, the championed proximate cause of which was illegitimate customs duties and collection practices. Rao's in-depth archival work of custom house records goes beyond Dalzell by giving the reader access to more evidence, over a longer period, of the fraught nature of customs collection in this tenuous atmosphere. Rao, importantly and ambitiously, takes a national view and reveals that consistent tensions faced custom houses nationwide. Perhaps unsurprisingly, however, the “negotiated authority” of the custom house led to dramatic variations in enforcement practices based on the cast of personalities involved in different locations. The depth of Rao's archival work allowed him to enrich the account with colorful anecdotes throughout.

Rao's narrative concludes in the aftermath of the War of 1812, when a number of events caused the harmony of the earlier discretionary system to dissolve. After the famous collapse of the financial system during the period between the First and Second Banks of the United States, the federal government faced pressure to find solid sources of revenue, and turned to custom house reform. Official policy began to require the strict enforcement of customs bonds, checks on the practice of false customs invoices, and a clampdown on the numerous minor policy infractions that characterized the earlier era. Moreover, Rao describes, but perhaps not with enough emphasis, the importance of an actual change in tariff policy toward explicit protectionism for Northern industry. Rao concludes that the formalization of customs collection and the dismantling of discretion in enforcing customs policy led to the Nullification Crisis, and ultimately, perhaps, to the Civil War.

Rao's book is successful on many levels, particularly in revealing a large amount of archival material that had previously been unexamined. Rao's conclusion, in the final two chapters, that the federal government breakdown reflected in the Nullification Crisis was directly caused by the rejection of the “negotiated authority” of custom houses could have been enhanced with even greater discussion of national political and economic trends. The chasm between North and South was widening, as the North underwent industrialization and the interests of Northern laborers, manufacturers, and merchants came to be viewed as at odds with those of Southern slaveowners and planters. Moreover, Because of Northern political pressure, actual tariff rates increased in 1816 and 1828. Rao's final chapters might have given greater attention to regional differences, as custom houses faced both reform in enforcement and a policy shift toward protectionism.

Rao states that, initially, “[t]he cozy relationship between custom houses and commerce did much to legitimize the new federal government” (88). One could look optimistically at Rao's account as a positive story of collaboration between market actors and the government that succeeded in building necessary legitimacy for the American state during a vulnerable period. Rao's evidence, however, raises the question of how national authority was achieved to the degree he describes in the face of a powerful group of merchants operating on the logic of profit maximization rather than national interest. The question lingers at the end of the book. Rao's book will remain as a central work in understanding custom houses' practices and nation-building in the early republic.