Alexander Hamilton Papers

Alexander Hamilton’s First Draft of the Report on the Subject of Manufactures, [27 January–4 February] 1790

Alexander Hamilton’s First Draft of
the Report on the Subject of

Treasury Department } 60
the   1790.

º    The Secretary of the Treasury, in obedience to the order of the house of Representatives of the fifteenth day of January last, has applied his attention, at as early a period as his other duties would permit, to the subject of Manufactures, º and particularly to the means of promoting such as will tend to render the United States independent on foreign Nations for military and other essential supplies.

Stands {
  The expediency of encouraging manufactures in the United States, ’tho recently deemed very questionable, appears at this time to be pretty generally admitted.61 There are nevertheless still persons, who entertain a less favourable opinion of them than are less inclined to affording them patronage than may perhaps consist with real good policy. It is Their argument against it is—that Agriculture is [most proper fittest]the true object of pursuit in the United States; that labour laid out in the improvement of our waste lands will be more productive than in any other way—that it is always best to leave human industry to its natural course; that to attempt to divert it from the channel in which would flow of itself into any an other is to turn it more it will always flow naturally of itself into that channel where it finds the most profitable employment objects; that consequently all attempts to divert it from this to another tend to divert it from more to less beneficial objects; that manufactures can only grow out of a full population and that the high price of labour in this Country, from an opposite situation, forbids an advantageous competition with foreigners in the article of manufactures; which therefore can only succeed if at all by such restrains & burthens on foreign importation as will give them a virtual monopoly; that it is better for thethe community to procure from foreigners manufactured articles from other countriesforeigners with the prof surplus products of itsour soil at the cheapest rate than to give a higher price for them to workmen of itsour own, who would be more usef usefully employed in producing the materials of exchange from the land cultivation of the earth.

There is so much of trut truth in these positions that an carefulattentive eye ought to be had to them in every step of our progress towards becoming a manufacturing people.[the Attainment of manufactures.] But though they are very proper considerations to moderate; they are not such as ought to extinguish a zeal for manufactures. All political theories, however true in the main, become pernicious when pushed to an certain extreme. They all admit of certainnumerous exceptions and qualifications; in discerning which the wisdom of a government it is shown[manifested.]

It is true for instance that agriculture, the best object of the attention of almost every country is peculiarly so of ours; but it does not follow that [it should be our sole pursuit, nor that] it will be will injured or impeded nor that it may not even be promoted by a reasonableprudent attention to manufactures.

A principal mean of promoting agriculture is to extend and as far as possible to render steadyextensive and certain the demand for that sup surplus which the labour of the farmer is capable of producing. This demand must depend on two circumstances; the wants of those classes of of our own citizens who are not engaged in the culture of the soil; and the wants of foreigners. The first, as far as it goes, is a certain dependence; the last is a more precarious one. To increase that º source of demand, which is the most certain is evidently desireable; and the most direct mean to this end is to multiply the number of manufacturers. These must of course derive their subsistence fuel, and the raw materials for their various fabrics from the cultivators of land. Provisions, Flax, hemp, º wool, cotton, iron and a variety of other articles will find thentheir most constant and most certainuniform vent in in in an extensive scene of domestic manufactures. Perhaps indeed it may be affirmed that the extensive abundant production of some of these articles must grow out of such a sience.

It has been observed, that the foreign demand for the surplus productions of our soils is to be regarded as [in some degree] a precarious one. This arises from an very obvious cause. It is a prina primary object of the policy of every most nations to be able to supply itselfthemselves with subsistence for itstheir own inhabitants and raw materials infor their own workmen. And it is presumeable from the app manifest propriety of this policy, that it will obtain more and more. Already the demand for foreign supply of such articles in several countries is rather casual and occasional than usual or constant. How far it or how soon it may become in the case in others is not easily to be foreseen. nor will it beIt is not dissented affirmed however that we have at any time heretofore experienced a stagnation from the operation of that principle an injurious an stagnation in the demand for some of the staple commodities of our country and nor that any thingparticular inconvenience of the kind is seriously to be apprehended in future. hereafter. Nevertheless, the fact which has been remarked is of a nature to beget reflections calculated to inspire leading to a a desire desire of diversifying the objects of our labour and industry; and, as it applies to of our agricultural interest, of increasing the sources of domesticinternal consumption forof the products of our soil lands.

It is likewise perhaps true in a general sense that the labour of our present citizens employed in converting waste lands into cultivated farms is more profitably employed than in other ways. Yet this is hardly to be admitted as universally true. There are certain fabrics in which a given capital and a given quantity of labour will produce more than if employed inbestowed on Agriculture. And when the variety of human talent is considered adverted to—when it is considered that minds of the strongest and most active powers for their proper objects fall below mediocrity and labour without effect whenif confined to incongenial pursuits; that the results effects of human enterprise and exertion are immensely augmented by the diversification of its objects pursuits;their objects; that there is a reciprocal reaction of the various species of industry upon each other mutually beu benefical to each other and conducive to general prosperity it is natural to conclude it must appear probable that the interest of a community will mo be most effectually promoted by diversifying the industrious pursuits of its citizensmembers; and by so regulating the political œconomy as that those who have been peculiarly qualified by nature for arts and manufactures may find the encouragement necessary to call forth and reward their peculiar talents. It is a position which seems to carry its own evidence, along with it, that the Nation whose citizens have attained to eminence and perfection in the greatest number of useful employments will be found at once the most independent and the most respectable.

