James Madison Papers

Commercial Discrimination, [14 January] 1794

Commercial Discrimination

[14 January 1794]

In a lengthy speech made in the Committee of the Whole, Smith (South Carolina) on 13 January opposed commercial retaliation against Britain as set forth in Jefferson’s report of 16 December 1793 and JM’s resolutions of 3 January 1794 (Annals of Congress description begins Debates and Proceedings in the Congress of the United States … (42 vols.; Washington, 1834–56). description ends , 3d Cong., 1st sess., 174–209). JM responded to Smith’s speech on 14 January.

He began, by observing that he had expected, from what was intimated yesterday, the sequel of what was then said against the resolutions before the committee; but as there was a silence in that quarter, and no other member has risen on either side of the question, he himself would request the attention of the committee.

It had been much pressed, that in the discussion of this subject, it should be viewed in its commercial relations only. He was perfectly willing to meet every objection that could be urged on that ground: But as he conceived it impossible to do full justice to the interests of the United States without taking some collateral considerations into view; he should be obliged in the course of his remarks, to point at the political disposition and conduct of some of the nations of Europe towards this country.

The propositions immediately before the committee, turned on the question whether any thing ought to be done at this time, in the way of commercial regulations, towards vindicating and advancing our national interests. Perhaps it might be made a question with some, whether in any case, legislative regulations of commerce were consistent with its nature and prosperity.

He professed himself to be a friend to the theory which gives to industry a free course, under the impulse of individual interest, and the guidance of individual sagacity. He was persuaded that it would be happy for all nations, if the barriers erected by prejudice, by avarice, and by despotism, were broken down, and a free intercourse established among them. Yet to this, as to all other general rules, there might be exceptions: And the rule itself required, what did not exist, that it should be general.

To illustrate this observation, he referred to the navigation act of Great-Britain, which not being counterbalanced by any similar acts on the part of rival nations, had secured to Great-Britain no less than eleven-twelfths of the shipping and seamen employed in her trade. It is stated, that in 1660, when the British act passed, the foreign tonnage was to the British as one to four: In 1700, less than one to six: In 1725 as one to nineteen: In 1750, as one to twelve: In 1774, nearly the same. At the commencement of the period, the tonnage was but 95,266 tons: At the end of it, 1,136,162.1

As another illustration, he mentioned the case where two countries happened to be in such a relation to each other, that the one, by discouraging the manufactures of the other, might not only invigorate its own, but transplant the manufacturers themselves. Here the gain would be a clear one; and the effect evidently consistent with the principle of the theory.

To allow trade to regulate itself is not therefore to be admitted as a maxim universally found. Our own experience has taught us that in certain cases, it is the same thing with allowing one nation to regulate it for another. Were the United States in fact in commercial intercourse with one nation only, and to oppose no restrictions whatever to a system of foreign restrictions, they would of necessity be deprived of all share in the carriage, altho’ their vessels might be able to do it cheapest; as well as of the only resources for defence on that side, where they must always be most exposed to attack. A small burden only in foreign ports on American vessels, and a perfect equality of foreign vessels with our own in our own ports, would gradually banish the latter altogether.

This subject, as had been remarked on a former occasion, was not a novel one. It was co-eval with our political birth; and has at all times exercised the thoughts of reflecting citizens. As early as the year succeeding the peace, the effect of the foreign policy which began to be felt in our trade and navigation, excited universal attention and inquietude. The first effort thought of, was an application of Congress to the states for a grant of power for a limited time, to regulate our foreign commerce;2 with a view to control the influence of unfavorable regulations in some cases, and to conciliate an extension of favorable ones in others. From some circumstances then incident to our situation, and particularly from a radical vice in the then political system of the United States, the experiment did not take effect.

The states next endeavored to effect their purpose by separate but concurrent regulations. Massachusetts opened a correspondence with Virginia and other states, in order to bring about the plan. Here again the effort was abortive.

Out of this experience, grew the measures which terminated in the establishment of a government competent to the regulation of our commercial interests, and the vindication of our commercial rights.

As these were the first objects of the people in the steps taken for establishing the present government, they were universally expected to be among the first fruits of its operation. In this expectation the public were disappointed. An attempt was made in different forms and received the repeated sanction of this branch of the legislature, but they expired in the Senate:3 Not indeed, as was alledged, from a dislike to the attempt altogether, but the modifications given to it. It has not appeared, however, that it was ever renewed in a different form in that house; & for some time it has been allowed to sleep in both.

If the reasons which originally prevailed against measures, such as those now proposed, had weight in them, they can no longer furnish a pretext for opposition.

When the subject was discussed in the first Congress at New-York, it was said, that we ought to try the effect of a generous policy towards Great-Britain; that we ought to give time for negociating a treaty of commerce; that we ought to await the close of negociations for explaining and executing the treaty of peace. We have now waited a term of more than four years. The treaty of peace remains unexecuted on her part; tho’ all pretext for delay has been removed by the steps taken on ours. No treaty of commerce is either in train, or in prospect. Instead of relaxations in former articles complained of, we suffer new and aggravated violations of our rights.

In the view which he took of the subject, he called the attention of the committee particularly to the subject of navigation, of manufactures, and of the discrimination proposed in the motion, between some nations and others.

