Alexander Hamilton Papers

Alexander Hamilton’s Third Draft of the Report on the Subject of Manufactures, 1791

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

The Secretary of the Treasury in obedience to the order of the House of Representatives of the fifteenth day of January 1790 has applied his attention, at as early a period as his other duties would permit, to the subject of manufactures; 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.

The expediency of encouraging manufactures in the United States, which was, not long since, deemed very questionable, appears, at this time, to be pretty generally admitted. The embarrassments, which have obstructed the progress of our foreign trade, have led to serious reflections on the necessity of enlarging the sphere of our domestic commerce; and the success which has attended manufacturing enterprise in some valuable º branches th has evincedevinced, that the obstacles to the growth of this species of Industry are, at least, not insurmountable.

There are neverthess, still, respectable patrons of opinions, unfriendly to the encouragement of manufactures. The arguments, with which they support these opinions, are substantially of the following nature—


In every Country, say they, Agriculture is the most beneficial and productive object of human labour Industry. This general position, in its application to the United States, derives peculiar emphasis from their immense trats of land, still uninhabited and unimproved. Nothing can afford so advantageous an employment for capital and labour, as the conversion of this wilderness into fruitful and cultivated farms. Nothing, so much as this, can contribute to the population and real riches of the Country.

To endeavour therefore to accelerate the growth of manufactures, by anthe º extraordinary patronage of government is, in fact, to endeavour, by force and art, to transfer an artificial power, or impulse, to change the natural current of Industry from a more to a less beneficial channel. Whatever has such a tendency must necessarily be unwise. This certainly certainly cannot be wise. º Indeed, it can scarcely ever be wise in government to attempt to give a direction to the Industry of its citizens. This, if left to itself, will under the sharpquick-sighted guidance of private interest naturally find its way to wherever there is the most profitable employment; and by such employment onlyalone will the public prosperity be most effectually promoted. To leave it to itself is, consequently, is in almost every situationcase the safest and the soundest policy.

This policy is not only recommended to the United States, by considerations, which apply to affect all nations, but is in a manner,


{ dictated to them to it, by the invincible irresitible force of a very peculiar situation. The smallness of their population compared with their territory—the continual allurements to emigration from the settled to the unsettled parts of the country—the facility with which the less independent situation of an Artizan can be exchanged for the more independent situation of a Farmer—
these and similar causes conspire to produce, and, for a great length of time, must continue to occasion a scarcity of hands


{ for manufacturing occupations, and a dearness of labour generally.
A deficiency of Capital combining itself, With these impediments a deficiency of Capital combines to forbids
a successful competition with the manufacturers of Europe. Extensive manufactures can only be the offspring of a redundant, º at least of a full population. ’Till the latter shall characterize the situation of this country, ’tis vain to hope for the former.

If contrary to the natural course of things, an unseasonable and premature spring can be given to certain fabrics, by heavy duties, prohibitions, bounties, or other forced expedients, this will only be to sacrifice the interests of the community to those of particular classes. Besides the º misdirection of labour, a virtual monopoly will be given to the persons employed on such fabrics; and an enhancement of price, the inevitable consequence of every monopoly, must be defrayed at the expence of all others. It is far preferrable, that those persons should be employed in the cultivation of the earth, and that we should procure with the surplus of our soil, the commodities, with which foreigners are able to supply us, in greater perfection, and upon better terms.

This mode of reasoning is founded upon principles just in the main; but frequently carried by those who adoptespouse them to an erroneous extreme.


{ Carefully guarding attending to the exceptions by which they are qualified and limited, they ought to serve as cautions against extremes of amn opposite kind. If they do not tend to convince, that all legislative aid should be withheld from particular branches of industry, which appear to require it, they at least inculcate, forcibly, that it ought to be afforded with moderation and measure—that the real aptitudes in the state of things for particular improvements and undertakings should be consulted with circumspection and care, and that even these should be unfolded, by gradual, systematic and progressive efforts rather than impelled into maturity by violentprecipitate and violent disproportioned exertions.

But in order to an accurate judgment of the true weight of the objections which restrict oppose are urged against the encouragement of manufactures in the United States, it is necessary to take a concise view of the circumstances and º considerations which seem capable which are to be found in the contrary scale.

Though it is readily to be admitted that Agriculture, as the primary and most certain source of national supply—as the immediate source of subsistence and nourishment to man—as the principal source of those materials, which give employment and support to other kinds of labour, as involving a state most favourable to the freedom and independence of the human mind, one perhaps most conducive to the multiplication of the human species, has intrinsically a strong claim to preeminence over every other kinds of industry; yet it is not equally evident that it is (as has is alleged) in any substantial meaning of the term more productive than every other kind. The reality of this suggestion has not been verified by any accurate detail of facts and calculations; and athe general arguments which is are made use of to prove it isare rather quaint thansubtil and paradoxical than solid or satisfactory. It is to this effect—that in the productions of the earth nature cooperates with man, and that the joint result of their united labour must be greater than the result of the labour of man alone.

But this does, by no means, appear to be a necessary inference. It is very conceivable that the labour of man alone bestowed upon a work, requiring of great skill and art to bring it to perfection may, in the practical estimate of value, be more productive than the labour of nature and man combined; when directed towards more simple operations and objects. And when it is considered to what an extent the mechanical powers are rendered subservient to the prosecution of manufactures, little more than the quaintness of the argument remains. These may be divided into such as are made use of to produce prove that the labour of of artificrs & manufactures is wholly unproductive and that the labour and such as are designed only to the shew that it is less productive than that of Farmers or Cultivators. Of the first kind the principal TheyThe principal of these are in substance to this effect—“Labour, which is bestowed upon the cultivation of land, produces enough not only to replace all the necessary expences incurred towards carrying it on and to maintain those employed in the work—but to afford together with the ordinary profit on the stock employed by the favour farmer, together with the a clear nett surplus or rent for the landlord or proprietor of the soil. But the labour of Artificers and manufactures does nothing more than replace the stock which employs them, or in other words, which furnishes materials tools and wages, and yield the ordinary profit upon that stock. It procures produces nothing equivalent to the rent of the landlord. Neither does it add any thing to the value of the whole annual produce of the land or to the annual value of the whole produce of the land and labour of the country. Whatever additional value is given into those parts of the produce of land which are wrought into manufactures is counterballanced by the value of those other parts of that produced which are consumed by the manufacturers. It can only therefore be by parsimony not butby the positive productiveness of their labour that the classes and of Artificers and manufactures can in any degree add to the Revenue of the countrycommunity. It cannot appear extraordinary either, that agriculture should be more productive than any other species of Industry, when it is considered that in that, nature cooperates with man. The result of their joint labourefforts must be greater than that of the efforts of man alone

To this system which affirms the total unproductiveness of m~ labour it has been very properly answered—that inasmuch as manufacturing labour reproduces an equal value with that which is consumed in carrying it on, and continues in existence the stock or capital employed for that purpose in it, it cannot, on that account alone,ought not to be considered as wholly unproductives:—That though it were admitted to be true, as the system, in question supposes, that the annual consumption of the products of the soil was exactly by the classes of artificers and manufacturers was exactly equal to the additional value given by their labour to the materials upon which it was bestowed; yet it would not thence follow that it added nothing to the revenue of the Society or to the total value of the annual produce of its land or labour. If the consumption duringfor any given period be stated atamounted to a given sum and the additional value value of produce manufactured in the same period during that period at to a like sum, an equal sum the total amount in value of what was produc consumed and produced during that period, would be equal to the two sums, and consequently double the value of the produce agricultural produce consumed. And though the value of what the Artificer or Manufacturer produces should at no time exceed that of his consumption, yet there would be at every moment, in consequence of his labour, a greater value of goods in the market, than would exist independent of it. That it ough instead of saying that the consumption of Artificers and manufacturers is equal to what they produce, it would be more accurate to say that their revenue, or the fund acquired by the value of the product of their labour and destined for their consumption was, in an ordinary way, not more than equal to it. And, thence, it would follow that all the savings of the more thrifty and parsimonious, and from all the surplus acquisitions of superior skill would be positive augmentations of the real ven wealth or capital of the community—ready to give employment to a greater quantity of useful labour. That it is only by similar savings that the cultivators of land can augment the real revenue of a country: For the annual produce of the land and labour of a society can be increased only in two ways—either by some improvement in the productive powers of useful labour actually existing within it or by some augment increase of its quantity. And since the labour of artificers and manufactures, from being capable of greater subdivision and greater simplicity of operation is on those accounts more susceptible of improvement in its productive powers, than that of the cultivators of land, whether it be considered with regard to either as it respects increase of skill in the results from an augemt augmentation of skill or the facility of applying Machinery, than that of the cultivators of land it will follow that the labour employed in Agriculture can in this respect have no advantage over that employed in manufactures. And as far as concerns an enlargementincrease of the quantity of useful labour, this must depend essentially upon an increase of Capital—which again must depend upon the savings that are made of those of a out of the revenue of those who manage or furnish or manage that which is at any time employed; whether in Agriculture or in manufacturing or in any other way.

But while it has been thus contended that the labour of Artificers and manufactures ought not to be considered as wholly barren and unproductive it has been, at the same time conceded that it is not equally productive with that of husbandmen andor cultivators; a position which has hadobtained no inconsiderable currency in this country and which being inof great importance as it in its relation of to maxims of public administration effec is not unworthy of an distinct examination of the grounds on which it rests. One of the arguments made use of in support of it is of so sufercial a nature that it shall be little more than mentioned. It is to this effect. That in nature In the productions of the soil nature (it is said) cooperates with man; and that the effect of their joint labour must be greater than that of the labour of man alone. But thisIt is sufficient to say that this appears by no means to be a necessary inference. It is very conceivable that the labour of man alone bestowed upon a work requiring great skill and art to bring it to perfection may in the practical estimate of value be more productive than the labour of nature and man combined when directed towards more ⟨si⟩mple operations and objects. And when it is considered to what extent the mechanical powers are made subservient to the prosecution of manufactures little more remains than the quaintness of the hypothesis remains.

Another and the principal argument for the superior productiveness of Agricultural labour turns upon a concession of the fact that manufacturing industry yields nothing equivalent to the Nett surplus or rent of land.

In investigating this point The first thing whichthat which strikes the attention in this inquiry is that it is the circumstance which is supposed to constituteat once strikes the attention that the superior productiveness of Agricultural labour seems to turn upon a distinction purely verbal. This species of labour, it is said, besides replacing the expences of carrying on the business, yields the ordinary profit of stock to the farmer (by whom is to be understood the actual tenant of the land) and a nett surplus or rent to the landlord (who is the ultimate proprietor)—While manufacturing labour only replaces the necessary expences of the business carried on together with the ordinary profits of the stock employed, but without any such nett surplus as is produced from land.

But in fact, what is separated into two parts in the first case and under the heads of the ordinary profit of stock to the farmer and rent to the landlord are nothing more than what in the first placesecond case is called simply and singly “the ordinary profits of stock.” To illustrate this idea, let it be supposed that there are two persons—one having, in money, Eight hundred Dollars the other two hundred dollars—Let it further be supposed that the first with his eight hundred dollars purchases a piece of land farm and lets it to the second, for a certain annual rent, who with his two hundred dollars purchases procures the requisite stock and utensils and hires the necessary labours for tilling and planting the ground the land. Here it is evident that the whole Capital employed in order to the cultivation of this farm though belonging to two different persons is 1000 Dollars—the surplus which remains to the tenant after defraying or replacing reimbursing all expences, is the ordinary profit of Stock or Capit his stock or Capital of two hundred dollars and the rent which is paid to the landlord is the ordinary profit of his stock or Capital of 800 dollars: both together are the ordinary profit of a capital of 1000 Dollars employed towards the cultivation of the a farm. All fallacy or confusion This conclusion becomes palpable if instead of considering that sum as an aggregate Capital as divided into consisting of two parts and belonging to two persons, it is considered as one intire under the aspect of one intire capital belonging to one person, who himself cultivates the f is at once the Owner, and cultivator of the farm; an association union of character common in the United States.