The positions positions which suppos

The considerations which recommend the leaving the industry of a people to its natural course are so far just that they ought to serve as cautions to every government to refrain from endeavouring by violent efforts or expedient, to produce an artificial change. But they are so far it would be to allow them an undue weight But they ought not to deter from pratronising the and encourageme encouraging by moderate methods the introduction of any branch of industry for which there is discovered to be a particularan aptitude a natural tendency in the situation of a country. Men are so much governed by habit and a spirit of imitation that it is not always easy to makeinduce them to adopt the simplest and most obvious improvements in the m instruments and means which they are accustomed to employ in their ordinary occupations. And how much less is it to be expectedcounted upon that they will of themselves without invitation and encouragement turn to new and untr that new arts will be introducedspring up into a community as early as may be its interest, byfrom the voluntary movements of individuals, without invitation or encouragement from the government. Distress from want of employment in other ways may after a length of time beget them; but the progress towards the desireable changes would probably be slower than they ought to be. This may not only be inferred from the natural make byass of the human mind but it would be to be looked for from the actual state of things in other respects. The progress made by particular certain nations byin arts and manufacturing and the free intercourse established by commerce between differentthem & those countries in which the like arts & manufactures do not obtainprevail would preclude their introduction into the latter without the aid of their governments. Every attempt towards it would be defeated by the impracticability of maintaining a competition with those who had already possessedacquired so great a superiority in the business. Hence the expediency and necessity of the interposition of Government in certain cases to give a new and more beneficial direction to the de industry of its citizens.

The objection deductd from the high price of labour in this Country against our success in manufactures is a weighty, one, perhapsespecially decisive when applied to the finer and most costly precious kinds. But there are circumstances which diminish its weight and seem to afford an assurance that many very extensive useful and extensive ones may be prosecuted with advantage.

The growing cheapness of raw materials provisions which is likely to increase the growing cheapness also of raw materials the trivial taxes and duties (compared with those of other countries ) which an American workman pays, the exemption from tythes and from corporation restraints which are paid by the Citizens of the United States; the exemption from tythes and corporation restraints and the heavy charges of importing rival the extensive ac the great agency of labour-saving labour saving machines, which has been so much extended by late inventions and improvements and which by diminishing the necessity of manual labour materially lessens the effect of disproportion in the prices of it—& the heavy charges of importing rival articles from abroad, even independent of the duties are laid on their importation—are circumstances which go far towards counterballancing the advantage of the superior cheapness of labour in the c in other countries.

There are other considerations which may serve to shew that the rate of labour is less likely to be an obstable to the success of manufactures than may have been supposed apprehended. ManySome branches of them are conducted wholly or in a great degree in the U States and in other countries in private families and at hours that would otherwise be unemployed. And in this respect there is an advantage in favour of this country arising from the more easy situation º [of a part, [of the] less luxurious habits] of [the body of]remainder ofits yeomanry which affording greater leisure [stronger dispositions] for collateral pursuits: And, in other branches, in certain parts of the Union, wages very little, if at all exceed the rates, º which successful manufacturers in Europe pay in the same business. Women also are known to ItAnd it may also be added that women in the some kinds of fabrics perform at a cheap rate the work which in other parts of the world is executed by men. Nor has it been found impracticable in some cases to substitute with adv to with good effect the services of Children. It is one and no inconsiderable recommendation of manufactures that they give occasion to the exertion of a greater quantity of industry, even by the same number of persons, inhabitating a place, in which they prevail, than if they did not exist; and from that cause alone[peculiarly] promote the wealth of a community. They in many instances rate rather produce promote additional effort than change the course of labour.

There are two general reflections which occur, in relationaddition to what has been said, on the point in question. One is that there are certain parts of the United States which are becoming thickly inhabited[populated] and the inhabitants of which increase notwithstanding emigrations to other parts. It may be expected that the increasing populousness of those districtsregions cooperating with the cheapness of subsistence will every day lessen the force of the objection drawn from the price of labour as it applies to them. The other reflection is, that a strong expectation may reasonably be entained that if this country should exhibit the countenance of a serious encouragement toprosecution of manufactures there is room for a strong expectation that considerable numbers of European workmen will be induced to transplant themselves to the United States. The higher price of labour, where it exists, would be a material inducement; the superior cheapness of provisions, the comparitive lightness of taxes would tend to render their condition here so much preferable to what it is, that it can only be required to make the advantages of it known and to afford a certain prospect of employment, to secure a numerous accession of valuable foreign artists. from abroad.

If experience be consulted

In this circumstance also may be perceived a considerable resource for obtaining the hands necessary for manufactures without diminishing the number of those which would naturally otherwise be employed in Agriculture.

The advantages which they are calculated to afford to of the Landholder by the demand they create for in furnishing raw materials, subsistence, fuel and other supplies to the manufacturerworkmen—the support whichthey tend to giveare in habit of giving to the fisheries derive from them by theirby promoting the consumption of articles drawn from the ocean—the assistance which is to be derived from them given to external commerce by their inducing promotoing the importation

Should the United States decline or omit to encourage manufactures their local situation will subject them to some peculiar disadvantages. Their commodities [productions of their soil,] which are generally very bulky, will sustain, in the freight and other charges of exportation to their distant foreign Consumers, a proportionate deduction; and, as the equality and moderation of individual property and the great of certain of[settlements of the] unimproved lands occasion an unusual demand for coarse manufactures, a corresponding weight of expence will be imposed on all their supplies. In seasons of profound peace these circumstances occasion an immense annual deduction from the gross value of their productions; but in the time of a war, that shall involve their principal carriers, the charges of exportation on some of the most bulky raw materials, perhaps the most profitable, must become a grievous burden to the farmer, if the introduction of factories should not be previously effected.