On the subject of navigation, he observed that we were prohibited by the British laws from carrying to Great-Britain the produce of other countries from their ports, or our own produce from the ports of other countries, or the produce of other countries from our own ports; or to send our own produce from our own or other ports in the vessels of other countries. This last restriction was, he observed, felt by the United States at the present moment. It was indeed the practice of Great-Britain sometimes to relax her navigation act so far in time of war, as to permit to neutral vessels a circuitous carriage; but as yet the act was in full force against the use of them for transporting the produce of the United States.

On the other hand, the laws of the United States allowed Great-Britain to bring into their ports, any thing she might please, from her own or from other ports; and in her own or in other vessels.

In the trade between the United States and the British West-Indies, the vessels of the former were under an absolute prohibition; whilst British vessels in that trade enjoyed all the privileges granted to other, even the most favored nations in their trade with us. The inequality in this case was the more striking, as it was evident that the West-Indies were dependant on the United States for the supplies essential to them, and that the circumstances which secured to the United States this advantage, enabled their vessels to transport the supplies on far better terms than could be done by British vessels.

To illustrate the policy requisite in our commercial intercourse with other nations, he presented a comparative view of the American and foreign tonnage employed in the respective branches of it, from which it appeared that the foreign stood to the American as follows—

Spain 1 to 5
Portugal 1 to 6
The United Netherlands, 1 to 15
Denmark, 1 to 12
France, 1 to 5
Great-Britain, 5 to 1

It results from these facts that in proportion as the trade might be diminished with Great-Britain and increased with other nations, would be the probable increase of the American tonnage. It appeared, for example, that as the trade might pass from British channels into those of France it would augment our tonnage at the rate of ten to one.

The above calculation, he said, had been made out on the documents of 1790, and on the amount of the tonnage entered in the several ports. A document, stating the amounts of the actual tonnage in the American trade, had been just reported to that house.4 If this, which was liable to some remarks that might hereafter be made, was to be substituted, it afforded another calculation, diminishing the excess in favor of Great-Britain, but augmenting it in favor of the United States in most of the other instances.

According to this calculation the foreign to the American tonnage might be stated, as follows:

Spain, 1 to 16
Portugal, 1 to 17
United Netherlands, 1 to 26
Denmark, 1 to 15
Russia, 1 to 14
France, 1 to between 4 & 5
Great-Britain, nearly as 3 to 1

Such a disproportion, taking even the reduced one, in the navigation with Great-Britain, was the more mortifying, when the nature and amount of our exports are considered. Our exports are not only for the most part, either immediately necessaries of life, or ultimately as necessaries to manufactures, necessaries of employment and life to manufacturers, and must thence command a sure market wherever they are received at all: But the peculiar bulkiness of them furnishes an advantage over the exports of every other country; and particularly over those of Great-Britain. If such an advantage belonged to that nation, the policy which governs her navigation laws, would probably have given the exclusive carriage to her own bottoms. It is equally in our power, if so selfish a principle should be forced upon us, to secure to our bottoms the same monopoly; leaving to other nations with which we trade, the like exclusive carriage of their exports. The regulation would, to be sure, be mutually inconvenient; and by forcing the vessels of each party to return empty from foreign markets, be so far a tax on the intercourse. This effect, however, did not disprove the power in general which the character of our exports gave us, over the carriage of them, nor lessen the argument drawn from it. Examine it in relation to Great-Britain. The bulk of her exports to us compared with that of ours to her, is as nothing. An inconsiderable quantity of shipping would suffice for hers, whilst ours can load about 222,000 tons: Including the articles she exports from the West-Indies to this country, they bear no proportion to ours. Yet in the entire trade between the United States and the British dominions, her tonnage is to that of the United States as 156,000, employing 9,360 seamen, to 66,000, employing 3,690 seamen. Were a rigid exertion of our right to take place, it would extend our tonnage to 222,000; and leave to G. B. employment for much less than the actual share now enjoyed by the United States. It could not be wished to push matters to this extremity. It shewed, however, the very unequal and unfavorable footing, on which the carrying trade, the great resource of our safety and respectability, was placed by foreign regulations, and the reasonableness of peaceable attempts to meliorate it. We might at least, in availing ourselves of the merit of our exports, contend for such regulations as would reverse the proportion, and give the United States the 156,000 tonnage and 9,360 seamen, instead of the 66,000 tonnage and 3,690 seamen.

He here adverted to the discount of ten per cent. on the duties paid by goods imported in American bottoms;5 remarking that it was not founded on the true policy of encouraging our shipping. It was not the imports but exports that regulated the quantity of tonnage. What was imported in American vessels, which would otherwise return empty, was no doubt, a benefit to the American merchant, but could slightly only, if at all, increase the mass of our tonnage. The way to effect this was to secure exportations to American bottoms.

Proceeding to the subject of manufactures, he observed that it presented no compensations for the inequalities in the principles and effects of the navigation system.

We consume British manufactures to double the amount of what Britain takes from us; and quadruple the amount of what she actually consumes.

We take everything after it has undergone all the profitable labor that can be bestowed on it: She receives in return, raw materials, the food of her industry.

We send necessaries to her: She sends superfluities to us.