Let it on the other hand be supposed that one person having in money a thousand dollars employs it in a particular manufacture. If the manufacture succeed it will defray or reimburse the expences of carrying it on and will yield the ordinary profit of a stock or capital of one thousand dollars employed in that way. If this capital had been owned by two persons who had united it in the prosecution of the same object, the profit as in the case of landlord and tenant would have been divided been between the two and would resemble what takes place in the other case, in relation to the landlord and tenant. Perhaps however a more exact similitude may be found in the case of two persons—one who who is being the lender of money to another who is the undertaker of a manufacture. What ever profit is made by the undertaker over and above the interest paid by him on the sum borrowed and upon whateverany addition of capital which he may have been able from his own resources to apply to the undertaking would be the ordinary profit of his own labour skill and capital and the interest paid to the lender would be equivalent to the rent paid to the landlord. In The interest in one case and the rent in the other are the ordinary profits of different stocks or capitals furnished one in land the other in money for carrying on different businesses—one in land the other in moneyIn one case, Land is the Organ; in one casein the other—gold and silver. in the other.

The rent therefore of the Landlord so far from being a test of superior exclusive productiveness is not even a test of superior productiveness. This last is a question of fact. To decide it it it see is necessary to examine whether a given capital emplowed towards the purchase and culture of a piece of land yields a greater surplus, after defraying all expences, than a like capital employed towards carrying on a particular manufacture, defraying in each case all necessary expences. This examination indeed is not a very simple or easy one. It involves details numerous and complicated. But there is reason to believe that it would not issue in a demonstration of the superior productiveness of Agricultural industry.

In England the rent of the landlord is computed at about 3 per Cent on the value of his landed capital, which is itself computed at about one third the gross product of the land. In the same country it is affirmed that the average nett profit of manufacturing Capital is usually estimated at ten per Cent; which if true would be a proofstrong symptom that manufacturing industry is there more productive than Agricultural. This qualified mode of expression is used because

A partial investigation

A slight investi

The relationresult of a slight investigation of this point in relation to particular parts of the United States and in reference to land owned and cultivated by the same person on the one hand and the brew brueries of Malt liquors prosecuted upon a large scale on the other,, is that the gross annual produce of the Capital employed in the first case is at the rate of  85 and the gross annual produce of the Capital employed in the second case at the rate of   the nett produce in the first case at the rate of and   and the nett produce in the second case at the rate of   This comparison as far as it can be relied upon is strongly in favour of the superior productiveness of manufacturing industry; but it is acknowleged that it has not been extended far enough nor made with sufficient precision to justify a positive inference of that kind. Another argument which has been made use of to prove the superior productiveness of agricultural labour is of the following. But there are a variety of other lights in which the subject presents itself tending to shew that manufacturing labour is not only not unproductive; but that the establishment of manufactures tends to increaserender the total mass of the useful & productive labour of a community greater even than it could be without them and even to augment the productiveness of Agriculture.

In tracing the topics which warrant such a conclusion it will be necesary to resume and review some of the points that have been already touched.

As incident to the general doctrine one of the positions º maintained by which belongs to the system which that which thatdenies the productiveness of M Indy which has been stated maintainsis also That the labour of Artificers and Manufactures adds nothing to the total value of the whole annual produce or revenue of the society of the land and labour of a country, asserting that they because they consume (it is alleged) as much in value of the produce of the land as they furnish in as they produce

The answer which has been noted as one that has been given to this position is certainly conclusive and satisfactory. The revenue of the society is evidently increased by the whole additional value given to the raw materials which are manufactur manufactured.

To render this idea more obvious and favour familiar it may be of use somewhat to dilate it & perhaps even to even place put it to place it into another light.form The consumption of a cou country together with the yearly current savings or accumlations of the industrious and industrious or thrifty may be stated as corresponding with its revenue or income. That consumption The Consumption of a Country has principally relation to principally to does not consist merely of the immediate productions of the earth in a compound of articles of subsistence all articles of cloathing articles of furniture and equita equipage, houses for habitation. Though Some of these objects, particularly to the last, have a degree of permanency, which seem to render it scarcely proper to class them among those of a consumeable nature; yet the gradual wear to which they are subject º will justify and which requires occasions a continual expence in reparations appears to justify their being included—at least for the purpose for which it is done. It is however not material to the argument, whether they are included or not. The value of all these articles in the state in which they are consumed, not in the primitive condition of raw materials determinesd consequently, the total amount in value of the consumption of the society. And for the same The value which each raw material acquires from its conversion it into a fabric enters into the estimate. And by the same rule it constitutes an increase of the Revenue of the Society. The consumption of a community together with and the savings of the industry industrious and thrifty (which go towards increasing the mass of the national capital) may be said in a general sense to correspond with its revenue or income.

Admitting it to be true that the manufacturer consumes exactly as much in value of the produce of land as he adds to the value of the raw material which he manufactures, it thisthere would be no more a reason on this account, for considering his labour as unproductive itthan there would be to consider that of the cultivator to be unproduct which producesprovides the surplus he exchanges with the manufacturer, as unproductive, because he consumes the fabric, which he receives in exchange for his provisions and raw materials.
  The allegation that the Manufacturer consumes as much of the produce of land as he adds to the value of the raw materials which he manufactures is of no more force to prove that his labour is unproductive than would

To say that the labour of the Artificer or Manufacturer is unproductive, because he consumes as much of the produce of the land, as he adds in value to the raw materials, which he manufactures, is as inconclusive, as it would be to say that the labour of the farmer which produces furnishes the materials exchanged with the manufacturer is unproductive; because he consumes an equal amount in value of manufactured articles. Each furnishes a certain proportionquantum of the product of his labour to the other of a given value and each destroys or consumes an equal proportion ora correspondent quantum of the labour of the other. The But the maintenance of two citizens in the mean time, instead of one, is going on; and they together consume at least double the value of what is produced from the land.

If instead of a farmer the artificer, there was a farmer only he would be obliged to devote a part of his labour to producing cloathing and other articles which in the other case he wouldwould procure of the artificer. He would of course produce proportionably less from his land. And the whole quantity of his production, in this case, in provisions raw materials and manufactures, would not exceed in value would be wouldwhat would be produced in the other case in provisions and raw materials only.

If there was an artificer as well as a farmer, the latter would be left at liberty to apply his whole labour to the cultivation of his farm. A greater quantity of provisions and raw materials would consequently be produced; equal as has been observed to the whole amount of provisions raw in value of the provisions raw materials, and manufactures which would be produced on the other supposition. The artificer, or manufacturer, at the same time, would produce in manufactured articles like amount in value in manufactured articlesa (deducting the first cost of the materials) a part of which he would give in exchange for the surplus provisions and materials of the farmer, and the remainder he would apply to his own consumption and use. Here then would be two quantities, or values, instead of one, and the revenue and consumption would be double in one case what it would be in the other.

If in place of both these suppositions, there were two farmers, and no artificer, each of whom applied a part of theirhis labour to the culture of the land and another part to the fabrication of the manufactures of which theyhe might stand in need, the portion of the labour of each bestowed onupon land would produce the same quantity of provisions and materials would as would be produced in the last case by the intire sum of the labour of one applied in the same manner and the portion of the labour of each bestowed upon manufactures would produce the same quantity of manufactures as would be produced in the samelike case by the intire sum of the labour of one applied in the same manner. Hence the value of the labour of the two farmers would not be more than equal to that of the labour of the farmer and artificer and hence it is perceived that the labour of the artificer as well as that of the favour farmer is positively productive occasionning aa a real au augmentation of the revenue of the community.

The labour of the Artificer replaces to the farmer the that portion of his labour with which he produces the materials which heof exchange with the Artificer and which he would otherwise have been obliged to bestow upon manufactures; and while the Artificer thus purch enables the farmer to enlarge his stock of agricultural labourindustry of which he purchases a portion for his own use, he also furnishes himself with the manufactured articles, offor which he has himself occasion. Thus he not only produces and gives an equivalent for the labour of the farmer which he consumes but he produces an additional supply of manufactured articles for his own own consumption & use.

In the course of these illustrations the labour of the Artificer and farmer are considered as equal to each other. But while this method of speaking was necessary to the simplicity and perspicuity it will not be understood that it is intended to state equal quantities of the two kinds of labour as precisely equal in value. That of the Artificer may be somewhat less or more valuable without affecting the maid main scope of the argument which only aims at shewing that it occasions a positive augmentation of the produce or revenue of the Society.

From what has been already it said it appears clearly that the labour of the Artificer more than replaces that portion of the labour of the farmer which he consumes; namely by producing an additional supply of manufactured articles for his own use. But it does still more than this. It furnishes a surplus which compensates for the advance of capital either by himself or some other person towards his own maintenance and the providing of materials for his work. This is the ordinary profit on the stock employed in carrying on the business and is as effective an addition to the income or revenue of the society as the rent of land. Hence the labour of the Artifcer may be regarded as consisting of three parts that which pl replaces the so bo labour of the farmervalue of the provisions purchased of the farmer & of the materials of agricultural labour employed in the fabric that which furnishes the Artificer with cloathing and other necessaries of which in he stands in need and that which constitutes the nett profit on the Stock employed. The two last portions seem to have intirely lost sight of in the assertion that ma doctrine do which maintains that the produce of the labour of the Artificer does no more than replace the produce of the land which he consumes.


But there are a variety of other considerations from, which it may be inferred that the establishment of manufactures in a country not only manufacturing artificers and manufacturers not only The following But there remain to be enumerated a variety of important circumstances by which extensive manufacturing establishments contribute to the positive augmentation of the Revenue of thea Society; but in fact rinders it itrendering it in fact greater than it can could possibly be without them.

These considerations relate to

1   The Division of Labour

2   The extension of the powers of machinery

3   The furnishing to classes not principally to other classes of the community additional employment.

4   The promoting of emigration from foreign countries

5   The giving a greater scope to the difference of talents and dispositions ofamong mankind


6   The furnishing a more ample and various field for enterprise

7   The creating in some instances a new & securing in all a more certain and steady demand for the surplus produce of the soil


8   The furnishing a more various and abundant market to foreigners.

These articles
to be taken up

9   The enlargement of the spere sphere in ought out of which parsimonious savings may be made to increase the permanent capital of the Nation.

There is scarcely any thing of greater importance in the œconomy of a nation than the proper division of labour. The separation of different occupations causes each to be carried to a much greater perfection than it could possibly acquire if they b were blended. This arises prin principally from three causes—1   the greater skill and dexterity which naturally result from an undivided and constant application to the same, object and a single object. It is evident, that these qualities must increase in proportion to the separation and simplification of objects and the steadiness of the attention which is bestowed upon them each—and must be decrease or be less in proportion to the complication of objects and the division of the attention number among which the attention is divided. 2   The saving of time, which arises from by avoiding athe loss of it incident to a frequent transition from one operation to another of a different nature. This depends on various circumstances—the transition itself—the putt the arrangements requisite to order, in regard to the implements tools machines or other means employed on the operation which is to be req relinquished—the preparations which must precede the commencement of a new one—the interruption of the impulse or momentum which the mind of the workman derives from having being actually engaged in it a particular operation—the dissipation of the mind,—the hesitations reluctances and saunterings which oftencommonly attend the passage from one kind of business to another. 3   An increase of the use of Machinery. A man engaged in a single operation will naturally be more led and will have it more in his power to exercise his imagination and in inventing methods to facilitate and abrige labour than if he is distracted and harrassed by a variety of independent distinct and dissimilar operations. The invention and application of machines will of course be necessarily more multiplied and extended in the former than in the latter case. This will happen too from another cause. The fabrication of machines, in various instances, becoming itself a distinct traittrade, the Artist employed in it act under underhas all the advantages which have been noticed noted att which have been enumerated to lead him to improvements in his particular Art.