It is unnecessary to suggest to the [wisdom of the] house The sound policy of pursuing such measures as will retain [in employment] at home the active capital, which will certainly flow, with due œconomy, out of the affairs of an industrious, and [intelligent] sensible people, cannot admit of question. That Manufacturing, in a considerable degree, is necessary to this purpose appears, highly probable, since we know not of any great maunfacturing nation, however inconsiderable its agriculture may be, that does not abound with money; nor is there any instance of a country which does not manufacture, that can retain its specie, however blest its soil or abundant its sources of the precious metals. The importationsThe reason is obvious. The importations of manufactured supplies invariablyincessantly drain the merely agricultural people of their wealth. Hence it is that the West India islands, the soils of which are the most fertile; and the Nation that which [in the greatest degree] supplies Europe with Coin [and Bullion;] enchange to a loss with [almost] every country in the world. In further illustration of this point it may be observed, that undisputed Statements62 in a principal manufacturing Country of Europe render it more than probable that their exports including their various fabrics [have not for many years] never exceeded one third of the gross value of their Manufactures. Had they entirely neglected this domestic branch of trade, and had they as freely consumed foreign articles similar to those they make for themselves, it is evident that national and individual poverty must have been the consequences.presumeable that their situation would exhibit a very different aspect from that which it now wears. That the United States [have] heretofore felt the inconvenience of thatsuch a situation in a very great degree is a matter of notoriety. To prevent the increase, and gradually to diminish the evil was [among] the objects of the house, it is humbly presumed, in the resolution, which calls for this report.


Altho agricultural employments are, generally speaking, the most proper for the great body of the inhabitants of these states, yet when the variety of human talent is duly remembred, and it is considered, that minds, of the strongest and most active powers for their proper objects, may fall below mediocrity, or labour without effect, if confined to incongenial pursuits, it will appear unwise so to arrange our political œconomy, as to impel to agriculture the whole body of the people. It is interesting to the prosperity and advancement of the United States that those, who have been peculiarly qualified by nature for the useful arts [and manufactures,] should find the encouragement necessary to call [and reward] forth their various talents. All employments, that are comprehended in the general plan of a well-formed[organized] community, were doubtless intended to be pursued, and that nation, whose citizens have attained to facility and eminence in the greatest variety, will be found at once the most independent and the most respectable.

If a doubts should remain of the expediency of encouraging manufactures in the United States an appeal to the substantial Evidence of facts may be safely made. The house may be respectfully reminded, that those parts of the Union, in which Manufactures have most strikingly encreased, have recovered in the greatest degree from the injuries of the late war, and that those states, which have given the most liberal encouragement to this branch of trade, are now among the most flourishing. Nor is this less manifest in the states, that [which] possess extensive bodies of vacant Land, than in those that are most numerously populated.

It may be usful in a survey of this subject to advert to It And with regard to the capacity of the United States in the business of Manufactures, especially as it was the opinion of a former period, not very remote, that they were incapable of any thing considerable in this branch of trade. To a body as accurately informed as the honorable house it is unnecessary to adduce proofs, that a very a strong argument may be drawn from the considerable number of Manufacturers, in a great variety of branches who have already established themselves in the United States, not a small part of whom carry on branches depending entirely on manual labor. It may be reasonably argued that what has succeeded in so many instances, notwithstanding the disadvantages supposed to exist, may succeed in many more. The cheapness of provisions, which is likely to encrease, º the trivial taxes and internal duties (compared with those of other countries) which a[an American] workman pays, the exemption from tythes and from corporation restraints, the growing cheapness of raw materials, together with the heavy charges of importing rival Articles, have produced this success, and promise the same advantage to all prudent and oeconomical attempts to establish even handicraft manufactures[factories] of articles in general Use. But when it is remembred, that the great objection to American manufactures (the price of labor) is in the most [of the] valuable branches obviated by the agency of fire or by that of water, or by that of labor saving machines moved by fire, water, or hand a doubt of success [except in fabrics of the finest kinds,] cannot be entertained.


But the rate of labor, it is believed, will not be found on consideration so weighty an objection, as it is by some supposed to be. Many branches are conducted wholly or in a great degree in the United States and all other countries by the thrifty industry of private families, in hours that would otherwise be unemployed. The wages in others [branches], do not exceed, in some parts of the Union, the rates which successful manufacturers in Europe pay in the same [business.]branches. Women are known to perform the work, in the making of some kinds of fabrics, which in other parts of the world, is executed by men. This useful habit may be extended, and the labor of Children may be added. It is moreover a reasonable expectation, that European workmen will be induced; by the supposed high rates of labor, wherever they really exist, to transplant themselves from that consideration to the United States.


After these preliminary observations, which have been rendered as brief as the nature of the subject would admit, the immediate object of the Resolution of the honorable house remains to be considered.

