Alexander Hamilton Papers

Alexander Hamilton’s Final Version of the Report on the Subject of Manufactures, [5 December 1791]

Alexander Hamilton’s Final Version of
the Report on the Subject of
Manufactures123

[Philadelphia, December 5, 1791
Communicated on December 5, 1791]124

[To the Speaker of the House of Representatives]

The Secretary of the Treasury in obedience to the order of ye House of Representatives, of the 15th day of January 1790,125 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. And he there [upon] respectfully submits the following Report.

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 external trade, have led to serious reflections on the necessity of enlarging the sphere of our domestic commerce: the restrictive regulations, which in foreign markets abrige the vent of the increasing surplus of our Agricultural produce, serve to beget an earnest desire, that a more extensive demand for that surplus may be created at home: And the complete success, which has rewarded manufacturing enterprise, in some valuable branches, conspiring with the promising symptoms, which attend some less mature essays, in others, justify a hope, that the obstacles to the growth of this species of industry are less formidable than they were apprehended to be; and that it is not difficult to find, in its further extension; a full indemnification for any external disadvantages, which are or may be experienced, as well as an accession of resources, favourable to national independence and safety.126

There still are, nevertheless, respectable patrons of opinions, unfriendly to the encouragement of manufactures. The following are, substantially, the arguments, by which these opinions are defended.

“In every country (say those who entertain them) Agriculture is the most beneficial and productive object of human industry. This position, generally, if not universally true, applies with peculiar emphasis to the United States, on account of their immense tracts of fertile territory, uninhabited and unimproved. Nothing can afford so advantageous an employment for capital and labour, as the conversion of this extensive wilderness into cultivated farms. Nothing equally with this, can contribute to the population, strength and real riches of the country.”127

“To endeavor by the extraordinary patronage of Government, to accelerate the growth of manufactures, is in fact, to endeavor, by force and art, to transfer the natural current of industry, from a more, to a less beneficial channel. Whatever has such a tendency must necessarily be unwise. Indeed it can hardly ever be wise in a government, to attempt to give a direction to the industry of its citizens. This under the quicksighted guidance of private interest, will, if left to itself, infallibly find its own way to the most profitable employment: and ’tis by such employment, that the public prosperity will be most effectually promoted. To leave industry to itself, therefore, is, in almost every case, the soundest as well as the simplest policy.”128

“This policy is not only recommended to the United States, by considerations which affect all nations, it is, in a manner, dictated to them by the imperious force of a very peculiar situation. The smallness of their population compared with their territory—the constant allurements to emigration from the settled to the unsettled parts of the country—the facility, with which the less independent condition of an artisan can be exchanged for the more independent condition of a farmer, these and similar causes conspire to produce, and for a length of time must continue to occasion, a scarcity of hands for manufacturing occupation, and dearness of labor generally. To these disadvantages for the prosecution of manufactures, a deficiency of pecuniary capital being added, the prospect of a successful competition with the manufactures of Europe must be regarded as little less than desperate. Extensive manufactures can only be the offspring of a redundant, at least of a full population. Till the latter shall characterise the situation of this country, ’tis vain to hope for the former.”129

“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 by other forced expedients; this will only be to sacrifice the interests of the community to those of particular classes. Besides the 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 the other parts of the society. It is far preferable, that those persons should be engaged in the cultivation of the earth, and that we should procure, in exchange for its productions, the commodities, with which foreigners are able to supply us in greater perfection, and upon better terms.”130

This mode of reasoning is founded upon facts and principles, which have certainly respectable pretensions. If it had governed the conduct of nations, more generally than it has done, there is room to suppose, that it might have carried them faster to prosperity and greatness, than they have attained, by the pursuit of maxims too widely opposite. Most general theories, however, admit of numerous exceptions, and there are few, if any, of the political kind, which do not blend a considerable portion of error, with the truths they inculcate.

In order to an accurate judgement how far that which has been just stated ought to be deemed liable to a similar imputation, it is necessary to advert carefully to the considerations, which plead in favour of manufactures, and which appear to recommend the special and positive encouragement of them; in certain cases, and under certain reasonable limitations.

It ought readily to be conceded, that the cultivation of the earth—as the primary and most certain source of national supply—as the immediate and chief source of subsistence to man—as the principal source of those materials which constitute the nutriment of other kinds of labor—as including 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 pre-eminence over every other kind of industry.

But, that it has a title to any thing like an exclusive predilection, in any country, ought to be admitted with great caution. That it is even more productive than every other branch of Industry requires more evidence, than has yet been given in support of the position. That its real interests, precious and important as without the help of exaggeration, they truly are, will be advanced, rather than injured by the due encouragement of manufactures, may, it is believed, be satisfactorily demonstrated. And it is also believed that the expediency of such encouragement in a general view may be shewn to be recommended by the most cogent and persuasive motives of national policy.

It has been maintained, that Agriculture is, not only, the most productive, but the only productive species of industry. The reality of this suggestion in either aspect, has, however, not been verified by any accurate detail of facts and calculations; and the general arguments, which are adduced to prove it, are rather subtil and paradoxical, than solid or convincing.131

Those which maintain its exclusive productiveness are to this effect.

Labour, bestowed upon the cultivation of land produces enough, not only to replace all the necessary expences incurred in the business, and to maintain the persons who are employed in it, but to afford together with the ordinary profit on the stock or capital of the Farmer, a nett surplus, or rent for the landlord or proprietor of the soil. But the labor of Artificers does nothing more, than replace the Stock which employs them (or which furnishes materials tools and wages) and yield the ordinary profit upon that Stock. It yields nothing equivalent to the rent of land. Neither does it add any thing to the total value of the whole annual produce of the land and labour of the country. The additional value given to those parts of the produce of land, which are wrought into manufactures, is counterbalanced by the value of those other parts of that produce, which are consumed by the manufacturers. It can therefore only be by saving, or parsimony not by the positive productiveness of their labour, that the classes of Artificers can in any degree augment the revenue of the Society.132

To this it has been answered—

I   “That inasmuch as it is acknowleged, that manufacturing labour reproduces a value equal to that which is expended or consumed in carrying it on, and continues in existence the original Stock or capital employed—it ought on that account alone, to escape being considered as wholly unproductive: That though it should be admitted, as alleged, that the consumption of the produce of the soil, by the classes of Artificers or Manufacturers, is exactly equal to the value added by their labour to the materials upon which it is exerted; yet it would not thence follow, that it added nothing to the Revenue of the Society, or to the aggregate value of the annual produce of its land and labour. If the consumption for any given period amounted to a given sum and the increased value of the produce manufactured, in the same period, to a like sum, the total amount of the consumption and production during that period, would be equal to the two sums, and consequently double the value of the agricultural produce consumed. And though the increment of value produced by the classes of Artificers should at no time exceed the value of the produce of the land consumed by them, yet there would be at every moment, in consequence of their labour, a greater value of goods in the market than would exist independent of it.”133

II—“That the position, that Artificers can augment the revenue of a Society, only by parsimony, is true, in no other sense, than in one, which is equally applicable to Husbandmen or Cultivators. It may be alike affirmed of all these classes, that the fund acquired by their labor and destined for their support is not, in an ordinary way, more than equal to it. And hence it will follow, that augmentations of the wealth or capital of the community (except in the instances of some extraordinary dexterity or skill) can only proceed, with respect to any of them, from the savings of the more thrifty and parsimonious.”134

III—“That the annual produce of the land and labour of a country can only be encreased, in two ways—by some improvement in the productive powers of the useful labour, which actually exists within it, or by some increase in the quantity of such labour: That with regard to the first, the labour of Artificers being capable of greater subdivision and simplicity of operation, than that of Cultivators, it is susceptible, in a proportionably greater degree, of improvement in its productive powers, whether to be derived from an accession of Skill, or from the application of ingenious machinery; in which particular, therefore, the labour employed in the culture of land can pretend to no advantage over that engaged in manufactures: That with regard to an augmentation of the quantity of useful labour, this, excluding adventitious circumstances, must depend essentially upon an increase of capital, which again must depend upon the savings made out of the revenues of those, who furnish or manage that, which is at any time employed, whether in Agriculture, or in Manufactures, or in any other way.”135

But while the exclusive productiveness of Agricultural labour has been thus denied and refuted, the superiority of its productiveness has been conceded without hesitation.136 As this concession involves a point of considerable magnitude, in relation to maxims of public administration, the grounds on which it rests are worthy of a distinct and particular examination.

One of the arguments made use of, in support of the idea may be pronounced both quaint and superficial. It amounts to this—That in the productions of the soil, nature co-operates with man; and that the effect of their joint labour must be greater than that of the labour of man alone.137

This however, is far from being a necessary inference. It is very conceivable, that the labor of man alone laid out upon a work, requiring great skill and art to bring it to perfection, may be more productive, in value, than the labour of nature and man combined, when directed towards more simple operations and objects:138 And when it is recollected to what an extent the Agency of nature, in the application of the mechanical powers, is made auxiliary to the prosecution of manufactures, the suggestion, which has been noticed, loses even the appearance of plausibility.

It might also be observed, with a contrary view, that the labour employed in Agriculture is in a great measure periodical and occasional, depending on seasons, liable to various and long intermissions;139 while that occupied in many manufactures is constant and regular, extending through the year, embracing in some instances night as well as day.140 It is also probable, that there are among the cultivators of land more examples of remissness, than among artificers. The farmer, from the peculiar fertility of his land, or some other favorable circumstance, may frequently obtain a livelihood, even with a considerable degree of carelessness in the mode of cultivation;141 but the artisan can with difficulty effect the same object, without exerting himself pretty equally with all those, who are engaged in the same pursuit.142 And if it may likewise be assumed as a fact, that manufactures open a wider field to exertions of ingenuity than agriculture,143 it would not be a strained conjecture, that the labour employed in the former, being at once more constant, more uniform and more ingenious, than that which is employed in the latter, will be found at the same time more productive.

But it is not meant to lay stress on observations of this nature—they ought only to serve as a counterbalance to those of a similar complexion. Circumstances so vague and general, as well as so abstract, can afford little instruction in a matter of this kind.

Another, and that which seems to be the principal argument offered for the superior productiveness of Agricultural labour, turns upon the allegation, that labour employed in manufactures yields nothing equivalent to the rent of land; or to that nett surplus, as it is called, which accrues to the proprietor of the soil.144

But this distinction, important as it has been deemed, appears rather verbal than substantial.

It is easily discernible, that what in the first instance is divided into two parts under the denominations of the ordinary profit of the Stock of the farmer and rent to the landlord, is in the second instance united under the general appellation of the ordinary profit on the Stock of the Undertaker; and that this formal or verbal distribution constitutes the whole difference in the two cases.145 It seems to have been overlooked, that the land is itself a Stock or capital,146 advanced or lent by its owner to the occupier or tenant, and that the rent he receives is only the ordinary profit of a certain Stock in land, not managed by the proprietor himself, but by another to whom he lends or lets it, and who on his part advances a second capital to stock & improve the land, upon which he also receives the usual profit. The rent of the landlord and the profit of the farmer are therefore nothing more than the ordinary profits of two capitals belonging to two different persons, and united in the cultivation of a farm: As in the other case, the surplus which arises upon any manufactory, after replacing the expences of carrying it on, answers to the ordinary profits of one or more capitals engaged in the prosecution of such manufactory. It is said one or more capitals; because in fact, the same thing which is contemplated, in the case of the farm, sometimes happens in that of a manufactory. There is one, who furnishes a part of the capital, or lends a part of the money, by which it is carried on, and another, who carries it on, with the addition of his own capital. Out of the surplus, which remains, after defraying expences, an interest is paid to the money lender for the portion of the capital furnished by him, which exactly agrees with the rent paid to the landlord; and the residue of that surplus constitutes the profit of the undertaker or manufacturer, and agrees with what is denominated the ordinary profits on the Stock of the farmer. Both together make the ordinary profits of two capitals [employed in a manufactory; as in the other case the rent of the landlord and the revenue of the farmer compose the ordinary profits of two Capitals] employed in the cultivation of a farm.

The rent therefore accruing to the proprietor of the land, far from being a criterion of exclusive productiveness, as has been argued, is no criterion even of superior productiveness. The question must still be, whether the surplus, after defraying expences, of a given capital, employed in the purchase and improvement of a piece of land, is greater or less, than that of a like capital employed in the prosecution of a manufactory: or whether the whole value produced from a given capital and a given quantity of labour, employed in one way, be greater or less, than the whole value produced from an equal capital and an equal quantity of labour employed in the other way: or rather, perhaps whether the business of Agriculture or that of Manufactures will yield the greatest product, according to a compound ratio of the quantity of the Capital and the quantity of labour, which are employed in the one or in the other.

The solution of either of these questions is not easy; it involves numerous and complicated details, depending on an accurate knowlege of the objects to be compared. It is not known that the comparison has ever yet been made upon sufficient data properly ascertained and analised. To be able to make it on the present occasion with satisfactory precision would demand more previous enquiry and investigation, than there has been hitherto either leisure or opportunity to accomplish.

Some essays however have been made towards acquiring the requisite information;147 which have rather served to throw doubt upon, than to confirm the Hypothesis, under examination: But it ought to be acknowledged, that they have been too little diversified, and are too imperfect, to authorise a definitive conclusion either way; leading rather to probable conjecture than to certain deduction. They render it probable, that there are various branches of manufactures, in which a given Capital will yield a greater total product, and a considerably greater nett product, than an equal capital invested in the purchase and improvement of lands;148 and that there are also some branches, in which both the gross and the nett produce will exceed that of Agricultural industry; according to a compound ratio of capital and labour: But it is on this last point, that there appears to be the greatest room for doubt. It is far less difficult to infer generally, that the nett produce of Capital engaged in manufacturing enterprises is greater than that of Capital engaged in Agriculture.

In stating these results, the purchase and improvement of lands, under previous cultivation are alone contemplated. The comparison is more in favour of Agriculture, when it is made with reference to the settlement of new and waste lands; but an argument drawn from so temporary a circumstance could have no weight in determining the general question concerning the permanent relative productiveness of the two species of industry. How far it ought to influence the policy of the United States, on the score of particular situation, will be adverted to in another place.

The foregoing suggestions are not designed to inculcate an opinion that manufacturing industry is more productive than that of Agriculture. They are intended rather to shew that the reverse of this proposition is not ascertained; that the general arguments which are brought to establish it are not satisfactory; and consequently that a supposition of the superior productiveness of Tillage ought to be no obstacle to listening to any substantial inducements to the encouragement of manufactures, which may be otherwise perceived to exist, through an apprehension, that they may have a tendency to divert labour from a more to a less profitable employment.

It is extremely probable, that on a full and accurate devellopment of the matter, on the ground of fact and calculation, it would be discovered that there is no material difference between the aggregate productiveness of the one, and of the other kind of industry; and that the propriety of the encouragements, which may in any case be proposed to be given to either ought to be determined upon considerations irrelative to any comparison of that nature.

II   But without contending for the superior productiveness of Manufacturing Industry, it may conduce to a better judgment of the policy, which ought to be pursued respecting its encouragement, to contemplate the subject, under some additional aspects, tending not only to confirm the idea, that this kind of industry has been improperly represented as unproductive in itself; but [to] evince in addition that the establishment and diffusion of manufactures have the effect of rendering the total mass of useful and productive labor in a community, greater than it would otherwise be. In prosecuting this discussion, it may be necessary briefly to resume and review some of the topics, which have been already touched.

To affirm, that the labour of the Manufacturer is unproductive, because he consumes as much of the produce of land, as he adds value to the raw materials which he manufactures, is not better founded, than it would be to affirm, that the labour of the farmer, which furnishes materials to the manufacturer, is unproductive, because he consumes an equal value of manufactured articles. Each furnishes a certain portion of the produce of his labor to the other, and each destroys a correspondent portion of the produce of the labour of the other. In the mean time, the maintenance of two Citizens, instead of one, is going on; the State has two members instead of one; and they together consume twice the value of what is produced from the land.

If instead of a farmer and artificer, there were a farmer only, he would be under the necessity of devoting a part of his labour to the fabrication of cloathing and other articles, which he would procure of the artificer, in the case of there being such a person; and of course he would be able to devote less labor to the cultivation of his farm; and would draw from it a proportionably less product. The whole quantity of production, in this state of things, in provisions, raw materials and manufactures, would certainly not exceed in value the amount of what would be produced in provisions and raw materials only, if there were an artificer as well as a farmer.

Again—if there were both an artificer and a farmer, the latter would be left at liberty to pursue exclusively the cultivation of his farm. A greater quantity of provisions and raw materials would of course be produced—equal at least—as has been already observed, to the whole amount of the provisions, raw materials and manufactures, which would exist on a contrary supposition. The artificer, at the same time would be going on in the production of manufactured commodities; to an amount sufficient not only to repay the farmer, in those commodities, for the provisions and materials which were procured from him, but to furnish the Artificer himself with a supply of similar commodities for his own use. Thus then, there would be two quantities or values in existence, instead of one; and the revenue and consumption would be double in one case, what it would be in the other.149

If in place of both these suppositions, there were supposed to be two farmers, and no artificer, each of whom applied a part of his labour to the culture of land, and another part to the fabrication of Manufactures—in this case, the portion of the labour of both bestowed upon land would produce the same quantity of provisions and raw materials only, as would be produced by the intire sum of the labour of one applied in the same manner, and the portion of the labour of both bestowed upon manufactures, would produce the same quantity of manufactures only, as would be produced by the intire sum of the labour of one applied in the same manner. Hence the produce of the labour of the two farmers would not be greater than the produce of the labour of the farmer and artificer; and hence, it results, that the labour of the artificer is as possitively productive as that of the farmer, and, as positively, augments the revenue of the Society.

The labour of the Artificer replaces to the farmer that portion of his labour, with which he provides the materials of exchange with the Artificer, and which he would otherwise have been compelled to apply to manufactures: and while the Artificer thus enables the farmer to enlarge his stock of Agricultural industry, a portion of which he purchases for his own use, he also supplies himself with the manufactured articles of which he stands in need.

He does still more—Besides this equivalent which he gives for the portion of Agricultural labour consumed by him, and this supply of manufactured commodities for his own consumption—he furnishes still a surplus, which compensates for the use of the Capital advanced either by himself or some other person, for carrying on the business. This is the ordinary profit of the Stock employed in the manufactory, and is, in every sense, as effective an addition to the income of the Society, as the rent of land.

The produce of the labour of the Artificer consequently, may be regarded as composed of three parts; one by which the provisions for his subsistence and the materials for his work are purchased of the farmer, one by which he supplies himself with manufactured necessaries, and a third which constitutes the profit on the Stock employed. The two last portions seem to have been overlooked in the system, which represents manufacturing industry as barren and unproductive.

In the course of the preceding illustrations, the products of equal quantities of the labour of the farmer and artificer have been treated as if equal to each other. But this is not to be understood as intending to assert any such precise equality. It is merely a manner of expression adopted for the sake of simplicity and perspicuity. Whether the value of the produce of the labour of the farmer be somewhat more or less, than that of the artificer, is not material to the main scope of the argument, which hitherto has only aimed at shewing, that the one, as well as the other, occasions a possitive augmentation of the total produce and revenue of the Society.

It is now proper to proceed a step further, and to enumerate the principal circumstances, from which it may be inferred—That manufacturing establishments not only occasion a possitive augmentation of the Produce and Revenue of the Society, but that they contribute essentially to rendering them greater than they could possibly be, without such establishments.150 These circumstances are—

1. The division of Labour.
2. An extension of the use of Machinery.
3. Additional employment to classes of the community not ordinarily engaged in the business.
4. The promoting of emigration from foreign Countries.
5. The furnishing greater scope for the diversity of talents and dispositions which discriminate men from each other.

6. The affording a more ample and various field for enterprize.

7. The creating in some instances a new, and securing in all, a more certain and steady demand for the surplus produce of the soil. Each of these circumstances has a considerable influence upon the total mass of industrious effort in a community. Together, they add to it a degree of energy and effect, which are not easily conceived. Some comments upon each of them, in the order in which they have been stated, may serve to explain their importance.

I.   As to the Division of Labour.

It has justly been observed, that there is scarcely any thing of greater moment in the œconomy of a nation, than the proper division of labour. The seperation of occupations causes each to be carried to a much greater perfection, than it could possible acquire, if they were blended. This arises principally from three circumstances.

1st—The greater skill and dexterity naturally resulting from a constant and undivided application to a single object. It is evident, that these properties must increase, in proportion to the separation and simplification of objects and the steadiness of the attention devoted to each; and must be less, in proportion to the complication of objects, and the number among which the attention is distracted.151

2nd. The œconomy of time—by avoiding the 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 orderly disposition of the impliments, machines and materials employed in the operation to be relinquished—the preparatory steps to the commencement of a new one—the interruption of the impulse, which the mind of the workman acquires, from being engaged in a particular operation—the distractions hesitations and reluctances, which attend the passage from one kind of business to another.152

3rd. An extension of the use of Machinery. A man occupied on a single object will have it more in his power, and will be more naturally led to exert his imagination in devising methods to facilitate and abrige labour, than if he were perplexed by a variety of independent and dissimilar operations. Besides this, the fabrication of Machines, in numerous instances, becoming itself a distinct trade, the Artist who follows it, has all the advantages which have been enumerated, for improvement in his particular art; and in both ways the invention and application of machinery are extended.153

And from these causes united, the mere separation of the occupation of the cultivator, from that of the Artificer, has the effect of augmenting the productive powers of labour, and with them, the total mass of the produce or revenue of a Country. In this single view of the subject, therefore, the utility of Artificers or Manufacturers, towards promoting an increase of productive industry, is apparent.154

II.   As to an extension of the use of Machinery a point which though partly anticipated requires to be placed in one or two additional lights.

The employment of Machinery forms an item of great importance in the general mass of national industry. ’Tis an artificial force brought in aid of the natural force of man; and, to all the purposes of labour, is an increase of hands; an accession of strength, unincumbered too by the expence of maintaining the laborer.155 May it not therefore be fairly inferred, that those occupations, which give greatest scope to the use of this auxiliary, contribute most to the general Stock of industrious effort, and, in consequence, to the general product of industry?

It shall be taken for granted, and the truth of the position referred to observation, that manufacturing pursuits are susceptible in a greater degree of the application of machinery, than those of Agriculture.156 If so all the difference is lost to a community, which, instead of manufacturing for itself, procures the fabrics requisite to its supply from other Countries. The substitution of foreign for domestic manufactures is a transfer to foreign nations of the advantages accruing from the employment of Machinery, in the modes in which it is capable of being employed, with most utility and to the greatest extent.

The Cotton Mill invented in England, within the last twenty years, is a signal illustration of the general proposition, which has been just advanced. In consequence of it, all the different processes for spining Cotton are performed by means of Machines, which are put in motion by water, and attended chiefly by women and Children; [and by a smaller] number of [persons, in the whole, than are] requisite in the ordinary mode of spinning. And it is an advantage of great moment that the operations of this mill continue with convenience, during the night, as well as through the day. The prodigious affect of such a Machine is easily conceived. To this invention is to be attributed essentially the immense progress, which has been so suddenly made in Great Britain in the various fabrics of Cotton.157

III.   As to the additional employment of classes of the community, not ordinarily engaged in the particular business.

This is not among the least valuable of the means, by which manufacturing institutions contribute to augment the general stock of industry and production. In places where those institutions prevail, besides the persons regularly engaged in them, they afford occasional and extra employment to industrious individuals and families, who are willing to devote the leisure resulting from the intermissions of their ordinary pursuits to collateral labours, as a resource of multiplying their acquisitions or [their] enjoyments. The husbandman himself experiences a new source of profit and support from the encreased industry of his wife and daughters; invited and stimulated by the demands of the neighboring manufactories.

Besides this advantage of occasional employment to classes having different occupations, there is another of a nature allied to it [and] of a similar tendency. This is—the employment of persons who would otherwise be idle (and in many cases a burthen on the community), either from the byass of temper, habit, infirmity of body, or some other cause, indisposing, or disqualifying them for the toils of the Country. It is worthy of particular remark, that, in general, women and Children are rendered more useful and the latter more early useful by manufacturing establishments, than they would otherwise be.158 Of the number of persons employed in the Cotton Manufactories of Great Britain, it is computed that 4/7 nearly are women and children; of whom the greatest proportion are children and many of them of a very tender age.

And thus it appears to be one of the attributes of manufactures, and one of no small consequence, to give occasion to the exertion of a greater quantity of Industry, even by the same number of persons, where they happen to prevail, than would exist, if there were no such establishments.

IV.   As to the promoting of emigration from foreign Countries. Men reluctantly quit one course of occupation and livelihood for another, unless invited to it by very apparent and proximate advantages. Many, who would go from one country to another, if they had a prospect of continuing with more benefit the callings, to which they have been educated, will often not be tempted to change their situation, by the hope of doing better, in some other way. Manufacturers, who listening to the powerful invitations of a better price for their fabrics, or their labour, of greater cheapness of provisions and raw materials, of an exemption from the chief part of the taxes burthens and restraints, which they endure in the old world, of greater personal independence and consequence, under the operation of a more equal government, and of what is far more precious than mere religious toleration—a perfect equality of religious privileges; would probably flock from Europe to the United States to pursue their own trades or professions, if they were once made sensible of the advantages they would enjoy, and were inspired with an assurance of encouragement and employment, will, with difficulty, be induced to transplant themselves, with a view to becoming Cultivators of Land.

If it be true then, that it is the interest of the United States to open every possible [avenue to] emigration from abroad, it affords a weighty argument for the encouragement of manufactures; which for the reasons just assigned, will have the strongest tendency to multiply the inducements to it.

Here is perceived an important resource, not only for extending the population, and with it the useful and productive labour of the country, but likewise for the prosecution of manufactures, without deducting from the number of hands, which might otherwise be drawn to tillage; and even for the indemnification of Agriculture for such as might happen to be diverted from it. Many, whom Manufacturing views would induce to emigrate, would afterwards yield to the temptations, which the particular situation of this Country holds out to Agricultural pursuits. And while Agriculture would in other respects derive many signal and unmingled advantages, from the growth of manufactures, it is a problem whether it would gain or lose, as to the article of the number of persons employed in carrying it on.

V.   As to the furnishing greater scope for the diversity of talents and dispositions, which discriminate men from each other.

This is a much more powerful mean of augmenting the fund of national Industry than may at first sight appear. It is a just observation, 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. And it is thence to be inferred, that the results of human exertion may be immensely increased by diversifying its objects.159 When all the different kinds of industry obtain in a community, each individual can find his proper element, and can call into activity the whole vigour of his nature. And the community is benefitted by the services of its respective members, in the manner, in which each can serve it with most effect.160

If there be anything in a remark often to be met with—namely that there is, in the genius of the people of this country, a peculiar aptitude for mechanic improvements, it would operate as a forcible reason for giving opportunities to the exercise of that species of talent, by the propagation of manufactures.

VI.   As to the affording a more ample and various field for enterprise.

This also is of greater consequence in the general scale of national exertion, than might perhaps on a superficial view be supposed, and has effects not altogether dissimilar from those of the circumstance last noticed. To cherish and stimulate the activity of the human mind, by multiplying the objects of enterprise, is not among the least considerable of the expedients, by which the wealth of a nation may be promoted. Even things in themselves not positively advantageous, sometimes become so, by their tendency to provoke exertion. Every new scene, 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.

The spirit of enterprise, useful and prolific as it is, must necessarily be contracted or expanded in proportion to the simplicity or variety of the occupations and productions, which are to be found in a Society. It must be less in a nation of mere cultivators, than in a nation of cultivators and merchants; less in a nation of cultivators and merchants, than in a nation of cultivators, artificers and merchants.