We admit every thing she pleases to send us, whether of her own or alien production. She refuses not only our manufactures, but the articles we wish most to send her; our wheat and flour, our fish, and our salted provisions. These constitute our best staples for exportation; as her manufactures constitute hers.

It appeared by an authentic document6 he had examined, that of the manufactured articles imported in 1790, amounting to 15,295,638 dollars 97 cents, we received from and thro’ Great Britain, 13,965,464 dollars 95 cents.

During the same year, the manufactures imported from France, the next great commercial country, and consuming more of our produce than Great-Britain, amounted to no more than 155,136 dollars and 63 cents.

To give a fuller view of our foreign commerce, he stated the balances with the several nations of Europe and their dominions, as follow:

Spain 1,670,797 in favor of U. S.
Portugal 1,687,699 do.
U. Netherlands 791,118 do.
Sweden 32,965 do.
Denmark 126,949 against the U. S.
France 2,630,387 in favor of U. S.
G. Britain 5,922,012 against the U. S.7

This enormous balance to G. B. is on the exports to her. On her consumption the balance is still greater, amounting to nine or ten millions, to which again is to be added her profits on the re-exports in a manufactured and raw state.

It might be said that an unfavorable balance was no proof of an unfavorable trade; that the only important balance was the ultimate one on our aggregate commerce.

That there was much truth in this general doctrine was admitted; at the same time it was equally certain that there were exceptions to it, some of which were conceived to be applicable to the situation of the United States.

But whether the doctrine were just or not, as applied to the United States, it was well known that the reasoning and practice of other countries were governed by a contrary doctrine. In all of them, an unfavorable balance to be paid in specie, was considered as an evil. Great-Britain in particular had always studied to prevent it as much as she could. What then may be the effect on the policy of a nation with which we have the most friendly and beneficial relations, when it sees the balance of trade with us not only so much against her, but all the specie that pays it, flowing immediately into the lap of her greatest rival, if not her most inveterate enemy.

As to the discrimination proposed between nations having, and not having commercial treaties with us, the principle was embraced by the laws of most, if not all the states, whilst the regulation of trade was in their hands.

It had the repeated sanction of votes in the house of representatives, during the session of the present government at New-York.

It has been practised by other nations, and in a late instance against the United States.

It tends to procure beneficial treaties from those who refuse them, by making them the price of enjoying an equality with other nations in our commerce.

It tends, as a conciliatory preference, to procure better treaties from those who have not refused them.

It was a prudent consideration, in dispensing commercial advantages, to favor rather those whose friendship and support may be expected in case of necessity, than those whose disposition wore a contrary aspect. He did not wish to enter at present, nor at all, if unnecessary, into a display of the unfriendly features which marked the policy of Great-Britain towards the United States. He should be content to lay aside, at least for the present, the subject of the Indians, the Algerines, the spoliations, &c. but he could not forbear remarking generally, that if that, or any other nation were known to bear us a settled ill-will, nothing could be more impolitic than to foster resources which would be more likely to be turned against us, than exerted in our favor.

It had been admitted by the gentleman who spoke yesterday (Mr. Smith of South Carolina) to be a misfortune, that our trade should be so far engrossed by any one nation, as it is, in the hands of Great-Britain. But the gentleman added nothing to alleviate the misfortune, when he advised us to make no efforts for putting an end to it. The evils resulting from such a state of things were as serious as they were numerous. To say nothing of sudden derangements from the caprice with which sovereigns might be seized, there were casualities which might not be avoidable. A general bankruptcy, which was a possible event, in a nation with which we were so connected, would reverberate upon us with a most dreadful shock. A partial bankruptcy, had actually and lately taken place; and was severely felt in our commerce. War is a common event particularly, to G. Britain, and involves us in the embarrassments it brings on her commerce whilst ours is so disproportionately interwoven with it. Add, the influence that may be conveyed into the public councils by a nation directing the course of our trade by her capital, & holding so great a share in our pecuniary institutions; and the effect that may finally ensue on our taste, our manners, and our form of government itself.

If the question be asked, what might be the consequence of counter-efforts, and whether this attempt to vindicate our public interests would not produce them? His answer was, that he did not in the least apprehend such a consequence, as well because the measure afforded no pretext, being short of what was already done by Great-Britain in her commercial system, as because she would be the greatest sufferer from a stagnation of the trade, between the two countries if she should force on such a crisis.

Her merchants would feel it. Her navigation would feel it. Her manufacturers would feel it. Her West-Indies would be ruined by it. Her revenue would deeply feel it. And her government would feel it thro’ every nerve of its operations. We too should suffer in some respects, but in a less degree, and, if the virtue and temper of our fellow citizens were not mistaken, the experiment would find in them a far greater readiness to bear it. It was clear to him, therefore, that if Great-Britain should, contrary to all the rules of probability, stop the commerce between the two countries, the issue would be a compleat triumph to the United States.