Capitals it is urged are wanting in this young country for manufacturing establishments. This seems to be no more, than an unduly confined assertion of an obvious and comfortable truth—that the opening affairs of this rising country afford profitable objects for more capital than it has vet acquired. It is true as well with regard to foreign Commerce as Manufactures else why do the American Merchants import so largely upon credit. That it is also true with regard to agriculture, our millions of uncultivated acres fully prove. The [actual]past success of many branches of manufacture nevertheless shew that our own industry and funds, if wisely directed, may be advantageously applied to them. But when the European Manufacturer and Capitalist shall be accurately informed of the situation of this country, of the [present & encreasing] cheapness of provisions and raw materials, of the duties on the importation of his European fabrics and the exemption of our own, of the cheapness of mill-seats and building—when he shall advert to the expences of freight and insurance with which his commodities are loaded and the facility of establishing the great labor-saving-works by water and fire, he must be convinced that no profit can accrue in Europe adequate to what must follow a well conducted establishment with a suitable capital in many parts of the United States. [After these preliminary observations, which have been rendered as concise as the nature of the Subject would admit, the immediate Object of the resolution of the house remains to be considered.] Hence an accession of foreign Capital may be expected in aid of our own. But it ought also to be taken into the account acco that a new and very considerable Capital has been brought into activity by the means which have been adopted for provision which has been made for the public Debt.

It remains at present to take into view the particular means by which the reference intention of the House in their reference on the subject of this report may be fulfilled.

Among the means devised by the European nations to encourage manufactures protecting duties have been very generally adopted. It cannot be unobserved by those, who are engaged in these pursuits, nor will it escape the notice of those capitalists, and workmen who may intend to transfer their property and business to the United States, that the duties already imposed by the legislature ‘tho principally for the purposes of revenue, afford very considerable and certain advantages to the American Manufacturer. Tho it may be very doubtful whether general additions to these duties be necessary further to encourage the manufactures of the United States, yet, it is humbly conceived, a few articles may be very properly aided by a moderate encrease. Among those in View is Sail Cloth which is important to defence, to domestic and foreign commerce, the fisheries and, as it relates to[the source of] the raw materials, to agriculture likewise.

Prohibitions of rival articles, or duties equivalent, frequently present themselves in the laws of foreign nations. Tho this measure, in most instances, may be of doubtful propriety in the United States, it appears to merit consideration in regard to particular Articles. From the present flourishing condition of some manufactories of military supplies, such as Gunpowder, leaden and iron ball, iron cannon and cartridge paper it may not be deemed hazardous, in a season of profound peace, to encrease the duty so as to prevent the Importation of them. Besides warlike stores there are certain Articles manufactured from materials with which the United States abound, that do not appear unfit subjects of excluding duties. Among the objects here contemplated are Malt liquors, º spirits made from grain of every sort and from fruit, (excepting that made of the grape,) the oils of sea and land animals and of flaxseed, the spirits of turpentine, snuff, chewing and smoking tobacco, starch and other things manufactured from such productions of the Earth and of the fisheries as are constantly exported in large quantities, which are encreasing on our hands, and for which a sufficient vent is consequently difficult to procure. The wisdom of the house however will render them duly aware of the injuries, that may be occasioned by an indiscriminate and too extended an application of duties equivalent to prohibitions, should they be induced to impose them in favor of certain maunfactures necessary for defence, or highly and universally beneficial to the landed interest.

Pecuniary bounties upon home made articles have been tried in several European countries with great success. The linen branch in Ireland is a well known instance. But under the present circumstances of this country the Secretary cannot discover sufficient inducements to these expensive encouragements to justify a strenuous recommendation of them to the consideration of the legislature. This aid to manufactures however is less necessary at the present moment in the United States than in any European country, because their fabrics, being generally wanted for home consumption, are free from the heavy expences of importation, which rival foreign goods sustain to the amount of fifteen, twenty and twenty five per Cent on their value according to their bulk. But if it should on consideration be deemed inexpedient to grant bounties in money to encourage manufactures it may nevertheless appear adviseable to devise some other method of aiding pecuniarily new undertakings, and to institute rewards and other encouragements for the introducers introduction of new and useful inventions A m manufactories arts machines and secrets, not before carried on known or possessed or known in the United States. º reward certain great and useful promoters of them by other means. The United States having a very large quantity of unappropriated lands the Secretary humbly submits to the house the propriety of setting apart the quantity of five hundred thousand acres of good quality and advantageously situated for the purpose of rewarding the first introducers or establishers of new and useful manufactories, arts, machines, and secrets not before possessed, known or carried on in the United States. The objects here contemplated and the mode of applying this landed fund will be more clearly explained by the plan contained in the paper [A]63 which accompanies this report. A measure of this nature Something of this kind besides its more direct effects would evince to the manufacturers of Europe the disposition of the legislature to encourage and reward them, and would afford to persons, who may transfer their capitals and establishments to the United States, a certain tho not an immediate compensation even in unsuccessful instances. The manner in which this may be done will be submitted in the hereafter.

In addition to these rewards for the Importation of manufacturing Machinery, and secrets of great value, acts may be passed, º if sufficiently warranted by the extraordinary utility of the object and the difficulty of attaining it, and if within the compass of the powers of the government granting to the introducers such exclusive privileges for a term of years as would have been secured by patent, had they been the inventors. Public advantage, if derived from each in an equal degree, will justify this favor to the one as well as to the other, and the successful practice of the principal manufacturing nations of Europe establishes the prudence of the measure.

As a substitute for pecuniary bounties on particular articles, sufficiently beneficial to the landed interest to merit that expensive and inconvenient encouragement, the revenue may be calculated to assist them by diminishing the use of rival, tho in some instances different, commodities. Thus the duties on ardent spirits may be renderedserve as a virtual bounty on beer, ale and porter and the impost on foreign spirituous liquors as an encouragement to those made at home. By careful attention to regulations of this nature, it is believed, very effectual aid may be given to our manufactures without any hazard of public inconvenience or injurious frauds. An examination of the Articles imported for circumspection[consumption] in the United States, and of the capacity of our manufacturers to make succedance for them out of our own produce, and imported raw Materials will suggest many objects, to which, it is supposed, this idea may be advantageously applied.

