Alexander Hamilton Papers

Tench Coxe’s Draft of the Report on the Subject of Manufactures, [Fall] 1790

Tench Coxe’s Draft of the Report
on the Subject of Manufactures46

Treasury Department
the  47 1790

The Secretary of the Treasury, in obedience to the order of the house of Representatives of the fifteenth day of January last, has applied his attention, at as early a period as his other duties would permit, to the subject of manufactures, 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, tho recently deemed very questionable, appears at this time to be generally admitted. The advantages of the Landholder in furnishing raw materials, subsistence, fuel and other supplies to the workmen—the support which the fisheries derive from them by their consumption of articles drawn from the ocean—the assistance given to external commerce by promoting the importation48 of raw articles and furnishing manufactured commodities for exportation—their favorable effects on population by inducing the emigration of foreign artists and laborers—the introduction of money by offering a new & promising field to capitalists of other nations—the promotion of individual industry & œconomy which naturally result from manufactures and particularly when engrafted upon an extensive agriculture—their encreasing and rendering more certain the means of defence and other articles of prime necessity and lastly the Reduction of the prices of convenient & essential supplies for public & private use, which has already taken place on the appearance of competition from the American manufacturer are among the considerations, which have produced more favorable opinions concerning this object.

Among the means devised by the European nations to encourage manufactures protecting duties have been very generally adopted. It cannot be unobserved by those, who are engaged in these pursuits nor will it escape the notice of those capitalists, and workmen who may intend to transfer their property and business to the United States, that the duties already imposed by the legislature,49 tho principally for the purposes of Revenue, afford very considerable and certain advantages to the American manufacturer. Tho it may be very doubtful whether general addition to these duties be necessary further to encourage the Manufactures of the United States, yet it is humbly conceived a few articles may be very properly aided by a moderate encrease. Among those in View is Sail Cloth which is important to defence, to domestic & foreign commerce, the fisheries &, as it relates to the raw materials, to agriculture likewise.

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

Pecuniary bounties upon home made articles have been tried in several European countries with great success. The linen branch in Ireland is a well known instance. [But under the present]50 circumstances of this country the Secretary cannot discover sufficient inducements to these expensive encouragements to justify a [strenuous] recommendation of them to the consideration of the legislature. This aid to manufactures however is less necessary at [the present moment] in the United States than in any European country, because their fabrics, being generally wanted for home consumption, are free from the heavy expences of importation, which rival foreign51 goods sustain to the amount of [fifteen, ⟨twentyand twenty five] ⅌ Cent on their Value according to their bulk. But if it should on consideration be deemed inexpedient to grant bounties in money to encourage manufactures it may nevertheless appear adviseable to reward certain great and useful promoters of them by other means. The United States having a very large quantity of unappropriated lands the Secretary humbly submits to the house the propriety of setting apart the quantity of five hundred thousand acres, of good quality and advantageously situated, for the purpose of rewarding the first introducers or establishers of new and useful manufactories, arts, machines, & secrets not before possessed, known or carried on in the United States. The objects here contemplated, and the mode of applying this landed fund will be more clearly explained by the plan contained in the paper (A)52 which accompanies this report. A measure of this nature would evince to the manufacturers of Europe the disposition of the legislature to encourage and reward them, and would afford to persons, who may transfer their capitals and establishments ⟨to the United States, a certain⟩ tho ⟨not⟩ an immediate compensation ⟨even in unsuccessful⟩ instances.

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

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

A drawback of the amount of the duty on the raw Material on the exportation of manufactured Articlesis a measure recommended bypolicy,andrendered in some degree necessaryby the practice of nations, who will hold a competition with us in foreign Markets. The duty on Molasses, if the idea here suggested should meet the approbation of the legislature, might be allowed on the exportation of American rum—that on Muscovado sugars on the exportation of refined—that on Cocoa on the exportation of Chocolate and in such other instances as shall admit of due security against deception & fraud the danger of which is the only objection that occurs to this mode of encouragement.

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

Facility of communication, and cheapness of transportation are matters of primary importance in the business of every country; but under the existing circumstances of the United States they call for the earliest & most efficient exertions of government. The good condition of the post roads, especially where they happen to connect places of landing on the rivers & bays, and those which run into the western country, will conduce exceedingly to the cheapness of transporting and the facility of obtaining raw materials, fuel & provisions. But the most useful assistance perhaps, which it is in the power of the legislature to give to manufactures and which at the same time will equally benefit the landed & commercial interests, is the improvement of inland navigation.