He dwelt particularly on the dependence of British manufactures on the market of the United States. He referred to a paper in Andersons history of commerce, which states the amount of British manufactures at £.51,310,000 sterling, and the number of souls employed in, and supported by them, at 5,250,000.8 Supposing the United States to consume two and a half millions of British manufactures which is a moderate estimate, the loss of their market, would deprive of subsistence 250,000 souls. Add 50,000 who depend for employment on our raw materials. Here are 300,000 souls, who live by our custom. Let them be driven to poverty and despair by acts of their own government, and what would be the consequence? Most probably an acquisition of so many useful citizens to the United States, which form the natural asylum against the distresses of Europe. But whether they should remain in discontent and wretchedness in their own country, or seek their fortunes in another, the evil would be felt by the British government as equally great, and be avoided with equal caution.

It might be regarded, he observed, as a general rule, that where one nation consumed the necessaries of life produced by another, the consuming nation was dependent on the producing one. On the other hand, where the consumption consisted of superfluities, the producing nation was dependent on the consuming one. The United States were in the fortunate situation of enjoying both these advantages over Great-Britain. They supply a part of her dominions with the necessaries of life. They consume superfluities which give bread to her people in another part. Great Britain therefore is under a double dependence on the commerce of the United States. She depends on them for what she herself consumes: she depends on them for what they consume.

In proportion as a nation manufactures luxuries must be its disadvantage in contests of every sort with its customers. The reason is obvious. What is a luxury to the consumer is a necessary to the manufacturer. By changing a fashion, or disappointing a fancy only, bread may be taken from the mouths of thousands whose industry is devoted to the gratification of artificial wants.

He mentioned the case of a petition from a great body of buckle makers presented a few years ago to the prince of Wales, complaining of the use of strings instead of buckles in the shoes, and supplicating his royal highness as giving the law to fashions, to save them from want and misery, by discontinuing the new one.9 It was not, he observed, the prince who petitioned the manufacturers to continue to make the buckles, but the manufacturers who petitioned their customers to buy them. The relation was similar between the American customers and the British manufacturers. And if a law were to pass for putting a stop to the use of their superfluities, or a stop were otherwise to be put to it, it would quickly be seen from which the distress and supplications would flow.

Suppose that Great Britain received from us alone the whole of the necessaries she consumes; and that our market alone took off the luxuries with which she paid for them. Here the dependence would be compleat; and we might impose whatever terms we pleased on the exchange. This to be sure is not absolutely the case; but in proportion as it is the case, her dependence is on us.

The West-Indies however are an example of compleat dependence. They cannot subsist without our food. They cannot flourish without our lumber, and our use of their rum. On the other hand we depend on them for not a single necessary, and can supply ourselves with their luxuries from other sources. Sugar is the only article about which there was ever a question, and he was authorised to say, that there was not at the most, one sixth of our consumption supplied from the British islands.

In time of war or famine the dependence of the West-Indies is felt in all its energy. It is sometimes such as to appeal to our humanity as well as our interest for relief. At this moment, the governor of Jamaica is making proclamation of their distresses. If ever therefore there was a case where one country could dictate to another the regulations of trade between them, it is the case of the United States, and the British West-Indies. And yet the gentleman from South-Carolina (Mr. Smith) had considered it as a favor that we were allowed to send our provisions in British bottoms & in these only, to the West-Indies. The favor reduced to plain language in the mouth of their planters, would run thus: We will agree to buy your provisions rather than starve, and let you have our rum, which we can sell nowhere else; but we reserve out of this indulgence a monopoly of the carriage to British vessels.

With regard to revenue, the British resources were extremely exhausted in comparison with those of the United States.

The people of Great-Britain were taxed at the rate of 40/ a head: the people of the United States at not more than 6/ a head; less than one-sixth of the British tax.

As the price of labor which pays the tax is double in the United States, to what it is in Great-Britain, the burden on American citizens is less than one-twelfth of the burden on British subjects.

It is true indeed that Britain alone does not bear the whole burden. She levies indirect taxes on her West-Indies and on her East-Indies; and derives from an acquiescence in her monopolizing regulations, an imperceptible tribute from the whole commercial world.

Still however the difference of burden in the two countries is immense.

Britain has moreover great arrears of unfunded debts. She is threatened with defects in her revenue even at this time. She is engaged in an expensive war. And she raises the supplies for it on the most expensive terms.

Add to the whole that her population is stationary if not diminishing, whilst that of the United States is in a course of increase beyond example.

Should it still be asked whether the impost might not be affected, and how a deficiency could be supplied? He thought sufficient answers might be given.

He took for granted that the articles subjected to the additional duties would continue to come according to the demand for them: And believed if the duties were prudently adjusted, the increase of the duties would balance the decrease of importation.

Our country is able to import, and probably will import, in proportion to our exports. Our exports amount, say, to twenty millions of dollars. If we import less from one country we shall import more from another. If we import less of some things we shall import more of other things; and according to our imports will be our revenue.

Suppose Great-Britain to make the rash and improbable experiment of prohibiting all commerce with the United States: She does not consume more than one-fourth of our exports; and we derive perhaps nearly half our revenue from the productions of other countries. In this point of view we should at the worst have three-fourths of our exports to pay for our reduced imports; and consequently a balance of about five millions of specie flowing into our country. The faculty which this would give to operations of revenue, together with the consideration that the labor employed on one-fourth of our ordinary exports would be employed for internal purposes, might assure us that a judicious government would easily be able to provide the means of supplying the deficiency of impost.