VII.   As to the creating, in some instances, a new, and securing in all a more certain and steady demand, for the surplus produce of the soil.161

This is among the most important of the circumstances which have been indicated. It is a principal mean, by which the establishment of manufactures contributes to an augmentation of the produce or revenue of a country, and has an immediate and direct relation to the prosperity of Agriculture.

It is evident, that the exertions of the husbandman will be steady or fluctuating, vigorous or feeble, in proportion to the steadiness or fluctuation, adequateness, or inadequateness of the markets on which he must depend, for the vent of the surplus, which may be produced by his labour; and that such surplus in the ordinary course of things will be greater or less in the same proportion.

For the purpose of this vent, a domestic market is greatly to be preferred to a foreign one; because it is in the nature of things, far more to be relied upon.

It is a primary object of the policy of nations, to be able to supply themselves with subsistence from their own soils; and manufacturing nations, as far as circumstances permit, endeavor to procure, from the same source, the raw materials necessary for their own fabrics. This disposition, urged by the spirit of monopoly, is sometimes even carried to an injudicious extreme. It seems not always to be recollected, that nations, who have neither mines nor manufactures, can only obtain the manufactured articles, of which they stand in need, by an exchange of the products of their soils; and that, if those who can best furnish them with such articles are unwilling to give a due course to this exchange, they must of necessity make every possible effort to manufacture for themselves, the effect of which is that the manufacturing nations abrige the natural advantages of their situation, through an unwillingness to permit the Agricultural countries to enjoy the advantages of theirs, and sacrifice the interests of a mutually beneficial intercourse to the vain project of selling every thing and buying nothing.162

But it is also a consequence of the policy, which has been noted, that the foreign demand for the products of Agricultural Countries, is, in a great degree, rather casual and occasional, than certain or constant. To what extent injurious interruptions of the demand for some of the staple commodities of the United States, may have been experienced, from that cause, must be referred to the judgment of those who are engaged in carrying on the commerce of the country; but it may be safely assumed, that such interruptions are at times very inconveniently felt, and that cases not unfrequently occur, in which markets are so confined and restricted, as to render the demand very unequal to the supply.

Independently likewise of the artificial impediments, which are created by the policy in question, there are natural causes tending to render the external demand for the surplus of Agricultural nations a precarious reliance. The differences of seasons, in the countries, which are the consumers make immense differences in the produce of their own soils, in different years; and consequently in the degrees of their necessity for foreign supply. Plentiful harvests with them, especially if similar ones occur at the same time in the countries, which are the furnishers, occasion of course a glut in the markets of the latter.

Considering how fast and how much the progress of new settlements in the United States must increase the surplus produce of the soil, and weighing seriously the tendency of the system, which prevails among most of the commercial nations of Europe; whatever dependence may be placed on the force of natural circumstances to counteract the effects of an artificial policy; there appear strong reasons to regard the foreign demand for that surplus as too uncertain a reliance, and to desire a substitute for it, in an extensive domestic market.

To secure such a market, there is no other expedient, than to promote manufacturing establishments. Manufacturers who constitute the most numerous class, after the Cultivators of land, are for that reason the principal consumers of the surplus of their labour.163

This idea of an extensive domestic market for the surplus produce of the soil is of the first consequence. It is of all things, that which most effectually conduces to a flourishing state of Agriculture. If the effect of manufactories should be to detatch a portion of the hands, which would otherwise be engaged in Tillage, it might possibly cause a smaller quantity of lands to be under cultivation but by their tendency to procure a more certain demand for the surplus produce of the soil, they would, at the same time, cause the lands which were in cultivation to be better improved and more productive. And while, by their influence, the condition of each individual farmer would be meliorated, the total mass of Agricultural production would probably be increased. For this must evidently depend as much, if not more, upon the degree of improvement; than upon the number of acres under culture.164

It merits particular observation, that the multiplication of manufactories not only furnishes a Market for those articles, which have been accustomed to be produced in abundance, in a country; but it likewise creates a demand for such as were either unknown or produced in inconsiderable quantities. The bowels as well as the surface of the earth are ransacked for articles which were before neglected. Animals, Plants and Minerals acquire an utility and value, which were before unexplored.165

The foregoing considerations seem sufficient to establish, as general propositions, That it is the interest of nations to diversify the industrious pursuits of the individuals, who compose them166—That the establishment of manufactures is calculated not only to increase the general stock of useful and productive labour; but even to improve the state of Agriculture in particular; certainly to advance the interests of those who are engaged in it.167 There are other views, that will be hereafter taken of the subject, which, it is conceived, will serve to confirm these inferences.

III   Previously to a further discussion of the objections to the encouragement of manufactures which have been stated, it will be of use to see what can be said, in reference to the particular situation of the United States, against the conclusions appearing to result from what has been already offered.

It may be observed, and the idea is of no inconsiderable weight, that however true it might be, that a State, which possessing large tracts of vacant and fertile territory, was at 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 is true of a State, which having such vacant and fertile territory, has at the same time ample opportunity of procuring from abroad, on good terms, all the fabrics of which it stands in need, for the supply of its inhabitants. The power of doing this at least secures the great advantage of a division of labour; leaving the farmer free to pursue exclusively the culture of his land, and enabling him to procure with its products the manufactured supplies requisite either to his wants or to his enjoyments. And though it should be true, that in settled countries, the diversification of Industry is conducive to an increase in the productive powers of labour, and to an augmentation of revenue and capital; yet it is scarcely conceivable that there can be any [thing] of so solid and permanent advantage to an uncultivated and unpeopled country as to convert its wastes into cultivated and inhabited districts.168 If the Revenue, in the mean time, should be less, the Capital, in the event, must be greater.

To these observations, the following appears to be a satisfactory answer—

1.   If the system of perfect liberty to industry and commerce were the prevailing system of nations—the arguments which dissuade a country in the predicament of the United States, from the zealous pursuits of manufactures would doubtless have great force. It will not be affirmed, that they might not be permitted, with few exceptions, to serve as a rule of national conduct. In such a state of things, each country would have the full benefit of its peculiar advantages to compensate for its deficiencies or disadvantages. If one nation were in condition to supply manufactured articles on better terms than another, that other might find an abundant indemnification in a superior capacity to furnish the produce of the soil. And a free exchange, mutually beneficial, of the commodities which each was able to supply, on the best terms, might 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 unfolded hereafter render it probable, that nations merely Agricultural would not enjoy the same degree of opulence, in proportion to their numbers, as those which united manufactures with agriculture; yet the progressive improvement of the lands of the former might, in the end, atone for an inferior degree of opulence in the mean time: and in a case in which opposite considerations are pretty equally balanced, the option ought perhaps always to be, in favour of leaving Industry to its own direction.

But the system which has been mentioned, is far from characterising the general policy of Nations. [The prevalent one has been regulated by an opposite spirit.]

The consequence of it is, that the United States are to a certain extent in the situation of a country precluded from foreign Commerce. They can indeed, without difficulty obtain from abroad the manufactured supplies, of which they are in want; but they experience numerous and very injurious impediments to the emission and vent of their own commodities. Nor is this the case in reference to a single foreign nation only. The regulations of several countries, with which we have the most extensive intercourse, throw serious obstructions in the way of the principal staples of the United States.

In such a position of things, the United States cannot exchange with Europe on equal terms; and the want of reciprocity would render them the victim of a system, which should induce them to confine their views to Agriculture and refrain from Manufactures. A constant and encreasing necessity, on their part, for the commodities of Europe, and only a partial and occasional demand for their own, in return, could not but expose them to a state of impoverishment, compared with the opulence to which their political and natural advantages authorise them to aspire.169

Remarks of this kind are not made in the spirit of complaint. ’Tis for the nations, whose regulations are alluded to, to judge for themselves, whether, by aiming at too much they do not lose more than they gain.170 ’Tis for the United States to consider by what means they can render themselves least dependent, on the combinations, right or wrong 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 affairs. To diversify and extend these improvements is the surest and safest method of indemnifying ourselves for any inconveniences, which those or similar measures have a tendency to beget. If Europe will not take from us the products of our soil, upon terms consistent with our interest, the natural remedy is to contract as fast as possible our wants of her.

2.   The conversion of their waste into cultivated lands is certainly a point of great moment in the political calculations of the United States. But the degree in which this may possibly be retarded by the encouragement of manufactories does not appear to countervail the powerful inducements to affording that encouragement.171

An observation made in another place is of a nature to have great influence upon this question. If it cannot be denied, that the interests even of Agriculture may be advanced more by having such of the lands of a state as are occupied under good cultivation, than by having a greater quantity occupied under a much inferior cultivation, and if Manufactories, for the reasons assigned, must be admitted to have a tendency to promote a more steady and vigorous cultivation of the lands occupied than would happen without them—it will follow, that they are capable of indemnifying a country for a diminution of the progress of new settlements; and may serve to increase both the capital [value] and the income of its lands, even though they should abrige the number of acres under Tillage.

But it does, by no means, follow, that the progress of new settlements would be retarded by the extension of Manufactures. The desire of being an independent proprietor of land is founded on such strong principles in the human breast, that where the opportunity of becoming so is as great as it is in the United States, the proportion will be small of those, whose situations would otherwise lead to it, who would be diverted from it towards Manufactures. And it is highly probable, as already intimated, that the accessions of foreigners, who originally drawn over by manufacturing views would afterwards abandon them for Agricultural, would be more than equivalent for those of our own Citizens, who might happen to be detached from them.

The remaining objections to a particular encouragement of manufactures in the United States now require to be examined.

One of these turns on the proposition, that Industry, if left to itself, will naturally find its way to the most useful and profitable employment: whence it is inferred, that manufactures without the aid of government will grow up as soon and as fast, as the natural state of things and the interest of the community may require.172

Against the solidity of this hypothesis, in the full latitude of the terms, very cogent reasons may be offered. These have relation to—the strong influence of habit and the spirit of imitation—the fear of want of success in untried enterprises—the intrinsic difficulties incident to first essays towards a competition with those who have previously attained to perfection in the business to be attempted—the bounties premiums and other artificial encouragements, with which foreign nations second the exertions of their own Citizens in the branches, in which they are to be rivalled.

Experience teaches, that men are often so much governed by what they are accustomed to see and practice, that the simplest and most obvious improvements, in the [most] ordinary occupations, are adopted with hesitation, reluctance and by slow gradations. The spontaneous transition to new pursuits, in a community long habituated to different ones, may be expected to be attended with proportionably greater difficulty. When former occupations ceased to yield a profit adequate to the subsistence of their followers, or when there was an absolute deficiency of employment in them, owing to the superabundance of hands, changes would ensue; but these changes would be likely to be more tardy than might consist with the interest either of individuals or of the Society. In many cases they would not happen, while a bare support could be ensured by an adherence to ancient courses; though a resort to a more profitable employment might be practicable. To produce the desireable changes, as early as may be expedient, may therefore require the incitement and patronage of government.173

The apprehension of failing in new attempts is perhaps a more serious impediment. There are dispositions apt to be attracted by the mere novelty of an undertaking—but these are not always those best calculated to give it success. To this, it is of importance that the confidence of cautious sagacious capitalists both citizens and foreigners, should be excited. And to inspire this description of persons with confidence, it is essential, that they should be made to see in any project, which is new, and for that reason alone, if, for no other, precarious, the prospect of such a degree of countenance and support from government, as may be capable of overcoming the obstacles, inseperable from first experiments.174

The superiority antecedently enjoyed by nations, who have preoccupied and perfected a branch of industry, constitutes a more formidable obstacle, than either of those, which have been mentioned, to the introduction of the same branch into a country, in which it did not before exist. To maintain between the recent establishments of one country and the long matured establishments of another country, a competition upon equal terms, both as to quality and price, is in most cases impracticable. The disparity in the one, or in the other, or in both, must necessarily be so considerable as to forbid a successful rivalship, without the extraordinary aid and protection of government.175

But the greatest obstacle of all to the successful prosecution of a new branch of industry in a country, in which it was before unknown, consists, as far as the instances apply, in the bounties premiums and other aids which are granted, in a variety of cases, by the nations, in which the establishments to be imitated are previously introduced. It is well known (and particular examples in the course of this report will be cited) that certain nations grant bounties on the exportation of particular commodities, to enable their own workmen to undersell and supplant all competitors, in the countries to which those commodities are sent. Hence the undertakers of a new manufacture have to contend not only with the natural disadvantages of a new undertaking, but with the gratuities and remunerations which other governments bestow. To be enabled to contend with success, it is evident, that the interference and aid of their own government are indispensible.

Combinations by those engaged in a particular branch of business in one country, to frustrate the first efforts to introduce it into another, by temporary sacrifices, recompensed perhaps by extraordinary indemnifications of the government of such country, are believed to have existed, and are not to be regarded as destitute of probability.176 The existence or assurance of aid from the government of the country, in which the business is to be introduced, may be essential to fortify adventurers against the dread of such combinations, to defeat their effects, if formed and to prevent their being formed, by demonstrating that they must in the end prove fruitless.

Whatever room there may be for an expectation that the industry of a people, under the direction of private interest, will upon equal terms find out the most beneficial employment for itself, there is none for a reliance, that it will struggle against the force of unequal terms, or will of itself surmount all the adventitious barriers to a successful competition, which may have been erected either by the advantages naturally acquired from practice and previous possession of the ground, or by those which may have sprung from positive regulations and an artificial policy. This general reflection might alone suffice as an answer to the objection under examination; exclusively of the weighty considerations which have been particularly urged.

The objections to the pursuit of manufactures in the United States, which next present themselves to discussion, represent an impracticability of success, arising from three causes—scarcity of hands—dearness of labour—want of capital.177

The two first circumstances are to a certain extent real, and, within due limits, ought to be admitted as obstacles to the success of manufacturing enterprize in the United States. But there are various considerations, which lessen their force, and tend to afford an assurance that they are not sufficient to prevent the advantageous prosecution of many very useful and extensive manufactories.

With regard to scarcity of hands, the fact itself must be applied with no small qualification to certain parts of the United States. There are large districts, which may be considered as pretty fully peopled; and which notwithstanding a continual drain for distant settlement, are thickly interspersed with flourishing and increasing towns. If these districts have not already reached the point, at which the complaint of scarcity of hands ceases, they are not remote from it, and are approaching fast towards it: And having perhaps fewer attractions to agriculture, than some other parts of the Union, they exhibit a proportionably stronger tendency towards other kinds of industry. In these districts, may be discerned, no inconsiderable maturity for manufacturing establishments.

But there are circumstances, which have been already noticed with another view, that materially diminish every where the effect of a scarcity of hands. These circumstances are—the great use which can be made of women and children; on which point a very pregnant and instructive fact has been mentioned—the vast extension given by late improvements to the employment of Machines, which substituting the Agency of fire and water, has prodigiously lessened the necessity for manual labor—the employment of persons ordinarily engaged in other occupations, during the seasons, or hours of leisure; which, besides giving occasion to the exertion of a greater quantity of labour by the same number of persons, and thereby encreasing the general stock of labour, as has been elsewhere remarked, may also be taken into the calculation, as a resource for obviating the scarcity of hands—lastly the attraction of foreign emigrants. Whoever inspects, with a careful eye, the composition of our towns will be made sensible to what an extent this resource may be relied upon. This exhibits a large proportion of ingenious and valuable workmen, in different arts and trades, who, by expatriating from Europe, have improved their own condition, and added to the industry and wealth of the United States. It is a natural inference from the experience, we have already had, that as soon as the United States shall present the countenance of a serious prosecution of Manufactures—as soon as foreign artists shall be made sensible that the state of things here affords a moral certainty of employment and encouragement—competent numbers of European workmen will transplant themselves, effectually to ensure the success of the design. How indeed can it otherwise happen considering the various and powerful inducements, which the situation of this country offers; addressing themselves to so many strong passions and feelings, to so many general and particular interests?

It may be affirmed therefore, in respect to hands for carrying on manufactures, that we shall in a great measure trade upon a foreign Stock; reserving our own, for the cultivation of our lands and the manning of our Ships; as far as character and circumstances [shall] incline. It is not unworthy of remark, that the objection to the success of manufactures, deduced from the scarcity of hands, is alike applicable to Trade and Navigation; and yet these are perceived to flourish, without any sensible impediment from that cause.178

As to the dearness of labour (another of the obstacles alledged) this has relation principally to two circumstances, one that which has been just discussed, or the scarcity of hands, the other, the greatness of profits.

As far as it is a consequence of the scarcity of hands, it is mitigated by all the considerations which have been adduced as lessening that deficiency.

It is certain too, that the disparity in this respect, between some of the most manufacturing parts of Europe and a large proportion of the United States, is not nearly so great as is commonly imagined. It is also much less in regard to Artificers and manufacturers than in regard to country labourers; and while a careful comparison shews, that there is, in this particular, much exaggeration; it is also evident that the effect of the degree of disparity, which does truly exist, is diminished in proportion to the use which can be made of machinery.

To illustrate this last idea—Let it be supposed, that the difference of price, in two Countries, of a given quantity of manual labour requisite to the fabrication of a given article is as 10; and that some mechanic power is introduced into both countries, which performing half the necessary labour, leaves only half to be done by hand, it is evident, that the difference in the cost of the fabrication of the article in question, in the two countries, as far as it is connected with the price of labour, will be reduced from 10. to 5, in consequence of the introduction of that power.

This circumstance is worthy of the most particular attention. It diminishes immensely one of the objections most strenuously urged, against the success of manufactures in the United States.

To procure all such machines as are known in any part of Europe, can only require a proper provision and due pains. The knowledge of several of the most important of them is already possessed. The preparation of them here, is in most cases, practicable on nearly equal terms. As far as they depend on Water, some superiority of advantages may be claimed, from the uncommon variety and greater cheapness of situations adapted to Mill seats, with which different parts of the United States abound.

So far as the dearness of labour may be a consequence of the greatness of profits in any branch of business, it is no obstacle to its success. The Undertaker can afford to pay the price.

There are grounds to conclude 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. The prices of foreign fabrics, in the markets of the United States, which will for a long time regulate the prices of the domestic ones, may be considered as compounded of the following ingredients—The first cost of materials, including the Taxes, if any, which are paid upon them where they are made: the expence of grounds, buildings machinery and tools: the wages of the persons employed in the manufactory: the profits on the capital or Stock employed: the commissions of Agents to purchase them where they are made; the expence of transportation to the United States [including insurance and other incidental charges;] the taxes or duties, if any [and fees of office] which are paid on their exportation: the taxes or duties [and fees of office] which are paid on their importation.

As to the first of these items, the cost of materials, the advantage upon the whole, is at present on the side of the United States, and the difference, in their favor, must increase, in proportion as a certain and extensive domestic demand shall induce the proprietors of land to devote more of their attention to the production of those materials. It ought not to escape observation, in a comparison on this point, that some of the principal manufacturing Countries of Europe are much more dependent on foreign supply for the materials of their manufactures, than would be the United States, who are capable of supplying themselves, with a greater abundance, as well as a greater variety of the requisite materials.

As to the second item, the expence of grounds buildings machinery and tools, an equality at least may be assumed; since advantages in some particulars will counterbalance temporary disadvantages in others.

As to the third item, or the article of wages, the comparison certainly turns against the United States, though as before observed not in so great a degree as is commonly supposed.

The fourth item is alike applicable to the foreign and to the domestic manufacture. It is indeed more properly a result than a particular, to be compared.

But with respect to all the remaining items, they are alone applicable to the foreign manufacture, and in the strictest sense extraordinaries; constituting a sum of extra charge on the foreign fabric, which cannot be estimated, at less than [from 15 to 30]179 per Cent. on the cost of it at the manufactory.180

This sum of extra charge may confidently be regarded as more than a Counterpoise for the real difference in the price of labour; and is a satisfactory proof that manufactures may prosper in defiance of it in the United States. To the general allegation, connected with the circumstances of scarcity of hands and dearness of labour, that extensive manufactures can only grow out of a redundant or full population, it will be sufficient, to answer generally, that the fact has been otherwise—That the situation alleged to be an essential condition of success, has not been that of several nations, at periods when they had already attained to maturity in a variety of manufactures.

The supposed want of Capital for the prosecution of manufactures in the United States is the most indefinite of the objections which are usually opposed to it.

It is very difficult to pronounce any thing precise concerning the real extent of the monied capital of a Country, and still more concerning the proportion which it bears to the objects that invite the employment of Capital. It is not less difficult 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 and property of a nation, may be encreased by the very circumstance of the additional motion, which is given to it by new objects of employment. That effect, like the momentum of descending bodies, may not improperly be represented, as in a compound ratio to mass and velocity. It seems pretty certain, that a given sum of money, in a situation, in which the quick impulses of commercial activity were little felt, would appear inadequate to the circulation of as great a quantity of industry and property, as in one, in which their full influence was experienced.

It is not obvious, why the same objection might not as well be made to external commerce as to manufactures; since it is manifest that our immense tracts of land occupied and unoccupied are capable of giving employment to more capital than is actually bestowed upon them. It is certain, that the United States offer a vast field for the advantageous employment of Capital; but it does not follow, that there will not be found, in one way or another, a sufficient fund for the successful prosecution of any species of industry which is likely to prove truly beneficial.

The following considerations are of a nature to remove all inquietude on the score of want of Capital.

The introduction of Banks, as has been shewn on another occasion181 has a powerful tendency to extend the active Capital of a Country. Experience of the Utility of these Institutions is multiplying them in the United States. It is probable that they will be established wherever they can exist with advantage; and wherever, they can be supported, if administered with prudence, they will add new energies to all pecuniary operations.

The aid of foreign Capital may safely, and, with considerable latitude be taken into calculation. Its instrumentality has been long experienced in our external commerce; and it has begun to be felt in various other modes. Not only our funds, but our Agriculture and other internal improvements have been animated by it. It has already in a few instances extended even to our manufactures.

It is a well known fact, that there are parts of Europe, which have more Capital, than profitable domestic objects of employment. Hence, among other proofs, the large loans continually furnished to foreign states. And it is equally certain that the capital of other parts may find more profitable employment in the United States, than at home. And notwithstanding there are weighty inducements to prefer the employment of capital at home even at less profit, to an investment of it abroad, though with greater gain, yet these inducements are overruled either by a deficiency of employment or by a very material difference in profit. Both these Causes operate to produce a transfer of foreign capital to the United States. ’Tis certain, that various objects in this country hold out advantages, which are with difficulty to be equalled elsewhere; and under the increasingly favorable impressions, which are entertained of our government, the attractions will become more and More strong. These impressions will prove a rich mine of prosperity to the Country, if they are confirmed and strengthened by the progress of our affairs. And to secure this advantage, little more is now necessary, than to foster industry, and cultivate order and tranquility, at home and abroad.

It is not impossible, that there may be persons disposed to look with a jealous eye on the introduction of foreign Capital, as if it were an instrument to deprive our own citizens of the profits of our own industry: But perhaps there never could be a more unreasonable jealousy. Instead of being viewed as a rival, it ought to be Considered as a most valuable auxiliary; conducing to put in Motion a greater Quantity of productive labour, and a greater portion of useful enterprise than could exist without it. It is at least evident, that in a Country situated like the United States, with an infinite fund of resources yet to be unfolded, every farthing of foreign capital, which is laid out in internal ameliorations, and in industrious establishments of a permanent nature, is a precious acquisition.

And whatever be the objects which originally attract foreign Capital, when once introduced, it may be directed towards any purpose of beneficial exertion, which is desired. And to detain it among us, there can be no expedient so effectual as to enlarge the sphere, within which it may be usefully employed: Though induced merely with views to speculations in the funds, it may afterwards be rendered subservient to the Interests of Agriculture, Commerce & Manufactures.

But the attraction of foreign Capital for the direct purpose of Manufactures ought not to be deemed a chimerial expectation. There are already examples of it, as remarked in another place. And the examples, if the disposition be cultivated can hardly fail to multiply. There are also instances of another kind, which serve to strengthen the expectation. Enterprises for improving the Public Communications, by cutting canals, opening the obstructions in Rivers and erecting bridges, have received very material aid from the same source.

When the Manufacturing Capitalist of Europe shall advert to the many important advantages, which have been intimated, in the Course of this report, he cannot but perceive very powerful inducements to a transfer of himself and his Capital to the United States. Among the reflections, which a most interesting peculiarity of situation is calculated to suggest, it cannot escape his observation, as a circumstance of Moment in the calculation, that the progressive population and improvement of the United States, insure a continually increasing domestic demand for the fabrics which he shall produce, not to be affected by any external casualties or vicissitudes.

But while there are Circumstances sufficiently strong to authorise a considerable degree of reliance on the aid of foreign Capital towards the attainment of the object in view, it is satisfactory to have good grounds of assurance, that there are domestic resources of themselves adequate to it. It happens, that there is a species of Capital actually existing within the United States, which relieves from all inquietude on the score of want of Capital—This is the funded Debt.

The effect of a funded debt, as a species of Capital, has been Noticed upon a former Occasion;182 but a more particular elucidation of the point seems to be required by the stress which is here laid upon it. This shall accordingly be attempted.

Public Funds answer the purpose of Capital, from the estimation in which they are usually held by Monied men; and consequently from the Ease and dispatch with which they can be turned into money. This capacity of prompt convertibility into money causes a transfer of stock to be in a great number of Cases equivalent to a payment in coin. And where it does not happen to suit the party who is to receive, to accept a transfer of Stock, the party who is to pay, is never at a loss to find elsewhere a purchaser of his Stock, who will furnish him in lieu of it, with the Coin of which he stands in need. Hence in a sound and settled state of the public funds, a man possessed of a sum in them can embrace any scheme of business, which offers, with as much confidence as if he were possessed of an equal sum in Coin.

This operation of public funds as capital is too obvious to be denied; but it is objected to the Idea of their operating as an augmentation of the Capital of the community, that they serve to occasion the destruction of some other capital to an equal amount.183

The Capital which alone they can be supposed to destroy must consist of—The annual revenue, which is applied to the payment of Interest on the debt, and to the gradual redemption of the principal—The amount of the Coin, which is employed in circulating the funds, or, in other words, in effecting the different alienations which they undergo.

But the following appears to be the true and accurate view of this matter.

1st. As to the point of the Annual Revenue requisite for Payment of interest and redemption of principal.

As a determinate proportion will tend to perspicuity in the reasoning, let it be supposed that the annual revenue to be applied, corresponding with the modification of the 6 per Cent stock of the United States, is in the ratio of eight upon the hundred, that is in the first instance six on Account of interest, and two on account of Principal.

Thus far it is evident, that the Capital destroyed to the capital created, would bear no greater proportion, than 8 to 100. There would be withdrawn from the total mass of other capitals a sum of eight dollars to be paid to the public creditor; while he would be possessed of a sum of One Hundred dollars, ready to be applied to any purpose, to be embarked in any enterprize, which might appear to him eligible. Here then the Augmentation of Capital, or the excess of that which is produced, beyond that which is destroyed is equal to Ninety two dollars. To this conclusion, it may be objected, that the sum of Eight dollars is to be withdrawn annually, until the whole hundred is extinguished, and it may be inferred, that in process of time a capital will be destroyed equal to that which is at first created.