Thus it is evident, that the mere division of labour; or the siparation of the calling of the farmer from that of the Artificer or manufacturer has the effect of rendering increases augmenting the productive powers of labour and consequently its the total mass of the produce or revenue of a a Country community. And in this sim single view of the subject the utility of artificers or manufacturers to that end as contradistinguished from cultivators is obvious.

If the Cultivators of land werecould themselves to be the fabricators of those manufactured articles, of which they stand in need, the state both of agriculturehusbandry and manufacturesof the arts would be incomparably worse than under a different the opposite arrangement. in the opposite system.


The inducements to make the soil productive The quantity of every species of industry would be less and the quality much inferior—the manufactures produced would be coas cour less abundant coarse and bad—the lands would be ill cultivated and the whole community ill supplied. In regard to Agriculture in particular, not only the advantages resulting from the division of labour would be lost, but the inducements to render the land productive would be sup circumscribed to within the narrowest limits. They would be limited to the maintenance of each family in the simplest manner. Neither the gratification of the manu inclinations which are incident to a state of greater improvement, nor the desire of desire of multiplying enjoyments nor of accumulating wealth, by the an exchange of surplus productions of the soil would prompt to exertions for obtaining such a surplus.

Their utility to the same end is not less obvious as it relates to an extension of the powers of machinery in the industry.

The second circumstance which has been mentioned, namely the extension of the Powers of Machinery by manufacturing establishments has been in part anticipated. But it deserves to be viewed viewed in one or two additional lights.


A substitute for domestic manufactures is the existence of foreign ones the products of which can be exten obtained in exchange for those the domestic products of the soil. But Since by this substitute a very great advantage for the increase of the industry of a country is transferred. It is certain that appears not to admit of dispute that manufacturing and pursuits are susceptible of the application admit of the use of machinery in much greater extent and variety than Agricultural ones. The reality of this fact must be referred to observation—nor can this it can appear extraordinary, when it is considered how few and simple are the operations of agriculture and how numerous and complicated are those of Agriculturemanufactures. If true, all the difference in the degree is lost to the countrycommunity, which instead of manufacturing for itself procures the manufactured produce for which it has occasionfabrics necessary to the supply of its wants from other countries. The circumstance of the employment of Mech Machinery froms forms a weight froms an item of prodigious importance in the general mass of national industry. Tis an artificial force brought in aid of the for natural force of man and is to all the purposes of labour an increase of hands an accession of strength. Hence Those occupations therefore in which in can be exerted to most advantage other things being equal must be most conduceconducive to the augmentation which give the greatest scope to it add proportionably to the aggregate momentum of industrious effort and consequently to the aggregate product of industry.

The furnishing to other classes of the community additional employment ismean another and a very valuable effect of theand a very valuable mean by which the establishment of manufactures tends to increase the mass of Industry and the Revenue of the Society. In towns and neighbourhoods were where manufactures are established besides those who are regularly and constantly engaged in them bred to them they adopt give occasional& give employment to many persons who would otherwise be idle, either from the bentbyass of their dispositions, the habits they may have acquired infirmity of body or some other cause indisposing or disqualifying them for the toils of the country; and they give occasional employments also to families industrious families who devote the leisure are willing to emplo devote the leisure, which the intermission of their ordinary occupations allows them, to collateral pursuits by which they can increase their acquisitions or their enjoyments. The two classes of Women and Children particularly are rendered more useful and more early useful by means of manufactures than they could otherwise be. Of the number of persons employed in the Cotton manufactories of Great Britain it is computed that nearly ⁴⁄₇ are women and children—of whom the greatest proportion are children. Thus it is one of the recommendations of manufactories that that they give M occasion to the exertion of a greater quantity of industry even by the same number of persons inhabiting a place in which they prevail than if they did not exist—another circumstance by which they serve to increase the sum of the produce & revenue of the society.

Of a similar nature is their tendency to draw emigrants from foreign country countries. Men are generallycommonly reluctant to quit onethe one course of occupation and livelihood to whic for another unless invited to it by very º apparent and proximate advantages. Many who would resolve to go from one country to another, if they had a prospect of pursuing with more benefit the callings to which they have been educated will often not be tempted to change their situation by the prospect of doing better in some other way. This consideration is of great importance Manufacturers, who listening to the invitations of a better price for their fabrics or their labour, of greater abundance andgreater cheapness of subsistence, both of provisions and raw materials of an exemption from the greater part of the burthens taxes and burthens which they endure throughout Europe the old world of greater personal independence under the º operation of a more equal government would flock from Europe to the United States to pursue their own trades and professions, if they were once made to understand the advantages with an assurance of countenance and encoura countenance and employment will not readily be persuaded to transa transplant themselves for the pup purpose of becoming cultivators and husbandmen. If it be true (as it is presumed to be) that it is the interest of the United States to open all the sluices of European emigration and a powerful argument may be derived from this source in favour of the encouragement of manufactures. It will probably be found a fruitful mean of augmenting the population, and with it the useful and productive labour of the country. Here we perceive a resource for the prosecution of manufactures without deducting materially from the hands which would naturallyotherwise be drawn to tillage and we perceive and even for the indemnification of agriculture for those who might be withdrawn or witheld from it. Many whom manufacturing views would in the first instance bring over would afterwards after their arrival yield to the temptations temptations wh which the particular situation of this country holds out to Agricultural pursuits. And while Agriculture would derive many positive and unqualif unmingled advantages from the growth and progress of manufactures in the United States, it is even a problem whether it would gain or lose even in the particular article of the number of persons who would be employed in carrying it on.

The giving scope to the varietydiversity of talents and dispositions which distinguinsh mankind discriminate men from each other is a much more powerful mean of augmenting the fund of National Industry than may at first sight appear. It is aan common observation not less just than common that minds of the strongest and most active powers for their proper objects fall below mediocrity and labour without effect, if confined to uncongenial pursuits. Whence it will follow that the results of human enterprise and exertion must be immensely augmented by the diversification of theirits objects when everyall the different species of industry existsprevail in a community each citizen is individual each citizen is then able to find his proper natural element and can there call into activity forth the whole vigour of his geniusnature.. And the community is benefitted by the services of each of the its members in the way in which he can serve it with most effect.

If there be any thing in a remark which is every where m to be met with, namely that there is a peculiar aptitude in the genius of of the people of this country for mechanic inventions and improvements it will add great weight to the general reasoning—would afford a strong argument for giving opportunities for thatto the operation of that propensity by the encouragement of manufactures.

The benefitseffects of enlarging the field of enterprise, by varying the industrious pursuits of a community, are of a nature allied closely allied to those which have been just attributed ascribed to ex an extension of the opportunities for exercising the different talents and dispositions of men. That a general spirit of enterprise is a fruitful source of national wealth is readily admitted as a general proposition; but the vast differences which are made in the aggregate of public prosperity by situations more or less favourable to it are not easy even to be conceived. Every new sience which is opened to the busy nature of man to rouse and exert itself is the addition of a new energy to the general stock of effort. It might be compared with the discovery of some new power in mechanics. This most useful and prolific spirit must necessarily be contracted or extended in proportion to the simplicity or variety of the occupations which obtain in a society. A nation of mere cultivators will experienc possess less of it an than a nation of cultivators and Merchants—and a nation of cultivators and merchants than one of cultivators artificers manufacturers and merchants.

One of the great arts of enriching a nation is to stipul cherish and stimulate the activity of the human mind by multiplying its objects. Things even in themselves not positively advantageous be often become come so by their tendency to increase promote greater exertion. This idea within due limits, is well worthy of the attention of the Legislators. of a Country.

To create in some instances a new and to secure in all a more steady demand for the surplus produce of the soil—This is another and a very principal mean by which the establishment of domestic manufactures tends to augment the produce or revenue of a Country. It is evident that the exertions of the husbandman will be steady or fluctuating feeble or vigorous in proportion to the steadiness or fluctuation adequateness or inadequateness of the market to which he can send the surplus produce of his lands; and consequently their produce will be greater or less in the same proportion. A domestic market is for this purpose infinitely more desireable than a foreign one because in the nature of things it is infinitely more to be relied upon. It is a primary object of the policy of most nations to be able to supply themselves with subsistence; and manufacturing nations endeavour as far as circumstances permit to procure from their own soil the raw materials which are necessary for their own workmen. This disposition is not only carried to what may be deemed a reasonable extent and salutary extent; but the spirit of moneymonopoly in many cases begets carries it to an extreme, which defeats the end aimed at.. It seems not to be recollected that nations which have no not mi mines can only procure the precious metals in exchange for the products of their industry—that those which have not mor no manufactures can only neither mines nor manufactures can only procure the manufactured articles of which they stand in need by an exchange of the products of the soil; and that if those nations who can best furnish them with manufactures are not willing, to give a free course to the exchange of those products, they must of necessity endeavour to manufacture for themselves. The consequence of which must be that the manufacturing nations will abrige the advantages of their situation because they are unwilling to permit the Agricultural ones to reap the benefits of theirs. They lose the substance in the vain project of selling every thing and buying nothing.

But the effect of the policy which has been stated is, that the foreign demands for the products of the soil of Agricultural country countries (provisions especially) is rather casual and occasional than usual or constant. To what degree any injurious interruptions of the demand for the staple commodities of the United States may have been experienced on this account must be referred to the judgment of those who are engaged in carrying on the commerce of the country. But it is presumed it may be taken for granted that such interruptions have been severely felt; either in a want and that markets have either been wanting or in so low a state as to oblige to rumours sacrifices in respect to the price.

When it is considered how muchfast the increasing settlements of the United States must augment the surplus product of thetheir soil and when the inauspicious symptoms which have appeared in some late regulations of Europe are duly attended to (however the necessary force of circumstances may be counted upon for counteracting an artificial policy and for repellingsilencing an overweening anxiety for the issue) prudence we shall be naturally led to regard the foreign demand for that surplus as too

error to contrast
manufactures &
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precarious a dependence and to a serious consideration of the means of finding a substitute in an extensive domestic market.

To have such a market, it is evident, there is no other other way than to promote extensive manufacturing establishments. Artificers and manufactures are the principal consumers of the surplus produce of the soil.

This idea of a se an extensive domestic market for the sup surplus produced by the labour of the country is of the greatest importance. It is of all things, that which will conduce most to a flourishing and vigorous state of Agriculture. As far as the number of hands who would be employed in tillage may be diminished by being drawn to manufactures it might possibly occasion a less quantity of lands to be under culture but those which were so would be much better improved and far more productive. And while the condition of each individual farmer would be meliorated the the total mass of Agricultural production would probably be increased. This evidently depends as much perhaps more as well upon the degree of improvement as upon the quantity of land improved.

The establishment existence establishment of domestic manufactures depends not only occasionsfurnishes a market wh for those articles which have been accustommed to be produced in abundance in a particular country but it creates a demand for the others which either have not been accustomed to be produced before or in much smaller quantity. Thus the productionculture of silk & the cult production of wool now circumscribed within very nam norrow limits in the UStates would not fail to grow with the growth of manufactures of those articles. A Animals Plants minerals and other fossils are produced and brought into use which were before neglected and Supplies are called for both from the surface and thefrom bowels of the earth which were before neglected. Animals plants & minerals each earths stones are produced acquire an utility and value which were before unknown. to them.

The result of the whole is not only an increase of the total mass of productive labour, but an improvement in the state of Agriculture, certainly an amelioration of the condition of those who are employed in it.


The furnishing a more various and abundant market to foreigners—in consequence of the establishment of manufactures is of a nature simil is attended with effects similar to those which have been ascribed to the securing an extensive domestic market for the surplus of the soil.

But as there are many additional considerations involved in this circumstance which would be improperly anticapt anticipated here it will be more properly enlarged upon in another place.

The foregoing considerations seem sufficient to satisfy the mind that, in the abstract, it is the interest of every communities to diversify the industrious pursuits of the citizens—and that the establishment of manufactures has a tendency not only to increase the total general stock of useful and productive labour; but even the to improve the state of Agriculture, certainly to ameliorate the condition of those who are employed in it. There are other as views of the subject which it is presumed will confirm this inference; previous to which it will be useful to see what can be said against the general doctrinearguments which have been used particularly in in relation to a Country circumstanced like the United States.