But it was superfluous to enter into calculations of this sort. He recurred to the utter improbability that such a contingency should happen. He was fully persuaded that the resolutions, if agreed to, would not impair the revenue.

It is objected, that Spain and Portugal who are good customers to us, and the latter particularly friendly, having no commercial treaty with us, will come within the operation of the resolutions.

Several answers may be given to this objection.

1. They do not manufacture the articles in question so as to be sensibly affected.

2. They employ but little tonnage in our trade: Spain 2,689 tons only; Portugal 2,340 tons only: They are supposed to be little anxious to increase the foreign branches of their carrying trade, being content with the internal trade carried on with their own dominions. As they have no navigation act within the purview of the resolutions, they would not be exposed to the retaliating clauses on that subject.

3. If friendly, they can be admitted to treaty on equitable conditions whenever they please.

4. They can easily be excepted, if thought expedient, either by a general proviso that the resolutions shall not extend to nations having no navigation act such as is therein described; or by providing that they shall not extend to countries south of Cape-Finisterre, a distinction familiar to the British statute-book.

It is said that Great-Britain treats the United States as well as she treats other nations, and therefore they ought to be satisfied.

If other nations were willing to bear unequal regulations, or unable to vindicate their rights, it was no example for us.

But is it true that the same degree of reciprocity subsists between the United States & Great-Britain, as between Great-Britain and other countries? He did not admit this to be the case. Where treaties existed, they stipulated in many instances, mutual and equal conditions of intercourse. He gave an example in the treaty of Methuen, in which the admission of British woolens by Portugal was balanced by the admission of Portugal wine, by Great-Britain. The treaty with France of late date, was another example, where a variety of reciprocal privileges and countervailing duties, were minutely provided for.10 Where no treaties existed or where they were silent, there were often legal regulations reciprocating the regulations of Great-Britain. He referred to the laws of Sweden and Denmark on the subject of manufactures as instances.

It is said that Great-Britain treats us as well as other nations treat us. What nation he asked, had such a navigation act? What nation besides, excludes us from a circuitous trade? What nation excludes us from carrying our own commodities in our own bottoms, where the carriage is allowed to her bottoms?

It is said, that at least Great-Britain treats us as well as we are treated by France, who will be favored by the resolutions. This point was particularly labored yesterday, by the gentleman from South-Carolina, (Mr. Smith,) who made a comparison of those two countries the principal basis of the discussion. As they were in fact the two countries which stood in the most important relations to the United States, the subject required a pretty accurate view of their respective dispositions, regulations, and intercourse with this country.

On the subject of the dispositions of France and Great-Britain towards the United States, the gentleman, (Mr. Smith) was of a very different opinion, Mr. Madison observed, from that expressed in the message of the President. The message informed the house, that France had generally manifested a friendly disposition towards the United States, had granted advantages to their commerce, and had actually made overtures for placing it permanently on a better footing.11 While the language of the communications, with respect to Great-Britain, sufficiently proves that there was no room for compliments of a like kind to that nation.

He meant to shew, however, from a particular review, in what light the two nations stood to us; and for that purpose should submit to the committee a comparative statement, as the gentleman had done, of their commercial policy towards us. He premised, however, that he could not follow the example of recurring to a period antecedent to the French revolution for evidence in relation to France. Mr. Smith, seemed to think that the order of things subsequent to that period, could not be regarded as a settled order. He, (Mr. Madison) on the contrary, considered it as the only settled order. He hoped and believed, that the revolution was not a fugitive thing, as some might wish, but that it was irreversibly established, and that the new republic would flourish for ever on the ruins of the ancient monarchy. He should not, however, he said, reject from his enquiry, what was done previous to the date of the republic in favor of the United States, because it could not be reasonably supposed that the disposition of the nation would be less favorable now, than it was under the former government.

He then proceeded to a view of the footing on which the commerce stood with the British and French dominions.

Wheat and Flour. In France free, that is to say, under a duty of one-eighth per cent. as a custom-house regulation, merely for ascertaining the quantity imported. This remark is to be applied to several other articles, which will be mentioned as free.

In Great-Britain, wheat and flour are prohibited, till the price is up at 6/3 sterling a bushel; which as to the United States, may be deemed a perpetual prohibition.

In the French West-Indies, these articles are also free; and as he at first stated, by a general law which had been suspended from time to time; but being told that he was mistaken, the articles being prohibited by a general law, and free only by suspensions, he said, that altho’ his documents gave him other information, he should leave the fact for further examination; adding, however, that it was not essential, as the actual practice and disposition of France on this subject were chiefly to be regarded.

In the British West-Indies these articles were free, but in British bottoms only.

Rice. In France free. In Britain under a duty of 7/4 sterling the hundred. In the French islands under a duty of one per cent. In the British, free in British bottoms.

Salted Fish. In France under a duty of 8 livres the kental. In Britain prohibited. In French islands admitted under some discouragements, which did not however prevent a great consumption. In the British islands prohibited.

Salted Beef. In France under a duty of 5 livres a kental. In Britain prohibited. In French islands under a duty of 1 per cent. and 3 livres a kental. In British islands prohibited.

Salted Pork. In France, under a duty of 5 livres a kental in some ports; prohibited in others. In Britain under a prohibitory duty of 44/9 a kental. In the British and French islands prohibited.