But it is nevertheless true, that during the whole of the interval, between the creation of the Capital of 100 dollars, and its reduction to a sum not greater than that of the annual revenue appropriated to its redemption—there will be a greater active capital in existence than if no debt had been Contracted. The sum drawn from other Capitals in any one year will not exceed eight dollars; but there will be at every instant of time during the whole period, in question a sum corresponding with so much of the principal, as remains unredeemed, in the hands of some person, or other, employed, or ready to be employed in some profitable undertaking. There will therefore constantly be more capital, in capacity to be employed, than capital taken from employment. The excess for the first year has been stated to be Ninety two dollars; it will diminish yearly, but there always will be an excess, until the principal of the debt is brought to a level with the redeeming annuity, that is, in the case which has been assumed by way of example, to eight dollars. The reality of this excess becomes palpable, if it be supposed, as often happens, that the citizen of a foreign Country imports into the United States 100 dollars for the purchase of an equal sum of public debt. Here is an absolute augmentation of the mass of Circulating Coin to the extent of 100 dollars. At the end of a year the foreigner is presumed to draw back eight dollars on account of his Principal and Interest, but he still leaves, Ninety two of his original Deposit in circulation, as he in like manner leaves Eighty four at the end of the second year, drawing back then also the annuity of Eight Dollars: And thus the Matter proceeds; The capital left in circulation diminishing each year, and coming nearer to the level of the annuity drawnback. There are however some differences in the ultimate operation of the part of the debt, which is purchased by foreigners, and that which remains in the hands of citizens. But the general effect in each case, though in different degrees, is to add to the active capital of the Country.

Hitherto the reasoning has proceeded on a concession of the position, that there is a destruction of some other capital, to the extent of the annuity appropriated to the payment of the Interest and the redemption of the principal of the deb⟨t⟩184 but in this, too much has been conceded. There is at most a temp⟨orary⟩ transfer of some other capital, to the amount of the Annuity, from those who pay to the Creditor who receives; which he again restor⟨es⟩ to the circulation to resume the offices of a capital. This he does ei⟨ther⟩ immediately by employing the money in some branch of Industry, or mediately by lending it to some other person, who does so employ ⟨it⟩ or by spending it on his own maintenance. In either sup⟨position⟩ there is no destruction of capital, there is nothing more ⟨than a⟩ suspension of its motion for a time; that is, while it is ⟨passing⟩ from the hands of those who pay into the Public coffers, & thence ⟨through⟩ the public Creditor into some other Channel of circulation. ⟨When⟩ the payments of interest are periodical and quick and made by instrumentality of Banks the diversion or suspension of capita⟨l⟩ may almost be denominated momentary. Hence the deduction on this Account is far less, than it at first sight appears to be.

There is evidently, as far as regards the annuity no destruction nor transfer of any other Capital, than that por⟨tion⟩ of the income of each individual, which goes to make up the Annuity. The land which furnishes the Farmer with the s⟨um⟩ which he is to contribute remains the same; and the like m⟨ay⟩ be observed of other Capitals. Indeed as far as the Tax, w⟨hich⟩ is the object of contribution (as frequently happens, when it doe⟨s⟩ not oppress, by its weight) may have been a Motive to greaterexertion in any occupation;185 it may even serve to encrease the contributory Capital: This idea is not without importanc⟨e⟩ in the general view of the subject.

It remains to see, what further deduction ought to be mad⟨e⟩ from the capital which is created, by the existence of the Debt; on account of the coin, which is employed in its circulation. This is susceptible of much less precise calculation, than the Article which has been just discussed. It is impossible to say what proportion of coin is necessary to carry on the alienations which any species of property usually undergoes. The quantity indeed varies according to circumstances. But it may still without hesitation be pronounced, from the quickness of the rotation, or rather of the transitions, that the medium of circulation always bears but a small proportion to the amount of the property circulated. And it is thence satisfactorily deducible, that the coin employed in the Negociations of the funds and which serves to give them activity, as capital, is incomparably less than the sum of the debt negotiated for the purposes of business.

It ought not, however, to be omitted, that the negotiation of the funds becomes itself a distinct business; which employs, and by employing diverts a portion of the circulating coin from other pursuits. But making due allowance for this circumstance there is no reason to conclude, that the effect of the diversion of coin in the whole operation bears any considerable proportion to the amount of the Capital to which it gives activity. The sum of the debt in circulation is continually at the Command, of any useful enterprise—the coin itself which circulates it, is never more than momentarily suspended from its ordinary functions. It experiences an incessant and rapid flux and reflux to and from the Channels of industry to those of speculations in the funds.

There are strong circumstances in confirmation of this Theory. The force of Monied Capital which has been displayed in Great Britain, and the height to which every species of industry has grown up under it, defy a solution from the quantity of coin which that kingdom has ever possessed. Accordingly it has been Coeval with its funding system, the prevailing opinion of the men of business, and of the generality of the most sagacious theorists of that country, that the operation of the public funds as capital has contributed to the effect in question. Among ourselves appearances thus far favour the same Conclusion. Industry in general seems to have been reanimated. There are symptoms indicating an extension of our Commerce. Our navigation has certainly of late had a Considerable spring, and there appears to be in many parts of the Union a command of capital, which till lately, since the revolution at least, was unknown. But it is at the same time to be acknowledged, that other circumstances have concurred, (and in a great degree) in producing the present state of things, and that the appearances are not yet sufficiently decisive, to be intirely relied upon.

In the question under discussion, it is important to distinguish between an absolute increase of Capital, or an accession of real wealth, and an artificial increase of Capital, as an engine of business, or as an instrument of industry and Commerce. In the first sense, a funded debt has no pretensions to being deemed an increase of Capital; in the last, it has pretensions which are not easy to be controverted. Of a similar nature is bank credit and in an inferior degree, every species of private credit.

But though a funded debt is not in the first instance, an absolute increase of Capital, or an augmentation of real wealth; yet by serving as a New power in the operation of industry, it has within certain bounds a tendency to increase the real wealth of a Community, in like manner as money borrowed by a thrifty farmer, to be laid out in the improvement of his farm may, in the end, add to his Stock of real riches.

There are respectable individuals, who from a just aversion to an accumulation of Public debt, are unwilling to concede to it any kind of utility, who can discern no good to alleviate the ill with which they suppose it pregnant; who cannot be persuaded that it ought in any sense to be viewed as an increase of capital lest it should be inferred, that the more debt the more capital, the greater the burthens the greater the blessings of the community.

But it interests the public Councils to estimate every object as it truly is; to appreciate how far the good in any measure is compensated by the ill; or the ill by the good, Either of them is seldom unmixed.

Neither will it follow, that an accumulation of debt is desireable, because a certain degree of it operates as capital. There may be a plethora in the political, as in the Natural body; There may be a state of things in which any such artificial capital is unnecessary. The debt too may be swelled to such a size, as that the greatest part of it may cease to be useful as a Capital, serving only to pamper the dissipation of idle and dissolute individuals: as that the sums required to pay the Interest upon it may become oppressive, and beyond the means, which a government can employ, consistently with its tranquility, to raise them; as that the resources of taxation, to face the debt, may have been strained too far to admit of extensions adequate to exigencies, which regard the public safety.

Where this critical point is, cannot be pronounced, but it is impossible to believe, that there is not such a point.

And as the vicissitudes of Nations beget a perpetual tendency to the accumulation of debt, there ought to be in every government a perpetual, anxious and unceasing effort to reduce that, which at any time exists, as fast as shall be practicable consistently with integrity and good faith.

Reasonings on a subject comprehending ideas so abstract and complex, so little reducible to precise calculation as those which enter into the question just discussed, are always attended with a danger of runing into fallacies. Due allowance ought therefore to be made for this possibility. But as far as the Nature of the subject admits of it, there appears to be satisfactory ground for a belief, that the public funds operate as a resource of capital to the Citizens of the United States, and, if they are a resource at all, it is an extensive one.

To all the arguments which are brought to evince the impracticability of success in manufacturing establishments in the United States, it might have been a sufficient answer to have referred to the experience of what has been already done. It is certain that several important branches have grown up and flourished with a rapidity which surprises: affording an encouraging assurance of success in future attempts: of these it may not be improper to enumerate the most considerable.

I
of
Skins.
{ Tanned and tawed leather dressed skins, shoes,
boots and Slippers, harness and sadlery of all kinds.
Portmanteau’s and trunks, leather breeches, gloves,
muffs and tippets, parchment and Glue.
II
of
Iron
{ Barr and Sheet Iron, Steel, Nail-rods & Nails,
implem⟨ents⟩ of husbandry, Stoves, pots and other
household utensils, the steel and Iron work of
carriages and for Shipbuildin⟨g,⟩ Anchors, scale beams
and Weights & Various tools of Artificers, arms of
different kinds; though the manufacture of these
last has of late diminished for want of demand.
III
of
Wood
{ Ships, Cabinet Wares and Turnery, Wool and Cotton
ca⟨rds⟩ and other Machinery for manufactures
and husband⟨ry,⟩ Mathematical instruments, Coopers
wares of every kind.
IV
of flax & Hemp.
Cables, sail-cloth, Cordage, twine and packthread.
V Bricks and coarse tiles & Potters Wares.
VI Ardent Spirits, and malt liquors.
VII { Writing and printing Paper, sheathing and wrapping
Paper, pasteboards, fillers or press papers,
paper hangings.
VIII Hats of furr and Wool and of mixtures of both, Womens Stuff and Silk shoes.
 
IX Refined Sugars.
X Oils of Animals and seeds; Soap, Spermaceti and Tallow Candles.
XI Copper and brass wares, particularly utensils for distillers, Sugar refiners and brewers, And—Irons and other Articles for household Use, philosophical apparatus
XII Tin Wares, for most purposes of Ordinary use.
XIII Carriages of all kinds
XIV Snuff, chewing & smoaking Tobacco.
XV Starch and Hairpowder.
XVI Lampblack and other painters colours,
XVII Gunpowder

Besides manufactories of these articles which are carried on as regular Trades, and have attained to a considerable degree of maturity, there is a vast scene of household manufacturing, which contributes more largely to the supply of the Community, than could be imagined; without having made it an object of particular enquiry. This observation is the pleasing result of the investigation, to which the subject of the report has led, and is applicable as well to the Southern as to the middle and Northern States; great quantities of coarse cloths, coatings, serges, and flannels, linsey Woolseys, hosiery of Wool, cotton & thread, coarse fustians, jeans and Muslins, check⟨ed⟩ and striped cotton and linen goods, bed ticks, Coverlets and Counterpanes, Tow linens, coarse shirtings, sheetings, toweling and table linen, and various mixtures of wool and cotton, and of Cotton & flax are made in the household way, and in many instances to an extent not only sufficient for the supply of the families in which they are made, but for sale, and (even in some cases) for exportation. It is computed in a number of districts that ⅔¾ and even 4/5 of all the clothing of the Inhabitants are made by themselves. The importance of so great a progress, as appears to have been made in family Manufactures, within a few years, both in a moral and political view, renders the fact highly interesting.186

Neither does the above enumeration comprehend all the articles, that are manufactured as regular Trades. Many others occur, which are equally well established, but which not being of equal importance have been omitted. And there are many attempts still in their Infancy, which though attended with very favorable appearances, could not have been properly comprized in an enumeration of manufactories, already established. There are other articles also of great importance, which tho’ strictly speaking manufactures are omitted, as being immediately connected with husbandry: such are flour, pot & pearl ash, Pitch, tar, turpentine and the like.

There remains to be noticed an objection to the encouragement of manufactures, of a nature different from those which question the probability of success. This is derived from its supposed tendency to give a monopoly of advantages to particula⟨r⟩ classes at the expence of the rest of the community, who, it is affirmed, would be able to procure the requisite supplies of manufactured articles on better terms from foreigners, than from our own Citizens, and who it is alledged, are reduced to a necessity of paying an enhanced price for whatever they want, by every measure, which obstructs the free competition of foreign commoditi⟨es.⟩187

It is not an unreasonable supposition, that measures, which serve to abridge the free competition of foreign Articles, have a tendency to occasion an enhancement of prices and it is not to be denied that such is the effect in a number of Cases; but the fact does not uniformly correspond with the theory. A reduction of prices has in several instances immediately succeeded the establishment of a domestic manufacture. Whether it be that foreign Manufacturers endeavour to suppla⟨nt⟩ by underselling our own, or whatever else be the cause, the effect has been such as is stated, and the reverse of what mig⟨ht⟩ have been expected.188

But though it were true, that the immedi⟨ate⟩ and certain effect of regulations controuling the competition of foreign with domestic fabrics was an increase of price, it is universally true, that the contrary is the ultimate effect with every successful manufacture. When a domestic manufacture has attained to perfection, and has engaged in the prosecution of it a competent number of Persons, it invariably becomes cheaper. Being free from the heavy charges, which attend the importation of foreign commodities, it can be afforded, and accordingly seldom or never fails to be sold Cheaper, in process of time, than was the foreign Article for which it is a substitute. The internal competition, which takes place, soon does away every thing like Monopoly, and by degrees reduces the price of the Article to the minimum of a reasonable profit on the Capital employed. This accords with the reason of the thing and with experience.

Whence it follows, that it is the interest of a community with a view to eventual and permanent oeconomy, to encourage the growth of manufactures. In a national view, a temporary enhancement of price must always be well compensated by a permanent reduction of it.

It is a reflection, which may with propriety be indulged here, that this eventual diminution of the prices of manufactured Articles; which is the result of internal manufacturing establishments, has a direct and very important tendency to benefit agriculture. It enables the farmer, to procure with a smaller quantity of his labour, the manufactured produce of which he stan⟨ds⟩ in need, and consequently increases the value of his income and property.189

The objections which are commonly made to the expediency of encouraging, and to the probability of succeeding in manufacturing pursuits, in the United states, having now been discussed; the Considerations which have appeared in the Course of the discussion, recommending that species of industry to the patronage of the Government, will be materially strengthened by a few general and some particular topics, which have been naturally reserved for subsequent Notice.

I   There seems to be a moral certainty, that the trade of a country which is both manufacturing and Agricultural will be more lucrative and prosperous, than that of a Country, which is, merely Agricultural.

One reason for this is found in that general effort of nations (which has been already mentioned) to procure from their own soils, the articles of prime necessity requisite to their own consumption and use; and which serves to render their demand for a foreign supply of such articles in a great degree occasional and contingent. Hence, while the necessities of nations exclusively devoted to Agriculture, for the fabrics of manufacturing st⟨ates⟩ are constant and regular, the wants of the latter for the products of the former, are liable to very considerable fluctuations and interruptions. The great inequalities resulting from difference of seasons, have been elsewhere remarked: This uniformity of deman⟨d⟩ on one side, and unsteadiness of it, on the other, must necessarily ha⟨ve⟩ a tendency to cause the general course of the exchange of commodit⟨ies⟩ between the parties to turn to the disadvantage of the merely agricultural States. Peculiarity of situation, a climate and soil ada⟨pted⟩ to the production of peculiar commodities, may, sometimes, contradi⟨ct⟩ the rule; but there is every reason to believe that it will be fou⟨nd⟩ in the Main, a just one.

Another circumstance which gives a superiority of commercial advantages to states, that manufact⟨ure⟩ as well as cultivate, consists in the more numerous attractions, which a more diversified market offers to foreign Customers, and greater scope, which it affords to mercantile enterprise. It is ⟨a⟩ position of indisputable truth in Commerce, depending too on very obvious reasons, that the greatest resort will ever be to those mar⟨ts⟩ where commodities, while equally abundant, are most various. Each difference of kind holds out an additional inducement. And it is a position not less clear, that the field of enterprise must be enlarged to the Merchants of a Country, in proportion ⟨to⟩ the variety as well as the abundance of commodities which they find at home for exportation to foreign Markets.

A third circumstance, perhaps not inferior to either of the other two, conferring the superiority which has been stated has relation to the stagnations of demand for certain commodities which at some time or other interfere more or less with the sale of all. The Nation which can bring to Market, but few articles is likely to be more quickly and sensibly affected by such stagnations, than one, which is always possessed of a great variety of commodities. The former frequently finds too great a proportion of its stock of materials, for sale or exchange, lying on hand—or is obliged to make injurious sacrifices to supply its wants of foreign articles, which are Numerous and urgent, in proportion to the smallness of the number of its own. The latter commonly finds itself indemnified, by the high prices of some articles, for the low prices of others—and the Prompt and advantageous sale of those articles which are in demand enables its merchant the better to wait for a favorable change, in respect to those which are not. There is ground to believe, that a difference of situation, in this particular, has immensely different effec⟨ts⟩ upon the wealth and prosperity of Nations.

From these circumstances collectively, two important inferences are to be drawn, one, that there is always a higher probability of a favorable balance of Trade, in regard to countries in which manufactures founded on the basis of a thriving Agriculture flourish, than in regard to those, which are confined wholly or almost wholly to Agriculture; the other (which is also a consequence of the first) that countries of the former description are likely to possess more pecuniary wealth, or money, than those of the latter.190

Facts appear to correspond with this conclusion. The importations of manufactured supplies seem invariably to drain the merely Agricultural people of their wealth. Let the situation of the manufacturing countries of Europe be compared in this particular, with that of Countries which only cultivate, and the disparity will be striking. Other causes, it is true, help to Account for this disparity between some of them; and among these causes, the relative state of Agriculture; but between others of them, the most prominent circumstance of dissimilitude arises from the Comparative state of Manufactures. In corroboration of the same idea, it ought not to escape remark, that the West India Islands, the soils of which are the most fertile, and the Nation, which in the greatest degree supplies the rest of the world, with the precious metals, exchange to a loss with almost every other Country.

As far as experience at home may guide, it will lead to the same conclusion. Previous to the revolution, the quantity of coin, possessed by the colonies, which now compose the United states, appeared, to be inadequate to their circulation; and their debt to Great-Britain was progressive. Since the Revolution, the States, in which manufactures have most increased, have recovered fastest from the injuries of the late War, and abound most in pecuniary resources.

It ought to be admitted, however in this as in the preceding case, that causes irrelative to the state of manufactures account, in a degree, for the Phœnomena remarked. The continual progress of new settlements has a natural tendency to occasion an unfavorable balance of Trade; though it indemnifies for the inconvenience, by that increase of the national capital which flows from the conversion of waste into improved lands: And the different degrees of external commerce, which are carried on by the different States, may make material differences in the comparative state of their wealth. The first circumstance has reference to the deficien⟨cy⟩ of coin and the increase of debt previous to the revolution; the last to the advantages which the most manufacturing states appear to have enjoyed, over the others, since the termination of the late War.

But the uniform appearance of an abundance of specie, as the concomitant of a flourishing state of manufacture⟨s⟩ and of the reverse, where they do not prevail, afford a strong presumption of their favourable operation upon the wealth of a Country.

Not only the wealth; but the independence and security of a Country, appear to be materially connected with the prosperity of manufactures. Every nation, with a view to those great objects, ought to endeavour to possess within itself all the essentials of national supply. These comprise the means of Subsistence habitation clothing and defence.

The possession of these is necessary to the perfection of the body politic, to the safety as well as to the welfare of the society; the want of either, is the want of an important organ of political life and Motion; and in the various crises which await a state, it must severely feel the effects of any such deficiency. The extreme embarrassments of the United States during the late War, from an incapacity of supplying themselves, are still matter of keen recollection: A future war might be expected again to exemplify the mischiefs and dangers of a situation, to which that incapacity is still in too great a degree applicable, unless changed by timely and vigorous exertion. To effect this change as fast as shall be prudent, merits all the attention and all the Zeal of our Public Councils; ’tis the next great work to be accomplished.

The want of a Navy to protect our external commerce, as long as it shall Continue, must render it a peculiarly precarious reliance, for the supply of essential articles, and must serve to strengthen prodigiously the arguments in favour of manufactures.

To these general Considerations are added some of a more particular nature.

Our distance from Europe, the great fountain of manufactured supply, subjects us in the existing state of things, to inconvenience and loss in two Ways.

The bulkiness of those commodities which are the chief productions of the soil, necessarily imposes very heavy charges on their transportation, to distant markets. These charges, in the Cases, in which the nations, to whom our products are sent, maintain a Competition in the supply of their own markets, principally fall upon us, and form material deductions from the primitive value of the articles furnished. The charges on manufactured supplies, brought from Europe are greatly enhanced by the same circumstance of distance. These charges, again, in the cases in which our own industry maintains no competition, in our own markets, also principally fall upon us; and are an additional cause of extraordinary deduction from the primitive value of our own products; these bei⟨ng⟩ the materials of exchange for the foreign fabrics, which we consume.

The equality and moderation of individual prope⟨rty⟩ and the growing settlements of new districts, occasion in this country an unusual demand for coarse manufactures; The charges of which being greater in proportion to their greater bulk augment the disadvantage, which has been just described.

As in most countries domestic supplie⟨s⟩ maintain a very considerable competition with such foreign productions of the soil, as are imported for sale; if the extensive establishment of Manufactories in the United states does not create a similar competition in respect to manufactured articles, it appears to be clearly deducible, from the Considerations which have been mentioned, that they must sustain a double loss in their exchanges with foreign Nations; strongly conducive to an unfavorable balance of Trade, and very prejudicial to their Interests.

These disadvantages press with no small weight, on the landed interest of the Country. In seasons of peace, they cause a serious deduction from the intrinsic value of the products of the soil. In the time of a War, which shou’d either involve ourselves, or another nation, possessing a Considerable share of our carrying trade, the charges on the transportation of our commodities, bulky as most of them are, could hardly fail to prove a grievous burthen to the farmer; while obliged to depend in so great degree as he now does, upon foreign markets for the vent of the surplus of his labour.

As far as the prosperity of the Fisheries of the United states is impeded by the want of an adequate market, there arises another special reason for desiring the extension of manufactures. Besides the fish, which in many places, would be likely to make a part of the subsistence of the persons employed; it is known that the oils, bones and skins of marine animals, are of extensive use in various manufactures. Hence the prospect of an additional demand for the produce of the Fisheries.

One more point of view only remains in which to Consider the expediency of encouraging manufactures in the United states.

It is not uncommon to meet with an opin⟨ion⟩ that though the promoting of manufactures may be the interest of a part of the Union, it is contrary to that of another part. The Northern & southern regions are sometimes represented as having adverse interests in this respect. Those are called Manufacturing, these Agricultural states; and a species of opposition is imagined to subsist between the Manufacturing a⟨nd⟩ Agricultural interests.

This idea of an opposition between those two interests is the common error of the early periods of every country, but experience gradually dissipates it. Indeed they are perceived so often to succour and to befriend each other, that they come at length to be considered as one: a supposition which has been frequently abused and is not universally true. Particular encouragements of particular manufactures may be of a Nature to sacrifice the interests of landholders to those of manufacturers; But it is nevertheless a maxim well established by experience, and generally acknowledged, where there has been sufficient experience, that the aggregate prosperity of manufactures, and the aggregate prosperity of Agriculture are intimately connected. In the Course of the discussion which has had place, various weighty considerations have been adduced operating in support of that maxim. Perhaps the superior steadiness of the demand of a domestic market for the surplus produce of the soil, is alone a convincing argument of its truth.

Ideas of a contrariety of interests between the Northern and southern regions of the Union, are in the Main as unfounded as they are mischievous. The diversity of Circumstances on which such contrariety is usually predicated, authorises a directly contrary conclusion. Mutual wants constitute one of the strongest links of political connection, and the extent of the⟨se⟩ bears a natural proportion to the diversity in the means of mutual supply.

Suggestions of an opposite complexion are ever to be deplored, as unfriendly to the steady pursuit of one great common cause, and to the perfect harmony of all the parts.

In proportion as the mind is accustomed to trace the intimate connexion of interest, which subsists between all the parts of a Society united under the same government—the infinite variety of channels which serve to Circulate the prosper⟨ity⟩ of each to and through the rest—in that proportion will it be little apt to be disturbed by solicitudes and Apprehensions which originate in local discriminations. It is a truth as important as it is agreeable, and one to which it is not easy to imagine exceptions, that every thing tending to establish substantial and permanent order, in the affairs of a Country, to increase the total mass of industry and opulence, is ultimately beneficial to every part of it. On the Credit of this great truth, an acquiescence may safely be accorded, from every quarter, to all institutions & arrangements, which promise a confirmation of public order, and an augmentation of National Resource.191

But there are more particular considerations which serve to fortify the idea, 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 more abundant, or of better quality, than elsewhere.192 These productions, principally are Timber, flax, Hemp, Cotton, Wool, raw silk, Indigo, iron, lead, furs, hides, skins and coals. Of these articles Cotton & Indigo are peculiar to the southern states; as are hitherto Lead & Coal. Flax and Hemp are or may be raised in greater abundance there, than in the More Northern states; and the Wool of Virginia is said to be of better quality than that of any other state: a Circumstance rendered the more probable by the reflection that Virginia embraces the same latitudes with the finest Wool Countries of Europe.193 The Climate of the south is also better adapted to the production of silk.

The extensive cultivation of Cotton can perhaps hardly be expected, but from the previous establishment of domestic Manufactories of the Article; and the surest encouragement and vent, for the others, would result from similar establishments in respect to them.

If then, it satifactorily appears, that it is the Interest of the United states, generally, to encourage manufactures, it merits particular attention, that there are circumstances, which Render the present a critical moment for entering with Zeal upon the important business. The effort cannot fail to be materially seconded by a considerable and encreasing influx of money, in consequence of foreign speculations in the funds—and by the disorders, which exist in different parts of Europe.

The first circumstance not only facilita⟨tes⟩ the execution of manufacturing enterprises; but it indicates them as a necessary mean to turn the thing itself to advantage, and to prevent its being eventually an evil. If useful employment be not found for the Money of foreigners brought to the country to be invested in purchase⟨s⟩ of the public debt, it will quickly be reexported to defray the expence of an extraordinary consumption of foreign luxuries; and distressing drains of our specie may hereafter be experienced to pay the interest and redeem the principal of the purchased debt.

This useful employment too ought to be of a Nature to produce solid and permanent improvements. If the money merely serves to give a temporary spring to foreign commerce; as it cannot procure new and lasting outlets for the products of the Country; there will be no real or durable advantage gained. As far as it shall find its way in Agricultural ameliorations, in opening canals, and in similar improvements, it will be productive of substantial utility. But there is reason to doubt, whether in such channels it is likely to find sufficient employment, and still more whether many of those who possess it, would be as readily attracted to objects of this nature, as to manufacturing pursuits; which bear greater analogy to those to which they are accustomed, and to the spirit generated by them.

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

There is at the present juncture a certain fermentation of mind, a certain activity of speculation and enterprise which if properly directed may be made subservient to useful purposes; but which if left entirely to itself, may be attended with pernicious effects.

The disturbed state of Europe, inclining its citizens to emigration, the requisite workmen, will be more easily acquired, than at another time; and the effect of multiplying the opportunities of employment to those who emigrate, may be an increase of the number and extent of valuable acquisitions to the population arts and industry of the Country. To find pleasure in the calamities of other nations, would be criminal; but to benefit ourselves, by opening an asylum to those who suffer, in consequence of them, is as justifiable as it is pol⟨itic.⟩

A full view having now been taken of the inducements to the promotion of Manufactures in the United states, accompanied with an examination of the principal objections which are commonly urged in opposition, it is proper in the next place, to consider the means, by which it may be effected, as introductory to a Specification of the objects which in the present state of things appear the most fit to be encouraged, and of the particular measures which it may be adviseable to adopt, in respect to each.

In order to a better judgment of the Means proper to be resorted to by the United states, it will be of use to Advert to those which have been employed with success in other Countries. The principal of these are.

I   Protecting duties—or duties on those foreign articles which are the rivals of the domestic ones, intended to be encouraged.