A drawback of the amount of the duty on the raw Material on the exportation of manufactured Articles is a measure recommended by policy, and rendered in some degree necessary by the practice of those nations, who will hold a competition with us in foreign Markets. This idea has been pursued in the bill64 which lately passed the H of R in respect to The duty on Molasses, if the idea here suggested should meet the approbation of the legislature, might be allowed on the exportation of American rum,It may perhaps be extended to that on Muscovado Sugars on the exportation of refined; to that on Cocoa on the exportation of Chocolate and into such other instances as shall admit due security against deception and fraud, the danger of which is the only objection that occurs to this mode of encouragement.

The admission of the tools and implements of their trade and the household furniture of manufacturers, free from import duty, is a regulation, which the legislature have already been pleased to make in their favor,65 in common with other emigrants. The continuance of this exemption appears to be perfectly safe and [highly] politic.

The promotion of friendly intercourse and fair trade with the indian Tribes will have a favorable effect upon some valuable branches of Manufacture, the raw materials for which are derived from the western Country. Towards these ends the wisdom as wellof the legislature and of the Chief Magistrate as of the Legislature have been already successfully directed; º and will doubtless continue to be so till they are completely attained.but some objects of great consequence to the indian trade and consequently to the manufactures dependent on it remain to be obtained. The pursuit of them however rests upon considerations of so much more Importance than any which arise on the present topic, that It is sufficient merely to intimate the relation between those objects &present them to the attention of the house, as connected with the subject of this report.

Facility of communication, and cheapness of transportation are objects which concern all the domestic interests of a community; but they may perhaps be mentioned without impropriety as immediately connected with the prosperity of manufactures. are matters of primary importance in the business of every country: but under the existing circumstances of the United States they call for the earliest and most efficient exertions of government. The good condition of the post roads, especially places of landing where they happen to connect [places of landing] on the rivers and bays, and those which run into the western country, will conduce exceedingly to the cheapness of transporting and the facility of obtaining raw materials, fuel and provisions. But the most useful assistance perhaps, which it is in the power of the legislature to give to manufactures and which at the same time will equally benefit the landed and commercial interests, is the improvement of inland navigation. º Three of the easiest and most important operations of this kind which occur at this time are the improvement of the communication between New York, Connecticut, Rhode Island and Boston by cutting a passage thro the peninsula of cape Cod, the Union of Delaware and Chessapeak bays by a canal from the waters of the former to those of the latter, and the junction of the Chessapeak bay and Albermarle sound by uniting the Elizabeth and [Pasquotank rivers.] The accomplishment of these and other objects of the same nature seem likely to afford greater and more various aids to our growing manufactures than any other measure, that has occured to the Secretary in the investigation, which he has been directed to make.than can perhaps be devised.

A further measure to promote the cheap transportation of raw materials and provisions presents itself in the abolition of the duty of Tonnage imposed on coasting vessels.66 This appears to be a burden on the produce of lands, as substantial as if it were imposed on working waggons, and seems hardly consistent with sound policy.

However And however Other true it may be that other most more urgent provisions ought to postpone awhile enterprises of this nature; it seems not unuseful to contemplate them in advance as means to be resorted to as early as circumstances shall permit.

Several The productions of the fisheries may not improperly be considered as articles of the nature of manufactures, and the remainder are of great utility as raw materials or cheap and wholesome food. [Whalebone cutters, the makers of whips, umbrellas, stays, millenary, fishing tackle and philosophical apparatus consume whalebone, Ivory turners use the seahorses teeth, druggists, chemists, instrument makers, hatters, tanners, watchmakers, sadlers and shoemakers work up the skins and furs of various sea animals, shipbuilders, riggers, soap & candle makers, and leather dressers consume the oils or spermaceti, and the workmen and manufacturers are enabled to observe a more beneficial œconomy by the use of the oils in lighting their shops and houses and of the fish in their sustenance. Aiding the fisheries therefore appears to be a [among the]very safe and efficient methods of promoting manufactures.] but as the means of encouraging that important branch of trade have been [specially] refered by the house to the Secretary of State,67 it is unnecessary and [would be] improper to enlarge upon it here.

The establishment of impartial and judicious inspections, by which frauds upon consumers at home and exporters to foreign countries might be prevented and proper standards might be ascertained, would have a favorable effect upon the quality and character of our manufactures. The reputation of Flour in some ports and the reputation of Pot-ash in others hashave been established by that method. The same good name may be derived to those articles by similar means in all the ports of the United States from whence they are usually shipt; and the inspection laws may be advantageously extended to other commodities. The manufactory of Gun Powder, it is conceived, is now in a train to be perfected by placing it under this wholesome regulation and it is not to be doubted that reflection and time will probably suggest other objects.

The regulation of inland bills of exchange, so as to ensure due caution in drawing them and strict punctuality in paying them, must have a favorable effect on the purchases of raw materials and sales of manufactured Articles in a country so extensive as the United States.