It maymight be observed with considerable force that however true it may be that a state which possessing large tracts of vacant and fertile territory is at º the same time secluded from foreign commerce would find its interest and the interest of Agriculture in diverting a part of its population from tillage to manufactures; yet it will not follow that the same thing can be advantageous to a country which having such vacant territory is at the same time in a situation by means of external commerce to procure on good terms from foreign nations all the fabrics which it may want. This all the effects at least secures all the advantages of a division of labour leaving the farmer at liberty to pursue exclusively the culture of his land and to procure the enabling him to procure the manufactured articles requiredrequisite for his use with the surplus of its produce in exchange for its produce. And however true it may be that in settled countries the existin diversification of industry increases the total mass and augments the Revenue of the Society, it can hardly be conceivable that any thing can be of such permanent advantage to an unpeopled country as to turn its wastes into fertile fields. Though the revenue in the mean time may be less the capital must ultimately be greater. And it may be added that as far as foreigners can supply those articles cheaper than citizens, the difference is an enhancement of the value of Agricultural labour; a smaller portion of which will then command a greater quantity of manufactured produce.

This objection is worthy of a particular examination.

If the free system were the prevailing system of Nations—if industry and commerce were every where left to their natural course, the considerations which dissuade a Country in the predicament of the United States from the zealous pursuit of manufactures would doubtless have very considerable weight. It will not be affirmed that they might not be trusted with a great degree of safety be permitted with few exceptions, to serve as a rule of national conduct; and that the ultimate though some very important advantages might in consequence of it be relinquished or postponed to a distant day. In such a state of things each country would have the full benefit of its peculiar advantages to compensate for its disadvantages or deficiences. or d If one was in condition to produce and supply manufactured articles on better terms than the other the latter might be able to supply the produce of the soil on better terms than the former. And a free exchange mutually beneficial would be carried on between them supporting in full vigour the industry of each. And though the circumstances which have been mentioned and others which will be added render it prop probable that the Nations merely Agricultural would not enjoy the same degree of opulence in proportion to their numbers as those which were both Agricultural and manufactural; yet the progressive improvement of the lands of the former might in the end in compensate for an inferior degree of opulence in the mean time; and in a case where considerations are pretty equally ballanced the option ought perhaps always to be in favour in favour of leaving industry to its own direction.

But such a performperfect freedom of intercourse ishas been very far from characterising being the being the policy of Nations. And to judge from recent events the contrary spirit would seem rather to gain than to lose ground.

The consequence of it is that the United States are in a great measure in the situation of a Country secluded from foreign commerce. They maycan indeed obtain with ease from abroad without difficulty the manufactured articles which they require; but they experience numerous and very injurious impediments to the emission outlet and vent of their own commodities. Nor is this the case in reference to one foreign Nation only—The regulations of different countries with whom we have the most extensive intercourse, Great Britain France Portugal and Spain & Portugal throw serious obstructions in the way of the several of the principal staples of the United States.

The Corn laws of Great Britain86 shut the European market against our grain except in rare and extraordinary cases; and by a late ex ex intirely against the products of our fisheries.87 The markets of her Islands are indeed open to all our commodities (except  ) but it is under the disadvantage of an exportation in her own ships.88
  France also excludes from her European market our   and from her West India markets all her grain our grain, except rice and Indian corn and our Pork.89 In particular emergencies the exclusion is suspended or relaxed but it is the general policy. Our Tobacc A serious obstacle has also been thrown in the way of the importation of our Tobacco into France by a difference of duties on the article imported in French or American bottoms, which can only not amount to a prohibition of the importation in our own vessels by an absolute a deficiency of French Vessels.90

In such a postureposition of things the United States cannot exchange commodities with Europe

In such a state of things the want of reciprocity would render the principles

upon equal terms and the want of reciprocity would render them in a great measure the victim of a system which is calculatedpersuades them to confine their views to Agri Agricultural Industry and to refrain from attempting a progress in any other species. manufactures. A constant and increasing necessity on their part for the the commodities of Europe and only on occasional andor partial demand for their own could not but check the progress of their Industry and leave them in a state of impoverishment compared with the degree of opulance opulence to which their faculties and resources and the natural ought to lead them give them a right their political and natural advantages give them a right to aspire pretend.

It is not meant by what has been said to complain heap censure on the conduct of any other nations towards the United States stigmatise the policy of other nations. What has been remarked with regard to the conductregulations of certain foreign nations is not designed neither for complaint nor censure. ’Tis for them to judge whether by grasping at too much they do not lose the advantages more than they gain; defeating the advantages which relative situations and a more natural policy would secure and long preserve to them. ’Tis for the United States to consider by what means they can best indemnify themselves for the impediments to their external course b commerce by giving a new direction to their pursuits and by opening new domestic resources. render their prosperity least dependent on the projects and vicissitudes of foreign policy.

It is no small consolation that already the measures which have embarrassed our Trade have accelerated internal improvements which upon the whole have bettered our condition. To diversify develope and extend these improvements is the surest and safest method of indemnifying ourselves for any inconviences which those or in similar measures have a tendency to occasion & will be found the most effectual retaliation, for any unkindness of disposition (if any there has been) which may have dictated them. If Europe will not consent to take from us the products of our soil upon terms consistent with our interest let us contract as fast as possible our wants of her.

The transformation of their waste into cultivated lands is certainly an idea of great weight and importance in the œconomicalpolitical calculations of the United States. But the more degree in which this may possibly be retarded by the establishment of manufactures does not appear to counterballance the powerful considerations in favour of the encouragement of manufactures which operate in favour of their encouragement.

It is pretty evdsufficiently evident that the it is more the interest of a community even confining the question viewing the question only in relation to the state of its Agriculture to have such of its lands as are under cultivation well cultivated than to have a greater quantity under inferior cultivation. The product of total amount of the product of its soil may even be greater in the first case than in the last. And if manufacturers for the reasons which have been assigned should promote a more steady and vigorous cultivation of the lands occupied than might otherwise be the case, they might abundantly indemnify for any progress diminution of the progress of new settlements. Not only the income but the Capi real capital of the nation may might be greater increased by them. The smaller quantity of lands under good cultivation might be truly worth more than the greater quantity under bad or indifferent culture; independent of the increase of active capital which naturally results from manufacturing industry.

But it does by no means follow that even the progress of new settlements would be retarded by the extension of manufactures. The desire of being a propriet proprietyproprietor of lands depends upon such strong principles in the human breast, that where the opportunity of acquiring is so easy as it is in the United States the proportion must be small of those, whose circumstances would otherwise lead to it, that would be diverted from the pursuit toward manufactures. And it is very probable as before intimated that the accessions from Europe of persons who originally drawn over by manufacturing views would abandon them for Acricultural ones would more than compensate for those of our own citizens who might happen to be detained from them.

It is any idea of great consequence to the affairs of this Country to open as many avenues as possible to European emigration; which will º best be affected by multiplying the objects upon which the industrious of all descriptions can be employed. The overflowing of these streams can hardly fail in the result to benefit Agriculture, which is very justly considered asthe common center of attraction and as well as the predominant interest of the United States.

The objections which consider represent an impracticability on the part of the United States to make any considerable progress in manufactures require next to be examined. These relate to three points—the scarcity of hands—the consequent dearness of labour—the want of Capital.

The circum two first circumstances are in a considerable degree real and ought to be admitted within due limits as obstables to our success in manufactures; especially those of the finer and most costly kinds. But there are various considerations, which diminish their weight, and seemseem to afford an assurance that many very useful and extensive manufactories may be prosecuted with advantage.

First with regard to the scarcity of hands—The fact itself must be applied with material qualifications to certain parts of the United States. There are large districts of country which may be considered as pretty fully peopled; and in which numerous flourishing and increasing towns have grown up; and this notwithstanding a continual drain for distant settlement. If these districts have not already arrived at the point at which the complaint of a scarcity of hands ceases, they appear, at least, to be not very remote from it, and to be still approaching to towards it. And Not being equally happy in agricultural advantages with some other parts of the United States they exhibit a proportionably stronger tendency towards other kinds of industry. In these districts there may be discerned no inconsiderable maturity for manufacturing establishments.

But there are circumstances which have been already noticed with another view that lessen the effect of this scarcity every where. These circumstances are—the extensive use which can be made of women and children, on which point, a very pregnant & instructive fact has been stated: the vast extension employment which late improvements have given to the employment of machines which substituting the agency of firer and water º to that of manual labour has prodigiously lessened the necessity for manual labour. Of this, the mill for spinning Cotton invented in Great Britain within the last seventeen years is a signal example. In consequence of it, the preparation of the Cotton for spinning and the spinning of it into yarns are performed by the mere force of machinery to a very great extent with only a veryvery small number of persons to attend the process. and collect the results

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Whence it has happened that Great Britain is not able not only to supply herself with the cotton manufactures which she formerly procured from India, but probably the rest to export any quantity for which a demand can be found.

The employmen occasional employment of persons engaged in other occupations during the hours or seasons of leisure. This is not only a resource for procuring an additional supply of labour, but as has been remarked in another give place gives besides giving occasion to the exertion of a greater quantity of labour by the same number of persons and increasing the general stock of labour (as has been remarked in another place) is a materialmay also be mentioned as a resource for carrying on manufactures and obviating the inconveniences of a scarcity of hands for the prosecution of manufactures; though it is of less importance than any other.

The attraction of foreign emigrants—This is a very important and efficacious resource for remedying the defect whi of hands. Whoever examines with a careful eye the composition of the population of our towns will be convinced how much this resource may be relied upon. This presents a large number of ingenious and valuable artists and mechanics, who, by expatriating from the old world, have essentially bettered their own condition and materially added to the industry and wealth of the new. It is demonstrated by the fact experience already had, that if the United States should exhibit the countenance of a serious encouragementprosecution of manufactures, considerable numbers of European workmen will be induced to transplant themselves to the United States. How indeed should it be otherwise, considering the numerous and powerful attractions which the situation of this country presents and which address themselves to so many strong passions & interests? The personal equality and independence of condition its citizens the superior price of labour—the actual abundance and cheapness of provisions—the growing abundance and cheapness of raw materials—the º lightness of taxes—the exemptions from tythes & corporation restraints, would furnish differ allurements to different descriptions of person these and other circumstances, operating differently indeed upon different descriptions of personals but powerfully upon each, would present to foreign Artists & manufacturatures prospects too alluring to be resisted when it was once clearly understood when that the state of things here afforded a certainty of employment in their respective branches.

It may be said therefore, in respect to hands for carrying on manufactures, that we should in a great measure trade upon a foreign stock, reserving our own for the cultivation of our lands; as far as as character and circumstances might dictate.

Secondly. With regard to The dearness of Labour—This depends essentially on two circumstances, that which which has been just discussed namely the scarcity of hands one that which has been just discussed, or the dearness of labour, scarcity of hands—the other the greatness of profits.

As far as it depends on the is a consequence of the scarcity of hands, all the circumstances which lessen that this inconvenience have a similar effect upon the other.

The disparity indeed, real disparity indeed which exists in this respect between certain parts of Europe and certain parts of the United States is not so considerable as may have been imagined. And the effect of this disparity in the final result is evidently diminished in proportion to the use which can be made of machines. To illustrate this idea let it be supposed that the difference of price in two countries of a given quantity of labour manual labour requisite to the fabrication of a particular commodity is as 10—and that some mechanic power is substituted in both, which performing half the requisite labour leaves only half to be done by hand, it is evident that the difference of in the pricecost of the fabrication of that commodity produced in each country, as far as it is connected with the price of labour, will be reduced to five instead of 10 as it would if have been the case, independently of the employment of that Power. To procure all such Machines as are known as are made use of in any part of Europe can only require the necessary pains. And some of them To prepare them here is in most cases practicable on nearly equal terms. As far as they depend on water some peculiar advantages may be claimed from the uncommon variety of situations adapted to mill seats with which this many parts of the U States abound.