Indigo. In France under a duty of 5 livres a kental. In Britain free. In the British and French islands prohibited.

Whale Oil. In France under a duty of 7 livres 10 sols a barrel of 520 lbs. In Britain under a duty of £.18.3. a ton. In both West-Indies prohibited.

Tar, Pitch, and Turpentine. In France under a duty of 2 per cent. In Britain, under duties, tar and pitch 11d. per barrel, turpentine ⅔ per 100 lb.

Tobacco is on a footing pretty similar in the two countries. So are wood, pot and pearl ash and flax-seed.

Indian Corn, Wood, Live Animals (except horses and mules which are free) in the French islands pay a duty of 1 per cent. In the British they are free, in British bottoms, prohibited in American bottoms.

Ships. In France, free to be naturalized. In Britain prohibited.

He proceeded to state the comparative amount of our exports and imports in the commerce with the two nations, and the balances on them as before shewn. He noticed particularly the excess of the exports to the French West-Indies which amounted to 3,284,656 dollars, over those to the British, which amounted to 2,357,583: Observing the importance of that market, and the more especially as it supplies the article of molasses, the only raw material imported into the United States, and otherwise so much valued as an article of consumption. He adverted also to the superior proportion of American tonnage in the trade with the French dominions, as had also been before shewn.

From this review, he left the committee to infer the true policy of the United States with regard to their commerce, in its two most considerable branches. He thought it clear, that in every view it was incumbent on the United States to cultivate the connection and intercourse with the French nation. As a market for our produce, their vast population, and their use of our articles of mere consumption, were peculiarly precious to our agriculture. They could do better without our trade than Great-Britain, yet they shewed more disposition to favor it. And what was by no means to be disregarded, they were the only considerable power on the face of the earth, sincerely friendly to the republican form of government established in this country.

Of all the objections which Mr. Madison had heard suggested against the resolutions, the most extravagant and chimerical was the idea of a war with Great-Britain in consequence of them. He was at a loss to say whether such an objection were a greater insult to the character of that nation or to the understanding of America. At the utmost the propositions go only to a reciprocity. They do not in fact go so far. On what imaginable pretext then can Great-Britain make war upon us. If we are no longer colonies, but independent states, we surely can do what all independent states do, regulate our trade as may suit our own interests. And Great-Britain can have the least right of any nation to complain of it, because it is her own example which we follow. If war therefore should be made on us it would only prove a fixt predetermination to make it. And in that case pretexts more plausible than any commercial regulations could easily be found or framed for the purpose.

The next ground on which he examined the subject was it’s operation among the several parts of the union. It was admitted and regretted, that the immediate benefits and burdens would not be equally distributed among all the states. More than a due share of the former would flow to the northern division: More than a due share of the latter would fall on the southern. This was unavoidably produced by the unequal advances made in manufactures and navigation; and it was an inconvenience that had necessarily taken place in a variety of other instances. It would be found, however, on a fair attention to the subject, that the inequality would be less than at first appeared.

With respect to manufactures, the southern states were at least equally interested in encouraging and distributing a competition for our market, among different nations of Europe, instead of being so much in the hands of a single one.

The duty on the finer articles imported would fall on those most able to bear it; and would be pretty equally diffused through the union.

The duty on the coarser articles would be saved in proportion to the progress made in manufactures among ourselves; and he was able to say, with great pleasure, that those carried on, not in public factories, but in the household or family way, which he regarded as the most important way, were nearly, if not quite as far advanced in the southern country as in the middle and northern. Virginia was proceeding with great spirit in this branch of industry. North-Carolina he understood was doing the same; and there was no reason why the more southern states would not avail themselves of the resource, especially as they enjoyed superior advantages in the article of cotton, a primary material for the business.

The exports would not be materially affected unless Great-Britain, should contrary to all probability, renounce the benefits of the trade in them, and expose her West-India islands to the danger of famine; and in that case, the inconveniences would be not local but general.

Even in the article of tonnage the inequality at present tho’ considerable, was not so great as he had imagined, before he examined the real state of it. It appeared from the official reports lately made on that subject, that the states south of Pennsylvania (which has about her due share,) have within one-third of their due quota. Georgia has more than her share. South-Carolina nearly her share. North Carolina has three eighths below her share. Virginia has about half her share. Maryland has more than her share. Delaware less than her share.

This computation is not perhaps very accurate, because it is founded on the relative population of the states. It should rather have reference to the value and volume of the produce exported from the several states. But as several of them carry on their trade thro’ their neighbours, this rule of calculation would in fact be more uncertain than the other.

Whatever be the rule, Virginia, he remarked, was the state that appeared most deficient; her exports both in value and bulk, being in full proportion to her population, and her tonnage being more short of that, than could be said of any state. He had every reason, notwithstanding, to believe that the great body of the people of Virginia, would chearfully concur in any temporary sacrifices, that might be necessary to vindicate our public rights, and our commercial interests.

It was a consideration that ought to have great weight with the southern states, that a home market for their naval stores would be extended by every measure, favoring our own navigation; and that they must soon begin themselves to turn to effect their natural advantages for ship building. Having the materials on the spot, they would not be long in imitating their northern brethren, North-Carolina was singularly favored in this particular. There was not a single article used in the various component parts of a ship, which she did not possess, or could not raise within herself.