Duties of this Nature evidently amount to a virtual bounty on the domestic fabrics since by enhancing the charges on foreign Articles, they enable the National Manufacturers to undersell all their foreign 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, but is sanctioned by the laws of the United states in a variety of instances; it has the additional recommendat⟨ion⟩ of being a resource of revenue. Indeed all the duties imposed on imported articles, though with an exclusive view to Revenue, have the effect in Contemplation, and except where they fall on raw materials wear a beneficent aspect towards the manufactures of the Country.194

II.   Prohibitions of rival articles or duties equivalent to prohibitions.

This is another and an efficacious mean of encouraging national manufactures, but in general it is only fit to be employed when a manufacture, has made such a progress and is in so many hands as to insure a due competition, and an adequate supply on reasonable terms. Of duties equivalent to prohibitions, there are examples in the Laws of the United States,195 and there are other Cases to which the principle may be advantageously extended, but they are not numero⟨us.⟩

Considering a monopoly of the domestic market to its own manufacturers as the reigning policy of 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; certainly by the duty of endeavouring to secure to their own Citizens a reciprocity of advantages.

III   Prohibitions of the exportation of the materials of manufactures.

The desire of securing a cheap and plentiful supply for the national workmen, and, where the article is either peculiar to the Country, or of peculiar quality there, the jealousy of enabling foreign workmen to rival those of the nation, with its ow⟨n⟩ Materials, are the leading motives to this species of regulation. ⟨It⟩ ought not to be affirmed, that it is in no instance proper, but it is certainly one which ought to be adopted with great circumspect⟨ion⟩ and only in very plain Cases. It is seen at once, that its immedi⟨ate⟩ operation, is to abridge the demand and keep down the price of the produce of some other branch of industry, generally speaking, of Agriculture, to the prejudice of those, who carry it on; and tho⟨ough⟩ if it be really essential to the prosperity of any very important nati⟨onal⟩ Manufacture, it may happen that those who are injured in the first instance, may be eventually indemnified, by the superior ⟨steadiness⟩ of an extensive domestic market, depending on that prosperity: yet in a matter, in which there is so much room for nice and difficult combinations, in which such opposite considerations combat each other, prudence seems to dictate, that the expedient in question, ought to be indulged with a sparing hand.196

IV Pecuniary bounties

This has been found one of the most efficacious means of encouraging manufactures, and it is in some views, the best. Though it has not yet been practiced upon by the Government of the United states (unless the allowance on the exportation of dried and pickled Fish and salted meat could be considered as a bounty)197 and though it is less favored by public opinion than some other modes.

Its advantages, are these—

1   It is a species of encouragement more positive and direct than any other, and for that very reason, has a more immediate tendency to stimulate and uphold new enterprises, increasing the chances of profit, and diminishing the risks of loss, in the first attempts.

2.   It avoids the inconvenience of a temporary augmentation of price, which is incident to some other modes, or it produces it to a less degree; either by making no addition to the charges on the rival foreign article, as in the Case of protecting duties, or by making a smaller addition. The first happens when the fund for the bounty is derived from a different object (which may or may not increase the price of some other article, according to the nature of that object) the second, when the fund is derived from the same or a similar object of foreign manufacture. One per cent duty on the foreign article converted into a bounty on the domestic, will have an equal effect with a duty of two per Cent, exclusive of such bounty; and the price of the foreign commodity is liable to be raised, in the one Case, in the proportion of 1 per Cent; in the other, in that of two per Cent. Indeed the bounty when drawn from another source is calculated to promote a reduction of price, because without laying any new charge on the foreign article, it serves to introduce a competition with it, and to increase the total quantity of the article in the Market.

3   Bounties have not like high protecting duties, a tendency to produce scarcity. An increase of price is not always the immediate, though, where the progress of a domestic Manufacture does not counteract a rise, it is commonly the ultimate effect of an additional duty. In the interval, between the laying of the duty and a proportional increase of price, it may discourage importation, by interfering with the profits to be expected from the sale of the article.

4.   Bounties are sometimes not only the best, but the only proper expedient, for uniting the encouragement of a new object of agriculture, with that of a new object of manufacture. It is the Interest of the farmer to have the production of the raw material promoted, by counteracting the interference of the foreig⟨n⟩ material of the same kind. It is the interest of the manufactu⟨rer⟩ to have the material abundant and cheap. If prior to the domes⟨tic⟩ production of the Material, in sufficient quantity, to supply the manufacturer on good terms; a duty be laid upon the importation of it from abroad, with a view to promote the raising of it at home, the Interests both of the Farmer and Manufacturer will be disserved. By either destroying the requisite supply, or raising the price of the article, beyond what can be afforded to be given for it, by the Conductor of an infant manufacture, it is abandoned or fails; an⟨d⟩ there being no domestic manufactories to create a demand for t⟨he⟩ raw material, which is raised by the farmer, it is in vain, that the Competition of the like foreign article may have been destroy⟨ed.⟩

It cannot escape notice, that a duty upon the importation of ⟨an⟩ article can no otherwise aid the domestic production of it, than giving the latter greater advantages in the home market. It ca⟨n⟩ have no influence upon the advantageous sale of the article produced, in foreign markets; no tendency, there⟨fore⟩ to promote its exportation.

The true way to conciliate these two interests, is to lay a duty on foreign manufactures of the material, the growth of which is desired to be encouraged, and to apply the produce of that duty by way of bounty, either upon the production of the material itself or upon its manufacture at home or upon both. In this disposition of the thing, the Manufacturer commences his enterprise under every advantage, which is attainable, as to quantity or price, of the raw material: And the Farmer if the bounty be immediately to him, is enabled by it to enter into a successful competition with the foreign material; if the bounty be to the manufacturer on so much of the domestic material as he consumes, the operation is nearly the same; he has a motive of interest to prefer the domestic Commodity, if of equal quality, even at a higher price than the foreign, so long as the difference of price is any thing short of the bounty which is allowed upon the article.198

Except the simple and ordinary kinds of household Manufactures, or those for which there are very commanding local advantages, pecuniary bounties are in most cases indispensable to the introduction of a new branch. A stimulus and a support not less powerful and direct is generally speaking essential to the overcoming of the obstacles which arise from the Competitions of superior skill and maturity elsewhere. Bounties are especially essential, in regard to articles, upon which those foreigners, who have been accustomed to supply a Country, are in the practice of granting them.

The continuance of bounties on manufactures long established must almost always be of questionable policy: Because a presumption would arise in every such Case, that there were natural and inherent impediments to success. But in new undertakings, they are as justifiable, as they are oftentimes necessary.

There is a degree of prejudice against bounties from an appearance of giving away the public money, without an immediate consideration, and from a supposition, that they serve to enrich particular classes, at the expence of the Community.

But neither of these sources of dislike will bear a serious examination. There is no purpose, to which public money can be more beneficially applied, than to the acquisition of a new and useful branch of industry; no Consideration more valuable than a permanent addition to the general stock of productive labour.

As to the second source of objection, it equally lies against other modes of encouragement, which are admitted to be eligible. As often as a duty upon a foreign article makes an addition to its price, it causes an extra expence to the Community, for the benefit of the domestic manufacturer. A bounty does no more: But it is the Interest of the society in each case, to submit to a temporary expence, which is more than compensated, by an increase of industry and Wealth, by an augmentation of resources and independence; & by the circumstance of eventual cheapness, which has been noticed in another place.

It would deserve attention, however, in the employment of this species of encouragement in the United states, as a reason for moderating the degree of it in the instances, in which it might be deemed eligible, that the great distance of this country from Europe imposes very heavy charges on all the fabrics which are brought from thence, amounting from [15 to 30]199 per Cent on their value, according to their bulk.200

A Question has been made concerning the Constitutional right of the Government of the United States to apply this species of encouragement, but there is certainly no good foundation for such a question. The National Legislature has express authority “To lay and Collect taxes, duties, imposts and excises, to pay the debts and provide for the Common defence and general welfare” with no other qualifications than that “all duties, imposts and excises, shall be uniform throughout the United states, that no capitation or other direct tax shall be laid unless in proportion to numbers ascertained by a census or enumeration taken on the principles prescribed in the Constitution, and that “no tax or duty shall be laid on articles exported from any state.” These three qualifications excepted, the power to raise money is plenary, and indefinite; and the objects to which it may be appropriated are no less comprehensive, than the payment of the public debts and the providing for the common defence and “general Welfare.” The terms “general Welfare” were doubtless intended to signify more than was expressed or imported in those which Preceded; otherwise numerous exigencies incident to the affairs of a Nation would have been left without a provision. The phrase is as comprehensive as any that could have been used; because it was not fit that the constitutional authority of the Union, to appropriate its revenues shou’d have been restricted within narrower limits than the “General Welfare” and because this necessarily embraces a vast variety of particulars, which are susceptible neither of specification nor of definition.

It is therefore of necessity left to the discretion of the National Legislature, to pronounce, upon the objects, which concern the general Welfare, and for which under that description, an appropriation of money is requisite and proper. And there seems to be no room for a doubt that whatever concerns the general Interests of learning of Agriculture of Manufactures and of Commerce are within the sphere of the national Councils as far as regards an application of Money.

The only qualification of the generallity of the Phrase in question, which seems to be admissible, is this—That the object to which an appropriation of money is to be made be General and not local; its operation extending in fact, or by possibility, throughout the Union, and not being confined to a particular spot.

No objection ought to arise to this construction from a supposition that it would imply a power to do whatever else should appear to Congress conducive to the General Welfare. A power to appropriate money with this latitude which is granted too in express terms would not carry a power to do any other thing, not authorised in the constitution, either expressly or by fair implication.201

V. Premiums

These are of a Nature allied to bounties, though 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 skill, and are dispensed on⟨ly⟩ in a small number of cases. But their effect is to stimulate gener⟨al⟩ effort. Contrived so as to be both honorary and lucrative, they address themselves to different passions; touching the chords as well of emulation as of Interest. They are accordingly a very economical mean of exciting the enterprise of a Whole Community.

There are various Societies in different countries, whose object is the dispensation of Premiums for the encouragemen⟨t⟩ of Agriculture Arts 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 great Britain: Scotland in particular owes materially to it a prodigious amelioration of Condition.202 From a similar establishment in the United states, supplied and supported by the Government of the Union, vast benefits might reasonably be expected.203 Some further ideas on this head, shall accordingly be submitted, in the conclusion of this report.

VI   The Exemption of the Materials of manufactures from duty.

The policy of that Exemption as a general rule, particularly in reference to new Establishments, is obvious. It can hardly ever be adviseable to add the obstructions of fiscal burthens to the difficulties which naturally embarrass a new manufacture; and where it is matured and in condition to become an object of revenue, it is generally speaking better that the fabric, than the Material should be the subject of Taxation. Ideas of proportion between the quantum of the tax and the value of the article, can be more easily adjusted, in the former, than in the latter case. An argument for exemptions of this kind in the United States, is to be derived from the practice, as far as their necessities have permitted, of those nations whom we are to meet as competitors in our own and in foreign Markets.204

There are however exceptions to it; of which some examples will be given under the next head.

The Laws of the Union afford instances of the observance of the policy here recommended, but it will probably be found adviseable to extend it to some other Cases. Of a nature, bearing some affinity to that policy is the regulation which exempts from duty the tools and implements, as well as the books, cloths and household furniture of foreign artists, who come to reside in the United states; an advantage already secured to them by the Laws of the Union, and which, it is, in every view, proper to Continue.205

VII   Drawbacks of the duties which are imposed on the Materials of Manufactures.

It has already been observed as a general rule that duties on those materials, ought with certain exceptions to be foreborne. Of these exceptions, three cases occur, which may serve as examples—one—where the material is itself, an object of general or extensive consumption, and a fit and productive source of revenue: Another, where a manufacture of a simpler kind [the competition of which with a like domestic article is desired to be restrained,] partakes of the Nature of a raw material, from being capable, by a further process to be converted into a manufacture of a different kind, the introduction or growth of which is desired to be encouraged; a third where the Material itself is a production of the Country, and in sufficient abundance to furnish cheap and plentiful supply to the national Manufacturer.

Under the first description comes the article of Molasses. It is not only a fair object of revenue; but being a sweet, it is just that the consumers of it should pay a duty as well as the Consumer⟨s⟩ of sugar.

Cottons and linens in their White state fall under the second description. A duty upon such as are imported is proper to promote the domestic Manufacture of similar articles in the same state. A drawback of that duty is proper to encourage the printing and staining at home of those which are brought from abroad: When the first of these manufac⟨tures⟩ has attained sufficient maturity in a Country, to furnish a full supply for ⟨the⟩ second, the utility of the drawback ceases.

The article of Hemp either now does or may be expected soon to exemplify the third Case, in the United states.

Where duties on the materials of manufactures are not laid for the purpose of preventing a competition with some domestic production, the same reasons which recommend, as a general rule, the exemption of those materials from duties, would recommend as a like General rule, the allowance of draw backs, in favor of the manufacturer. Accordingly such drawbacks are familiar in countries which systematically pursue the business of manufactures; which furnishes an argument for the observance of a similar policy in the United states;206 and the Idea has been adopted by the laws of the Union in the instances of salt and Molasses.207 It is believed that it will be found advantageous to extend it to some other Articles.

VIII   The encouragement of new inventions and discoveries, at home, and of the introduction into the United States of such as may have been made in other countries; particularly those, which relate to machinery.208

This is among the most useful and unexceptionable of the aids, which can be given to manufactures. The usual means of that encouragement are pecuniary rewards, and, for a time, exclusive privileges. The first must be employed, according to the occasion, and the utility of the invention, or discovery: For the last, so far as respects “authors and inventors” provision has been made by Law.209 But it is desireable in regard to improvements and secrets of extraordinary value, to be able to extend the same benefit to Introducers, as well as Authors and Inventors; a policy which has been practiced with advantage in other countries. Here, however, as in some other cases, there is cause to regret, that the competency of the authority of the National Government to the good, which might be done, is not without a question. Many aids might be given to industry; many internal improvements of primary magnitude might be promoted, by an authority operating throughout the Union, which cannot be effected, as well, if at all, by an authority confined within the limits of a single state.

But if the legislature of the Union cannot do all the good, that might be wished, it is at least desirable, that all may be done, which is practicable. Means for promoting the introduction of foreign improvements, though less efficaciously than might be accomplished with more adequate authority, will form a part of the plan intended to be submitted in the close of this report.

It is customary with manufacturing nations to prohibit, under severe penalties, the exportation of implements and machines, which they have either invented or improved. There are already objects for a similar regulation in the United States;210 and others may be expected to occur from time to time. The adoption of it seems to be dictated by the principle of reciprocity. Greater liberality, in such respects, might better comport with the general spirit of the country; but a selfish and exclusive policy in other quarters will not always permit the free indulgence of a spirit, which would place us upon an unequal footing. As far as prohibitions tend to prevent foreign competitors from deriving the benefit of the improvements made at home, they tend to increase the advantages of those by whom they may have been introduced; and operate as an encouragement to exertion.

IX   Judicious regulations for the inspection of manufactured commodities.

This is not among the least important of the means, by which the prosperity of manufactures may be promoted. It is indeed in many cases one of the most essential. Contributing to prevent frauds upon consumers at home and exporters to foreign countries—to improve the quality & preserve the character of the national manufactures, it cannot fail to aid the expeditious and advantageous Sale of them, and to serve as a guard against successful competition from other quarters.211 The reputation of the flour and lumber of some states, and of the Pot ash of others has been established by an attention to this point. And the like good name might be procured for those articles, wheresoever produced, by a judicious and uniform system of Inspection; throughout the ports of the United States.212 A like system might also be extended with advantage to other commodities.

X   The facilitating of pecuniary remittances from place to place is a point of considerable moment to trade in general, and to manufactures in particular; by rendering more easy the purchase of raw materials and provisions and the payment for manufactured supplies. A general circulation of Bank paper, which is to be expected from the institution lately established213 will be a most valuable mean to this end. But much good would also accrue from some additional provisions respecting inland bills of exchange. If those drawn in one state payable in another were made negotiable, everywhere, and interest and damages allowed in case of protest, it would greatly promote negotiations between the Citizens of different states, by rendering them more secure; and, with it the convenience and advantage of the Merchants and manufacturers of each.

XI   The facilitating of the transportation of commodities.

Improvements favoring this object intimately concern all the domestic interests of a community; but they may without impropriety be mentioned as having an important relation to manufactures. There is perhaps scarcely any thing, which has been better calculated to assist the manufactures of Great Britain, than the ameliorations of the public roads of that Kingdom, and the great progress which has been of late made in opening canals.214 Of the former, the United States stand much in need; and for the latter they present uncommon facilities.

The symptoms of attention to the improvement of inland Navigation, which have lately appeared in some quarters, must fill with pleasure every breast warmed with a true Zeal for the prosperity of the Country. These examples, it is to be hoped, will stimulate 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 administrations; and it were to be wished, that there was no doubt of the power of the national Government to lend its direct aid, on a comprehensive plan. This is one of those improvements, which could be prosecuted with more efficacy by the whole, than by any part or parts of the Union. There are cases in which the general interest will be in danger to be sacrificed to the collission of some supposed 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 pertinent to deserve a literal quotation. “Good roads, canals, and navigable rivers, by diminishing the expence of carriage, put the remote parts of a country more nearly upon a level with those in the neighborhood 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 neighborhood. 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 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 countries in the neighborhood 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 they would thereby reduce their rents and ruin their cultivation. Their rents however have risen and their cultivation has been improved, since that time.”215

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

The foregoing are the principal of the means, by which the growth of manufactures is ordinarily promoted. It is, however, not merely necessary, that the measures of government, which have a direct view to manufactures, should be calculated to assist and protect them, but that those which only collaterally affect them, in the general course of the administration, should be gaurded from any peculiar tendency to injure them.

There are certain species of taxes, which are apt to be oppressive to different parts of the community, and among other ill effects have a very unfriendly aspect towards manufactures. All Poll or Capitation taxes are of this nature. They either proceed, according to a fixed rate, which operates unequally, and injuriously to the industrious poor; or they vest a discretion in certain officers, to make estimates and assessments which are necessarily vague, conjectural and liable to abuse. They ought therefore to be abstained from, in all but cases of distressing emergency.

All such taxes (including all taxes on occupations) which proceed according to the amount of capital supposed to be employed in a business, or of profits supposed to be made in it are unavoidably hurtful to industry. It is in vain, that the evil may be endeavoured to be mitigated by leaving it, in the first instance, in the option of the party to be taxed, to declare the amount of his capital or profits.

Men engaged in any trade of business have commonly weighty reasons to avoid disclosures, which would expose, with any thing like accuracy, the real state of their affairs. They most frequently find it better to risk oppression, than to avail themselves of so inconvenient a refuge. And the consequence is, that they often suffer oppression.

When the disclosure too, if made, is not definitive, but controulable by the discretion, or in other words, by the passions & prejudices of the revenue officers, it is not only an ineffectual protection, but the possibility of its being so is an additional reason for not resorting to it.

Allowing to the public officers the most equitable dispositions; yet where they are to exercise a discretion, without certain data, they cannot fail to be often misled by appearances. The quantity of business, which seems to be going on, is, in a vast number of cases, a very deceitful criterion of the profits which are made; yet it is perhaps the best they can have, and it is the one, on which they will most naturally rely. A business therefore which may rather require aid, from the government, than be in a capacity to be contributory to it, may find itself crushed by the mistaken conjectures of the Assessors of taxes.

Arbitrary taxes, under which denomination are comprised all those, that leave the quantum of the tax to be raised on each person, to the discretion of certain officers, are as contrary to the genius of liberty as to the maxims of industry. In this light, they have been viewed by the most judicious observers on government;216 who have bestowed upon them the severest epithets of reprobation; as constituting one of the worst features usually to be met with in the practice of despotic governments.

It is certain at least, that such taxes are particularly inimical to the success of manufacturing industry, and ought carefully to be avoided by a government, which desires to promote it

The great copiousness of the subject of this Report has insensibly led to a more lengthy preliminary discussion, than was originally contemplated, or intended. It appeared proper to investigate principles, to consider objections, and to endeavour to establish the utility of the thing proposed to be encouraged; previous to a specification of the objects which might occur, as meriting or requiring encouragement, and of the measures, which might be proper, in respect to each. The first purpose having been fulfilled, it remains to pursue the second. In the selection of objects, five circumstances seem intitled to particular attention; the capacity of the Country to furnish the raw material—the degree in which the nature of the manufacture admits of a substitute for manual labour in machinery—the facility of execution—the extensiveness of the uses, to which the article can be applied—its subserviency to other interests, particularly the great one of national defence.217 There are however objects, to which these circumstances are little applicable, which for some special reasons, may have a claim to encouragement.

A designation of the principal raw material of which each manufacture is composed will serve to introduce the remarks upon it. As, in the first place—

Iron

The manufactures of this article are entitled to preeminent rank. None are more essential in their kinds, nor so extensive in their uses. They constitute in whole or in part the implements or the materials or both of almost every useful occupation. Their instrumentality is everywhere conspicuous.

It is fortunate for the United States that they have peculiar advantages for deriving the full benefit of this most valuable material, and they have every motive to improve it, with systematic care. It is to be found in various parts of the United States, in great abundance and of almost every quality; and fuel the chief instrument in manufacturing it, is both cheap and plenty. This particularly applies to Charcoal; but there are productive coal mines already in operation, and strong indications, that the material is to be found in abundance, in a variety of other places.

The inquiries to which the subject of this report has led have been answered with proofs that manufactories of Iron, though generally understood to be extensive, are far more so than is commonly supposed.218 The kinds, in which the greatest progress has been made, have been mentioned in another place, and need not be repeated; but there is little doubt that every other kind, with due cultivation, will rapidly succeed. It is worthy of remark that several of the particular trades, of which it is the basis, are capable of being carried on without the aid of large capitals.

Iron works have very greatly increased in the United States and are prosecuted, with much more advantage than formerly. The average price before the revolution was about Sixty four Dollars per. Ton—at present it is about Eighty; a rise which is chiefly to be attributed to the increase of manufactures of the material.219

The still further extension and multiplication of such manufactures will have the double effect of promoting the extraction of the Metal itself, and of converting it to a greater number of profitable purposes.

Those manufactures too unite in a greater degree, than almost any others, the several requisities, which have been mentioned, as proper to be consulted in the selection of objects.

The only further encouragement of manufactories of this article, the propriety of which may be considered as unquestionable, seems to be an increase of the duties on foreign rival commodities.

Steel is a branch, which has already made a considerable progress, and it is ascertained that some new enterprizes, on a more extensive scale, have been lately set on foot. The facility of carrying it to an extent, which will supply all internal demands, and furnish a considerable surplus for exportation cannot be doubted.220 The duty221 upon the importation of this article, which is at present seventy five cents per Cwt., may it is conceived be safely and advantageously extended to 100 Cents. It is desireable, by decisive arrangements, to second the efforts, which are making in so very valuable a branch.

The United States already in a great measure supply themselves with Nails & Spikes. They are able, and ought certainly, to do it intirely. The first and most laborious operation, in this manufacture is performed by water mills; and of the persons afterwards employed a great proportion are boys, whose early habits of industry are of importance to the community, to the present support of their families, and to their own future comfort. It is not less curious than true, that in certain parts of the country, the making of Nails is an occasional family manufacture.222

The expendiency of an additional duty on these articles is indicated by an important fact. About one million 800,000 pounds of them were imported into the United States in the course of a year ending the 30th. of September 1790. A duty of two Cents per lb223 would, it is presumeable, speedily put an end to so considerable an importation. And it is in every view proper that an end should be put to it.

The manufacture of these articles, like that of some others, suffers from the carelessness and dishonesty of a part of those who carry it on. An inspection in certain cases might tend to correct the evil.224 It will deserve consideration whether a regulation of this sort cannot be applied, without inconvenience, to the exportation of the articles either to foreign countries, or from one state to another.

The implements of husbandry are made in several States in great abundance. In many places it is done by the common blacksmiths. And there is no doubt that an ample supply for the whole country can with great ease be procured among ourselves.

Various kinds of edged tools for the use of Mechanics are also made; and a considerable quantity of hollow wares; though the business of castings has not yet attained the perfection which might be wished. It is however improving, and as there are respectable capitals in good hands, embarked in the prosecution of those branches of iron manufactories, which are yet in their infancy, they may all be contemplated as objects not difficult to be acquired.

To ensure the end, it seems equally safe and prudent to extend the duty ad valorem upon all manufactures of Iron, or of which iron is the article of chief value, to ten per Cent.

Fire arms and other military weapons may it is conceived, be placed without inconvenience in the class of articles rated at 15 per. Cent. There are already manufactories of these articles, which only require the stimulus of a certain demand to render them adequate to the supply of the United States.

It would also be a material aid to manufactories of this nature, as well as a mean of public security, if provision should be made for an annual purchase of military weapons, of home manufacture to a certain determinate extent, in order to the formation of Arsenals;225 and to replace from time to time such as should be withdrawn for use, so as always to have in store the quantity of each kind, which should be deemed a competent supply.

But it may hereafter deserve legislative consideration, whether manufactories of all the necessary weapons of war ought not to be established, on account of the Government itself. Such establishments are agreeable to the usual practice of Nations and that practice seems founded on sufficient reason.

There appears to be an improvidence, in leaving these essential instruments of national defence to the casual speculations of individual adventure; a resource which can less be relied upon, in this case than in most others; the articles in question not being objects of ordinary and indispensable private consumption or use. As a general rule, manufactories on the immediate account of Government are to be avoided; but this seems to be one of the few exceptions, which that rule admits, depending on very special reasons.

Manufactures of Steel, generally, or of which steel is the article of chief value, may with advantage be placed in the class of goods rated at 7½ per Cent. As manufactures of this kind have not yet made any considerable progress, it is a reason for not rating them as high as those of iron; but as this material is the basis of them, and as their extension is not less practicable, than important, it is desireable to promote it by a somewhat higher duty than the present.

A question arises, how far it might be expedient to permit the importation of iron in pigs and bars free from duty. It would certainly be favourable to manufactures of the article; but the doubt is whether it might not interfere with its production.

Two circumstances, however, abate if they do not remove apprehension, on this score; one is, the considerable increase of price, which has been already remarked, and which renders it probable, that the free admission of foreign iron would not be inconsistent with an adequate profit to the proprietors of Iron Works; the other is, the augmentation of demand, which would be likely to attend the increase of manufactures of the article, in consequence of the additional encouragements proposed to be given. But caution nevertheless in a matter of this kind is most adviseable. The measure suggested ought perhaps rather to be contemplated, subject to the lights of further experience, than immediately adopted.

Copper

The manufactures of which this article is susceptible are also of great extent and utility. Under this description, those of brass, of which it is the principal ingreedient, are intended to be included.

The material is a natural production of the Country. Mines of Copper have actually been wrought, and with profit to the undertakers, though it is not known, that any are now in this condition. And nothing is easier, than the introduction of it, from other countries, on moderate terms, and in great plenty.

Coppersmiths and brass founders, particularly the former, are numerous in the United States; some of whom carry on business to a respectable extent.

To multiply and extend manufactories of the materials in question is worthy of attention and effort. In order to this, it is desireable to facilitate a plentiful supply of the materials. And a proper mean to this end is to place them in the class of free articles. Copper in plates and brass are already in this predicament, but copper in pigs and bars is not—neither is lapis calaminaris, which together with copper and charcoal, constitute the component ingredients of brass. The exemption from duty, by parity of reason, ought to embrace all such of these articles, as are objects of importation. An additional duty, on brass wares, will tend to the general end in view. These now stand at 5 per. Cent, while those of tin, pewter and copper are rated at 7½. There appears to be a propriety in every view in placing brass wares upon the same level with them; and it merits consideration whether the duty upon all of them ought not to be raised to 10 per. Cent.226

Lead

There are numerous proofs, that this material abounds in the United States, and requires little to unfold it to an extent, more than equal to every domestic occasion. A prolific mine of it has long been open in the South Western parts of Virginia, and under a public administration, during the late war, yielded a considerable supply for military use. This is now in the hands of individuals, who not only carry it on with spirit; but have established manufactories of it, at Richmond, in the same State.227

The duties, already laid upon the importation of this article, either in its unmanufactured, or manufactured state, ensure it a decisive advantage in the home market—which amounts to considerable encouragement. If the duty on pewter wares should be raised it would afford a further encouragement.228 Nothing else occurs as proper to be added.