Three of the easiest and most important operations of this kind are the improvement of the communication between New York, Connecticut, Rhode Island & Boston by cutting a passage thro the penninsula of cape Cod, the Union of Delaware and Chesapeak bays by a canal from the waters of the former to those of the latter, and the junction the Chessapeak bay & Albermarle sound by uniting the Elizabeth and the  .53 The accomplishment of these and other objects of the same nature seem likely to afford greater & more various aids to our growing manufactures than any other measure, that has occured to the Secretary in the investigation, which he has been directed to make.

A further ⟨measure⟩ to promote the cheap transportation of raw materials & provisions presents itself in the abolition of the duty of Tonnage imposed on coasting vessels.54 This appears to be a burden on the produce of lands, as substantial as if it were imposed on working waggons, and seems hardly consistent with sound policy.

The principal productions of the fisheries may not improperly be considered as articles of the nature of manufactures, & the remainder are of great Utility as raw materials or cheap & wholesome food but as the means of encouraging that important branch of trade have been refered by the house to the Secretary of State,55 it is unnecessary and improper to enlarge upon it here.

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

The ability to place funds with celerity and ease in every part of the Country for the purchase of raw materials and provisions is a matter of great importance to the manufacturer. To afford the accommodation of a general paper circulation of the nature of Bank Notes, payable with absolute certainty in specie on demand, is therefore very desirable. This benefit will immediately result from a national bank, & from ⟨such arrangements⟩ of Government with that ⟨Institution as soon⟩ as it shall be erected, as may give an universal circulation to their cash notes.56

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

The ⟨Importation of⟩ raw materials and ingredients, and of colors, drugs & other articles necessary to complete manufactures, free of duty, is an encouragement of obvious propriety, generally considered; but when it is remembered, that the principal nations of Europe afford this aid to their manufactories, and that we are to meet them, as competitors, in our own and in foreign markets, it appears to be almost indispensible. Proceeding, it is presumed, on these principles the legislature have been pleased to exempt from impost a number of articles of the nature above described,57 thereby giving their sanction to the principle here contemplated. An extension of this exemption further than has yet taken place particularly to include, cotton & hemp, the Secretary humbly conceives to be necessary to success in the business of manufactures.

The particular value to the U.S. of improved implements and machinery for manufacturing, and the inducements to export those we have already obtained or may hereafter procure, which the interest of our competitors obviously creates, ⟨seem to⟩ render a penalty for such exportations an eligible m⟨easure.⟩ It is manifestly proper to guard carefully against extending this ⟨fur⟩ther than is absolutely necessary to prevent a deprivation of any particular implement or machine, lest in the formation of the law, the export trade of well known articles, applicable in manufactures, may be unfavorably affected.

Besides the measures for the encouragement of manufactures, which it appears eligible that the legislature should pursue there are some of considerable importance which fall more immediately within the sphere of the other branches of government and on which for obvious reasons arising out of the nature of those measures, the Secretary refrains from enlarging.58

46ADf, deposited in the Historical Society of Pennsylvania, Philadelphia, and printed by permission of Mr. Daniel M. Coxe, Philadelphia.

There are two small portions of this draft which are in a clerk’s handwriting and which are printed in italics.

47Space left blank in MS. Internal evidence indicates that this draft was written during the fall of 1790.

48The remainder of this paragraph does not appear in H’s first draft of the Report.