As far as the dearness of labour is a consequence of the greatness of Profits, in any undertaking branch of business, it is no obstacle to its sec success, but because the Undertakers can well afford to pay the Price.

There appears to be no doubt that undertakers of manufactures in this Country can at this time afford to pay higher wages to the workmen they may employ than are paid to similar workmen in Europe. Generally speakingThe component parts of The prices of foreign manufactured articles in this country in the market of the United States which will for a long time regulate those of domestic manufacture, may be considered as compounded of these ingredients—the first cost of the materials, wa the wages of the workmen including the taxes w if any, which are laidpaid upon them, the expence of tools and machinery & tools the wages of the workmen by whom they are fabricated, the profits of the stock of the Undertak capital or stock employed in the business, the commissions of an Agent to purchase them where they are made, the expence of transportation from thence to the United States including the taxes if any which are paid upon exportation, the the the taxes or duties on importation—the profits of the importing Merchants who import the articles.

As to the first article item, the cost first cost of the raw materials, the º advantage upon the whole is on the side of the United States and in a little time might be rendered much more so.

As to the second, the wages of the m workmen, the comparison is to the disadvantage of the United States; though as already remarked, not in so great a degree as has been commonly supposed.

As to the profits of the stock employed in the manufacture these are alike applicable to the domestic as to the foreign manufacture and must be excluded from the calculation.

But as to all the succeeding items they are alone applicable to the foreign nat manufacture and constitute a mass of extra charge upon it º which cannot be les computed at less than 40 or 50 per Cent on the Cost at the foreign factory and which must much more than counterb in the competition between domestic and foreign manufactures must be much more than a counterpoise for the difference in the price of labour. º The statement of the amount of these charges will not appear high when it is considered that the Commissions of Agents & expence of transportation alone amount on different articles from 15 to   per Cent.

Domestic manufactures therefore can well sustain the extra price of labour as far as it is real, and prosper in defiance of it.

Thirdly. With regard to a want of capital—This objection is of a nature rather indefinite, one which it is not easy neither to maintain nor to refute. It is not easy possible to pronounce any thing cert precise concerning the extent of the active or moneyd capital of the United States, still less concerning the proportion which it bears to the objects whichthat require Capital and invite the employment of Capital. Why might it not as well be objected the same objection be made to foreign Commerce: since it is event evident that our immense tracts of uncultivated land would give employment to more are capable of giving employment to a larger capital than is are actually bestowed upon them? It is certain that the United States offer a boundless field to the advantageous employment of Capital. But it does not follow that there will not be found a sufficiency for the successful prosecution of any species of Industry, which is likely to prove really beneficial.

The Effect of money as Capital, or in other words as a medium for putting in motion and circulating the industry of a country may be compared with the momentum of heavy bodies and may be said to be in a compound ratio ration to the quantity and velocity. Every new impulse therefore

In every such Question

It is not easy to pronounce how far the effect of any given quantity of money as capital or in other words as a medium for circulating the industry of a country may be multiplied or extended by the very si circumstance of giving to it new additional motion by new objects of º employment. It is very certain that that effect may in many respects be compared with the momentum of descending bodies, and may be regarded as in a compound ratio to quantitymass and velocity. A given sum of money in a situation unaided by the quick impulses of commercial activity would be found inadequate to the circulation of as great a quantity of industry and property as in one in which it felt the full influence of that activity.

The establishment and increase of Banks in the United States will tend powerfully to obviate the objection under consideration.

The aid of foreign Capital also, in every question of this nature may be safely and with considerable latitude admitted into the calculation. It has been long experienced in our external commerce in the shape of thea credit given to our merchants. º And it begins to be perceived in various other modes. Not only our funds, but our Agriculture Its operation has of late reached not only our funds; but our Agriculture and other internel improvements—in a few instances it has even extended to particularour manufactures.

It is a well known fact, that there are parts of Europe which have much more Capital than profitable domestic objects of employment. Hence the public loans continually made to foreign States. And it is equally certain that the capital of other parts may find more profitable employment in the United States º than at home. And that though there are many weighty considerations which induce men to prefer the employment of their capital in º their own country even at less profit to a distant employment of it in foreign countries at greater profit; yet those considered give way, either where there is and an absolute deficiency of employment or where the difference in employment profit is material. As well the former cause as the latter have operated in relation to us. Tis certain that various objects in this Country invite foreign Capital by much greater profits than can be made at home; and under the increasingly favourable impressions which are entertained of our Government the attraction will be  92


One or two points of view only remain, in which to consider the expediency of the encouragement of manufactures in the U States, previous to a discussion of the means, by which it is to be effected.

It is not uncommon to meet with an opinion that though the promoting of manufactures may be the interest of a part of the United States, it is contrary to that of another part. The Northern and Southern regions are sometimes represented as having a distinctan opposite interest in thatthis respect. Those are called manufacturing states, these Agricultural—and a species of opposition and contradiction is imagined to subsist between the manufacturing and Agricultural interest.

It is not to be denied that particular encouragements of particular manufactures may be of a nature to sacrifice the interestcertain interests of the Landholder to those of the Manufacturer—And hence it can of which examples there are not wanting examples in manufacturing countries. And hence it cannot be admitted as us universally true ⟨that⟩ the interests of Agriculture and manufactures ⟨are⟩ the same, a position which has been in many ⟨in⟩stances abused. But there is no maxim bet ⟨bet⟩ter established by experience or more generally ⟨ac⟩knowleged where there has been sufficient experience, than that the aggregate prosperity of manufactures and the aggregate prosperity of Agriculture are intimately connected. And it is relied upon that the truth of this maxim has been demonstrated by a variety of important considerations in the course of the preceding discussion,—of which the superior steadiness of the steady demand of a domestic market for the surplus products of the soil is alone a convincing argument.

The idea of a contrariety of interests between the Northern & Southern regions of the United States ought to be treated without mercyexploded as often as it appears. It is as unfounded as it is mischievous.

The diversity of circumstances on which it is foundedpredicated authorises a directly contrary conclusion. Mutual wants constitute one of the strongest links of political connection and these are the reas the extent of these is in bears a proportion to the diversity in the objects of supply.

If there are have been appearances of a struggle between contending interests in any cases they it may be confidently affirmed that they have proceeded from erroneous opinions on one part or on the other. It ought to be the effort of patriot⟨ism⟩ to suppress the suggestions, proceeding from the suppos⟨tion of a different⟩ interest. It will be the effort of ⟨enlightened⟩ patriotism to extinguish a spirit ⟨as unfriendly to⟩ a concentration of efforts a steady ⟨pursuit of one⟩ great common cause and to the ⟨perfect harmony of⟩93 all the parts.


In proportion as the mind is accustomed to contemplate trace the intimate u union and connection of interest; between all the parts of a Society, united one under one and the same government—the infinite variety of channels, through which the prosperity of each circulates to and through the rest, will it be little disposed to respect little the ideas of a jealous discrimination. It is a truth as important as it is solid, that everyconsoling as profound as it is simple that every thing which tends to establish substantial & permanent order in the affairs of a country, to increase the greattotal mass of industry and opulence is ultimately beneficial to º every part of it. On the credit of this truth as profound as it is simple & consoling and invaluable precept may be On the credit of this great Truth an acquiescence be safely given from every quarter to every institution and arrangement which promises a confirmation of public order and an augmentation of national resource.

But there are more particular considerations which serve to shew confirm the idea belief that the encouragement of manufactures is the interest of all parts of the Union. If the Northern and middle states should be the principal scenes of such establishments, they would immediately benefit the more Southern by creating a demand for productions; some of which they have in common with the other states and others of which are either peculiar to them or of better quality more abundant or of better quality than elsewhere. These productions principally are, Timber, flax, hemp, cotton, wool, raw silk, indigo, iron, lead, furs, hides, skins and coal. Of these articles, cotton and Indigo are altogether peculiar to the Southern states, and as are hitherto in a great measure lead and coal. Flax and Hemp are or may be raised in greater abundance there than in the more Northern States. And the wool produced in certain parts of Virginia is said to be of better quality than that which is raised in other parts of the United States; a circumstance which is rendered the more probable by the reflection that the finest º wool country of Europe is in the same latitude with that state. The extensive propagationcultivation of Cotton in particular can perhaps hardly be expected, but from the previous establishment of domestic manufactories of that article, and the surest encouragement and vent fro for the others would result from similar establishments in relation to them.

The last remark which remains previous to a specification of the objects to be encouraged & the means of encouragement is this—That the present is the critical moment for entering with zeal upon the important business. Two circumstances conspire to make it so—A considerable and increasing influx of Capital money from foreign speculations in the public Debt, the disorders in Europe.

When The first circumstance not only facilitates the execution of manufacturing projects but it indicates them as a necessary mean to render it an advantage and prevent its being ultimately an evil. It is of great moment to find useful employt. for the increase of num money resulting from foreign purchases of our debt else it will be reexported in consequence of an increased consumption of foreign luxuries and we must suffer hereafter distressing drains of our specie to pay the interest and finally the principal of the purchased debt.

This useful employment too must be of a nature to produce solid dome and permanent domestic improvements. If it merely gives an increased activity additional spring to foreign commerce, as it is not cannot procure new and lasting sources of demandoutlets for the products of our country, it will be of no real or lastingdurable advantage. In Agricultural ameliorations as far as it may find its way, it will be prove of solid utility—but it is to be doubted whether in this channel it would find sufficient employment & still more whether many of those who possess it would be as readily attached to objects of this nature as to those of a manufacturing kind which bear greater analogy to their accustomned pursuits.

To open the one field as well as the other will at least afford secure a better prospect of useful employment for whatever accession of money their either has been or may be.

This is at the present juncture ana certaina certain fermentation of mind activity of speculation and enterprise, which if properly directed may be turned to thevery beneficial purposes but if left wholly to itself may be attended with many pernicious effects.

The present disturbed state of Europe inclining its citizens to emigration, the requisite manufacturers will be the more easily acquired at this juncture and the opening new means of employment to them by giving a new impulse to the current may increase the extent of valuable acquisitions to our population & to our industry in every branch.

In entering upon a designation of the species of manufactures, which may appear to claim, in a peculiar manner, the encouraging hand of government, it occurs both as an indication of aptitudes in the state of things, and as an assurance of the probability of success, in manufacturing attempts, that already a considerable progress has been made in manufactures of the following kinds—Distill Distilleries of ardent spirits, breweries of malt liquors, various art various articles of iron particularly (including the preparation extraction & preparation of the metal itself) particuly steel, muskets nails   various kinds of le articles of which leather is the basis, particularly, sala sadlery, shoes º

Paper and paper hangings—Sail Duck and some other linnens of the coarser kind—Hats—Gunpowder, Carriages, Cordage, Books Some promising attempts are also going onbeginnings have also been made in other branches, in Cott in fabrics of cotton wool lead glass but as yet these have attained toacquired little maturity or extent.

An association however has lately been set on foot to carry on the cotton branch with a force of capital and means which with the due countenance of government can hardly fail of success and which promises an acquisition of incalculable value to the United States.

In the sectionselection of the proper objects of encouragement the following circumstances deserve peculiar attention—the aptitudes of the country for furnishing the raw material—the degree to which a substitude for manual labour may be found in machinery, the facility of executing the manufacture—the extent of the usues to which it is applied applicable.

Where these circumstances unite in favour of a particular object they plead for its encouragement with irresistible force.