Fossil Coal

This, as an important instrument of manufactures, may without impropriety be mentioned among the subjects of this Report.

A copious supply of it would be of great consequence to the iron branch: As an article of household fuel also it is an interesting production; the utility of which must increase in proportion to the decrease of wood, by the progress of settlement and cultivation. And its importance to navigation, as an immense article of transportation coastwise, is signally exemplified in Great Britain.229

It is known, that there are several coal mines in Virginia, now worked; and appearances of their existence are familiar in a number of places.

The expediency of a bounty on all the species of coal of home production, and of premiums, on the opening of new mines, under certain qualifications, appears to be worthy of particular examination. The great importance of the article will amply justify a reasonable expence in this way, if it shall appear to be necessary to and shall be thought it likely to answer the end.230

Wood

Several manufactures of this article flourish in the United States. Ships are no where built in greater perfection, and cabinet wares, generally, are made little if at all inferior to those of Europe. Their extent is such as to have admitted of considerable exportation.

An exemption from duty of the several kinds of wood ordinarily used in these manufactures seems to be all, that is requisite, by way of encouragement. It is recommended by the consideration of a similar policy being pursued in other countries, and by the expediency of giving equal advantages to our own workmen in wood. The abundance of Timber proper for ship building in the United States does not appear to be any objection to it. The increasing scarcity and the growing importance of that article, in the European countries, admonish the United States to commence, and systematically to pursue, measures for the preservation of their stock. Whatever may promote the regular establishment of Magazines of Ship Timber is in various views desireable.

Skins

There are scarcely any manufactories of greater importance, than of this article. Their direct and very happy influence upon Agriculture, by promoting the raising of Cattle of different kinds, is a very material recommendation.

It is pleasing too, to observe the extensive progress they have made in their principal branches; which are so far matured as almost to defy foreign competition. Tanneries in particular are not only carried on as a regular business, in numerous instances and in various parts of the Country; but they constitute in some places a valuable item of incidental family manufactures.

Representations however have been made, importing the expediency of further encouragement to the Leather-Branch in two ways—one by increasing the duty on the manufactures of it, which are imported—the other by prohibiting the exportation of bark. In support of the latter it is alleged that the price of bark, chiefly in consequence of large exportations, has risen within a few years from [about three Dollars to four dollars and a half per cord.]231

These suggestions are submitted rather as intimations, which merit consideration, than as matters, the propriety of which is manifest. It is not clear, that an increase of duty is necessary: and in regard to the prohibition desired, there is no evidence of any considerable exportation hitherto; and it is most probable, that whatever augmentation of price may have taken place, is to be attributed to an extension of the home demand from the increase of manufactures, and to a decrease of the supply in consequence of the progress of Settlement; rather than to the quantities which have been exported.

It is mentioned however, as an additional reason for the prohibition, that one species of the bark usually exported is in some sort peculiar to the country, and the material of a very valuable dye, of great use in some other manufactures, in which the United States have begun a competition.

There may also be this argument in favor of an increase of duty. The object is of importance enough to claim decisive encouragement and the progress, which has been made, leaves no room to apprehend any inconvenience on the score of supply from such an increase.

It would be of benefit to this branch, if glue which is now rated at 5 perCent, were made the object of an excluding duty. It is already made in large quantities at various tanneries; and like paper, is an entire œconomy of materials, which if not manufactured would be left to perish. It may be placed with advantage in the class of articles paying 15 perCent.

Grain

Manufactures of the several species of this article have a title to peculiar favor; not only because they are most of them immediately connected with the subsistence of the citizens; but because they enlarge the demand for the most precious products of the soil.

Though flour may with propriety be noticed as a manufacture of Grain, it were useless to do it, but for the purpose of submitting the expediency of a general system of inspection, throughout the ports of the United states; which, if established upon proper principles, would be likely to improve the quality of our flour every where, and to raise its reputation in foreign markets. There are however considerations which stand in the way of such an arrangement.

Ardent spirits and malt liquors are, next to flour, the two principal manufactures of Grain. The first has made a very extensive, the last a considerable progress in the United States. In respect to both, an exclusive possession of the home market ought to be secured to the domestic manufacturers; as fast as circumstances will admit. Nothing is more practicable & nothing more desireable.

The existing laws of the United States232 have done much towards attaining this valuable object; but some additions to the present duties, on foreign distilled spirits, and foreign malt liquors, and perhaps an abatement of those on home made spirits, would more effectually secure it; and there does not occur any very weighty objection to either.

An augmentation of the duties on imported spirits would favour, as well the distillation of Spirits from molasses, as that from Grain. And to secure to the nation the benefit of the manufacture, even of foreign materials, is always of great, though perhaps of secondary importance.

A strong impression prevails in the minds of those concerned in distilleries233 (including too the most candid and enlightened) that greater differences in the rates of duty on foreign and domestic spirits are necessary, completely to secure the successful manufacture of the latter; and there are facts which entitle this impression to attention.

It is known, that the price of molasses for some years past, has been successively rising in the West India Markets, owing partly to a competition, which did not formerly exist, and partly to an extension of demand in this country; and it is evident, that the late disturbances in those Islands,234 from which we draw our principal supply, must so far interfere with the production of the article, as to occasion a material enhancement of price. The destruction and devastation attendant on the insurrection in Hispaniola, in particular, must not only contribute very much to that effect, but may be expected to give it some duration. These circumstances, and the duty of three cents per Gallon on molasses, may render it difficult for the distillers of that material to maintain with adequate profit a competition, with the rum brought from the West Indies, the quality of which is so considerably superior.

The consumption of Geneva or Gin in this country is extensive. It is not long since distilleries of it have grown up among us, to any importance. They are now becoming of consequence, but being still in their infancy, they require protection.

It is represented, that the price of some of the materials is greater here, than in Holland, from which place large quantities are brought, the price of labour considerably greater, the capitals engaged in the business there much larger, than those which are employed here, the rate of profits, at which the Undertakers can afford to carry it on, much less—the prejudices, in favor of imported Gin, strong.235 These circumstances are alleged to outweigh the charges, which attend the bringing of the Article, from Europe to the United states and the present difference of duty, so as to obstruct the prosecution of the manufacture, with due advantage.

Experiment could perhaps alone decide with certainty the justness of the suggestions, which are made; but in relation to branches of manufacture so important, it would seem inexpedient to hazard an unfavourable issue, and better to err on the side of too great, than of too small a difference, in the particular in question.

It is therefore submitted, that an addition of two cents per Gallon be made to the duty on imported spirits of the first class of proof, with a proportionable increase on those of higher proof; and that a deduction of one cent per Gallon be made from the duty on spirits distilled within the United states, beginning with the first class of proof, and a proportionable deduction from the duty on those of higher proof.

It is ascertained, that by far the greatest part of the malt liquors consumed in the United States are the produce of domestic breweries. It is desireable, and, in all likelihood, attainable, that the whole consumption should be supplied by ourselves.

The malt liquors, made at home, though inferior to the best are equal to a great part of those, which have been usually imported. 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 a greater capital into this channel of employment.

To render the encouragement to domestic breweries decisive, it may be adviseable to substitute to the present rates of duty eight cents per gallon generally; and it will deserve to be considered as a gaurd against evasions, whether there ought not to be a prohibition of their importation, except in casks of considerable capacity. It is to be hoped, that such a duty would banish from the market, foreign malt liquors of inferior quality; and that the best kind only would continue to be imported till it should be supplanted, by the efforts of equal skill or care at home.

Till that period, the importation so qualified would 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 a most useful branch of domestic industry, could not reasonably be deemed a hardship.

As a further aid to the manufactures of grain, though upon a smaller scale, the articles of Starch, hair powder and wafers, may with great propriety be placed among those, which are rated at 15 perCent. No manufactures are more simple, nor more completely within the reach of a full supply, from domestic sources, and it is a policy, as common as it is obvious, to make them the objects either of prohibitory duties, or of express prohibition.

Flax and Hemp

Manufactures of these articles have so much affinity to each other, and they are so often blended, that they may with advantage be considered in conjunction. The importance of the linnin branch to agriculture—its precious effects upon household industry—the ease, with which the materials can be produced at home to any requisite extent—the great advances, which have been already made, in the coarser fabricks of them, especially in the family way, constitute claims, of peculiar force, to the patronage of government.

This patronage may be afforded in various ways; by promoting the growth of the materials; by increasing the impediments to an advantageous competition of rival foreign articles; by direct bounties or premiums upon the home manufacture.

First.   As to promoting the growth of the materials.

In respect to hemp, something has been already done by the high duty upon foreign hemp. If the facilities for domestic production were not unusually great, the policy of the duty, on the foreign raw material, would be highly questionable, as interfering with the growth of manufactures of it. But making the proper allowances for those facilities, and with an eye to the future and natural progress, of the country, the measure does not appear, upon the whole, exceptionable. A strong wish naturally suggests itself, that some method could be devised of affording a more direct encouragement to the growth both of flax and hemp; such as would be effectual, and at the same time not attended with too great inconveniences. To this end, bounties and premiums offer themselves to consideration; but no modification of them has yet occurred, which would not either hazard too much expence, or operate unequally in reference to the circumstances of different parts of the Union; and which would not be attended with very great difficulties in the execution.

Secondly—

As to encreasing the impediments to an advantageous competition of rival foreign articles.

To this purpose, an augmentation of the duties on importation is the obvious expedient; which, in regard to certain articles, appears to be recommended by sufficient reasons.

The principal of these articles is Sail cloth; one intimately connected with navigation and defence; and of which a flourishing manufactory is established at Boston and very promising ones at several other places.236

It is presumed to be both safe and adviseable to place this in the class of articles rated at 10 Per cent. A strong reason for it results from the consideration that a bounty of two pence sterling per ell is allowed, in Great Britain, upon the exportation of the sail cloth manufactured in that Kingdom.237

It would likewise appear to be good policy to raise the duty to 7½ perCent on the following articles. Drillings, Osnaburghs, Ticklenburghs, Dowlas, Canvas, Brown Rolls, Bagging, and upon all other linnens the first cost of which at the place of exportation does not exceed 35 cents per yard. A bounty of 12½ per Cent, upon an average on the exportation of such or similar linens from Great-Britain encourages the manufacture of them in that country and increases the obstacles to a successful competition in the countries to which they are sent.238

The quantities of tow and other household linnens manufactured in different parts of the United States and the expectations, which are derived from some late experiments, of being able to extend the use of labour-saving machines, in the coarser fabrics of linnen, obviate the danger of inconvenience, from an increase of the duty upon such articles, and authorize a hope of speedy and complete success to the endeavours, which may be used for procuring an internal supply.

Thirdly. As to direct bounties, or premiums upon the manufactured articles.

To afford more effectual encouragement to the manufacture, and at the same time to promote the cheapness of the article for the benefit of navigation, it will be of great use to allow a bounty of two Cents per yard on all Sail Cloth, which is made in the United States from materials of their own growth. This would also assist the Culture of those materials. An encouragement of this kind if adopted ought to be established for a moderate term of years, to invite to new undertakings and to an extension of the old. This is an article of importance enough to warrant the employment of extraordinary means in its favor.

Cotton

There is something in the texture of this material, which adapts it in a peculiar degree to the application of Machines. The signal Utility of the mill for spinning of cotton, not long since invented in England, has been noticed in another place; but there are other machines scarcely inferior in utility which, in the different manufactories of this article are employed either exclusively, or with more than ordinary effect. This very important circumstance recommends the fabricks of cotton, in a more particular manner, to a country in which a defect of hands constitutes the greatest obstacle to success.

The variety and extent of the uses to which the manufactures of this article are applicable is another powerful argument in their favor.

And the faculty of the United States to produce the raw material in abundance, & of a quality, which though alledged to be inferior to some that is produced in other quarters, is nevertheles capable of being used with advantage, in many fabrics, and is probably susceptible of being carried, by a more experienced culture, to much greater perfection—suggests an additional and a very cogent inducement to the vigorous pursuit of the cotton branch, in its several subdivisions.

How much has been already done has been stated in a preceding part of this report.

In addition to this, it may be announced, that a society is forming with a capital which is expected to be extended to at least half a million of dollars; on behalf of which measures are already in train for prosecuting on a large scale, the making and printing of cotton goods.239

These circumstances conspire to indicate the expediency of removing any obstructions, which may happen to exist, to the advantageous prosecution of the manufactories in question, and of adding such encouragements, as may appear necessary and proper.

The present duty of three cents per lb. on the foreign raw material, is undoubtedly a very serious impediment to the progress of those manufactories.240

The injurious tendency of similar duties either prior to the establishment, or in the infancy of the domestic manufacture of the article, as it regards the manufacture, and their worse than inutility, in relation to the home production of the material itself, have been anticipated particularly in discussing the subject of pecuniary bounties.

Cotton has not the same pretensions, with hemp, to form an exception to the general rule.

Not being, like hemp an universal production of the Country it affords less assurance of an adequate internal supply; but the chief objection arises from the doubts; which are entertained concerning the quality of the national cotton. It is alledged, that the fibre of it is considerably shorter and weaker, than that of some other places; and it has been observed as a general rule, that the nearer the place of growth to the Equator, the better the quality of the cotton. That which comes from Cayenne,241 Surrinam and Demarara is said to be preferable, even at a material difference of price, to the Cotton of the Islands.242

While a hope may reasonably be indulged, that with due care and attention the national cotton may be made to approach nearer than it now does to that of regions, somewhat more favored by climate; and while facts authorize an opinion, that very great use may be made of it, and that it is a resource which gives greater security to the cotton fabrics of this country, than can be enjoyed by any which depends wholly on external supply it will certainly be wise, in every view, to let our infant manufactures have the full benefit of the best materials on the cheapest terms.

It is obvious that the necessity of having such materials is proportioned to the unskilfulness and inexperience of the workmen employed, who if inexpert, will not fail to commit great waste, where the materials they are to work with are of an indifferent kind.243

To secure to the national manufactures so essential an advantage, a repeal of the present duty on imported cotton is indispensible.

A substitute for this, far more encouraging to domestic production, will be to grant a bounty on the national cotton, when wrought at a home manufactory;244 to which a bounty on the exportation of it may be added. Either or both would do much more towards promoting the growth of the article, than the merely nominal encouragement, which it is proposed to abolish. The first would also have a direct influence in encouraging the manufacture.

The bounty which has been mentioned as existing in Great Britain, upon the exportation of coarse linnens not exceeding a certain value, applies also to certain discriptions of cotton goods of similar value.

This furnishes an additional argument for allowing to the national manufacturers the species of encouragement just suggested, and indeed for adding some other aid.

One cent per yard, not less than of a given width, on all goods of cotton, or of cotton and linnen mixed, which are manufactured in the United States; with the addition of one cent per lb weight of the material; if made of national cotton; would amount to an aid of considerable importance, both to the production and to the manufacture of that valuable article. And it is conceived, that the expence would be well justified by the magnitude of the object.

The printing and staining of cotton goods is known to be a distinct business from the fabrication of them. It is one easily accomplished and which, as it adds materially to the value of the article in its white state, and prepares it for a variety of new uses, is of importance to be promoted.

As imported cottons, equally with those which are made at home, may be the objects of this manufacture, it will merit consideration, whether the whole, or a part of the duty, on the white goods, ought not to be allowed to be drawn back in favor of those, who print or stain them. This measure would certainly operate as a powerful encouragement to the business; and though it may in a degree counteract the original fabrication of the articles it would probably more than compensate for this disadvantage, in the rapid growth of a collateral branch, which is of a nature sooner to attain to maturity. When a sufficient progress shall have been made, the drawback may be abrogated; and by that time the domestic supply of the articles to be printed or stained will have been extended.

If the duty of 7½ per. Cent on certain kinds of cotton goods were extended to all goods of cotton, or of which it is the principal material, it would probably more than counterbalance the effect of the drawback proposed, in relation to the fabrication of the article. And no material objection occurs to such an extension. The duty then considering all the circumstances which attend goods of this description could not be deemed inconveniently high; and it may be inferred from various causes that the prices of them would still continue moderate.

Manufactories of cotton goods, not long since established at Beverly, in Massachusetts, and at Providence in the state of Rhode Island and conducted with a perseverence corresponding with the patriotic motives which began them, seem to have overcome the first obstacles to success; producing corduroys, velverets, fustians, jeans, and other similar articles of a quality, which will bear a comparison with the like articles brought from Manchester. The one at Providence has the merit of being the first in introducing [into the United States] the celebrated cotton mill; which not only furnishes materials for that manufactory itself, but for the supply of private families for household manufacture.245

Other manufactories of the same material; as regular businesses, have also been begun at different places in the state of Connecticut, but all upon a smaller scale, than those above mentioned. Some essays are also making in the printing and staining of cotton goods. There are several small establishments of this kind already on foot

Wool.

In a country, the climate of which partakes of so considerable a proportion of winter, as that of a great part of the United States, the woolen branch cannot be regarded, as inferior to any, which relates to the cloathing of the inhabitants.

Household manufactures of this material are carried on, in different parts of the United States, to a very interesting extent; but there is only one branch, which, as a regular business, can be said to have acquired maturity. This is the making of hats.

Hats of wool, and of wool mixed with furr, are made in large quantities, in different States; & nothing seems wanting, but an adequate supply of materials, to render the manufacture commensurate with the demand.246

A promising essay, towards the fabrication of cloths, cassimires and other woolen goods, is likewise going on at Hartford in Connecticut.247 Specimens of the different kinds which are made, in the possession of the Secretary, evince that these fabrics have attained a very considerable degree of perfection. Their quality certainly surpasses anything, that could have been looked for, in so short a time,248 and under so great disadvantages; and conspires with the scantiness of the means, which have been at the command of the directors, to form the eulogium of that public spirit, perseverance and judgment, which have been able to accomplish so much.

To cherish and bring to maturity this precious embryo must engage the most ardent wishes—and proportionable regret, as far as the means of doing it may appear difficult or uncertain.

Measures, which should tend to promote an abundant supply of wool, of good quality, would probably afford the most efficacious aid, that present circumstances permit.

To encourage the raising and improving the breed of sheep, at home, would certainly be the most desireable expedient, for that purpose; but it may not be alone sufficient, especially as it is yet a problem, whether our wool be capable of such a degree of improvement, as to render it fit for the finer fabrics.

Premiums would probably be found the best means of promoting the domestic, and bounties the foreign supply. The first may be within the compass of the institution hereafter to be submitted—The last would require a specific legislative provision. If any bounties are granted they ought of course to be adjusted with an eye to quality, as well as quantity.

A fund for the purpose may be derived from the addition of 2½ per Cent, to the present rate of duty, on Carpets and Carpeting; an increase, to which the nature of the Articles suggests no objection, and which may at the same time furnish a motive the more to the fabrication of them at home; towards which some beginnings have been made.249

Silk.

The production of this Article is attended with great facility in most parts of the United States, Some pleasing essays are making in Connecticut, as well towards that, as towards the Manufacture of what is produced. Stockings, Handkerchiefs Ribbons & Buttons are made though as yet but in small quantities.250

A Manufactory of Lace upon a scale not very extensive has been long memorable at Ipswich in the State of Massachusetts.251

An exemption of the material from the duty, which it now pays on importation, and premiums upon the production, to be dispensed under the direction of the Institution before alluded to, seem to be the only species of encouragement adviseable at so early a stage of the thing.252

Glass

The Materials for making Glass are found every where. In the United States there is no deficiency of them. The sands and Stones called Tarso, which include flinty and chrystalline substances generally, and the Salts of various plants, particularly of the Sea Weed Kali or Kelp constitute the essential ingredients.253 An extraordinary abundance of Fuel is a particular advantage enjoyed by this Country for such manufactures. They, however, require large Capitals and involve much manual labour.

Different manufactories of Glass are now on foot in the United States.254 The present duty of 12½ per Cent on all imported articles of glass amount to a considerable encouragement to those Manufactories. If any thing in addition is judged eligible, the most proper would appear to be a direct bounty, on Window Glass and black Bottles.

The first recommends itself as an object of general convenience; the last adds to that character, the circumstance of being an important item in breweries. A Complaint is made of great deficiency in this respect.

Gun Powder

No small progress has been of late made in the manufacture of this very important article: It may indeed be considered as already established; but its high importance renders its further extension very desireable.

The encouragements, which it already enjoys, are a duty of 10 per Cent on the foreign rival article, and an exemption of Salt petre one of the principal ingredients of which it is composed, from duty. A like exemption of Sulphur, another chief ingredient, would appear to be equally proper. No quantity of this Article has yet been produced, from internal sources. The use made of it in finishing the bottoms of Ships, is an additional inducement to placing it in the class of free goods. Regulations for the careful inspection of the article would have a favourable tendency.255

Paper

Manufactories of paper are among those which are Arrived at the greatest maturity in the United States, and are most adequate to national supply. That of paper hangings is a branch, in which respectable progress has been made.

Nothing material seems wanting to the further success of this valuable branch which is already protected by a competent duty on similar imported Articles.

In the enumeration of the several kinds, made subject to that duty, Sheathing and Cartridge paper have been omitted. These, being the most simple manufactures of the sort, and necessary to military supply, as well as Ship building, recommend themselves equally with those of other descriptions, to encouragement, and appear to be as fully within the compass of domestic exertions.256

Printed books

The great number of presses disseminated throughout the Union, seem to afford an assurance, that there is no need of being indebted to foreign Countries for the printing of the Books, which are used in the United States. A duty of ten per Cent instead of five, which is now charged upon the Article, would have a tendency to aid the business internally.

It occurs, as an objection to this, that it may have an unfavourable aspect towards literature, by raising the prices of Books in universal use in private families Schools and other Seminaries of learning. But the difference it is conceived would be without effect.

As to Books which usually fill the Libraries of the wealthier classes and of professional Men, such an Augmentation of prices, as might be occasioned by an additional duty of five per Cent would be too little felt to be an impediment to the acquisition.

And with regard to books which may be specially imported for the use of particular seminaries of learning, and of public libraries, a total exemption from duty would be adviseable, which would go far towards obviating the objection just mentioned. They are now subject to a duty of 5 per Cent.

As to the books in most general family use, the constancy and universality of the demand would insure exertions to furnish them at home and the means are compleatly adequate. It may also be expected ultimately, in this as in other cases, that the extension of the domestic manufacture would conduce to the cheapness of the article.

It ought not to pass unremarked, that to encourage the printing of books is to encourage the manufacture of paper.

Refined Sugars and Chocolate.

Are among the number of extensive and prosperous domestic manufactures.

Drawbacks of the duties upon the materials, of which they are respectively made, in cases of exportation, would have a beneficial influence upon the manufacture, and would conform to a precedent, which has been already furnished, in the instance of molasses, on the exportation of distilled spirits.257

Cocoa the raw material now pays a duty of one cent per lb., while chocolate which is a prevailing and very simple manufacture, is comprised in the mass of articles rated at no more than five per Cent.

There would appear to be a propriety in encouraging the manufacture, by a somewhat higher duty, on its foreign rival, than is paid on the raw material. Two cents per lb. on imported chocolate would, it is presumed, be without inconvenience.258

The foregoing heads comprise the most important of the several kinds of manufactures, which have occurred as requiring, and, at the same time, as most proper for public encouragement; and such measures for affording it, as have appeared best calculated to answer the end, have been suggested.

The observations, which have accompanied this delineation of objects, supercede the necessity of many supplementary remarks. One or two however may not be altogether superfluous.

Bounties are in various instances proposed as one species of encouragement.

It is a familiar objection to them, that they are difficult to be managed and liable to frauds. But neither that difficulty nor this danger seems sufficiently great to countervail the advantages of which they are productive, when rightly applied. And it is presumed to have been shewn, that they are in some cases, particularly in the infancy of new enterprises indispensable.

It will however be necessary to guard, with extraordinary circumspection, the manner of dispensing them. The requisite precautions have been thought of; but to enter into the detail would swell this report, already voluminous, to a size too inconvenient.

If the principle shall not be deemed inadmissible the means of avoiding an abuse of it will not be likely to present insurmountable obstacles. There are useful guides from practice in other quarters.

It shall therefore only be remarked here, in relation to this point, that any bounty, which may be applied to the manufacture of an article, cannot with safety extend beyond those manufactories, at which the making of the article is a regular trade.

It would be impossible to annex adequate precautions to a benefit of that nature, if extended to every private family, in which the manufacture was incidentally carried on, and its being a merely incidental occupation which engages a portion of time that would otherwise be lost, it can be advantageously carried on, without so special an aid.

The possibility of a diminution of the revenue may also present itself, as an objection to the arrangements, which have been submitted.

But there is no truth, which may be more firmly relied upon, than that the interests of the revennue are promoted, by whatever promotes an increase of National industry and wealth.

In proportion to the degree of these, is the capacity of every country to contribute to the public Treasury; and where the capacity to pay is increased, or even is not decreased, the only consequence of measures, which diminish any particular resource is a change of the object. If by encouraging the manufacture of an article at home, the revenue, which has been wont to accrue from its importation, should be lessened, an indemnification can easily be found, either out of the manufacture itself, or from some other object, which may be deemed more convenient.

The measures however, which have been submitted, taken aggregately, will for a long time to come rather augment than decrease the public revenue.

There is little room to hope, that the progress of manufactures, will so equally keep pace with the progress of population, as to prevent, even, a gradual augmentation of the product of the duties on imported articles.

As, nevertheless, an abolition in some instances, and a reduction in others of duties, which have been pledged for the public debt, is proposed, it is essential, that it should be accompanied with a competent substitute. In order to this, it is requisite, that all the additional duties which shall be laid, be appropriated in the first instance, to replace all defalcations, which may proceed from any such abolition or diminution. It is evident, at first glance, that they will not only be adequate to this, but will yield a considerable surplus.

This surplus will serve.

First. To constitute a fund for paying the bounties which shall have been decreed.

Secondly. To constitute a fund for the operations of a Board, to be established, for promoting Arts, Agriculture, Manufactures and Commerce. Of this institution, different intimations have been given, in the course of this report. An outline of a plan for it shall now be submitted.259

Let a certain annual sum, be set apart, and placed under the management of Commissioners, not less than three, to consist of certain Officers of the Government and their Successors in Office.

Let these Commissioners be empowered to apply the fund confided to them—to defray the expences of the emigration of Artists, and Manufacturers in particular branches of extraordinary importance—to induce the prosecution and introduction of useful discoveries, inventions and improvements, by proportionate rewards, judiciously held out and applied—to encourage by premiums both honorable and lucrative the exertions of individuals, And of classes, in relation to the several objects, they are charged with promoting—and to afford such other aids to those objects, as may be generally designated by law.

The Commissioners to render [to the Legislature] an annual account of their transactions and disbursments; and all such sums as shall not have been applied to the purposes of their trust, at the end of every three years, to revert to the Treasury. It may also be enjoined upon them, not to draw out the money, but for the purpose of some specific disbursment.

It may moreover be of use, to authorize them to receive voluntary contributions; making it their duty to apply them to the particular objects for which they may have been made, if any shall have been designated by the donors.