The ability to place funds with celerity and ease in every part of the Country for the purchase of raw materials and provisions is a matter of great importance to the manufacturer. To afford the accommodation of a general paper circulation of the nature of Bank Notes, payable with absolute certainty in specie on demand, is therefore very desirable. This benefit will immediately result from a National Bank, and from such arrangements of Government with [that] Institution, as soon as it shall be erected, as may give an universal circulation to their cash notes.68

The want of sufficient capital being deemed one of the principal difficulties, in a national view, with which the manufactures of the United States have at this time to contend a steady pursuit of such measures as will give full and unfluctuating value to the public funds appears of the utmost importance to the increase and prosperity of American manufactures. Having enlarged upon the beneficial circulation that ever grows out of a well founded national debt in the report upon public credit, which he had the honor to make in January last, the Secretary conceives it sufficient at this time to reiterate hisrepeat his thorough convictions of the truth what is therein stated on that point.

The Importation of raw materials and ingredients, and of colors, drugs and other articles necessary to complete manufactures, free of duty, is an encouragement of obvious propriety, generally considered; but when it is remembered, that the principal nations of Europe afford this aid to their manufactories, and that we are to meet them, as competitors, [not only] in our own [but] and in foreign markets, it appears to be almost indispensible. Proceeding, it is presumed, on these principles the legislature have been pleased to exempt from impost a number of articles of the nature above described,69 thereby giving their sanction to the principle here contemplated.

It is worthy of consideration whether this exemption ought to not to extended to other articles and among the rest to Iron Hemp Cotton Hemp and raw silk. Our manufactories of bar Iron seem to have attained a degree of Maturity which leave them nothing in no danger of being subverted by foreign Competition. They also derive aid and may derive more from the extension of demand which is created by the effect of the encouragements already given and those which may still be given to various manufactures of iron and by the outlet for that article which is afforded by the East India trade. Accordingly the price of Iron has risen of late years [in our lowest markets] from sixty five to Eighty Dollars per Ton. It is therefore presumeable that sufficient profits will remain, if foreign Iron is admitted into our market free of duty. While great additional encouragement will be given by it to the manufactures of that article.

The heavy motive to the heavy duty which has been laid upon Cotton professedly is to encourage the growth of it. But this presupposes an internal demand for what is raised. While thein fact is that little if any such internal demand exists; scarcely anyvery inconsiderable progress having been yet made in manufactures of Cotton except in private families in the parts of the Country where it is raised for their own use. That duty consequently [may retard & may even]only tends to prevent the introduction of Cotton manufactories without answering the purpose for which it is laid. It even operates against that purpose; since it prevents the creation of that internal demand mu which must be an effect of preexistingsuch manufactories. The way to the encouragement of the growth of the commodity seems to be first to encourage the establishments of manufactories of it those manufactories and to this a cheap & plentiful supply of the raw material in the first instance is indispensable.

The same observations apply to Hemp, in a degree, & to raw silk intirely. To Hemp, they apply with less force because there already exist respectable manufactories of that material and because it is now extensively cultivated so as to afford a more immediate prospect of adequate and cheap supply. It is however probable that eventually the growth of it will be most effectually encouraged by promoting a rapid and vigorous extension of the manufacture of it. An extension of this exemption further than has yet taken place, particularly to include, iron raw-silk, cotton and hemp, the Secretary humbly conceives to be necessary to success in the business of manufactures.

The particular value to the United States of improved implements and machinery for manufacturing, and the inducements to export those we have already obtained or may hereafter procure, which the interest of our º competitiors obviously creates, seem to render a penalty for such exportations an eligible measure. It [In doing this it] is manifestly proper to guard carefully against extending the [regulation] further than is absolutely necessary to prevent a deprivation of any particular implement or machine, lest in the formation of the law, the export trade of well known articles, applicable in manufactures, may be [un]favorably affected.

Under the existing circumstances of this Country The foregoing ideas [are suggested detailed] are respectfully submitted as introductory to more specific suggestions relatively to [the] as the constituent parts of a general plan for the the encouragement of national manufactures [that shall bein such particulars as appear adapted to the circumstances of the Country.]. The requisite aid to those particular branches, which are necessary for defence, or which may be deemed most essential to the Government and citizens of the United States [may, after the preceding survey, be more accurately]are yet to be considered. [digested.]

The manufactory of Gunpowder has been rapidly advanced, and principally by individual exertions, within the few last years. Tho it may be considered as established, yet its [high] importance renders its extension through the Union very desireable. Sulphur, which is a very considerable ingredient in its composition, has been made liable to the non enumerated duty of five per Cent.70 No quantity of that article has yet been produced from internal sources. The addition of sulphur to the class of free goods appears therefore to merit consideration. It may be further observed, that another principal use of this commodity is in finishing the bottoms of Ships, a manufactory that cannot be deemed secondary to that of gunpowder, they being at once powerful instruments of defence, and the necessary vehicles of all the productions and all the supplies of the United States.


The annual importation of a certain quantity of Salt petre rough or refined, has been made, [it is said,] an indispensible obligation on one of the most successful East India companies of Europe.71 This, it is understood, has been required with a view to assisting the manufacturers of gun Powder. The trade to China being now well established, a moderate regulation of this nature, duly proportioned to the Tonnage of each vessel, might perhaps be conveniently enacted. The United States not having factorsies established in other parts of the East Indies the requisition could not be reasonably extended to Vessels from any other than the port of Canton.

Leaden Ball and Shot employ but few hands and require little skill to make them, and therefore may be [reasonably] expected to succeed. To aid the exertions of the owners of lead mines the foreign commodity has been charged with a duty of one cent per pound, which may be safely extended, it is believed, to shot, ball and all the manufactures of this article. These are liable at present to the lowest rate of duty,72 tho the foreign raw material is subjected to one of the highest, which operates [directly] to encourage the importation of the foreign manufactures.