The following manufactures are particularly recommended by some or all of the considerations which have been noticed. Of Iron particularly of Of spirits ardent spirits and malt liquors—Of iron particularly

These relate immediately to the principal and most valuable staples of the country, grain of different kinds Fruits also are to be comprehended.—It is peculiarly worthy of the cares of the legislature to promote and multiply the means of a profitable º disposition of that increasing surplus which is resulting from the improvements in agriculture and the continual progress of new settlements in the immense territory of the U States. Of the two objects which have been mentioned malt-liquors are in various lights intitled to a preference; but ardent spirits the domestic manufacture of ardent spirits will deserve encouragement in competition with those of foreign countries. As far as the habits of the country lead to the use of them, it is desirable that they should be of our own making & from our own materials.

Of Iron particularly

Here the raw material is an abundant production of our country. Numerous & flourishing foundries are established The process in many particulars is not difficult and it gives occasion to an exten a considerable employedment of machinery & in some cases may be performed by Children.

Of lead particularly

It is known to the Legislature that Mines of lead have begun to be worked, and it is ascertained, that copiedus copious supplies are to be had in various parts of the United States.

Of Leather particularly

It is needless to observe that we produce a

The plentiful production of thethe raw material of the manufactures among ourselves, the simplicity of the process, the e in many cases—the extensive uses of ar the article and the maturity which the manufacture of it in certain branches of it has acquired indicate it as one of the best objects of industrious pursuit & public patronage.

Of paper, paper hangings,

The manufacture of pape Manufactories of paper are numerous extensive and have nearly attained to perfection. An encouraging progress has been made in paper hangings, and nothing but adequate skill in the conductors of it is requisite to complete success. In viewing the growth of this manufacture it is a pleasing reflection that the materials of it are an absolute saving of what would otherwise be lost while the demand for them and contributes to the support of the indigent. It is also presumeable that it will be found practicable with advantage to employ in this way the raw materials of linnens in their primitive shape; thus giving a new aid to agriculture.

Sail Duck Cloth& coarse linnens.   The progress which has been made within a few years in the manufacture of sail Cloth and in other coarse linnen articles, their importance to navigation, in the equipments of fleets and in the appointment of arti armies, their general use as materia for the purposes of apparel, the universal capacity of the States to produce the raw materials, the precious effects of the linnen branch upon individual industry & domestic œconomy recommend all the fabrics of that kind in a peculiar manner to the protection of the Legislature. These fabrics are intitled to peculiar attention. The raw materials Hemp & flax are our own and may be increased to with vast advantage to our agriculture to any requisite necessary extent. The process in each kind is simple and easy. SeveralSome of them are now carried on with great advantage and success in private families. Sail Duck is already made in sev different places in a considerable great degree of perfection. The interests of our nav navigation are materially concerned in the extension growth of this manufacture. Manufactories of Sail are prosecuted with spirit & success at Boston New London & other places: That which is made at Boston is asserted to be of a quality superior to any imported. New York and Baltimore have each an association occupied principally in linnen fabrics. And tow and other household linnens are already made in such abundance in different parts of the U States as alredy to maintain a successful competition with rep rival foreign articles & to occasion a diminution of their prices.

The like

Similar considerations apply to Cordage. But it is the less necessary to dwell upon this article as it is one which has for some time been in a very prosperous train.

Hats:   the manufacture of this article as well of wool as of beaver exists in an extent has succeeded in an extent which leaves no doubt of the possibility of carrying it on to a degree completely adequate to the wants of the country. The materials of both kinds are our own and the utility is general.

Carpets and blankets particularly the latter.   Manufactories of the first exist but not under the most fav favourable circumstancespresages. It is not known that any of the latter are made in the United States. the But the essential nature, the extensive& general utilityof the article—the facility of its fabrication, the certainty of being able with due exertion to supply ourselves with the raw material—are circumstances which strongly recommend an encouragement of the manufacture of it.

Carriages   The manufacture of these is in a train that leaves little more to be desired.

Glass:   The chief ingredients the kinds of Earth & Stone called Tarson & the sea Weed called Kali or Kelp and it is believed, of a proper kind, for the manufacture of this article are to be found in the us United States, and the abundance of fuel is particularly favourable to its success. But the result of the experimentsessays hitherto made is not flattering—and it is a question whether future attempts are likely to be more so. The process is difficult and arduous labourious—depending altogether to a very mu requisi requiring too an unusual portion of manuf manual labour; which is in this country the principal obstacle to success in manufactures. Without despairing wholly of the success of manufactories of this article there is no room in indulge such expectations as to authorise anticipations by the Govurme Goverment. It will be time enough to aid when future experiments shall afford better hopes; in which event the vast importance & general usefulness of the manufacture will plead powerfully for all reasonable cooperation.

Gunpowder.   The progress which has already been made in this article is an earnest of its complete sulphur I success. It is not to be doubted that surpl sulphure a principal ind ingredient in its composition is to be found in sufficient quantity in the United States The manufactory of this article has been rapidly advanced, and principally by individual exertions within the few last years. Though it may be considered as established yet its importance renders its extention very desirable. Sulphur a considerable ingredient in its composition, it is presumeableprobable will hereafter be found in sufficient quantity in the United States; but hitherto no material internal resources have afforded but an insignificant supply. The deficiency may easily be supplied from other quarters. And means may be taken to facilitate the introduction of the other ingredients.

Muskets and other fire armsRespec This article might have been properly referred to under the head of manufactories of iron; but its importance intitles it to a distinct viewplace. Manufactories of it exist & the specifi specimens of work which n have been furnished assure success to an attempts to extend them.


The two last mentioned articles concern so immediately the defence of the country, that they claim the serious attention of the Governments upon considerations not merely relative to the national advantage but to the national safety.


Books.   The printing and binding of books has of late considerably increased. It is evident however that much more might be done in this business than is at present done. The manufactories of paper furnish the principal material to ourselves and the vast number of printing presses disseminated throughout the Union leave no doubt of the adequate means of execution.

Cotton Goods.   The manufacture of these generally will deserve the particular patronage of the government. The Southern States supply the raw material; and though it is questionable whether that which they produce will answer for the coarser kind of goods, those in most general use, the staple being short and fine, yet there is reason to believe that it will be very serviceable and even preferable to the West India Cotton, in fabrics of the finer kind. And the French Spanish Dutch & Danish West Indies as well as the East Indies will abundantly supply any deficiency in the Material. The reasons which particularly recommend fabrics of this article, are the very great use which can be made of machinery, women and Children in carrying them on. This circumstance has been remarked and dwelt upon in another place. The peculiar texture of It depends on the peculiar texture of the material. An association has lately been formed for carrying on the manufacture of this article with a force of Capital that with the due countenance of government, seems to ensure success, promising an acquisition of incalculable value to the Union.

In addition to the foregoing objects, there are others which will be mentioned in the subsequent part of this report as requiring some favouring regulations, which it is unnecessary to present here in a distinct perspective. distant view

In order to a judgment of the means proper to be employedresorted by the United States for the encouragement of manufactures, it will be useful to advert to those which have been employed with success in other countries. The principal of these are


1   Protecting duties—or duties upon those foreign articles which t are the rivals of the domestic ones intended to be encouraged.

Duties of this nature are evidently amount to a virtual bounty on the domestic º fabrics; enab giving these as since by enhancing the charges on foreign articles, they enable the national manufacturers to undersell their foreign º competitors. The propriety of this species of encouragement need not be dwelt upon; as it is not only a clear result from the numerous topics which have been suggested entered upon discussed but is sanctionned by the laws of the United States in a variety of instances. Indeed It has the additional recommendation of being a resource of revenue. Indeed all the duties imposed on imported articles, though with an exclusive view to the object of revenue, have the effect in contemplation, and wear except where they fall on raw materials have wear a beneficient benignant aspect towards the manufactures of the country.º

2   Prohibitions of rival articles, or duties equivalent to prohibitions.

This is another and an efficacious mean of encouraging national manufactures; giving a monopoly of the home market to those who are engaged in them. it is one however But in general it is only fit to be employed resorted to when a manufacture has made such a progress and is in so many hands, as as to insure a due competition and an adequate a competent supply, infor the home market, on reasonable terms. Of duties equivalent to prohibitions, there are examples in the laws of the United States—such are those on  94 —and there are other cases to which the principle may be advantagously extended, but they are not numerous.

Considering a monopoly of the domestic market to its own manufacturers as the rei reigning policy of corre manufacturing nations, a similar policy on the part of the United States, in every proper instance is dictated it might almost be said by the principles of distributive justice by the desire of securing to their own citizens retaining certainly by the duty of endeavouring to secure to their own citizens a reciprocity of advantages. by considerations or self preservation and the principles of Justice to its own Citizens. It is dictated by the necessity of aiming at a reciprocity of advantages.º

IV 3 Pecuniary bounties on home made articles—

This has been found one of the most efficacious means of encouraging manufactures; and it is in many some respects the very views the best; though it has not yet been practiced upon been resorted to by the government of the U States (unless the allowance on the exportation of dried & pickled fish & salted pro meat95 could be considered in that light) and though it is less favoured by public opinion, than some other modes kinds.

Its advantages are these.

It is a species of encouragement more positive and direct, than any other, and for that very reason, it has a more immediate tendency to promote and support new enterprizes; increasing the chances of profit, and diminishing the risks of loss, in first attempts. indemnifying them wholly or in part for the first losses which are commonly usually attend them.

It steers clear of either avoids steers clear of the inconvenience of a temporary increase of price, which is incident to thesome other modes, that have been mentioned because or it produces it in a less degree; by either by not increasing the charges on the foreign rival article similar to that to be manufactured or by increasing them in a smaller proportion. less degree. The first happens when the fund for the bounty is drawnderived from another a different object in which case, however, it may or may not increase the price of some other article according to the nature of the object; the second when itthe fund is derived from the same or a similar object of foreign manufacture. production. One per Cent du shilling per cent duty on the foreign article converted into a bounty on the domestic will have t an equal effect with two per Cent duty on the foreign articlle without exclusive of such bounty; and the charge first price of the foreign article commodity is on raised in the one case, in the proportion of one per cent, in the other, of two per Cent. Indeed the bounty when derived from another source promotes a diminution of price cheapness because without laying any new charges on the foreign article, it increases the quan total quantity of the article in the market. and even where the duty is A The bounty has also less tendency to occasion scarcity, of which there is greater danger from than protecting duties; high protecting duties. An increase of price which if high may for a time interfere too much with the profits to be gained on the importation of the articles upon which they are laid: of an the article. For an increase of price is not always the immediate effect of a new though it is generallycommonly the ultimate effect of a new an additional duty, where the progress of a domestic article manufacture does not counteract the rise.

Bounties are sometimes not only the best but the only proper mean of uniting the encouragement of a new object of manufacture with that of a new object of agriculture. It is the interest of the farmer to have the production of a raw material encouraged—of the manufacturer, to have the raw material cheap. If prior to a sufficientdomestic production of the domestic the raw material in sufficient quantity to supply the manufacturer on cheap tern terms, a duty is laid on the foreign raw material with a view to the encouragement of its cultivation at home, it equally counteracts the purpose of the farmer and of the manufacturer and of the farmer. By raising the price of the raw material to the former it to disables him incapacitates from prosecutinge with success the manufacture—and thus defeats the object of the farmer, forlatter; because there being no domestic manufacture to create a demand for his commodity, it is in vain that the competition of the foreign article may have been destroyed. The true way to conciliate both interests is to lay a duty on foreign manufactures of the raw material in question and to apply the product of that duty, in a bounty either immediately upon the production of the article or upon the exportation or the manufacture of that which is produced at home. In this case the manufacturer undertakes his enterprise under every advantage he can desire as far as respects the quantity & the price of the raw material—and where the bounty is directly to the farmer, he can afford to the b undersell the foreign material, or where it is to the manufacturer, on the domestic material he has (prices being equal) a motive of interest to prefer the use of it. prices being equal.

Qr {
The linnen branch in Ireland is a well known instance of the effect of this species of encouragement. And the Cotton branch in England is a no less signal example. At this moment there is a bounty on certain kinds of cotton goods of not about 12½ per Cent.96

Except in the simplest and most ordinary kinds of manufacturesin respect for which there are transcendent local advantages—pecuniary bounties are a in most cases indispensable to the introduction of a new branch. A stimulous and a support not less powerful and direct is essential to the overcoming of the obstacles arising from the competitions of the superior skill and maturity in foreigners. It is especially essential in those cases where they are themselves in the practice of granting bounties.

