This Typo Cost America About $40 Million

Way back in 1872, a comma replaced a hyphen in a significant government document, and the mistake ended up costing the US a huge sum of money.

The error occurred in a tariff act passed that same year. 

Tariffs — fees imposed on imported goods — are one of the oldest kinds of taxes in the US. The government used to support a substantial portion of its budget through them.

The first was enacted as part of the Tariff Act of 1789.

Years passed, the North and South warred, and the government wrote up a few other tax laws. Finally on June 6, 1872, President Ulysses S. Grant’s administration issued the 13th tariff act, which included a “free list” — items exempt from taxation upon entry to the US.

The free list included “fruit, plants tropical and semi-tropical for the purpose of propagation or cultivation,” according to a New York Times report from 1934. 

A previous act from 1870, however, placed a 20% tax on oranges, lemons, pineapples, and grapes and a 10% tax on limes, bananas, plantains, shaddocks (also known as a pomelos), mangoes, and coconuts.

Technically, the act of 1872 didn’t repeal the act of 1870. But some importers claimed the word “fruit,” since separated by a comma, indicated the free entry of all tropical or semi-tropical fruits and plants. Grammatically, they weren’t wrong. 

Initially, the Secretary of the Treasury, then William Richardson, said the comma was intended to be a hyphen, making the line “fruit-plants tropical and semi-tropical.” The hyphen makes “fruit-plants” a compound noun. The tax stayed.

Soon, importers began suing over Richardson’s decision to tax tropical and semi-tropical fruits, as Priceonomics recently noted.

As a result, in December 1874, Richardson changed his mind, making all fruit free to import. He even started issuing refunds — to the tune of about $US2 million or $US40 million, adjusted for inflation.  

Naturally, the government doesn’t like giving its money back, and Congress launched a huge investigation. As it turns out, the comma was, indeed, supposed to be a hyphen. The copying clerk made a typo. 

Although unable to renege on the fees already returned to importers, Congress passed a law on May 9, 1874 (“An act in relation to the customs duties on imported fruits“) explaining the issue, and all subsequent acts contained the hyphen. 

Considering $US2 million was nearly 1.3% of America’s total profit from tariffs, Congress was, rightly, pretty peeved. It then also passed laws prohibiting the Secretary of Treasury from “reversing himself,” unless approved by the attorney general or the court system, according to the Times.

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