The brass founderies, that are already introduced into the United States, tho at present confined to common wares, may be considered as furnishing the future means of manufacturing ordinance of that metal. In the new impost law,73 ’tho iron Castings, and copper wares are rated at seven and one half per cent, those of brass are included in the non enumerated class, which pay the lowest duty. If this raw material be continued among the free articles, and copper (the principal ingredient in brass) in pigs and bars [& lapis calaminaris (the component ingredients of brass) should] should be added to that class, there appears to be perfect safety in placing manufactured brass in the list of wares subject to the duty of seven and one half per Cent. This metal being also use din the manufactory of some kinds of small arms, of instruments in the Arts and Sciences, and other useful articles the influence of the duty, which cannot be deemed high, will be extensive.

Musquets and all the class of small fire arms, swords and other military weapons of that nature, and the connected articles of surgical instruments and cutlery [in general] might be rated, it is conceived, without injury at seven and one half per Cent [centum], Iron and Steel of which they are made, being among the most abundant productions of [commodities in] the United States.

The several species of wood and timber, ordinarily used in cabinet work and ship building, are free of duty in foreign Countries, when imported in their national Vessels. Cabinet wares being in general use, and frequently exported; and the manufactory of ships being the most perfect in the United States, it appears both safe and politic to give the workers in wood that support, which other nations have universally extended to them. A further inducement to this regulation arises from its favorable tendency in regard to our Magazines of Ship timber. The encreasing scarcity and the growing importance of that article in the European countries admonish the United States to commence and systematically to pursue measures for the preservation of their stock.

In the enumeration of the several kinds of paper which are subjected to a duty of seven and one half per Cent, sheathing and cartridge paper are omitted. Being the most simple manufactures of that nature, and necessary to military supply, as well as the national shipping the addition of these to the specification appears to be re-commended by all the considerations that apply to the other articles.

The duty on nails, and spikes, however various in size and value is laid upon their weight. The effect of this is to reduce the impost on the smallest kind [nearly] [to the rate of non enumerated [goods],] while the larger pay a considerable advalorem duty. Of the persons employed in this branch a great proportion are boys, whose early habits of industry are of importance to the community, to the present relief [support] of their families, and to their own future comfort. The raw material is a native production of almost every state—the necessary fuel is abundant in all. The addition [of a duty] Therefore of  74per Cent upon the value of nails only, does not appear unworthy of consideration. Upwards of a million & a half pounds of this article were imported in a year ending the 30th of Sepr last.

Glue, Starch, hair powder, and wafers are left in the mass of non enumerated articles at five per Cent. No manufactures are more simple. The first, like paper, is an entire œconomy of materials, which if not manufactured, must be left to perish. The three last are made, with the utmost ease, from the most abundant productions of the Earth. They all appear suitable additions to the class of Articles rated at 12½ per Cent. In Europe they are generally objects of excluding duties, or expressly prohibited.

The progress, which has been made within a few years in the manufactory of Sail Cloth and other coarse linen articles, º their importance in the equipment of fleets and in the appointment of armies, the universal capacity of the states to produce the raw materials, both flax and hemp, and the precious effects of the linen branch upon individual industry and domestic œconomy recommend all the fabrics of that kind, in a peculiar degree, to the protection of the legislature. To these considerations may be added the example of a more encouraging duty upon the principal maunfactures of cotton, which are rated, and with sound policy, it is conceived, at seven and a half per Cent. There appears to be no hazard of injury from placing a little above non enumerated goods, two descriptions of merchandize, the cotton and the linens of the coarser kinds capable of being manufactured by the great labor-saving machines. The sail cloth manufactured at Boston is said to be of a quality superior quality to any imported: And there is a respectable maunfactory of the same article at New London. Tow linnens and other household linnens are pro made in such abundance in different parts of the U States as already to maintain a successful competition with the rival foreign articles & to to occasion a diminution of their prices.

It is not possible to do complete justice to the subject of this report without bringing into the view of the house those great instruments of manufacture in the European Nations, labor-saving Machines. The United States, by the bountiful distribution of mill seats over the face of their Territories and by the uncommon turn for mechanic arts observable in their citizens their skill in mechanism, are peculiarly qualified for these profitable modes of manufacture. A fitness, no less peculiar, arises from the State and nature of their population. By the qualities of their soil [& climate] and [by] the activity of their Merchants they can command [obtain procure] the raw materials to which these machines best apply, on the most advantageous Terms. The requisite machinery is already obtained: Bbut the enterprise has hitherto appeared appeared too novel for individuals. The capital required is not inconsiderable and the risque of injury in the attempt consequently greater than a private person has yet ventured to encounter. Tis seldom adviseable for a government to interest itself in these undertakings, however promising the calculations [may be], because they too often suffer in the execution of projects that would have been profitable to individuals. It is also true that a loan of capital to individuals, even upon indubitable security, is a measure, [which]that should be very rarely [and cautiously] adopted, and that such aid should never be extended to objects of confined Utility. Yet there may be cases of such obvious safety & from which such extensive national benefits will certainly result, as to justify a deviation from those rules, by which a wise government will circumscribe itself in all ordinary instances.

It is submitted to the Considerationable of the House, whether it may not be expedient to institute some proper Board(which if judged adviseable may consist of pre-existing officers of the Government) and to place in their disposalvest in them all the product of all such duties as shallmay be laid—either pursuant to the suggestions of this report or otherwise with a view to the as it may be thought proper to lay with a view not to revenue but to the encouragement of manufactures only, to be applied by them to that purpose, in such modes as in certainsuch ways to as be shall be generally designated to that to them by the law.