There is reason to believe, that the progress of particular manufactures has been much retarded by the want of skilful workmen.260 And it often happens that the capitals employed are not equal to the purposes of bringing from abroad workmen of a superior kind. Here, in cases worthy of it, the auxiliary agency of Government would in all probability be useful. There are also valuable workmen, in every branch, who are prevented from emigrating solely by the want of means. Occasional aids to such persons properly administered might be a source of valuable acquisitions to the country.

The propriety of stimulating by rewards, the invention and introduction of useful improvements, is admitted without difficulty. But the success of attempts in this way must evidently depend much on the manner of conducting them. It is probable, that the placing of the dispensation of those rewards under some proper discretionary direction, where they may be accompanied by collateral expedients, will serve to give them the surest efficacy. It seems impracticable to apportion, by general rules, specific compensations for discoveries of unknown and disproportionate utility.

The great use which may be made of a fund of this nature to procure and import foreign improvements is particularly obvious. Among these, the article of machines would form a most important item.

The operation and utility of premiums have been adverted to; together with the advantages which have resulted from their dispensation, under the direction of certain public and private societies. Of this some experience has been had in the instance of the Pennsylvania society, [for the Promotion of Manufactures and useful Arts;]261 but the funds of that association have been too contracted to produce more than a very small portion of the good to which the principles of it would have led. It may confidently be affirmed that there is scarcely any thing, which has been devised, better calculated to excite a general spirit of improvement than the institutions of this nature. They are truly invaluable.

In countries where there is great private wealth much may be effected by the voluntary contributions of patriotic individuals, but in a community situated like that of the United States, the public purse must supply the deficiency of private resource. In what can it be so useful as in prompting and improving the efforts of industry?

All which is humbly submitted

[Alexander Hamilton
Secy of the Treasury]

123DS, with additions in H’s handwriting, RG 233, Original Reports of the Secretary of the Treasury, 1791–1792, National Archives.

This document is in the handwriting of four clerks. In addition, there are insertions and corrections in H’s handwriting which are printed in brackets.

124Journal of the House, I description begins Journal of the House of Representatives of the United States (Washington, 1826), I. description ends , 468. The communicating letter, which is dated December 5, 1791, may be found in RG 233, Original Reports of the Secretary of the Treasury, 1791–1792, National Archives.

125On January 15, 1790, the House “Ordered, That it be referred to the Secretary of the Treasury to prepare and report to this House, a proper plan or plans, conformably to the recommendation of the President of the United States, in his speech to both Houses of Congress, for the encouragement and promotion of such manufactories as will tend to render the United States independent of other nations for essential, particularly for military supplies” (Journal of the House, I description begins Journal of the House of Representatives of the United States (Washington, 1826), I. description ends , 141–42).

126The American Museum, to which H was a charter subscriber, contains many statements of the pre-Revolutionary idea that the establishment of American manufactures would be difficult, if not impossible. One writer commented: “Previous to the late revolution, it was a favourite sentiment among Englishmen, and an opinion imbibed by too many Americans, that it was contrary to the interest of this country to carry on manufactures” (The American Museum, II [September, 1787], 257–58).

On the other hand, post-Revolutionary writers in the same periodical maintained that the establishment of American manufactures was both practicable and necessary. By 1791 innumerable examples of the growing interest of Americans in manufactures might be given. Among the examples with which H was certainly familiar are William Barton’s “Remarks on the state of American manufactures and commerce” (The American Museum, VII [June, 1790], 285–92), a copy of which is in the Hamilton Papers, Library of Congress; Tench Coxe’s Brief Examination, which appeared in The American Museum in serial form during the spring and summer of 1791 while Coxe was Assistant to the Secretary of the Treasury; and William Bingham’s A Letter from an American, which was published in 1784 together with Mentor’s Reply to Phocion’s ‘Letter (A Letter from an American, Now resident in London, to a Member of Parliament, On the Subject of the Restraining Proclamation: and Containing Strictures on Lord Sheffield’s Pamphlet, on the Commerce of the American States. Said to be written by William Bingham, Esquire: late Agent for the Congress of the United States of America, at Martinico. To which are Added, Mentor’s Reply to Phocion’s Letter; with some Observations on Trade, addressed to the Citizens of New York) (Philadelphia: Printed and Sold by Robert Bell, in Third-Street, 1784). See also “Tench Coxe’s Draft of the Report on the Subject of Manufactures.”

127The views expressed in this paragraph—like similar statements later in the Report in which H outlines a Physiocratic approach to the subject under discussion—had been expounded by Physiocratic economists not only on the Continent but in England. H’s notes, drafts, or finished writings do not indicate, however, that he had read the works of any of the leading Physiocratic thinkers. There is little doubt that H made use of Adam Smith’s discussion of Physiocratic views. Some excerpts from The Wealth of Nations which parallel this paragraph are:

“When the capital of any country is not sufficient for all those three purposes [agriculture, manufactures, and trade], in proportion as a greater share of it is employed in agriculture, the greater will be the quantity of productive labour which it puts into motion within the country; as will likewise be the value which its employment adds to the annual produce of the land and labour of the society.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 364.)

“In North America … the purchase and improvement of uncultivated land, is … the most profitable employment of the smallest as well as of the greatest capitals.…” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 414–15.)

“Compare the slow progress of those European countries of which the wealth depends very much upon their commerce and manufactures, with the rapid advances of our North American colonies, of which the wealth is founded altogether in agriculture. Through the greater part of Europe, the number of inhabitants is not supposed to double in less than five hundred years. In several of our North American colonies, it is found to double in twenty or five-and-twenty years.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 413–14.)

“It has been the principle cause of the rapid progress of our American colonies towards wealth and greatness, that almost their whole capitals have hitherto been employed in agriculture.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 365.)

Necker, like Smith, on occasion summarized the views of the Physiocrats. Thus, in an effort to refute Physiocratic critics of Colbert’s policies, Necker paraphrased Physiocratic ideas as follows: “Mais, dit-on, il n’a pas permis dans tous les tems la sortie des bleds, sans mesure et sans limite. Il n’a donc pas senti que la liberté est l’ame du commerce; il n’a donc pas connu les effets invincibles de la concurrence; il n’a donc pas apperçu la puissance de l’intérêt personnel” (Necker, Œuvres description begins Jacques Necker, Œuvres de M. Necker (A Lausanne: Chez J. P. Heubach et Compagnie, 1786). description ends , III, 204).

Clavière, who defined “the force of things” as the “political law which governs all, in politics, as in physics,” wrote: “Favouring, in political œconomy, signifies for the most part, not to shackle industry with too many regulations; however favourable certain of these may be, they restrain it in some respect or other. It is never more encouraged than when left to itself” (Clavière, Considerations on America description begins Etienne Clavière, Considerations on the Relative Situation of France, and the United States of America: Shewing the Importance of the American Revolution to the Welfare of France: Giving also An Account of their Productions, and the reciprocal Advantages which may be drawn from their Commercial Connexions: And Finally, Pointing Out the Actual Situation of the United States. Translated from the French of Etienne Clavière, and J. P. Brissot De Warville (London: Printed at the Logographic Press, and Sold by Robson and Clarke, New Bond Street; T. Longman, Pater-Noster-Row; and W. Richardson, Royal-Exchange, 1788). description ends , 9, 7).

128Smith summarizes the effect of mercantilist restriction as follows: “The industry of the country, therefore, is thus turned away from a more to a less advantageous employment, and the exchangeable value of its annual produce, instead of being increased, according to the intention of the lawgiver, must necessarily be diminished by every such regulation” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 449).

The similarity between the views summarized by H in this paragraph and those stated by Smith can be seen in the following quotations from The Wealth of Nations:

“To give the monopoly of the home-market to the produce of domestic industry, in any particular art or manufacture, is in some measure to direct private people in what manner they ought to employ their capitals, and must, in almost all cases, be either a useless or a hurtful regulation.… But though the industry of the society may be thus carried with advantage into a particular channel sooner than it could have been otherwise, it will by no means follow that the sum total, either of its industry, or of its revenue, can ever be augmented by any such regulation.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 448–49.)

“The sovereign is completely discharged from a duty, in the attempting to perform which … no human wisdom or knowlege could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of the society.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 203.)

“What is the species of domestic industry which his capital can employ, and of which the produce is likely to be of the greatest value, every individual, it is evident, can, in his local situation, judge much better than any statesman or lawgiver can do for him.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 447–48.)

“Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command.… the study of his own advantage naturally, or rather necessarily leads him to prefer that employment which is most advantageous to the society.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 445.)

129The views summarized by H in this paragraph had been expressed by Smith as follows:

“… the disproportion between the great extent of the land and the small number of the people [in America], which commonly takes place in new colonies, makes it difficult for … [a proprietor] to get … labour.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 68.)

“A new colony must always for some time be more under-stocked in proportion to the extent of its territory, and more under-peopled in proportion to the extent of its stock, than the greater part of other countries.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 93.)

“In our North American colonies, where uncultivated land is still to be had upon easy terms, no manufactures for distant sale have ever yet been established in any of their towns. When an artificer has acquired a little more stock than is necessary for carrying on his own business in supplying the neighbouring country, he does not, in North America, attempt to establish with it a manufacture for more distant sale, but employs it in the purchase and improvement of uncultivated land. From artificer he becomes planter, and neither the large wages nor the easy subsistence which that country affords to artificers, can bribe him rather to work for other people than for himself.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 378.)

Clavière, among others, had expressed ideas similar to those summarized by H in this paragraph. Clavière wrote:

“… if they [the Americans] had raw materials in plenty, they ought to be advised not to establish manufactures; or, to speak more justly, manufactures could not be established; the nature of things ordains it so.” (Clavière, Considerations on America description begins Etienne Clavière, Considerations on the Relative Situation of France, and the United States of America: Shewing the Importance of the American Revolution to the Welfare of France: Giving also An Account of their Productions, and the reciprocal Advantages which may be drawn from their Commercial Connexions: And Finally, Pointing Out the Actual Situation of the United States. Translated from the French of Etienne Clavière, and J. P. Brissot De Warville (London: Printed at the Logographic Press, and Sold by Robson and Clarke, New Bond Street; T. Longman, Pater-Noster-Row; and W. Richardson, Royal-Exchange, 1788). description ends , 50.)

“As population must for many ages be disproportioned to the extent of the United States, land will be cheap there during the same length of time, and consequently the inhabitants will for a long time be cultivators.

“Those whom ambition, thirst of gain, or ignorance should incline to establish manufactures, will, from that moment be disbanded from it, by the dearness of workmanship. This dearness is already very considerable, and may become still more so, as the cause which occasions it must naturally become more extended.” (Clavière, Considerations on America description begins Etienne Clavière, Considerations on the Relative Situation of France, and the United States of America: Shewing the Importance of the American Revolution to the Welfare of France: Giving also An Account of their Productions, and the reciprocal Advantages which may be drawn from their Commercial Connexions: And Finally, Pointing Out the Actual Situation of the United States. Translated from the French of Etienne Clavière, and J. P. Brissot De Warville (London: Printed at the Logographic Press, and Sold by Robson and Clarke, New Bond Street; T. Longman, Pater-Noster-Row; and W. Richardson, Royal-Exchange, 1788). description ends , 53–54.)

“These manufactures ought, according to natural order, to be the productions of an excess of population only, which cannot give its industry to agriculture or simple manufactures; but in general they are the result of the gathering together of the poor and wretched, in great cities.” (Clavière, Considerations on America description begins Etienne Clavière, Considerations on the Relative Situation of France, and the United States of America: Shewing the Importance of the American Revolution to the Welfare of France: Giving also An Account of their Productions, and the reciprocal Advantages which may be drawn from their Commercial Connexions: And Finally, Pointing Out the Actual Situation of the United States. Translated from the French of Etienne Clavière, and J. P. Brissot De Warville (London: Printed at the Logographic Press, and Sold by Robson and Clarke, New Bond Street; T. Longman, Pater-Noster-Row; and W. Richardson, Royal-Exchange, 1788). description ends , 5–6.)

The argument that the scarcity of labor precluded manufactures was mentioned by most Americans who discussed the encouragement of manufactures. See The American Museum, I [January, 1787], 17; II [September, 1787], 258; II [October, 1787], 331; VI [July, 1789], 72, 74. Arguments similar to those advanced in The American Museum had also been used during the first session of Congress. See, for example, the remarks of Thomas Scott of Pennsylvania on April 16, 1789 (Annals of Congress, I description begins The Debates and Proceedings in the Congress of the United States; with an Appendix, Containing Important State Papers and Public Documents, and All the Laws of a Public Nature (Washington, 1834–1849). description ends , 160–61).

130In this paragraph, as in the preceding paragraphs which H set off as a quotation, H was apparently relying upon similar statements made by Smith. Thus, Smith wrote:

“It is thus that through the greater part of Europe the commerce and manufactures of cities, instead of being the effect, have been the cause and occasion of the improvement and cultivation of the country.

“This order, however, being contrary to the natural course of things, is necessarily both slow and uncertain.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 413.)

“Though, by this oppressive policy, a landed nation should be able to raise up artificers, manufacturers and merchants of its own, somewhat sooner than it could do by the freedom of trade; a matter, however, which is not a little doubtful; yet it would raise them up, if one may say so, prematurely, and before it was perfectly ripe for them.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 187.)

“Were the Americans, either by combination or by any other sort of violence, to stop the importation of European manufactures, and, by thus giving a monopoly to such of their own countrymen as could manufacture the like goods, divert any considerable part of their capital into this employment, they would retard instead of accelerating the further increase in the value of their annual produce, and would obstruct instead of promoting the progress of their country towards real wealth and greatness.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 365–66.)

“By restraining, either by high duties, or by absolute prohibitions, the importation of such goods from foreign countries as can be produced at home, the monopoly of the home-market is more or less secured to the domestic industry employed in producing them.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 444.)

“In the restraints upon the importation … the interest of the home-consumer is evidently sacrificed to that of the producer. It is altogether for the benefit of the latter, that the former is obliged to pay that enhancement of price which this monopoly almost always occasions.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 173.)

“If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 448.)

A number of American observers held opinions similar to those summarized by H in this paragraph. For example, see The American Museum, I (January, 1787), 16–17; II (September, 1787), 214–15; VI (July, 1789), 72–73.

131Although Smith indicated his respect for the economic liberalism of Physiocratic thought, his criticism of the Physiocratic theory of manufactures as paradoxical is similar to H’s statement. Smith wrote that the followers of the Physiocrats were “very numerous; and as men are fond of paradoxes, and of appearing to understand what surpasses the comprehension of ordinary people, the paradox which it maintains, concerning the unproductive nature of manufacturing labour, has not perhaps contributed a little to increase the number of its admirers” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 194).

132Smith, in a section which H is paraphrasing in this paragraph, wrote: “The rent which properly belongs to the landlord, is no more than the neat produce which remains after paying in the compleatest manner all the necessary expences which must be previously laid out in order to raise the gross, or the whole produce. It is because the labour of the cultivators, over and above paying completely all those necessary expences, affords a neat produce of this kind, that this class of people are in this system peculiarly distinguished by the honourable appellation of the productive class.… Artificers and manufacturers … are in this system represented as … unproductive. Their labour, it is said, replaces only the stock which employs them, together with its ordinary profits. That stock consists in the materials, tools, and wages, advanced on them by their employer.… The profits of manufacturing stock, therefore, are not, like the rent of land, a neat produce which remains after completely repaying the whole expence which must be laid out in order to obtain them.… The labour of artificers and manufacturers never adds any thing to the value of the whole annual amount of the rude produce of the land. It adds indeed greatly to the value of some particular parts of it. But the consumption which in the mean time it occasions of other parts, is precisely equal to the value which it adds to those parts.… Artificers, manufacturers and merchants, can augment the revenue and wealth of their society by parsimony only …” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 179–82).

133This paragraph is a paraphrase of the following sections from The Wealth of Nations: “First, this class, it is acknowledged, reproduces annually the value of its own annual consumption, and continues, at least, the existence of the stock or capital which maintains and employs it. But upon this account alone the denomination of barren or unproductive should seem to be very improperly applied to it.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 189.)

“Though we should suppose, for example, as it seems to be supposed in this system, that the value of the daily, monthly, and yearly consumption of this class was exactly equal to that of its daily, monthly, and yearly production, yet it would not from thence follow that its labour added nothing to the real revenue, to the real value of the annual produce of the land and labour of the society.… The value, therefore, of what has been consumed and produced during these six months is equal, not to ten, but to twenty pounds.… Though the value of what the artificer produces, therefore, should not at any one moment of time be supposed greater than the value he consumes, yet at every moment of time the actually existing value of goods in the market is, in consequence of what he produces, greater than it otherwise would be.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 190–91.)

134This paragraph is a paraphrase of the following section from The Wealth of Nations: “When the patrons of this system assert that the consumption of artificers, manufacturers and merchants, is equal to the value of what they produce, they probably mean no more than that their revenue, or the fund destined for their consumption, is equal to it. But if they had expressed themselves more accurately, and only asserted that the revenue of this class was equal to the value of what they produced, it might readily have occurred to the reader, that what would naturally be saved out of this revenue, must necessarily increase more or less the real wealth of the society.… farmers and country labourers can no more augment, without parsimony, the real revenue, the annual produce of the land and labour of their society, than artificers, manufacturers and merchants” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 191–92).

135This paragraph is a paraphrase of the following sections from The Wealth of Nations: “The annual produce of land and labour of any nation can be increased in its value by no other means, but by increasing either the number of its productive labourers, or the productive powers of those labourers who had before been employed.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 342.)

“The improvement in the productive powers of useful labour depend[s], first, upon the improvement in the ability of the workmen; and, secondly, upon that of the machinery with which he works. But the labour of artificers and manufacturers, as it is capable of being more subdivided, and the labour of each workman reduced to a greater simplicity of operation, than that of farmers and country labourers, so it is likewise capable of both these sorts of improvement in a much higher degree. In this respect, therefore, the class of cultivators can have no sort of advantage over that of artificers and manufacturers.

“The increase in the quantity of useful labour actually employed within any society, must depend altogether upon the increase of the capital which employs it; and the increase of that capital again must be exactly equal to the amount of the savings from the revenue, either of the particular persons who manage and direct the employment of that capital, or of some other persons who lend it to them.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 192.)

136In this connection Smith wrote: “The capital employed in agriculture, therefore, not only puts into motion a greater quantity of productive labour than any equal capital employed in manufactures, but in proportion too to the quantity of productive labour which it employs, it adds a much greater value to the annual produce of the land and labour of the country, to the real wealth and revenue of its inhabitants” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 362).

137H is referring to the following section in The Wealth of Nations: “In agriculture too nature labours along with man; and though her labour costs no expence, its produce has its value, as well as that of the most expensive workmen.… No equal quantity of productive labour employed in manufactures can ever occasion so great a reproduction. In them nature does nothing; man does all; and the reproduction must always be in proportion to the strength of the agents that occasion it” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 361–62).

138Necker wrote: “Je sais bien que presque tous les objets d’industrie sont composés d’une production du sol; mais quand le prix de ces ouvrages dérive principalement du travail, la portion de terre, consacrée à la matiere premiere, est presqu’imperceptible” (Necker, Œuvres description begins Jacques Necker, Œuvres de M. Necker (A Lausanne: Chez J. P. Heubach et Compagnie, 1786). description ends , IV, 99).

“Le prix du travail commun et grossier est composé de la valeur des diverses productions nécessaires aux ouvriers; mais le prix du talent ou d’une industrie rare ou particuliere, est encore composé d’une somme quelconque qu’on ne dépense pas, mais qu’on thésaurise.…

“Rendons cette vérité sensible. Un habile peintre fait dans le cours d’une année un nombre quelconque de tableaux qui sont vendus aux étrangers, et qui introduisent en France dix mille écus; ce peintre cependant n’en a voulu dépenser que cinq mille; ainsi lors même que toutes les productions que lui, sa famille et ses serviteurs ont consommées, auroient pu être vendues aux étrangers, il est sûr qu’elles n’auroient rapporté dans le Royaume que la moitié du prix du travail du peintre.

“Cet exemple frappant peut s’appliquer à tous les hommes industrieux, depuis l’artiste célebre ou le chef de manufacture qui thésaurisent peut-être dix mille francs chaque année, jusqu’à l’artisan grossier qui n’épargne qu’un écu.” (Necker, Œuvres description begins Jacques Necker, Œuvres de M. Necker (A Lausanne: Chez J. P. Heubach et Compagnie, 1786). description ends , IV, 102–03.)

Similar views had been expressed by Americans. For example, see Coxe, Address description begins Tench Coxe, An Address to an Assembly of the Friends of American Manufactures, Convened for the Purpose of establishing a Society for the Encouragement of Manufactures and the useful Arts, read in the University of Pennsylvania, on Thursday the 9th of August 1787, by Tench Coxe, Esq. and Published at their Request (Philadelphia: Printed by R. Aitken & Son, at Pope’s Head in Market Street, 1787). description ends , 7; The American Museum, II (September, 1787), 256.

139In this connection Smith wrote: “The occasions for those different sorts of labour returning with the different seasons of the year, it is impossible that one man should be constantly employed in any one of them” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 7).

140Emphasizing the difference between agriculture and manufactures, Clavière stated: “The most necessary conditions for manufacturing, at a cheap rate, articles complicated, or extremely fine and perfect, or which require the union of several kinds of workmanship, are a constant and assiduous application, and a numerous population; one half of which must be at a distance from the labours of the field, and applied to manufacture alone” (Clavière, Considerations on America description begins Etienne Clavière, Considerations on the Relative Situation of France, and the United States of America: Shewing the Importance of the American Revolution to the Welfare of France: Giving also An Account of their Productions, and the reciprocal Advantages which may be drawn from their Commercial Connexions: And Finally, Pointing Out the Actual Situation of the United States. Translated from the French of Etienne Clavière, and J. P. Brissot De Warville (London: Printed at the Logographic Press, and Sold by Robson and Clarke, New Bond Street; T. Longman, Pater-Noster-Row; and W. Richardson, Royal-Exchange, 1788). description ends , 5).

There are numerous references to the uninterrupted operation of mills. For example, a writer describing the silk mills at Derby, England, stated: “In these mills are 26,586 wheels, and 97,746 movements, continually working, except on Sundays” (The American Museum, II [September, 1787], 255). See also Thomas Marshall to H, July 24–31, 1791.

141Hume had also made invidious comparisons between the industry of farmers and that inspired by commerce and manufactures. For example, he wrote: “It may seem an odd position, that the poverty of the common people in France, Italy, and Spain is, in some measure, owing to the superior riches of the soil and happiness of the climate; and yet there want not many reasons to justify this paradox. In such a fine mold or soil as that of those more southern regions, agriculture is an easy art.… All the art, which the farmer knows, is to leave his ground fallow for a year, as soon as it is exhausted; and the warmth of the sun alone and temperature of the climate enrich it, and restore its fertility” (Hume, Political Discourses description begins David Hume, Political Discourses (Edinburgh: Printed by R. Fleming, for A. Kincaid and A. Donaldson, 1752). description ends , 20).

One writer, quoted in an article in an American periodical, stated: “A nation peopled only by farmers, must be a region of indolence and misery.—If the soil is naturally fertile, little labour will produce abundance; but, for want of exercise, even that little will be burthensome, and often neglected:—want will be felt in the midst of abundance, and the human mind be abased nearly to the same degree with the beasts that graze the field. If the region is more barren, the inhabitants will be obliged to become somewhat more industrious, and therefore more happy—But miserable at best must be the happiness of such a people” (Columbian Magazine, I [September, 1786], 27).

142In this connection, Hume wrote: “In times, when industry and arts flourish, men are kept in perpetual occupation, and enjoy, as their reward, the occupation itself, as well as those pleasures, which are the fruits of their labour.… Banish those arts from society, you deprive men both of action and of pleasure; and leaving nothing but indolence in their place …” (Hume, Political Discourses description begins David Hume, Political Discourses (Edinburgh: Printed by R. Fleming, for A. Kincaid and A. Donaldson, 1752). description ends , 25–26).

143H’s point of view had been shared by many earlier writers. Expressions of this view may be found in publications with which H was familiar. For example, Postlethwayt wrote: “In the management of the more estimable manufactures, there is required not only an extraordinary dexterity, care, and ingenuity, on the part of the common workmen, to execute their respective parts to the necessary perfection …” (Postlethwayt, Universal Dictionary description begins Malachy Postlethwayt, The Universal Dictionary of Trade and Commerce, Translated from the French of the Celebrated Monsieur Savary, Inspector-General of the Manufactures for the King, at the Custom-house of Paris; With Large Additions and Improvements, Incorporated throughout the Whole Work; Which more particularly accommodate the same to the Trade and Navigation Of these Kingdoms, And the Laws, Customs, and Usages, To which all Traders are subject. Second edition (London: Printed for John Knapton, in Ludgate-Street, 2 vols., 1757). description ends , II, 134).

An article in The American Museum stated: “The labour and ingenuity bestowed upon the fabric, by the manufacturer, create, in most cases, the greater part of its value: and, therefore, the industry and genius of our mechanics and artisans may be considered as a valuable portion of the productive stock of our country” (The American Museum, VII [June, 1790], 286).

144In the following statement Smith combines both arguments criticized by H: “Over and above the capital of the farmer and all its profits, they regularly occasion the reproduction of the rent of the landlord. This rent may be considered as the produce of those powers of nature, the use of which the landlord lends to the farmer” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 362).

145In a passage from a chapter which Smith devotes to distinguishing wages of labor, profits of stock, and rent of land he states:

“When those three different sorts of revenue belong to different persons, they are readily distinguished; but when they belong to the same they are sometimes confounded with one another, at least in common language.

“A gentleman who farms a part of his own estate, after paying the expence of cultivation, should gain both the rent of the landlord and the profit of the farmer. He is apt to denominate, however, his whole gain, profit, and thus confounds rent with profit, at least in common language. The greater part of our North American and West Indian planters are in this situation. They farm, the greater part of them, their own estates, and accordingly we seldom hear of the rent of a plantation, but frequently of its profit.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 53.)

146Necker wrote: “Le benefice du propriétaire est toujours le résultat d’une comparaison faite entre le capital de la terre qu’il possede, et le revenu qu’il en tire” (Necker, Œuvres description begins Jacques Necker, Œuvres de M. Necker (A Lausanne: Chez J. P. Heubach et Compagnie, 1786). description ends , IV, 82).

148Richard Peters, in his answer to H’s request for information, wrote: “Yet with all this I find Farming but a bad Trade when Capital is calculated upon. There are few Men of any Talents who cannot employ themselves in any other Business to greater advantage” (Peters to H, August 27, 1791).

149In the two preceding paragraphs H gives specific examples for a general Physiocratic view described by Smith as follows: “By means of the industry of merchants, artificers and manufacturers, the proprietors and cultivators can purchase both the foreign goods and the manufactured produce of their own country which they have occasion for, with the produce of a much smaller quantity of their own labour, than what they would be obliged to employ, if they were to attempt, in an aukward and unskilful manner, either to import the one, or to make the other for their own use. By means of the unproductive class, the cultivators are delivered from many cares which would otherwise distract their attention from the cultivation of land. The superiority of produce, which, in consequence of this undivided attention, they are enabled to raise, is fully sufficient to pay the whole expence which the maintenance and employment of the unproductive class costs either the proprietors, or themselves. The industry of merchants, artificers, and manufacturers, though in its own nature altogether unproductive, yet contributes in this manner indirectly to increase the produce of the land. It increases the productive powers of productive labour, by leaving it at liberty to confine itself to its proper employment, the cultivation of land …” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 183).

150In a criticism of Physiocratic theory Smith wrote: “… the revenue of a trading and manufacturing country must, other things being equal, always be much greater than that of one without trade or manufactures” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 192).