The continuance of a pecuniary a bountyies on a manufactures long established would be in most cases of questionable utility policy; because a presumption would arise that there were natural and intrinsicinherent impediments to itstheir success—but in new undertakings they are often not only justifiable but necessary. And it would be a highly misplaced parsimony to withold them.

There is nevertheless a prejudice with some against bounties which may be traced to a misconstrued appearance of giving away the public money to individuals without an immediate consideration—and to a supposition that it is rewarding a particular class at the expence of the community.

But neither of these objections on cool examination can be deemed will appear to have much weight. There can be no purpose to which public money can be more beneficially applied thatn to the acquisition of a new and beneficial branch of Industry. And as to the last objection, as far as it is founded it equally lies against all the other modes of encouragement. º A duty on the foreign article, by raising the price on the community creates to it an extra expence for the benefit of the manufacturer. A bounty does no more—But it is the interest of the community to submit to this expence which is in its nature temporary, because it is more than indemnified in the variety of ways which have been delineated and among the rest in the even in a general increase of industry and of wealth, in an agmentation of its resources and independence—and in what is a more direct compensation, though perhaps an inferior consideration, in the circumstance of eventual cheapness. The Govert. too will find ample retribution for its disbursements in a multiplication of the means from which future supplies are to arise.


This mode of encouragement, nevertheless, may perhaps be moderated, in its qua degree, by the consideration of the heavy expences, which the distance of the U States from the manufacturing countries of Europe imposes on the introduction of foreign supplies—amounting to 15, 20 & 25 per Cent on their value according to their bulk. Questions have been made concerning the right of the U States to adopt this mode of encouraging the industry of the Society. But.

No. IV



4 V Premiums.

These are of a nature allied to bounties, though materially in some respects distinguishable from them in some important features. Bounties are applicable to the whole quantity of an article produced, or manufactured, or exported, and involve a correspondent expence. Premiums serve to reward some particular excellence or superiority, some extraordinary exertion or extraordinary skill; and are dispensed only in a small number of cases. But their effect is to stimulateex stimulate general effort. Being so contin Contrived so as to be bothboth honorary as well asand lucrative they address themselves to touch different chords and excite different put in motion different passions, touching the chords as well of emulation as of avarice. They are acrdingly a very œconomical mean of exciting the enterprise of a hole community.

There are various societies in different countries, the U States included, whose object is the dispensation of premiums for the encouragement of agricuture arts and manufactures and Commerce;; and though they are for the most part, voluntary associations, with comparatively slender funds, their utility has been immense. Much has been done by this mean in this way in Great Britain: Scotland in particular owes materially to this causeit a prodigious mal amelioration of its her condition. From A similar establishment in the U States in the United States supplied and supported by the Government of the Union vast benefits might reasonably be expected. Some further ideas on this head shall accordingly will be submitted in the conclusion of this report. º

5   Drawbacks of the duties which are imposed on f the rawthe materials of Manufactures—

TheseThis constitutes another and an obviously proper method of encouraging them manufactures. It is in general good policy to forbear the lay taxing of the materials of manufactures raw materials; but there are expect exceptions to the rule. Of these the following are examples instances. Where the raw material is itself an immediate object of general or extensive consumption, and a fit and productive source of revenue. (Such is the article of molasses: As a sweet too it is just that the consumers of it as should pay a duty as well as the consumers of Sugar.) Where the article is in fact the material it has assumed the shape of a munufacture though of a simpler kind, (of which it is proper to prevent a competition with some similar national domestic manufacture) and is yet capable of a further process, by which it may be converted into a manufacture of a different kind which it is desired desireable to encourage. Such may be deemed cottons and linnens in their white states, proper for the purpose of being converted into Callicoes. A duty upon them as an article of consumption is would be proper to favour the manufacture of the article in the same state—A drawback of that duty is would be proper for to encouraginge the printing and staining of them at home.

The expediency of such propriety of drawbacks is enforced in similar cases by the consideration, that it is the practice of nations who may be our competitors either in the domestic or in foreign markets. The ideas has been pursued by the U States, in respect to the article of molasses97 & it will probably be found that it may be advantageously extended to other articles.


VI   6   The exemption of the materials of manufactures from duty.

The expediency of this policy has been already noticed with the exceptions of which it admits. No species of en Nothing certainly can be more obviously proper in itself—and the necessity of it is enforced by the same consideration which has been remarked in relation to Drawbacks namely that it is the practice of the principal manufacturing nations: those whom we are to meet as our competitors both in our own and in foreign markets. This policy has been pursued by the U States in relation to a number of articles but it will probably be found adviseable to extend it to others. Of a nature somewhat allied to this is the exempting from duty the tools and implements of foreign artistsof their trade & the household furniture of foreign artists who come to settle in the United States; an advantage which has been already secured to them in common with other emigrants—and which it will be in every view proper to continue.98

VIII   78   The encouragement of new inventions of machine and improvements at home and (particularly in the article of machinery) and of the introduction of such as have been made abroad.

This is among the most important and unexceptionable of the aids that which can be given to manufactures. The most usual means of encouragement º are pecuniary rewards and, for a time, exclusive privileges. For the last as far as regards “Authors and Inventors” provision has been made. º in the existing laws. But in respect to some improvements and secrets of extraordinary utility and value it might be found advantageous to extend them to introducers, though not authors nor inventors, that is, when brought from abroad. But in this as in some other cases there is cause to regret that there is room for qu a question whether the constitutional authority of the United States is competent to the good which might be done by aiding the industry of the Country and promoting a variety of internal domestic improvements of primary magnitude.

It ought not to pass unnoticed here that it is a customary policy customary with manufacturing nations to prohibit, under severe penalties, the exportation of those implemen implements and machines which they have either invented or improved. Similar regulations in the U States There are already proper objects of a similar regulation in the U States & they will be multiplied others will doubtless occur from time to time. The adoption of it is dictated by the principle of reciprocity. Greater liberality in such respects would be more congenial with the general spirit which prevailsprevailing in this Country; but a jealous policy every where else will often forbid the indulgence of that spirit.


X   8   The facilityfacilitating of pecuniary remittances from place to place.

This iIs a point of considerable consequencemoment to trade in general, and to manufactures in particular; by facilitating the purchase of raw materials and provisions and the payment for manufactured supplies. As general circulation of Bank paper which is to be expected from the institution lately established will be a most valuable mean to this end. proposed. But much good would also would accrue from some additional sanctionsprovisions to the circulation of concerning respecting inland bills of exchange. If those drawn in one state payable in another were made negotiable, every where, and interest and damages allowed in º case of protest, it would greatly promote the reciprocal negotiations between the citizens of different states, by rendering them more secure; and, with it, the convenience and advantage of the merchants of all & manufacturers of each. A law of the These which will accordingly be submitted in their proper place

º XI   9   The facility of communication and the ease and cheapness offacilitating of the transportation of commodities.

Improvements favouring this these objects intimately concern all the domestic interests of a community; but they may without impropriety be mentioned as having an important relation reference to manufactures. There is perhaps scarcely any thing which has been better calculated to fr assist had a more beneficial influence upon manufactures of Great Britain than the ameliorations of the public road of that Kingdom, and the vastgreat progress which has been letel recently of late made in opening canals. Of the former the United States stand greatlymuch in need & for the latter they present uncommon facilities. The symptoms of attention to the improvement of inland Navigation this great object which have appea lately appeared in some quarters and especially particularly in the state of Pensylvania, must fill with pleasure every breast warmed with a true zeal for the prosperity of the Country. The example it is to be hoped will be extented so as to and will stimule the exertions of the government and the citizens of every state. There can certainly be no object more worthy of the cares of the local º administrations; and it were to be wished that there was no doubt of the power of the national Government to lend its aid direct aidon a comprehensive plan. This is one of those. There are improvements of this nature which could certainly be prosecuted with more efficacy by the whole than by any part or parts of the Union. Indeed There are cases in which the general interest will be in danger too likely to be sacrificed to the collision of some supposed adverse local interests. Jealousies in matters of this kind are as apt to exist as they are apt to be erroneous.

The following remarks are sufficiently judicious and applicablepertinent to deserve a literal quotation “Good roads canals and navigable rivers (says a judicious writer)100 by diminishing the expence of carriage, put the remote parts of a country more nearly upon a level with those in the neighbourhood of the town. They are upon that account the greatest of all improvements. They encourage the cultivation of the remote which must always be the most extensive circle of the country. They are advantageous to the Town by breaking down the monopoly of the country in its neighbourhood. They are advantageous even to that part of the country. Though they introduce some rival commodities into the old market, they open many new markets to its produce. Monopoly besides is a great enemy to good management, which can never be universally º established but in consequence of that free and universal competition which forces every body to have recourse to it for the sake of self defence. It is not more than fifty years ago that some of the Counties in the neighbourhood of London petitioned the Parliament against the extension of the turnpike roads into the remoter counties. Those remoter counties, they pretended, from the cheapness of labor would be able to sell their grass and corn cheaper in the London Market than themselves, and would thereby reduce their rents and ruin their cultivation. Their rents however have s risen and their cultivation has been improved, since that time.”

Specimens of a similar spirit similar to that which governed the counties here spoken of present themselves too frequently to the eye of an impartial observer, and m render it a wish of patriotism that the body in this country in whose councils a local or so partial a spirit is least likely to º predominate were at liberty to pursue & promote the general pursue the public good interest in those instaces instances in which there might be danger of the interference of such a from that spirit.

But if there should be a doubt of the power of the National Government to embrace the whole subject, there is none of its rightcompetency to a provision for the improvement of the Post roads; an object which merits and will doubtless occupy an early attention of the national Government Legislature of the United States.


It remains to s designate some specific means for the encouragement of specific objects of manufacture in the U States.

1   of Ardent Spirits

The differences in the rates of duties heretofore laid on imported and home made spirits101 afford considerable advantage and encouragement to the latter; yet there appears to be a strong impression on the minds of those who are concerned in distilleries, that even the most candid, that still greater differences are requisite completely to secure the success of the business; and there are reasons which recommend an attention to this impression. are reasons which plead for which to render still greater differences. expedient It hasis agreed that the price of molasses for some years past has been gra successively rising in the West India Market (to putting out of the question the temporary dearness and scarcity arising fromoccasioned by the existing disturbances in the French coloniesIslands) which together with the duty of 3 Cents on Molasses, renders it difficult for the makers of spirits from that article to maintain with adequate profit a competition with the rum brought from the West Indies, the quality of which is naturallyconsiderably superior.

Experiment only could perhaps decide, with certainty, the point—but it it in so important a branch of manufactures, it would be inexpedient to hazard an unfavourable issue, and better to err on the side of too great than too small a difference in the particular in question.

The differ

The object to be obtained accomplished may be obtained either by raising the duties on foreign spirits or diminishing that on those made at homethose on spirits made at home. The experience of other countries demonstrates that duties on distilled liquors may be advantageously carried much further than they at present are in the United States; yet it may be a question whether it can be done; with perfect safety, under a system of collection not more coerciv offe secured by no greater precautions, than that which has been devised—a doubt which recommends conspiring with other inducements recommends a diminution the alternative of a diminution of the spe duties on home made spirits.

It is therefore proposed that there be an abatement ofin the duties on spirits distilled within the U States; whether from foreign or domestic materials of at the rate of one cent per Gallon of the lowest class of proof and in proportion upon the higher classes of proof.

It is probable too that some modification in the form of the duties on spirits made of domestic materials may be found expedient and convenient—but the nature of such modification is not yet sufficiently indicated by experience to be here submitted.

2   of Malt Liquors.

It has been truly observed that Malt liquors have a title to encouragement superior to ardent spirits—They constitute a national beverage drink as wholesome and invigorating as it is palatable—leadly rarely to intoxication; while they also give vent to the products of the soil also promote a demand for the surplus productions of the ear Agriculture.