49This is a reference to Section 1 of “An Act making further provision for the payment of the debts of the United States,” which reads in part as follows: “Section 1. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That from and after the last day of December next, the duties specified and laid in and by the act aforesaid, shall cease and determine; and that upon all goods, wares and merchandise (not herein particularly excepted) which after the said day shall be brought into the United States, from any foreign port or place, there shall be levied, collected and paid the several and respective duties following, that is to say: … molasses, per gallon, three cents; beer, ale and porter in casks, per gallon, five cents; beer, ale and porter in bottles, per dozen, twenty cents;… cocoa, per pound, one cent; loaf sugar, per pound, five cents; brown sugar, per pound, one and a half cent; other sugar, per pound, two and a half cents; candles of tallow, per pound, two cents; candles of wax or spermaceti, per pound, six cents; … cotton, per pound, three cents; nails and spikes, per pound, one cent; bar and other lead, per pound, one cent; steel unwrought, per one hundred and twelve pounds, seventy-five cents; hemp, per one hundred and twelve pounds, fifty-four cents; … malt, per bushel, ten cents; coal, per bushel, three cents; boots, per pair, fifty cents; shoes, slippers and goloshoes, made of leather, per pair, seven cents; shoes and slippers, made of silk or stuff, per pair, ten cents; wool and cotton cards, per dozen, fifty cents; … all China ware, looking glasses, window and other glass, and all manufactures of glass, (black quart bottles excepted) twelve and an half per centum ad valorem; … blank books, writing paper, and wrapping paper, paper hangings, pasteboards, parchment and vellum … oil, gun-powder … ten per centum ad valorem; cabinet wares … saddles, gloves of leather, hats of beaver, felt, wool, or a mixture of any of them, millinery ready made, castings of iron, and slit and rolled iron, leather tanned or tawed, and all manufactures of which leather is the article of chief value, except such as are herein otherwise rated, canes, walking sticks, and whips, clothing ready made, brushes, anchors, all wares of tin, pewter, or copper, all or any of them … carpets and carpeting, all velvets, velverets, satins and other wrought silks, cambrics, muslins, muslinets, lawns, laces, gauzes, chintzes, and colored calicoes, and nankeens, seven and an half per centum ad valorem.… and five per centum ad valorem upon all other goods, wares and merchandise, except … tin in pigs, tin plates, old pewter, brass teutenague, iron and brass wire, copper in plates, saltpetre … wool, dyeing woods, and dyeing drugs, raw hides and skins, undressed furs of every kind, the sea stores of ships or vessels, the clothes, books, household furniture, and the tools or implements of the trade or profession of persons who come to reside in the United States, philosophical apparatus, specially imported for any seminary of learning …” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 180–81 [August 10, 1790]).

50The material within brackets in this paragraph is in Coxe’s handwriting.

51Material within broken brackets in this draft has been taken from H’s first draft of the Report.

52Coxe is referring to the following document, which may be found in the Hamilton Papers, Library of Congress:


“A Plan for creating a landed fund to be granted in premiums to the Introducers, Inventors and Establishers of manufactories, machinery and secrets in the useful Arts.

“There being six great staple raw materials, silk, cotton, wool, hemp, flax and iron, that are deemed capable of being maunfactured by water they may be considered as forming

the 1st. Class, which may be encouraged by a grant of 30,000 Acres of Land to the persons who shall introduce the Model and the completest foreign mill for each. This will require 180,000
The 2d. Class will be more numerous. Let it be supposed that it may contain ten objects, but being individually less important 15,000 Acres are proposed. This will require 150,000
The 3d. Class will be still more numerous, but of less individual importance. Let it be supposed that it may contain 17 objects each to be rewarded by 10,000 Acres. This will require 170,000

“The above premiums may be applied indiscriminately to reward Introductions, or native Inventions, which will not yield an immediate or adequate benefit to the Inventor.

“The management and distribution of this fund it is conceived would be most beneficially conducted under the direction of the President of the United States. The principles of the distribution being fixed by the Law, the application of the fund to the several cases would might be most conveniently left in the judgment and discretion of the President.”

53Space left blank in MS.

54The current tonnage was imposed under “An Act imposing duties on the tonnage of ships or vessels” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 135–36 [July 20, 1790]).

55On August 9, 1790, the House had “Ordered, That the representation from the General Court of the Commonwealth of Massachusetts, on the subject of the Whale and Cod Fisheries, together with the several papers accompanying the same, which lay on the table, be referred to the Secretary of State, with instruction to examine the matter thereof, and report his opinion thereupon to the next session of Congress” (Journal of the House, I description begins Journal of the House of Representatives of the United States (Washington, 1826), I. description ends , 296).

Jefferson’s report on the fisheries was not submitted until February 4, 1791 (Journal of the House, I description begins Journal of the House of Representatives of the United States (Washington, 1826), I. description ends , 370).

56At this point Coxe wrote several additional sentences which because of the disintegration of the MS cannot be read.

See “Second Report on the Further Provision Necessary for Establishing Public Credit (Report on a National Bank),” December 13, 1790. “An Act to incorporate the subscribers to the Bank of the United States” was not approved by the President until February 25, 1791 (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 191–96).

57See note 49.

58This paragraph does not appear in H’s first draft of the Report.

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