The capacity of the United States, to provide with celerity for the transportation of their produce, was strongly attested by what they had effected before the revolution. In the marine of the British empire, whilst the United States were part of it, the American built ships were to the British built as 23 to 40. New-England furnished about three fifths of the former.

In two points of view, the southern states were peculiarly interested in promoting our navigation.

First. As they are in some respects the weaker part of the Union, and have most wealth exposed on the sea, they have most need of that protection, which results from extensive marine resources. The existence of these will either prevent attack, or can readily be turned into the means of repelling it.

Secondly. As they have so much valuable and bulky produce to carry to market, it is their interest to possess a conveyance for it, that may be as little affected as possible by the contingencies and wars of other nations; and particularly of Great-Britain, a nation which is so frequently at war, and which has so disproportionate a share in our carrying trade. This subject, he said, had been placed in so striking a view, by the Secretary of State in a former report on the fisheries, that he should rely on the patience of the committee in reading the observations and calculations to which he alluded. He here read the following note at the end of that report.

“That the encouragement of our carrying business is interesting, not only to the carrying states, but in a high degree also to the others, will result from the following facts.

The whole exports of the United States, may
be stated at
Great-Britain carries two-fifths of these in
value, that is to say,
Freight and insurance on this in times of
peace, are about twenty-two and one half
per cent.
The same charges in war are very various,
according to the circumstances of the
war, we may say, however fifty-five per
The difference between peace and war,
freight and insurance, then is annually

Taxed on our agriculture by British wars, during their continuance, and our dependance on British bottoms.

Of the last one hundred years, Great-Britain has had* forty-two years of war and fifty-eight of peace, which is three of war to every four of peace, nearly.

*Y. M. 1689. May. } Y. M.
Peace. 4 8 { 1697. Sept. 8 4 War.
1702. May. } 10 3
6 4 { 1712. August
1718. Dec. } 2 6
5 8 { 1721. June.
1727. March } 0 2
12 4 { 1727. May.
1739. Oct. } 8 7
7 0 { 1748. May.
1755. June. } 7 5
15 7 { 1762. Nov.
1778. June. } 4 9
6 2 { 1783. March
1789. May.
57 9 42

In every term of seven years then, we pay three times three million two hundred and fifty thousand dollars, or nine million seven hundred and fifty thousand, which, averaged on the years of peace & war, are annually and constantly one million three hundred & ninety-two thousand eight hundred and fifty-seven more than we should, if we could raise our own shipping to be competent to the carriage of all our productions. Besides this, many of our bulky articles, not bearing a war freight, cannot be exported, if exposed, to that, so that their total loss is to be added to that before estimated.”12

This was a demonstration of the interest the United States had, particularly the southern states, in obtaining an independent transportation for their commodities; and the effect of the present war to which Britain as a party, in depriving them of the ordinary foreign resource, is bringing the evidence home to their feelings at the present moment.

It had been asked what ground there was for concluding, that Great-Britain would be led by the measures proposed, to change her policy towards the United States. He thought we had the best ground for relying on such an effect.

It is well known, that when she apprehended such measures would be taken, she manifested a readiness to admit a greater reciprocity into the commerce between the two countries. A bill for the purpose was brought into the house of commons by the present minister Mr. Pitt, and would probably have passed into a law, if hopes had not sprung up that they should be able to maintain their exclusive system.13 Knox, an under secretary, appears from a collection of papers published by him, to have been the chief adviser in the cabinet, as Lord Sheffield was the great champion before the public, of this experiment. It was founded according to both these witnesses,14 on a belief—1st. That Nova-Scotia and Canada, would soon be able to feed the West-Indies, and thereby make them independent of supplies from the United States. 2dly. That the general government was so feeble that it could not execute a plan of retaliating restrictions—and, 3dly. That local interests and prejudices predominated so much among the states, that they would never even agree in making an attempt.

It is now thoroughly understood and admitted by the most biassed judges, that the British continental colonies cannot supply the islands; that as well as the islands, they depend frequently for essential supplies on the United States. This calculation therefore has failed Great-Britain.

The next has been completely destroyed by the change of our former frail confederacy, into a government which is found to be adequate to all its national objects. This hope has therefore in like manner failed.

The only remaining hope that can induce Great-Britain to persevere in the plan of conduct she has adopted towards the United States, lies in the supposed difficulty of reconciling their different interests and local prejudices. The present occasion will decide whether this hope also shall be withdrawn from her; or whether she is to be inspired with fresh confidence in pursuing her own interests without a due respect either for our interests or for our rights.

He could not but view the present as perhaps the final chance of combining the opinions and interests of the several quarters of the Union in some proper and adequate plan. If at a moment when so many occurrences conspire to unite the public councils; when the public mind is so well disposed to second all equitable and peaceable means of doing justice to our country; and when our commerce is so critically important to the vital resources of Great-Britain, it should be found that nothing can be done, he could foresee no circumstances under which success was to be expected. To reject the propositions therefore, whilst nothing better was substituted, must convey the most unfavorable impressions of our national character, and rivet the fetters on our commerce, as well as prolong other causes which had produced such injurious consequences to our country. He would not permit himself to apprehend that such would be the event of the deliberations of the committee.

