The purpose of the U.S. Customs service on Puget Sound was to collect payment of customs duties. On February 14, 1851 the Customs District of Puget Sound was established. Simpson P. Moses, the first Collector of Customs immediately let it be known he meant to enforce the revenue laws to the letter. Olympia was the headquarters of the district but was considered inconvenient by those involved in shipping. Another duty of the Customs Collector was to investigate smuggling between international waterways. Since the Canadian Border and the Pacific Ocean were so distant from Olympia the Collector had difficulty enforcing the laws governing international trade. Thus it was suggested that the Port of Entry be established at Port Townsend.

U.S. Presidents appoint Collectors and in 1853 President Franklin Pierce appointed Colonel Isaac N. Ebey of Whidbey Island, at a salary of $1200 per year. Ebey agreed the port needed to be more central to the shipping activity and so it was moved to Port Townsend in 1854. It remained at Port Townsend until the infamous Victor Smith saga, who managed to get it moved to Port Angeles, where incidentally he had many investments. After years of infighting between Smith and the Port Townsend residents the Customs House was removed to Port Townsend in 1866.

In 1893 President Cleveland appointed James C. Saunders to the post of Customs Collector at Port Townsend. He had previously been a clerk in the House of Representatives, a private secretary to Senator Gorman, and the Executive Clerk to President Cleveland. In 1888 he was appointed as Indian Inspector on the Coeur d'Alene Reservation.

James C. Saunders was a Southerner born in Memphis Tennessee in 1854. His father was Rolfe Saunders a newspaper writer also born in Tennessee and his mother was Mary Eliza Anderson from Alabama. He had three sisters, Mary, Bettie and Carrie. In 1880 the family moved to Washington DC where James started his career as a clerk in the House of Representatives, then later the post with Cleveland and as Indian Inspector. In 1882 James was married to Alice E. Sample, a daughter of Rev. W.A. Sample, a minister in the Presbyterian Church at Fort Smith Arkansas. They had three children, William, Rolfe Lamont and Mary all born in Arkansas. The family moved to Port Townsend in 1889 during the beginning of the boom years where James started a real estate business with Leslie Cullom and was instrumental in founding the Commercial Bank as Vice President. He represented the fifth ward of Port Townsend as a City Councilman. In 1890 the Saunders built a beautiful home overlooking Port Townsend Bay. Known as the Saunders House or earlier Holly Manor for all the Holly Trees now mostly gone, it still stands as beautiful as ever.

In 1893 at the age of 39 he was given the post of Collector of Customs. Mr. Cleveland appointed him to take charge of the district which he declared, "gave him more trouble than all the collections districts of the United States put together."

To be continued.