151In this section H is apparently paraphrasing the following statement by Smith:

“This great increase of the quantity of work, which, in consequence of the division of labour, the same number of people are capable of performing, is owing to three different circumstances; first, to the increase of dexterity in every particular workman; secondly, to the saving of the time which is commonly lost in passing from one species of work to another; and lastly, to the invention of a great number of machines which facilitate and abridge labour, and enable one man to do the work of many.

“First, the improvement of the dexterity of the workman necessarily increases the quantity of the work he can perform; and the division of labour, by reducing every man’s business to some one simple operation, and by making this operation the sole employment of his life, necessarily increases very much the dexterity of the workman.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 8–9.)

152Compare H’s remarks with the following statement by Smith: “Secondly, the advantage which is gained by saving the time commonly lost in passing from one sort of work to another, is much greater than we should at first view be apt to imagine it. It is impossible to pass very quickly from one kind of work to another, that is carried on in a different place, and with quite different tools.… A man commonly saunters a little in turning his hand from one sort of employment to another.… The habit of sauntering and of indolent careless application, which is naturally, or rather necessarily acquired by every country workman who is obliged to change his work and his tools every half hour, and to apply his hand in twenty different ways almost every day of his life; renders him almost always slothful and lazy, and incapable of any vigorous application even on the most pressing occasions” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 9–10).

153Smith wrote: “Thirdly, and lastly, every body must be sensible how much labour is facilitated and abridged by the application of proper machinery.… Men are much more likely to discover easier and readier methods of attaining any object, when the whole attention of their minds is directed towards that single object, than when it is dissipated among a great variety of things” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 10).

Smith also wrote: “Many improvements have been made by the ingenuity of the makers of the machines, when to make them became the business of a peculiar trade …” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 11).

154Compare H’s conclusion of this section devoted to the division of labor with the following statement by Smith: “The division of labour, however, so far as it can be introduced, occasions, in every art, a proportionable increase of the productive powers of labour. The separation of different trades and employments from one another, seems to have taken palce, in consequence of this advantage.… In every improved society, the farmer is generally nothing but a farmer; the manufacturer, nothing but a manufacturer” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 7). See also note 149.

155Among the works with which H had indicated an earlier acquaintance is Sir James Steuart’s Political Economy. Steuart wrote: “As agriculture, exercised as a trade, purges the land of idle mouths, and pushes them to a new industry which the state may turn to her own advantage; so does a machine introduced into a manufacture, purge off hands which then become superfluous in that branch, and which may quickly be employed in another.… now the machine eats nothing, so does not diminish subsistence …” (Steuart, Political Economy description begins Sir James Steuart, An Inquiry into the Principles of Political Œconomy: Being an Essay on the Science of Domestic Policy in Free Nations. In Which Are Particularly Considered Population, Agriculture, Trade, Industry, Money, Coin, Interest, Circulation, Banks, Exchange, Public Credit, and Taxes. By Sir James Steuart, Bart.… In Two Volumes (London: Printed for A. Millar, and T. Candell, in the Strand, 1767). description ends , I, 122–23).

The interest shared by H and Tench Coxe in the utility of power-driven machines has been emphasized as one important point of similarity between the views of the two men. In a speech in 1787 Coxe said: “Factories, which can be carried on by watermills, windmills, fire, horses and machines ingeniously contrived, are not burdened with any heavy expence of boarding, lodging, cloathing and paying workmen, and they multiply the force of hands to a great extent without taking our people from agriculture” (Coxe, Address description begins Tench Coxe, An Address to an Assembly of the Friends of American Manufactures, Convened for the Purpose of establishing a Society for the Encouragement of Manufactures and the useful Arts, read in the University of Pennsylvania, on Thursday the 9th of August 1787, by Tench Coxe, Esq. and Published at their Request (Philadelphia: Printed by R. Aitken & Son, at Pope’s Head in Market Street, 1787). description ends , 8).

156See note 135.

157The progress made by the British cotton textile industry despite the interruption of American demand had also been noted by Coxe. In the summer of 1791 Coxe wrote: “It is to be observed further, that the eight years which followed 1774, were those in which machinery was first rendered considerably profitable in Great Britain. Before the American war, the cotton branch was very inconsiderable in that country; but though it has increased wonderfully since the peace, it must have felt a very large advancement during the term in which our regular importations from thence were cut off. Other branches were aided during those years, by the introduction of machinery, manual flight, and new processes, so as to diminish the effects of the interruption of the American demand.… Such extraordinary new inventions of mechanical aid are not to be expected again …” (Coxe, Brief Examination description begins Tench Coxe, A Brief Examination of Lord Sheffield’s Observations on the Commerce of the United States. In Seven Numbers. With Two Supplementary Notes on American Manufactures (Philadelphia: From the Press of M. Carey, 1791). description ends , 108–09).

158Advocacy of child labor and the industrial employment of women was, of course, common in the eighteenth century in Europe and America. For representative statements of Americans with which H was presumably familiar, see The American Museum, II (September, 1787), 257; V (March, 1789), 256; V (June, 1789), 584; VII (January, 1790), 25.

See also Moses Brown to John Dexter, July 22–October 15, 1791, and “Report of a Committee Appointed to Obtain Information on Manufacturing in Providence,” October 10, 1791, both printed as enclosures to John Dexter to H, October, 1791.

159In another connection Smith wrote: “… the understandings of the greater part of men are necessarily formed by their ordinary employments. The man whose whole life is spent in performing a few simple operations, of which the effects too are, perhaps, always the same, or very nearly the same, has no occasion to exert his understanding, or to exercise his invention in finding out expedients for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 298).

In “Of Luxury” Hume wrote: “In times, when industry and arts flourish, men are kept in perpetual occupation, and enjoy, as their reward, the occupation itself, as well as those pleasures, which are the fruits of their labour. The mind acquires new vigour; enlarges its powers and faculties; and by an assiduity in honest industry, both satisfies its natural appetites, and prevents the growth of unnatural ones, which commonly spring up, when nourish’d with ease and idleness” (Hume, Political Discourses description begins David Hume, Political Discourses (Edinburgh: Printed by R. Fleming, for A. Kincaid and A. Donaldson, 1752). description ends , 25–26).

Observations similar to those made by H may be found in The American Museum, V (June, 1789), 584; Columbian Magazine, III (March, 1789), 177–78; III (May, 1789), 295; III (June, 1789), 349.

160In connection with the division of labor Smith wrote: “And thus the certainty of being able to exchange all that surplus part of the produce of his own labour, which is over and above his own consumption, for such parts of the produce of other men’s labour as he may have occasion for, encourages every man to apply himself to a particular occupation, and to cultivate and bring to perfection whatever talent or genius he may possess for that particular species of business.… The effects of those different geniuses and talents, for want of the power or disposition to barter and exchange, cannot be brought into a common stock, and do not in the least contribute to the better accommodation and conveniency of the species.… Among men, on the contrary, the most dissimilar geniuses are of use to one another; the different produces of their respective talents, by the general disposition to truck, barter, and exchange, being brought, as it were, into a common stock, where every man may purchase whatever part of the produce of other men’s talents he has occasion for” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 16–17).

Smith also wrote: “The difference of natural talents in different men is, in reality, much less than we are aware of; and the very different genius which appears to distinguish men of different professions, when grown up to maturity, is not upon many occasions so much the cause, as the effect of the division of labour” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 16).

161Steuart expressed a view similar to that of H when he wrote: “The proper and only right encouragement for agriculture, is a moderate and gradual increase of demand for the productions of the earth …” (Steuart, Political Economy description begins Sir James Steuart, An Inquiry into the Principles of Political Œconomy: Being an Essay on the Science of Domestic Policy in Free Nations. In Which Are Particularly Considered Population, Agriculture, Trade, Industry, Money, Coin, Interest, Circulation, Banks, Exchange, Public Credit, and Taxes. By Sir James Steuart, Bart.… In Two Volumes (London: Printed for A. Millar, and T. Candell, in the Strand, 1767). description ends , I, 54).

According to Smith, the first way in which towns contributed to the improvement and cultivation of land was “by affording a great and ready market for the rude produce of the country, they gave encouragement to its cultivation and further improvement” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 405).

Hume discussed the effect of a limited market on agriculture in the following manner: “Where manufactures and mechanic arts are not cultivated, the bulk of the people must apply themselves to agriculture; and if their skill and industry increase, there must arise a great superfluity from their labour beyond what suffices to maintain them. They have no temptation, therefore, to increase their skill and industry; since they cannot exchange that superfluity for any commodities, which may serve either to their pleasure or vanity. A habit of indolence naturally prevails. The greater part of the land lyes uncultivated. What is cultivated, yields not its utmost, for want of skill or assiduity in the farmers” (Hume, Political Discourses description begins David Hume, Political Discourses (Edinburgh: Printed by R. Fleming, for A. Kincaid and A. Donaldson, 1752). description ends , 11). See also Hume, Political Discourses description begins David Hume, Political Discourses (Edinburgh: Printed by R. Fleming, for A. Kincaid and A. Donaldson, 1752). description ends , 12, 209.

Necker gave preference to the home market for reasons similar to those expressed by H when he wrote:

“J’oppose à ce raisonnement, que l’échange des bleds contre l’industrie nationale, est beaucoup plus sûr et plus encourageant pour les propriétaires, que l’échange de ces mêmes denreés contre les productions des autres pays.…

“Cet échange des subsistances dans l’intérieur d’un État, est aussi beaucoup plus sûr; car la nourriture des hommes étant fixée par la nature, le besoin des bleds est nécessairement limité; ainsi, les propriétaires François ne pourroient convertir leurs grains superflus dans d’autres richesses, par la voie de l’exportation, qu’autant qu’il y auroit disette dans les pays étrangers, et dès-lors ce commerce seroit incertain; au lieu que l’échange de ces denrées est constamment assuré, lorsque le même Royaume qui les a produites, abonde en ouvriers, en fabriquans et en artistes de toute espece.” (Necker, Œuvres description begins Jacques Necker, Œuvres de M. Necker (A Lausanne: Chez J. P. Heubach et Compagnie, 1786). description ends , IV, 31–32.)

Examples of statements by Americans of a preference for a domestic market as a market less subject to the fluctuations introduced by foreign wars, foreign commercial policies, and irregular foreign harvests may be found in The American Museum, II (October, 1787), 361; Columbian Magazine, I (September, 1786), 27; VI (May, 1791), 295; [Philadelphia] Gazette of the United States, September 7, 1791; Barton, The True Interest description begins [William Barton], The True Interest of the United States, and particularly of Pennsylvania, considered; with respect to the advantages resulting from a State Paper-Money: with Some Observations on the subject of a Bank and on Agriculture, Manufactures and Commerce. By an American (Philadelphia: Printed by Charles Cist, at the Corner of Fourth and Archstreets, 1786). description ends , 26. See also H to Benjamin Goodhue, June 30, 1791.

162“… nations, whose politicians now grudgingly perceive them take from us the food they are unable to raise, and who treat as a favour the reception of our precious raw materials, may discover, when it is too late, the evils induced by an over-driven spirit of monopoly.” (Coxe, Brief Examination description begins Tench Coxe, A Brief Examination of Lord Sheffield’s Observations on the Commerce of the United States. In Seven Numbers. With Two Supplementary Notes on American Manufactures (Philadelphia: From the Press of M. Carey, 1791). description ends , 85.)

“For each, led on by a blind ambition, has wished to embrace every thing, to do every thing at home, and furnish every thing to others; each has taken for principle to receive nothing from others, except it be gold; each has accustomed itself to look upon every production, manufactured or unmanufactured, which it sent abroad as a profit, and all those which it received, as so many losses. Such is the false principle, according to which, all the European nations have directed their exterior commerce.” (Clavière, Considerations on America description begins Etienne Clavière, Considerations on the Relative Situation of France, and the United States of America: Shewing the Importance of the American Revolution to the Welfare of France: Giving also An Account of their Productions, and the reciprocal Advantages which may be drawn from their Commercial Connexions: And Finally, Pointing Out the Actual Situation of the United States. Translated from the French of Etienne Clavière, and J. P. Brissot De Warville (London: Printed at the Logographic Press, and Sold by Robson and Clarke, New Bond Street; T. Longman, Pater-Noster-Row; and W. Richardson, Royal-Exchange, 1788). description ends , 270.)

“Exportation, is that part of foreign commerce, which is distinguished by the active, or selling part, in opposition to importation, which is called the passive, or buying part. And, although mutual intercourses of trade cannot be supposed to be carried on with other nations by selling, or exporting all, and buying or importing no merchandizes from others; yet that nation is certainly the wisest, that so conducts it’s affairs, as to sell more to other nations than it buys of them.…” (Postlethwayt, Universal Dictionary description begins Malachy Postlethwayt, The Universal Dictionary of Trade and Commerce, Translated from the French of the Celebrated Monsieur Savary, Inspector-General of the Manufactures for the King, at the Custom-house of Paris; With Large Additions and Improvements, Incorporated throughout the Whole Work; Which more particularly accommodate the same to the Trade and Navigation Of these Kingdoms, And the Laws, Customs, and Usages, To which all Traders are subject. Second edition (London: Printed for John Knapton, in Ludgate-Street, 2 vols., 1757). description ends , I, 758.)

163Similar views had been expressed by Necker when he wrote:

“… la variété des établissemens d’industrie sera l’unique moyen d’exciter les possesseurs de vastes domaines à perfectionner la culture, et d’admettre la multitude au partage des fruits de la terre.” (Necker, Œuvres description begins Jacques Necker, Œuvres de M. Necker (A Lausanne: Chez J. P. Heubach et Compagnie, 1786). description ends , IV, 35.)

“C’est ici qu’on découvre le service important que rendent les métiers, les arts et les manufactures; ils augmentent la population, en arrêtant sans contrainte les excédens de subsistances que les propriétaires tiennent dans leurs mains, et dont ils ont le droit de disposer à leur gré.” (Necker, Œuvres description begins Jacques Necker, Œuvres de M. Necker (A Lausanne: Chez J. P. Heubach et Compagnie, 1786). description ends , III, 198.)

Many Americans interested in manufacturing agreed with H on this point. One writer commented: “If there be any among you, who suppose that the interests of agriculture will be injured by an attention to manufactures, they should recollect, that a constant demand for the productions of our lands, cannot be secured, without manufacturing towns to consume them …” (The American Museum, II [October, 1787], 361). See also Columbian Magazine, VII (October, 1791), 285.

164Steuart and H agreed on this point. On one occasion Steuart wrote: “… when the earth is not improved it cannot produce so much nourishment for man as when it is.… if industry does not draw into the hands of the indigent, wherewith to purchase this additional nourishment, no body will be at a considerable first expence to break up grounds in order to produce it. The withdrawing therefore a number of hands from a trifling agriculture forces, in a manner, the husbandman to work the harder; and by hard labour upon a small spot, the same effect is produced as with slight labour upon a great extent” (Steuart, Political Economy description begins Sir James Steuart, An Inquiry into the Principles of Political Œconomy: Being an Essay on the Science of Domestic Policy in Free Nations. In Which Are Particularly Considered Population, Agriculture, Trade, Industry, Money, Coin, Interest, Circulation, Banks, Exchange, Public Credit, and Taxes. By Sir James Steuart, Bart.… In Two Volumes (London: Printed for A. Millar, and T. Candell, in the Strand, 1767). description ends , I, 105). Steuart also wrote: “The natural and necessary effect of industry, in trades and manufactures, is to promote the increase of relative husbandry; which, by augmenting the surplus, tends of course to increase the proportion of the free hands relatively to the farmers” (Steuart, Political Economy description begins Sir James Steuart, An Inquiry into the Principles of Political Œconomy: Being an Essay on the Science of Domestic Policy in Free Nations. In Which Are Particularly Considered Population, Agriculture, Trade, Industry, Money, Coin, Interest, Circulation, Banks, Exchange, Public Credit, and Taxes. By Sir James Steuart, Bart.… In Two Volumes (London: Printed for A. Millar, and T. Candell, in the Strand, 1767). description ends , I, 132).

165Tench Coxe expressed a similar belief when he wrote: “… [Manufacturing] will consume our native productions now encreasing to super-abundance—it will improve our agriculture and teach us to explore the fossil and vegetable kingdoms, into which few researches have heretofore been made…” (Coxe, Address description begins Tench Coxe, An Address to an Assembly of the Friends of American Manufactures, Convened for the Purpose of establishing a Society for the Encouragement of Manufactures and the useful Arts, read in the University of Pennsylvania, on Thursday the 9th of August 1787, by Tench Coxe, Esq. and Published at their Request (Philadelphia: Printed by R. Aitken & Son, at Pope’s Head in Market Street, 1787). description ends , 29).

The idea expressed by H in this paragraph had also been stated in American periodicals. For example, one writer stated: “The carrying on of manufactures increases the consumption, the demand, and the value of our produce in general; but especially of a great variety of our raw materials …” (The American Museum, VII [January, 1790], 24). See also The American Museum, VII (June, 1790), 286.

166Necker stressed the importance of diversifying industry in several parts of his works. For example, he wrote:

“Il résulte de ces observations, que l’étendue et la variété de l’industrie nationale sont le premier des encouragemens qu’on puisse présenter à l’agriculture.…” (Necker, Œuvres description begins Jacques Necker, Œuvres de M. Necker (A Lausanne: Chez J. P. Heubach et Compagnie, 1786). description ends , IV, 32.)

“Ainsi les progrès de l’agriculture rameneront toujours à l’augmentation de l’industrie, et la variété de celle-ci servira d’encouragement aux travaux de la terre.” (Necker, Œuvres description begins Jacques Necker, Œuvres de M. Necker (A Lausanne: Chez J. P. Heubach et Compagnie, 1786). description ends , IV, 34.)

“… ainsi les institutions qui entretiennent à un taux modéré le prix de la main-d’œuvre, qui accroissent et diversifient l’industrie nationale, sont la meilleure et la moins dispendieuse de toutes les sauvegardes contre la concurrence étrangere.” (Necker, Œuvres description begins Jacques Necker, Œuvres de M. Necker (A Lausanne: Chez J. P. Heubach et Compagnie, 1786). description ends , IV, 89.)

Postlethwayt discussed the views of a promoter of the useful arts who made “the prosperity of a trading nation to consist in the multiplying of the number of new trades; that is to say, in the multiplying of the different species of mechanics, artificers, and manufacturers: for want of this it is, that all the old ways of gain become overstocked, as has been observed, and then people complain for want of trade, when the true cause is owing to the want of art, or to the want of the invention of a number of new trades and new arts, in proportion to the increase of people among ourselves, and in proportion as other rival states strike into the like trades and arts which we have been long used to” (Postlethwayt, Universal Dictionary description begins Malachy Postlethwayt, The Universal Dictionary of Trade and Commerce, Translated from the French of the Celebrated Monsieur Savary, Inspector-General of the Manufactures for the King, at the Custom-house of Paris; With Large Additions and Improvements, Incorporated throughout the Whole Work; Which more particularly accommodate the same to the Trade and Navigation Of these Kingdoms, And the Laws, Customs, and Usages, To which all Traders are subject. Second edition (London: Printed for John Knapton, in Ludgate-Street, 2 vols., 1757). description ends , I, 118).

167Coxe had made a particular point of the benefit which the landed interest would derive from the development of manufactures. In this connection he said: “I cannot conclude this address, gentlemen, without taking notice of the very favorable and prodigious effects upon the landed interest, which may result from manufactures” (Coxe, Address description begins Tench Coxe, An Address to an Assembly of the Friends of American Manufactures, Convened for the Purpose of establishing a Society for the Encouragement of Manufactures and the useful Arts, read in the University of Pennsylvania, on Thursday the 9th of August 1787, by Tench Coxe, Esq. and Published at their Request (Philadelphia: Printed by R. Aitken & Son, at Pope’s Head in Market Street, 1787). description ends , 25).

168See note 127.

169Impediments to the institution of free trade policies, which H discusses in this and the three preceding paragraphs, had been discused by several writers. Although Smith was critical of the corn laws, which he compared to laws of religion, he also wrote in their defense: “Were all nations to follow the liberal system of free exportation and free importation, the different states into which a great continent was divided would so far resemble the different provinces of a great empire.… But very few countries have entirely adopted this liberal system.… The very bad policy of one country may thus render it in some measure dangerous and imprudent to establish what would otherwise be the best policy in another” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 38).

The following statements by Necker should also be noted:

“Une académie distinguée avoit proposé pour question, il y a quelque tems, d’examiner quel seroit l’effet de l’abolition des loix prohibitives à l’égard de la nation que les abrogeroit la premiere.…

“Une société qui laisseroit entrer toutes les productions de l’industrie étrangere, tandis que les autres nations continueroient à interdire l’introduction des siennes, seroit peu-à-peu obligée de payer, en subsistances ou en argent, ce qu’elle demanderoit aux étrangers; bientôt ses richesses et sa population diminueroient. Ce que nous venons de dire, dans une hypothese absolue, telle que l’interdiction totale des marchandises d’un pays, jointe à la libre introduction dans ce même pays de toutes les marchandises étrangeres, s’appliqueroit proportionnellement aux hypotheses mixtes et tempérées.” (Necker, Œuvres description begins Jacques Necker, Œuvres de M. Necker (A Lausanne: Chez J. P. Heubach et Compagnie, 1786). description ends , III, 260–61.)

“Un pays ne peut acheter qu’autant qu’on reçoit ses propres richesses en paiement; ainsi refuser d’acheter de lui, c’est refuser de lui vendre, c’est détruire le commerce.” (Necker, Œuvres description begins Jacques Necker, Œuvres de M. Necker (A Lausanne: Chez J. P. Heubach et Compagnie, 1786). description ends , III, 259.)

“Doubtless if all other nations, by a general compact, would agree to abolish all prohibitions, and all import duties, France ought not to refuse to accede; for it is probable that she would be a gainer by such a convention. However, she would still have occasion to reflect upon it maturely, if either the increase of the public burthens should sensibly raise the price of labour, or if an industrious nation should spring up in the midst of a fertile country, free from those taxes which wars and the luxury of modern governments have introduced into Europe. But all those hypotheses which are founded upon a general freedom of commerce, are chimerical propositions; the powers who would lose by this freedom would never adopt it, and those who would gain by it, might in vain desire it; however, that power which should wish to introduce it, by setting the example, would imitate the folly of a private individual, who in the hope of establishing a community of effects, suffered all his neighbours to share his patrimony.” (Necker, Finances of France description begins Jacques Necker, A Treatise on the Administration of the Finances of France. In Three Volumes. By Mr. Necker. Translated from the genuine French Edition, 1784, by Thomas Mortimer, Esq. (London: Printed at the Logographic Press, 1785). description ends , II, 192.)

This point of view did not disappear in France with Necker’s resignation. See, for example, Gaspard Joseph Amand Ducher, Analyse des Loix Commerciales, Avec le Tarif des Droits sur les Batiments & les Marchandises dans les Treize Etats Unis de l’Amerique (n.p., n.d.).

The difficulties in the way of inaugurating free trade policies were also appreciated by many Americans. On April 9, 1789, Madison in a speech in Congress said:

“If my general principle is a good one, that commerce ought to be free, and labor and industry left at large to find its proper object, the only thing which remains will be to discover the exceptions that do not come within the rule I have laid down.… Although the freedom of commerce would be advantageous to the world, yet, in some particulars, one nation might suffer to benefit others, and this ought to be for the general good of society.

“If America was to leave her ports perfectly free, and make no discrimination between vessels owned by her citizens and those owned by foreigners, while other nations make this discrimination, it is obvious that such policy would go to exclude American shipping altogether from foreign ports, and she would be materially affected in one of her most important interests.” (Annals of Congress, I description begins The Debates and Proceedings in the Congress of the United States; with an Appendix, Containing Important State Papers and Public Documents, and All the Laws of a Public Nature (Washington, 1834–1849). description ends , 117.)

For the viewpoint of many American merchants on this subject, see the article by Charles Pettit in The American Museum, VIII (July, 1790), 28.

170On this problem Smith wrote:

“But if foreigners, either by prohibitions or high duties, are hindered from coming to sell, they cannot always afford to come to buy; because coming without a cargo, they must lose the freight from their own country to Great Britain. By diminishing the number of sellers, therefore, we necessarily diminish that of buyers, and are thus likely not only to buy foreign goods dearer, but to sell our own cheaper, than if there was a more perfect freedom of trade.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 456.)

“Even the regulations by which each nation endeavours to secure to itself the exclusive trade of its own colonies, are frequently more hurtful to the countries in favour of which they are established than to those against which they are established. The unjust oppression of the industry of other countries falls back, if I may say so, upon the heads of the oppressors, and crushes their industry more than it does that of those other countries.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 136.)

171The importance of cultivating wasteland had been suggested by Smith, (see note 127) and also by many Americans. For example, one writer stated: “… the opposers of American manufactures may perhaps, object,—that, as we have large tracts of unsettled country, it would be more for the national benefit, that the people should be employed in cultivating the unimproved lands, than in manufacturing goods…” (Columbian Magazine, I [February, 1787], 282). See also The American Museum, II (October, 1787), 331.

172This objection to the encouragement of manufactures was, of course, stated most forcibly by Adam Smith, who wrote: “As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can.… By preferring the support of domestic to that of foreign industry he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 447).

173In A Treatise of Human Nature Hume wrote: “By degrees the repetition produces a facility, which is another very powerful principle of the human mind, and an infallible source of pleasure, where the facility goes not beyond a certain degree.… But custom not only gives a facility to perform any action, but likewise an inclination and tendency towards it, where it is not entirely disagreeable, and can never be the object of inclination” (David Hume, A Treatise of Human Nature: Being An Attempt to introduce the experimental Method of Reasoning Into Moral Subjects. Book II. Of The Passions [London: Printed for John Noon, at the White-Hart, near Mercer’s-Chapel, in Cheapside, 1739], 423–24).

In opposing free trade Necker emphasized the need for the central direction of a national economy in the following fashion: “Les hommes sont tellement gouvernés par l’habitude, qu’une nation industrieuse peut méconnoître long-tems ses forces, et faire un trafic continuel de ses grains contre les manufactures étrangeres, tandis qu’avec quelques efforts ou quelques privations momentanées, elle parviendroit à établir chez elle ces mêmes manufactures, et satisferoit ainsi le goût de ses propriétaires sans nuire à sa population” (Necker, Œuvres description begins Jacques Necker, Œuvres de M. Necker (A Lausanne: Chez J. P. Heubach et Compagnie, 1786). description ends , IV, 36).

Again, in a discussion of Colbert’s policies Necker wrote: “Nous voyons encore des nations agricoles échanger leurs bleds … contre des travaux qu’elles pourroient encourager chez elles … car l’habitude la plus déraisonnable et la plus stupide a souvent besoin d’être rompue par un administrateur éclairé …” (Necker, Œuvres description begins Jacques Necker, Œuvres de M. Necker (A Lausanne: Chez J. P. Heubach et Compagnie, 1786). description ends , III, 205).

Steuart was also concerned with the role of habit and emphasized it as a limiting condition of economic growth (Steuart, Political Economy description begins Sir James Steuart, An Inquiry into the Principles of Political Œconomy: Being an Essay on the Science of Domestic Policy in Free Nations. In Which Are Particularly Considered Population, Agriculture, Trade, Industry, Money, Coin, Interest, Circulation, Banks, Exchange, Public Credit, and Taxes. By Sir James Steuart, Bart.… In Two Volumes (London: Printed for A. Millar, and T. Candell, in the Strand, 1767). description ends , I, 117–18).