Philadelphia Gazette, 27 Feb. 1794 (also reported in Philadelphia Gazette, 16 Jan. 1794, General Advertiser, 16, 17, and 18 Jan. 1794, and Gazette of the U.S., 17, 18, and 20 Jan. 1794). Reprinted in James Madison, Speech in the House of Representatives of the Congress of the United States, Delivered January 14, 1794, by James Madison, of Virginia, in Support of His Propositions for the Promotion of the Commerce of the United States, and in Reply to William Smith, of South Carolina (New York, 1794; Evans description begins Charles Evans, ed., American Bibliography … 1639 … 1820 (12 vols.; Chicago, 1903–34). Roger P. Bristol, ed., Supplement to Charles Evans’ American Bibliography (Charlottesville, Va., 1970). description ends 27258), pp. 1–27.

1JM gleaned these figures from Sheffield, Observations on Commerce (1784 ed.), pp. 136–37. For his previous use of this information, see For the National Gazette, 19 Nov. 1791, PJM description begins Robert A. Rutland et al., eds., The Papers of James Madison: Presidential Series (1 vol. to date; Charlottesville, Va., 1984—). description ends , 14:119, 122 n. 3.

2On 30 Apr. 1784 the Continental Congress passed resolutions recommending that the states grant to Congress for fifteen years the power to exclude the carrying trade of nations not having a commercial treaty with the U.S. and cargoes imported in ships not of the same country of origin (JCC description begins Worthington C. Ford et al., eds., Journals of the Continental Congress, 1774–1789 (34 vols.; Washington, 1904–37). description ends , 26:322).

3JM’s reciprocity proposals for the impost and tonnage bills of 1789 passed the House but were defeated in the Senate (PJM description begins Robert A. Rutland et al., eds., The Papers of James Madison: Presidential Series (1 vol. to date; Charlottesville, Va., 1984—). description ends , 12:54–55).

4Hamilton’s “Statement of the Actual Tonnage of American Vessels,” 10 Jan. 1794 (ASP description begins American State Papers: Documents, Legislative and Executive, of the Congress of the United States … (38 vols.; Washington, 1832–61). description ends , Commerce and Navigation, 1:252).

5This discount was provided for in section 5 of the Impost Act of 1789 (U.S. Statutes at Large description begins The Public Statutes at Large of the United States of America … (17 vols.; Boston, 1848–73). description ends , 1:27).

6The figures in this and the succeeding paragraph appear in JM’s List of Imports, 1789–1790, ca. 29 Dec. 1793, probably based on an “authentic document” supplied by Tench Coxe.

7JM arrived at these figures by calculating the differences between exports and imports as stated in the “Report of the Secretary of State on the Privileges and Restrictions on the Commerce of the United States in Foreign Countries” of 16 Dec. 1793 (ASP description begins American State Papers: Documents, Legislative and Executive, of the Congress of the United States … (38 vols.; Washington, 1832–61). description ends , Foreign Relations, 1:301).

8Anderson, Origin of Commerce (1790 ed.), 6:699.

9For JM’s previous use of this example, see For the National Gazette, 20 Mar. 1792, PJM description begins Robert A. Rutland et al., eds., The Papers of James Madison: Presidential Series (1 vol. to date; Charlottesville, Va., 1984—). description ends , 14:257–59 and n. 1.

10Great Britain concluded the Methuen Treaty with Portugal in 1703 and the Eden Treaty with France in 1786.

11JM paraphrased part of Washington’s 5 Dec. 1793 message to Congress (ASP description begins American State Papers: Documents, Legislative and Executive, of the Congress of the United States … (38 vols.; Washington, 1832–61). description ends , Foreign Relations, 1:141).

12“Report on the American Fisheries by the Secretary of State,” 1 Feb. 1791, appendix no. 18 (Boyd, Papers of Jefferson description begins Julian P. Boyd et al., eds., The Papers of Thomas Jefferson (21 vols. to date; Princeton, N.J., 1950—). description ends , 19:236). JM provided this information for Jefferson in his memorandum of ca. 31 Jan. 1791 (PJM description begins Robert A. Rutland et al., eds., The Papers of James Madison: Presidential Series (1 vol. to date; Charlottesville, Va., 1984—). description ends , 13:362–63).

13During the last days of Lord Shelburne’s government in 1783, William Pitt the younger as chancellor of the exchequer (then in his liberal period) proposed an American intercourse bill to reestablish commercial relations on the basis of reciprocity. Shelburne’s ministry had already lost a vote of confidence over the terms of the peace treaty with the U.S., and the new Fox-North coalition won passage of an alternative bill that authorized the king in council to regulate trade with the U.S. (Setser, Commercial Reciprocity Policy of the United States, 1774–1829, p. 44; Hansard’s Parliamentary Debates, 23:609–11, 724–25, 762; 23 Geo. 3, chap. 39, Statutes at Large [1786 ed.], 14:331).

14William Knox, Extra Official State Papers Addressed to the Right Hon. Lord Rawdon (2 vols.; London, 1789), 2: appendix, 69–71, 75–76; Sheffield, Observations on Commerce (1784 ed.), pp. 168, 198–200.

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