James was appointed to the position of deputy collector in 1870 and put in charge of the warehouse division and bonded warehouses of the port. James had much success in the new position, organizing the records of the division, which had been in confusion, in only a month, and bringing the work up to date, which had been up to three years behind, in only six months. Afterwards, he was appointed by Chester A. Arthur, then Collector of the Port of New York, to be a member of the civil service board of the collector's and surveyor's offices and made its chairman. He became one of the first public officials to advocate for the reform of civil service by appointing positions on the basis of examination and merit.