Fruit Loopholes

As America’s society fractured during the lead-up to the Civil War, a senator from Vermont by the name of Justin Smith Morrill led the push for tariffs which reversed a few decades of generally unencumbered trade. The tariffs were often cited by some southerners as a non-slavery reason for secession although that’s likely overstated — very few Civil War historians believe that tariffs were the main reason for the war. (This Wikipedia section discusses that point.) Similarly, the tariffs — which were extended once war broke out — were likely designed to raise revenue for the Union army, but weren’t all that impressive in doing so. After the war, Congress began rolling many tariffs back. For example, the Tariff of 1872 exempted “fruit plants, tropical and subtropical, for the purpose of propagation or cultivation” from tariffs. Not bad if you’re importing pineapple plants or coconut trees, but totally worthless if you’re importing oranges by the crate.

Until someone screwed up.

If you look up the law in question, you’ll see that on page 9, it doesn’t say “fruit plants, tropical and subtropical, for the purpose of propagation or cultivation.” It says “fruits, plants, tropical and subtropical, for the purpose of propagation or cultivation” — there’s an extra “s” and a comma after “fruits.” (A screenshot of a scan is above.) Typographical errors happen, as long-time readers of this email newsletter surely know, and they’re often nuisances not worth otherwise worrying about. But when it comes to errors in the law, the story changes.

On February 20, 1874, Senator John Sherman from Ohio (best known today as the lead sponsor of the Sherman Anti-Trust Act) took to the Senate floor to address the typo, as recounted in the New York Times. While the purpose of the words “fruit plants,” as proposed and passed by Congress, was to create a narrow exception to the tariff, the typo resulted in “fruits” being treated as an entirely separate category which was similarly now tariff-free. According to a report from 1947 (yes, nearly 75 years later), the Treasury department originally treated the error as a non-issue and kept to the original intent of Congress, but reversed course soon after.

But it was too late. A number of importers had already walked through the loophole, bringing in duty-free lemons, limes, oranges, and more.
As Sherman noted in his comments to the Senate this ruling resulted in $500,000 in lost tax revenue. Accounting for inflation, that’s equivalent to $10 million today.

The Senate fixed the error by adding hyphen between “fruit” and “plants” on May 9, 1874.

Bonus Fact: War and tariffs both play a role in why this thing is typically called a kiwi or kiwifruit. Originally, the fruit was marketed as the Chinese gooseberry, but Cold War concerns surrounding China hampered sales. To make matters worse, at the time, American importers had to pay higher tariffs for berries and melons than they did for other fruits, and customs agents assumed that the fruit was a berry due to its name. The producers and importers got together to rename the fruit for these reasons (and importers quickly rejected the name “melonette” because of the tariff problems). The name kiwi comes from a long-standing nickname for New Zealanders, where the fruit is commonly (but less often nowadays) from.

From the Archives: Fruits and Vegetables (and Prank Callers, Too!): Because of tariffs, the Supreme Court had to decide if tomatoes were fruits or vegetables.

Related: “Growing Tasty Tropical Fruits in Any Home, Anywhere,” a book averaging 4.4 stars on 19 reviews, in case you want to avoid some import tariffs.