There are materials for a tolerable conjecture that (though not an exact computation) that about two thirds of the malt liquors consumed in the º United States are the product of domestic breweries—the remaining third being imported. This conjecture has reference to the importation of a year ending in the 30th 30th of September 1790.102 It is desireable and attainable that the whole consumption should be supplied by ourselves.

A considerable part of the Malt liquors imported is not superior in quality th to thatsthose which isare made at home; and if the same can though the same cannot with truth be said of the whole, yet there is no natural impediment to the attainment of equal perfection throughout. The progress already made is an earnest of what may be accomplished. The growing competition is an assurance of improvement. This will be accelerated by measures tending to invite Capital a greater capital into this modechannel of employment.

An increase of the duty addition to the duty heretofore laid will conduce to this end. Instead of the existing rates it is presumed that it will º be found safe and expedient to lay 8 Cents per Gallon generally. This will probablyIt is to be hoped that this will banish from the market foreign malt liquors of inferior quality; The betterand that the best kind only will continue to be imported, till it shall be supplanted by the efforts of equal skill or care at home. And Till then it will tend to excite exertion to improve be an useful stimulous to improvement. And in the mean time the payment of the increased price, for the enjoyment of a luxury, in order to the encouragement of an useful º branch of domestic industry cannot reasonably be deemed a hardship.


The importance of encouraging manufactures of this article and the probability of success have been strongly insisted upon.

The first of these manufactures which presents itself is steel. A considerable progress has already been made in of it and new undertakings are on foot. There is at present a duty of upon its importation of 75 per Ct.Cents per Cwt which is about 7½ per Cent on the value. It is conceived that this duty may be safely & advantageously increased to 100 Cents—And it is desireable to ensure by decisive arrangements the success of the efforts which are making or may be made to º extend so useful a branch. As an auxiliary to this manufacture it is not perceived that there is any good objection to classing surgical instruments and cutlery generally among the articles which are rated at 7½ per Cent.

The Nails & spikes next present themselves to consideration. This manufacture has already attained very considerable maturity. Several of the states º almost wholly supply themselves and furnish a surplus to the others. There is no doubt that the U States are completely adequate to their own supply in this article. And it is one for which they ought to depend on no other nation.

It appears that the importation of this article for a year ending the last of September 1790 was 1579947 lb a quantity which though far f short of the total consumption of the country is too great to be permitted to continue.

The present duty is of 1 Cent per lb generally on Nails and spikes which appears not to be sufficient and is perhaps not in the best form there º being a very great inequality in the value of the different kinds of the article. Twenty per Cent ad valorem while it obviated this objection would probably be found adequate to the end proposed.

Various other manufactures of iron and to a considerable extent are carried on in the U States. The addition of iron wares generally to the class of articles rated at 7½ per Cent would have a very beneficial effect for the º manufacture and is in other respects liable to no material objection.

It may also be expedient to grant a bounty on the implements of husbandry made in the United States, namely

  • Scythes
  • Pickaxes
  • spades
  • shovels
  • hoes

which may be regulated suficicially according to a ratio of 2 per Cent of their value. This would have the double effect of promoting their manufacture º and of favouring husbandry indemnifying agriculture for the increase of duty on the imported article. A bounty likewise on the exportation of home made Nails m might be found to have a beneficial tendency. The The rate may be 5 per Cent 50 cents per hundred weight.

It will moreover deserve the serious consideration of the Legislature whether the importation of Iron in gu pigs and bars ought not to be permitted free of duty. It now pays 5 per Cent. This would certainly tend to encourage manufactures of the article. The doubt only is whether it may not interfere with the production of it, which is certainly of far greater importance. The following circumstances abate if they do not remove apprehension on this score. The price of iron has risen of late years risen in the lowest markets of the United States from 65 to 80 Dollars per Ton. It is therefore presumeable that sufficient profit will remain if foreign Iron is admitted free of duty. The increase of demand also will also serve to counteract the effect of a reduction of price from the competition of foreign iron, below the desireable level. This An augmentation of demand has already taken place proceeded from the Trade to the East Indies and progress of domestic manufactures. The regulations here proposed for their further encouragement will necessarily promote a greater augmentation.

Muskets and small fire arms of every kind.

It would appear adviseable to impose on these a specific duty according to the following rates

For every musket
Fowling piece
p pistols

And it would assist the manufacture to allow a bounty on the exportation of such as are made in the U States which may be regulated uponaccording to the ratio of   per Centum of the value.

If in addition to this it were establ provided by law that a certain number annually of muskets manufactured in the U States should be purchased on the account of the government at a liberal determinate price, towards the formation of magazines it would have a considerable effect as a mode of encouragement, by producing a certainty of demand to a given extent. The price   per Musket would be not an extravagant price and it would answer be an adequate one for the manufacturer.

Gun Powder

This article is already rated at 10 per Ct. on its importation from abroad. There is no need of any further duty. There seem but three things requisite to complete its progresssuccess which is already considerable. One is to rank surphur which is (a principal ingredient in its composition) among the free articles free goods. Of this article no great quantity has yet been produced in the United States—Another is to establish proper regulations for its inspection; and a third which will deserve to be considered is a bounty on its exportation. For this purpose a dollar for per hundred weight will may be the proper standard. Great Britain allows in the like case 4/6 Stg.103 The bounty by promoting a foreign demand for the article will tend to ensure the demand necessary to its support.

The It is said

It is said to be an injunction on the British East India Company to import annually a certain quantity of salt Petre rough or refined in order to assist the manufacture of Gunpowder.104 A similar regulation with regard to Ships trading to China from the U States proportioned to the Tonnage of each may be perhaps be enacted without inconvenience. No American factories being established in other pla parts of the East Indies the reason requisition a requisition of this nature if made ought to be confined to vessels from the Port of Canton.

Sail Cloath and other coarse Linnens

Considering that Great Britain grants a bounty of 2d. Sterling pr. ell on the exportation of British Made sail Cloth and of about 12½ pr Cent ad valorem upon an average on all British made linnens of the value of not less thannot exceeding ⅙ Stg. per yard, and that Ireland grants a still greater bounty on the exportation of her sail Cloth & similar bounties on that of other coarse linnens,105 it is ess appears necessary to the complete success of similar manufactures in the United States that further encouragements should be given.

First by an increase of duty. It is consequently submitted that the present duty of 5 per Cent be raised to ten on the following articles

  • Sail Cloth
  • Oznaburghs
  • Ticklenburghs
and upon all other linnens which cost at the place of exportation a rate º and under pr. yard not exceeding 35 Cents.

Secondly   By a bounty on home made sail Cloth at the manufactureFactory, of 2 5 1 Cents per yard, and a similar bounty of 5 per Cent ad valorem on all linnens of the above descriptions made in the U States, upon their exportation to foreign Countries.

The bounty on sail Cloth will not only promote the fabric but will be favourable to navigation by counteracting the influence of the increased duty to raiseupon the price of the article.

Cotton Goods

A Bounty similar to that on linnens and within the same limits as to Pricevalue is allowed in Great Britain upon the exportation of Cotton goods, or goods of cotton & linnen mixed and which are either printed painted stained or dyed;106

The same reason therefore which applies to linnens calls for a like arrangement in respect to such goods.

84ADf, Hamilton Papers, Library of Congress.

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

85This and subsequent spaces left blank in MS.

86See note 76.

87See note 78.

88See note 77.

89See notes 79 and 80.

90See note 82.

92At this point in the MS three or more pages are missing.

93Words within broken brackets in this paragraph have been taken from H’s fourth draft of this Report.

94At this point in the MS H wrote “blank of two lines.”

95H is referring to the drawback given under Section 4 of “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 181–82 [August 10, 1790]).

96See 29 Geo. II, C. 15 (1756), continued by 28 Geo. III, C. 23 (1788).

97The drawback on molasses was allowed under Section 51 of “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,” which reads in part as follows: “Be it further enacted, That if any of the said spirits … shall, after the last day of June next, be exported … there shall be an allowance to the exporter … by way of drawback … upon spirits distilled within the United States, from molasses … three cents per gallon …” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 210–11 [March 3, 1791]).

98For these exemptions, see note 49.

99H is referring to “An Act to promote the progress of useful Arts” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 109–12 [April 10, 1790]).

100At the bottom of this MS page H wrote and crossed out “(Smith W of Nations 1 Vol P 219).” The edition from which H is quoting is An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. Formerly Professor of Moral Philosophy in the University of Glasgow. In Three Volumes. Vol. I (Dublin: Printed for Messrs. Whitestone, Chamberlaine, W. Watson, Potts, S. Watson, Hoey, Williams, W. Colles, Wilson, Armitage, Walker, Moncrieffe, Jenkin, Gilbert, Cross, Mills, Hallhead, Faulkner, Hillary, and J. Colles. 1776).

References which H made to Smith, however, in other documents in the Hamilton Papers, Library of Congress, do not coincide with the pagination of this edition of The Wealth of Nations.

101The differences are given in Sections 1, 14, and 15 of “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” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 199–214 [March 3, 1791]).

102See “Report on Imports for the Year Ending September 30, 1790,” November 18, 1791. The enclosures to this report may be found in ASP description begins American State Papers, Documents, Legislative and Executive, of the Congress of the United States (Washington, 1832–1861). description ends , Commerce and Navigation, I, 35–43.

The tariff rates in effect, to which H is referring here and in the remainder of this section, are cited in note 49.

103This bounty, given in 4 Geo. II, C. 29 (1731), had been extended by various acts and was repealed by 31 Geo. III, C. 42 (1791).

104See note 71.

105The sailcloth bounty, instituted in Great Britain under 12 Ann., Stat. I, C. 16 (1714), had been extended by several acts, the most recent of which was 29 Geo. II, C. 54 (1789). The linen bounty of 1½d. per yard on all British and Irish linens twenty-five inches in width and between the value of 6d. and 1s. 6d. per yard had been given under 29 Geo. III, C. 15 (1756); its most recent extension was made under 28 Geo. III, C. 23 (1788). The Irish bounties were granted under 19 and 20 Geo. III, C. 33 (1779–80) and were subsequently reenacted at each session of the Irish Parliament.

106See 23 Geo. III, C. 21 (1783).

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 1

º force and art

º 2

º 3

º 3

º 4

º 5


º 6

º Connections observation more particularly examined

º Note


º cheapness of articles raises the value of land


º Elsewhere

º Peculiar turn of the people of this Country towards mechanic arts

º Quare




º said before

º Fustians
Bed ticking
Striped Cottons

º Qr

º Qr

º Qr

º take care that nothing to contradict necessity of extra encouragement

º Qr.

º Persons who think it an evil—Nat
Approbation of our Government

º defect
material difference

º Whatever attracts money   once introduced may be turned elsewhere good way to detain it is to multiply objects.

º advantage of encouraging manufactures to the fisheries

º Encouragement to Fisheries arising from manufactures

º This great Truth, as profound as it is simple & consoling cannot be too deeply impressed on the minds of all those who are entrusted with the care of the public welfare. It teaches that

º Ex

º Lead
Oils & paints

º See what has been said on other occasions as to ardent spirits

º Books

º next paper

º Beging

º A

º No. II

º End Beginning

º End

º Qr. if nothing elsewhere contradictory

º Qr. how far elsewhere


º End of IV

º Inspections

º Patent Act99

º No. V

º to make bills drawn in one state payable in another negotiable & to allow interest & damages

º No. VI

º No. VI

º No. VI

º No. VI

º Intercourse with Indians—Inspections

º Qr

º Qr

º bounty of 2 Cent per Gall on such as being made in one state shall be exported to another

º Qr. as to
bounty on
steel exportation

º Qr.

º Qr
quare if not 2 Cents per lb or 25 per Ct at valorem

º Note bounties given by Eng & Ireland on Iron Wares

º note all bounties to be on public factories—

º 18d. Stg

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