The species of encouragements, which are contemplated, are, to procure at the public expence for a limited time skilful manufacturers from in Europe to be Europe to be employed in aid of the first or early attempts of the the manufactories which have been ofr shall be established in the U States. first in their commencements. There is g or first at in their first or early attempts to rew induce the introduction of new inventions and improvements by proper rewards prop seasonably affording in holding out competent rewards well timed and in the ways best calculated to give then effect —& to encourage by premiums both honorary and lucrative, to excel exertions endeavours to excel in the production of raw materials and in the fabrication workmanship of manufactures: & perhaps to afford loans to undertakers at a moderate rate of interest upon good security.

There is good reason to believe that the failure or slow progress of particular manufactures has been owing to the want of skill in the workmen employed; and it is not common for the capitals engaged to be equal to the purpose of procuring from abroad workmen of a superior kind. Here the auxiliary agency of Government seems to be wanting and in all probability would be very useful.

The idea of rewarding the introduction of useful inventions will probably be embraced without difficulty. But the success of attemps int in this way will evidently depend in a great degree upon the manner of conductin them. It is conceiving conceived that the placing them under some discretionary direction where they may be accompanied by collateral expedients will serve to give them the surest efficacy. It seems scarcely impracticable to apportion by general rules specific rewards for discoveries & improvements of unknown and disproportionate utility.

The usefulness of premiums would probably be greater than can well be may be readily imagined. Their effect under the direction of private societies, upon a very narrowconfined scale, is known to have been considerable in a variety of instances. How much more then may then reasonably be hoped from them, proceeding upon public and more ample extensive funds, under a judicious and liberal management. Premiums are of a nature essentially different from bounties. The latter are applicable to the whole quantity of an article produced and involve a correspondent degree of proportionable expence. The latter are confined to some particular excellence or superiority either in relation to quantity or quality and operable operate only in a few cases; while at the same time they have the effect of producing a general effort. They are therefore a cheap mean of stimulating the enterprise and emulation of a whole community.

With regard to loans they will serve to aid a defect of Capital, till a manufacture shall have acquired maturity enough to aid it support itself. While the public money so employed will neither be given away nor rendered unproductive to the govert.

All which is hum sum

Whether that now contemplated may be deemed of a nature, that will warrant the advancement of an adequate capital, is humbly submitted with the other suggestions in this report by

Alexander Hamilton
Secy. of the Treasury.

59Df, Hamilton Papers, Library of Congress.

Approximately one third of this draft is a clerk’s copy of Tench Coxe’s draft of this Report. Several additional pages are also in the clerk’s handwriting. There are queries and comments in the margin and additions and interlineations to the text in H’s handwriting and in an unidentified handwriting, possibly that of Tench Coxe. All material in H’s handwriting is printed in italics; that in an unidentified handwriting is bracketed.

Words which were underlined for emphasis in the MS are printed with underlines in this draft of the Report.

60Internal evidence indicates that H’s additions and corrections for this draft were prepared between January 27, 1791, and February 4, 1791.

61At this point a page has been inserted, at the top of which H wrote and crossed out: “The objections usually opposed to the encouragement of manufactures.”

62On a separate sheet of paper in the MS of this draft there is a note in Coxe’s handwriting which reads:

“* this note is not to be copied.

“Mr. Pitts Statement to the house of commons in May 1790 placed the exports of G. B. at £18,513,000 of wch. British Mans., he said, were £13,494.000. The imports he said were £17,828,000. The Duke of Portlands Statement in 1783 was £54,000,000 as the Value of all the Manufs. made, i.e consumed & exported. There is no doubt of their increase since 1783.”

The material to which this note refers is not found in Coxe’s draft of the Report. Under the circumstances it seems logical to assume that Coxe’s draft does not constitute his only substantive contribution to this Report.

63See note 52.

64On January 27, 1791, a bill, entitled “An act repealing, after the last day of June next, the duties heretofore laid upon distilled spirits, imported from abroad, and laying others in their stead; and also upon spirits distilled within the United States, and for appropriating the same,” passed the House of Representatives (Journal of the House, I description begins Journal of the House of Representatives of the United States (Washington, 1826), I. description ends , 365). During the following spring it became law (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 199–214 [March 3, 1791]).

65See note 49.

66See note 54.

67See note 55.

68See note 56.

69See note 49.

70See note 49.

71The requirement covering the importation of saltpeter dates back to the founding in 1702 of the United Company of Merchants Trading to the East Indies (1 Ann., Stat. I. C. 12 [1702]). In subsequent years laws to extend and amend this requirement were enacted.

72Before the “Report on Manufactures” was submitted to Congress, this recommendation was carried into effect by “An Act to explain and amend an act intituled ‘An act making further provision for the payment of the debts of the United States’” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 198 [March 2, 1791]).

73See note 49.

74Space left blank in MS.

Authorial notes

[The following note(s) appeared in the margins or otherwise outside the text flow in the original source, and have been moved here for purposes of the digital edition.]

º [to be left out—or pro last read 1790]

º Stands

º [dele: source of]

º particularly wool and cotton

º [less luxurious habits]

º Qr

º [See after]

º [introduced before]

º [before]

º [transpose]
[error—introduced afterwards in its proper place]

º Qr. (1)

º (2)

º (3)

º [(the western posts)]

º (4)

º Quare?

º Qu: (6)

º [qu:] (7)

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