174The need for government encouragement of fledgling industries had been stressed by many Americans who were interested in domestic manufactures. For example, see [Philadelphia] National Gazette, November 24, 1791; Annals of Congress, I description begins The Debates and Proceedings in the Congress of the United States; with an Appendix, Containing Important State Papers and Public Documents, and All the Laws of a Public Nature (Washington, 1834–1849). description ends , 121. See also Moses Brown to John Dexter, July 22–October 15, 1791, printed as an enclosure to Dexter to H, October, 1791.

175In opposing this view, Smith wrote: “Whether the advantages which one country has over another, be natural or acquired, is in this respect of no consequence. As long as the one country has those advantages, and the other wants them, it will always be more advantageous for the latter, rather to buy of the former than to make. It is an acquired advantage only, which one artificer has over his neighbour, who exercises another trade; and yet they both find it more advantageous to buy of one another, than to make what does not belong to their particular trades” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 450).

Steuart considers the problem of new nations entering into foreign trade in Book II (Steuart, Political Economy description begins Sir James Steuart, An Inquiry into the Principles of Political Œconomy: Being an Essay on the Science of Domestic Policy in Free Nations. In Which Are Particularly Considered Population, Agriculture, Trade, Industry, Money, Coin, Interest, Circulation, Banks, Exchange, Public Credit, and Taxes. By Sir James Steuart, Bart.… In Two Volumes (London: Printed for A. Millar, and T. Candell, in the Strand, 1767). description ends , I, 285, 298–99, 301–05).

176Interested Americans were aware of the attempts of industrial nations to frustrate the introduction of manufacturing in the United States. See, for example, The American Museum, III (January, 1788), 179; IV (October, 1788), 343–44; [Philadelphia] National Gazette, November 21, 1791. See also John Mix, Jr., to John Chester, September 30, 1791, printed as an enclosure to Chester to H, October 11, 1791, and Moses Brown to John Dexter, July 22–October 15, 1791, printed as an enclosure to Dexter to H, October, 1791.

177During and after the American Revolution arguments similar to those mentioned by H concerning the impossibility of establishing manufactures in America were cited—in order to be refuted—by most of the publicists of American manufactures. See, for example, Barton, The True Interest 27; The American Museum, V (June, 1789), 583–84; Coxe, Address description begins Tench Coxe, An Address to an Assembly of the Friends of American Manufactures, Convened for the Purpose of establishing a Society for the Encouragement of Manufactures and the useful Arts, read in the University of Pennsylvania, on Thursday the 9th of August 1787, by Tench Coxe, Esq. and Published at their Request (Philadelphia: Printed by R. Aitken & Son, at Pope’s Head in Market Street, 1787). description ends , 8.

178Some members of Congress who had opposed government protection of manufactures had supported their position with arguments drawn from The Wealth of Nations. The same individuals had sometimes given support for the encouragement of American shipping. Smith had placed manufactures ahead of trade and navigation in a natural order of development. For example, Smith wrote:

“In seeking for employment to a capital, manufactures are, upon equal or nearly equal profits, naturally preferred to foreign commerce, for the same reason that agriculture is naturally preferred to manufactures.… If the society has not acquired sufficient capital both to cultivate all its lands, and to manufacture in the compleatest manner the whole of its rude produce, there is even a considerable advantage that that rude produce should be exported by a foreign capital, in order that the whole stock of the society may be employed in more useful purposes.…

“According to the natural course of things, therefore, the greater part of the capital of every growing society is, first, directed to agriculture, afterwards to manufactures, and last of all to foreign commerce. This order of things is so very natural, that in every society that had any territory, it has always, I believe, been in some degree observed.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 379.)

179In his final version of the Report H left blank spaces which he apparently intended to fill in later with the appropriate information. He also indicated points on which he had queries. In the Hamilton Papers, Library of Congress, is a list in H’s handwriting which consists of a series of reminders to H of the omissions in the Report or queries concerning certain statements in the Report. This list, which corresponds to the blank spaces and queries, reads as follows:

“I Amount of extra Charges Page 57. 87.
II Latitude of Virginia 80
III Examples of prohibitory duties 83
IV Rise in price of bark 114
V Name of Pensylvania Society 147
Cayenne.”

The page numbers in the right-hand column of the list refer to the pagination of H’s final version of the Report. Thus, the first item on H’s list refers to material omitted on pages 57 and 87 of the final version of the Report, and H at a later time inserted the words “from 15 to 30” which are printed above in brackets.

180In “Thoughts on the present situation of the united states” Coxe wrote: “… [British] manufacturers, by machines, placed at the distance of three thousand miles from all rivals, and enjoying a very great demand for low priced goods, will be long, very long protected in the profits of those machines by charges of 20 to 30 per cent. that will arise on the importation of foreign articles…” (The American Museum, IV [November, 1788], 403–04).

181See “Second Report on the Further Provision Necessary for Establishing Public Credit (Report on a National Bank),” December 13, 1790.

183H is apparently referring to the following statement by Smith: “This annuity, no doubt, replaced to them their capital, and enabled them to carry on their trade and business to the same or perhaps to a greater extent than before; that is, they were enabled either to borrow of other people a new capital upon the credit of this annuity, or by selling it to get from other people a new capital of their own, equal or superior to that which they had advanced to government. This new capital, however, which they in this manner either bought or borrowed of other people, must have existed in the country before, and must have been employed, as all capitals are, in maintaining productive labour. When it came into the hands of those who had advanced their money to government, though it was in some respects a new capital to them, it was not so to the country; but was only a capital withdrawn from certain employments in order to be turned towards others. Though it replaced to them what they had advanced to government, it did not replace it to the country. Had they not advanced this capital to government, there would have been in the country two capitals, two portions of the annual produce, instead of one, employed in maintaining productive labour.…

“When the public expence is defrayed by funding, it is defrayed by the annual destruction of some capital which had before existed in the country.…” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 463–64.)

184All material within broken brackets in this MS has been taken from H’s fourth draft of the Report.

185Hume expressed a similar view when he wrote: “But there is a third consequence, which very often follows upon taxes, viz. that the poor encrease their industry, perform more work, and live as well as before, without demanding more for their labour.” But Hume qualified this statement, for he also wrote: “This doctrine, therefore, with regard to taxes, may be admitted in some degree: But beware of the abuse. Taxes, like necessity, when carry’d too far, destroy industry, by engendring despair …” (Hume, Political Discourses description begins David Hume, Political Discourses (Edinburgh: Printed by R. Fleming, for A. Kincaid and A. Donaldson, 1752). description ends , 115, 118).

186See note 147.

187Smith mentioned the monopolistic effect of mercantile regulations in The Wealth of Nations when he wrote:

“In the restraints upon the importation … the interest of the home-consumer is evidently sacrificed to that of the producer. It is altogether for the benefit of the latter, that the former is obliged to pay that enhancement of price which this monopoly almost always occasions.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 173.)

“Merchants and manufacturers are the people who derive the greatest advantage from this monopoly of the home market.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 450.)

The argument to which H is referring was frequently used in debates in the First Congress. See, for example, the remarks of Thomas Tudor Tucker of South Carolina and Theodorick Bland of Virginia during the debate over the 1789 impost (Annals of Congress, I description begins The Debates and Proceedings in the Congress of the United States; with an Appendix, Containing Important State Papers and Public Documents, and All the Laws of a Public Nature (Washington, 1834–1849). description ends , 129, 307–08) and a speech by Andrew Moore of Virginia (Annals of Congress, I description begins The Debates and Proceedings in the Congress of the United States; with an Appendix, Containing Important State Papers and Public Documents, and All the Laws of a Public Nature (Washington, 1834–1849). description ends , 160). See also The American Museum, V (April, 1789), 422.

188After listing price increases caused by mercantile regulations, Smith wrote: “When a landed nation, on the contrary, oppresses either by high duties or by prohibitions the trade of foreign nations, it necessarily hurts its own interest in two different ways. First, by raising the price of all foreign goods and of all sorts of manufactures, it necessarily sinks the real value of the surplus produce of its own land, with which, or, what comes to the same thing, with the price of which, it purchases those foreign goods and manufactures. Secondly, by giving a sort of monopoly of the home market to its own merchants, artificers and manufacturers, it raises the rate of mercantile and manufacturing profit in proportion to that of agricultural profit …” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 186–87).

On the other hand, in connection with the tendency of an increased demand for Indian goods in India and a consequent price increase he wrote: “The increase of demand, besides, though in the beginning it may sometimes raise the price of goods, never fails to lower it in the long run. It encourages production, and thereby increases the competition of the producers, who, in order to undersell one another, have recourse to new divisions of labour and new improvements of art, which might never otherwise have been thought of” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 266).

189Similarities between the preceding three paragraphs in the Report and statements made by Smith may be found. Although Smith, of course, maintained that the general revenue and industry of a country would not be increased by mercantile regulations, he also wrote: “By means of such regulations, indeed, a particular manufacture may sometimes be acquired sooner than it could have been otherwise, and after a certain time may be made at home as cheap or cheaper than in the foreign country” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 449). In addition, he advocated the use of restrictions which might force other nations to remove trade barriers on the grounds that “the recovery of a great foreign market will generally more than compensate the transitory inconveniency of paying dearer during a short time for some sorts of goods” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 460).

In a description of Physiocratic views, Smith wrote: “But those artificers and manufacturers, finding at home, both the materials of their work and the fund of their subsistence, might immediately, even with much less art and skill, be able to work as cheap as the like artificers and manufacturers of such mercantile states, who had both to bring from a great distance. Even though from want of art and skill, they might not for some time be able to work as cheap, yet, finding a market at home, they might be able to sell their work there as cheap as that of the artificers and manufacturers of such mercantile states, which could not be brought to that market but from so great a distance; and as their art and skill improved, they would soon be able to sell it cheaper” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 185).

In a description of the advantages of towns, Smith wrote: “They work up the materials of manufacture which the land produces, and exchange their finished work, or what is the same thing the price of it, for more materials and provisions. They give a new value to the surplus part of the rude produce, by saving the expence of carrying it to the water side, or to some distant market; and they furnish the cultivators with something in exchange for it that is either useful or agreeable to them, upon easier terms than they could have obtained it before” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 403).

A “natural effect” of the growth of industry, according to Smith, was “to diminish gradually the real price of almost all manufactures. That of the manufacturing workmanship diminishes, perhaps, in all of them without exception” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 250).

190H, in this instance, agreed with Smith, who wrote: “A small quantity of manufactured produce purchases a great quantity of rude produce. A trading and manufacturing country, therefore, naturally purchases with a small part of its manufactured produce a great part of the rude produce of other countries; while, on the contrary, a country without trade and manufactures is generally obliged to purchase, at the expence of a great part of its rude produce, a very small part of the manufactured produce of other countries” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 193).

Necker expressed a generally accepted tradition when he wrote: “Ainsi, moins une société achetera d’objets d’industrie étrangere, plus elle aura de moyens pour obtenir en échange de la sienne, ou des subsistances, ou de l’argent, seules fins de commerce qui augmentent la population et la richesse, tous les autres échanges n’étant qu’un troc de jouissances” (Necker, Œuvres description begins Jacques Necker, Œuvres de M. Necker (A Lausanne: Chez J. P. Heubach et Compagnie, 1786). description ends , III, 260). Necker also wrote: “Il est donc manifeste que plus la valeur des marchandises qu’on vend aux étrangers est composée du prix du travail, plus on fait un commerce favorable à la population nationale.… Concluons donc, que de toutes les manieres de payer les biens étrangers, la plus avantageuse à un Royaume, c’est la vente du tems, c’est-à-dire, celle des productions de l’industrie …” (Necker, Œuvres description begins Jacques Necker, Œuvres de M. Necker (A Lausanne: Chez J. P. Heubach et Compagnie, 1786). description ends , IV, 100–04).

H, himself, had previously emphasized the advantages of a diversified market. See, for example, essay 11 of The Federalist and “Prospectus of the Society for Establishing Useful Manufactures,” August, 1791. In the latter he had stated: “⟨And⟩ both theory and experience conspire to prove that a nation (unless from a very peculiar coincidence of circumstances) cannot possess much active wealth but as the result of extensive manufactures.”

Many Americans had also expressed views similar to those held by H. See, for example, Barton, The True Interest description begins [William Barton], The True Interest of the United States, and particularly of Pennsylvania, considered; with respect to the advantages resulting from a State Paper-Money: with Some Observations on the subject of a Bank and on Agriculture, Manufactures and Commerce. By an American (Philadelphia: Printed by Charles Cist, at the Corner of Fourth and Archstreets, 1786). description ends , 25; The American Museum, V, (June, 1789), 582–84.

191On the tendency of commerce and manufactures to promote “substantial and permanent order,” Smith wrote: “… commerce and manufactures gradually introduced order and good government, and with them, the liberty and security of individuals, among the inhabitants of the country, who had before lived almost in a continual state of war with their neighbours, and of servile dependency upon their superiors. This, though it has been the least observed, is by far the most important of all their effects. Mr. Hume is the only writer who, so far as I know, has hitherto taken notice of it” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 406).

192The effect of internal commerce on the Union had often been discussed in the decade preceding 1791, and as early as 1775 H had written in The Farmer Refuted: “Nature has disseminated her blessings variously throughout this continent: Some parts of it are favourable to some things, others to others; some colonies are best calculated for grain; others for flax and hemp; others for cotton; and others for live stock of every kind: By this means, a mutually advantageous intercourse may be established between them all. If we were to turn our attention from external to internal commerce, we should give greater stability, and more lasting prosperity to our country, than she can possibly have otherwise” (The Farmer Refuted, &c., February 23, 1775).

193See note 179.

194Smith opposed protective duties on the following grounds: “All taxes upon consumable commodities, therefore, tend to reduce the quantity of productive labour below what it otherwise would be, either in preparing the commodities taxed, if they are home commodities; or in preparing those with which they are purchased, if they are foreign commodities; Such taxes too always alter, more or less, the natural direction of national industry, and turn it into a channel always different from, and generally less advantageous than that in which it would have run of its own accord” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 431–32). See also “Tench Coxe’s Draft of the Report on the Subject of Manufactures.”

195See note 179.

196Necker, who also believed that in the United States, at least, prohibitions of export of grains would be too harsh upon farmers, wrote: “Chez les nations naissantes, telles que celles qui se forment aujourd’hui sur le continent de l’Amérique, l’exportation des grains doit être nécessairement libre. La culture s’étendant plus rapidement que les arts et les manufactures ne s’établissent, ce seroit la décourager, ce seroit interdire aux propriétaires la jouissance de leurs subsistances surabondantes, que de ne pas leur permettre de les échanger contre les commodités que fournissent les pays où l’industrie est plus avancée; car il faut du tems avant que le travail des nations naissantes puisse présenter d’autres objets d’échanges que les produits les plus simples de la terre” (Necker, Œuvres description begins Jacques Necker, Œuvres de M. Necker (A Lausanne: Chez J. P. Heubach et Compagnie, 1786). description ends , III, 264).

In general, Necker agreed with H that there were few instances in which a prohibition of export would be sound policy. Necker said: “Une nation défend communément la sortie des outils de manufactures qui lui sont propres; et quand elle possede seule une matiere premiere susceptible d’être travaillée et qui excite l’envie générale, elle peut ordonner que l’exportation n’ait lieu qu’après que la matiere aura été fabriquée, afin d’augmenter le travail chez elle, et ses droits sur la puissance des autres nations: mais il est bien peu de circonstances où l’on puisse faire de pareilles loix, parce que, pour les objets d’un besoin indispensable, il y a presque toujours des concurrens, ou du moins des raisons qui empêchent de dicter la loi” (Necker, Œuvres description begins Jacques Necker, Œuvres de M. Necker (A Lausanne: Chez J. P. Heubach et Compagnie, 1786). description ends , III, 262).

Adam Smith’s objections to the prohibition of the export of raw materials were as follows:

“Our woollen manufacturers, in order to justify their demand of such extraordinary restrictions and regulations, confidently asserted, that English wool was of a peculiar quality, superior to that of any other country; that the wool of other countries could not, without some mixture of it, be wrought up into any tolerable manufacture; that fine cloth could not be made without it; that England, therefore, if the exportation of it could be totally prevented, could monopolize to herself almost the whole woollen trade of the world; and thus, having no rivals, could sell at what price she pleased, and in a short time acquire the most incredible degree of wealth by the most advantageous balance of trade.… It has been shown … that the effect of these regulations has been to depress the price of English wool.…

“To hurt in any degree the interest of any one order of citizens, for no other purpose but to promote that of some other, is evidently contrary to that justice and equality of treatment which the sovereign owes to all the different orders of his subjects. But the prohibition certainly hurts, in some degree, the interest of the growers of wool, for no other purpose but to promote that of the manufacturers.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 162–66.)

197See note III.

198Smith objected to bounties because they forced industry “not only into a channel that is less advantageous, but into one that is actually disadvantageous.” On the other hand, he wrote: “To encourage the production of any commodity, a bounty upon production, one should imagine, would have a more direct operation, than one upon exportation. It would, besides, impose only one tax upon the people, that which they must contribute in order to pay the bounty. Instead of raising, it would tend to lower the price of the commodity in the home market; and thereby, instead of imposing a second tax upon the people, it might, at least, in part, repay them for what they had contributed to the first. Bounties upon production, however, have been very rarely granted.… But it is not the interest of merchants and manufacturers, the great inventors of all these expedients, that the home market should be overstocked with their goods, an event which a bounty upon production might sometimes occasion” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 13–14).

H’s suggestions on bounties had been recommended by other Americans. See, for example, Barton, The True Interest description begins [William Barton], The True Interest of the United States, and particularly of Pennsylvania, considered; with respect to the advantages resulting from a State Paper-Money: with Some Observations on the subject of a Bank and on Agriculture, Manufactures and Commerce. By an American (Philadelphia: Printed by Charles Cist, at the Corner of Fourth and Archstreets, 1786). description ends , 27–28; The American Museum, V (January, 1789), 50.

Necker, urging the use of “encouragements distributed to commerce, and manufactories,” wrote: “The diminution of this expence can never be reckoned in the number of prudent savings, but the intelligent distribution of such bounties is of a great importance: some principles must necessarily be adopted on that subject, if it is intended to produce an efficient benefit with a moderate sum.

“The most essential encouragements, are those that may contribute to introduce new branches of commerce and industry into the kingdom; then we are assured of reaping after having sown; because we shall then, either purchase less merchandize from other nations, or we shall have a greater quantity to dispose of.

“… If a province, or a part of one, is by its situation, in the impossibility of carrying on any trade with the overplus of its produce, it becomes important to excite by bounties, the establishment of some branch of industry that may be an article of commerce, and that may, as it were, serve to convert the articles of consumption into works, the transport of which would be easier and less expensive.… Undoubtedly, the simple combinations of self-interest, may successively exhibit all these branches of industry: but when government has it in its power to forward that exhibition, and consequently the progress of public good; the pecuniary bounties destined thereto, are to be accounted some of the most profitable expences of the State.” (Necker, Finances of France description begins Jacques Necker, A Treatise on the Administration of the Finances of France. In Three Volumes. By Mr. Necker. Translated from the genuine French Edition, 1784, by Thomas Mortimer, Esq. (London: Printed at the Logographic Press, 1785). description ends , II, 474–76.)

199See note 179.

200In 1787 Coxe wrote: “Here is a solid premium, operating like a bounty, while it happily costs the consumer nothing, for the charges of importation are unavoidable and the duty being merely for the purpose of revenue, is applied to pay the public debts and expences …” (Coxe, Enquiry description begins Tench Coxe, An Enquiry into the Principles on which a Commercial System for the United States of America Should be Founded (Philadelphia, 1787). description ends , 24–25). See also note 180. See also “Tench Coxe’s Draft of the Report on the Subject of Manufactures.”

202H’s information concerning the encouragement to manufactures given in Scotland by a society established for that purpose may have been obtained from Postlethwayt or from a fragment of an undated document in the Hamilton Papers, Library of Congress (possibly written by Samuel Paterson), which describes the activities of “The Trustees for incouraging Fisheries & Manufactures in scotland.”

Postlethwayt’s description of the same organization and its early activities is as follows: “The wisdom of the legislature cannot be sufficiently admired, for annexing the Highland forfeited estates to the crown … and in appropriating the revenues thereof, for the improvement of the country in the manufactures, &c.: and farther for the same purpose, by an act of the last parliament, 3000 l. per ann. payable out of the customs, is granted and put under the management of the commissioners and trustees for improving fisheries and manufactures in Scotland; and they have already made a beginning, and published a plan for distributing the said sum for the first year.… For supporting and encouraging the manufacture in those places where it hath been already introduced, but hath not yet arrived to any considerable degree of perfection.… It is hoped that these wise and useful measures will have the desired effect” (Postlethwayt, Universal Dictionary description begins Malachy Postlethwayt, The Universal Dictionary of Trade and Commerce, Translated from the French of the Celebrated Monsieur Savary, Inspector-General of the Manufactures for the King, at the Custom-house of Paris; With Large Additions and Improvements, Incorporated throughout the Whole Work; Which more particularly accommodate the same to the Trade and Navigation Of these Kingdoms, And the Laws, Customs, and Usages, To which all Traders are subject. Second edition (London: Printed for John Knapton, in Ludgate-Street, 2 vols., 1757). description ends , II, 672).

203Postlethwayt, in supporting the distribution of premiums, wrote: “Nothing is more obvious than that the commerce and navigation of this nation principally depends on the daily improvements made by our artificers, in that infinite and amazing variety in our mechanic and manufactural arts. Wherefore artists of this kind, who strike out new inventions, or who improve the old mechanics and manufactures, are deserving of some public regard and encouragement more than what they acquire to themselves by dint of their peculiar profession only.

“Daily experience manifests the extraordinary effects of those small rewards which have been given in Scotland and Ireland, for the improvement of their manufactures; nor do the premiums, perhaps, operate so powerfully as the motive of emulation; for that credit and reputation which attends a man’s excelling in his employment, has, sometimes, a far greater influence upon the industrious and ingenious mind, than pecuniary rewards only.” (Postlethwayt, Universal Dictionary description begins Malachy Postlethwayt, The Universal Dictionary of Trade and Commerce, Translated from the French of the Celebrated Monsieur Savary, Inspector-General of the Manufactures for the King, at the Custom-house of Paris; With Large Additions and Improvements, Incorporated throughout the Whole Work; Which more particularly accommodate the same to the Trade and Navigation Of these Kingdoms, And the Laws, Customs, and Usages, To which all Traders are subject. Second edition (London: Printed for John Knapton, in Ludgate-Street, 2 vols., 1757). description ends , I, 116.)

Smith, who also was in favor of premiums, wrote: “Premiums given by the public to artists and manufacturers who excel in their particular occupations, are not liable to the same objections as bounties. By encouraging extraordinary dexterity and ingenuity, they serve to keep up the emulation of the workmen actually employed in those respective occupations, and are not considerable enough to turn towards any one of them a greater share of the capital of the country than what would go to it of its own accord. Their tendency is not to overturn the natural balance of employments, but to render the work which is done in each as perfect and complete as possible. The expence of premiums, besides, is very trifling; that of bounties very great” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 20).

In the first issue of the Columbian Magazine the author of an article on the encouragement of manufactures recommended “that a Society be instituted, for the encouragement of arts, manufactures, and commerce” (Columbian Magazine, I [September, 1786], 29). See also Columbian Magazine, IV (March, 1790), 156.

204In the following passage Smith described the familiar practices of mercantilism which H is recommending:

“Though the encouragement of exportation, and the discouragement of importation are the two great engines by which the mercantile system proposes to enrich every country, yet with regard to some particular commodities, it seems to follow an opposite plan: to discourage exportation and to encourage importation.… It encourages the importation of the materials of manufacture, in order that our own people may be enabled to work them up more cheaply, and thereby prevent a greater and more valuable importation of the manufactured commodities…

“The importation of the materials of manufacture has sometimes been encouraged by an exemption from the duties to which other goods are subject, and sometimes by bounties.” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 153–54). See also “Tench Coxe’s Draft of the Report on the Subject of Manufactures.”

205See note 49 for the exemption to which H is referring.

206Smith’s approval of drawbacks can be found in the following excerpt: “Of these encouragements what are called Drawbacks seem to be the most reasonable. To allow the merchant to draw back upon exportation, either the whole or a part of whatever excise or inland duty is imposed upon domestic industry, can never occasion the exportation of a greater quantity of goods than what would have been exported had no duty been imposed.… They tend not to destroy, but to preserve, what it is in most cases advantageous to preserve, the natural division and distribution of labour in the society” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 493). See also “Tench Coxe’s Draft of the Report on the Subject of Manufactures.”

207For the drawback allowed on salt and molasses, see notes 97 and 111.

208In his first annual address to Congress, Washington stated: “The advancement of Agriculture, Commerce and Manufactures by all proper means, will not I trust need recommendation. But I cannot forbear intimating to you the expediency of giving effectual encouragement as well to the introduction of new and useful inventions from abroad, as to the exertions of skill and genius in producing them at home…” (GW description begins John C. Fitzpatrick, ed., The Writings of George Washington (Washington, 1931–1944). description ends , XXX, 493).

209See note 99.

210“An Act to encourage and protect the Manufactures of this State,” March 29, 1788 (Laws Enacted in the Second Sitting of the Twelfth General Assembly of the Commonwealth of Pennsylvania, Which commenced at Philadelphia, on Tuesday the nineteenth Day of February, in the Year of our Lord, One thousand seven hundred and eighty-[eight] [Philadelphia, n.d.]). See also “Tench Coxe’s Draft of the Report on the Subject of Manufactures.”

211Necker discussed the question of inspection in “Compte Rendu au Roi,” January, 1781. Concerning the removal of inspection, he wrote: “D’un autre côté, pour applanir tous ces obstacles, anéantir absolument, et par une loi positive, toute espece de reglemens, de marques ou d’examens, c’étoit risquer la réputation des fabriques françoises, c’étoit ôter aux consommateurs étrangers et nationaux la base de leur confiance, enfin c’étoit aller contre les idées des vieux fabricans qui avoient vu leurs manufactures et celles de leurs peres, prospérer à l’ombre des loix d’ordre” (Necker, Œuvres description begins Jacques Necker, Œuvres de M. Necker (A Lausanne: Chez J. P. Heubach et Compagnie, 1786). description ends , III, 118).

212According to Victor S. Clark, “Inspection laws guaranteeing the quality of flour, tar, nails, potash, and provisions were reënacted by State legislatures in terms almost identical with those employed by the colonial assemblies” (Victor S. Clark, History of Manufactures in the United States, 1607–1860 [Washington, 1916], 263).

213The Bank of the United States.

For the encouragement to manufactures which would be rendered by a national bank and by Federal regulation of inland bills of exchange, see “Tench Coxe’s Draft of a Report on the Subject of Manufactures.”

214The value of roads and canals had long been recognized by Europeans. For example, Steuart wrote: “Another advantage of cities is, the necessity arising from thence of having great roads, and these again prove a considerable encouragement to agriculture” (Steuart, Political Economy description begins Sir James Steuart, An Inquiry into the Principles of Political Œconomy: Being an Essay on the Science of Domestic Policy in Free Nations. In Which Are Particularly Considered Population, Agriculture, Trade, Industry, Money, Coin, Interest, Circulation, Banks, Exchange, Public Credit, and Taxes. By Sir James Steuart, Bart.… In Two Volumes (London: Printed for A. Millar, and T. Candell, in the Strand, 1767). description ends , I, 57).

Among the recommendations contained in Washington’s first inaugural address is one concerning the desirability of “facilitating the intercourse between the distant parts of our Country by a due attention to the Post-Office and Post-Roads” (GW description begins John C. Fitzpatrick, ed., The Writings of George Washington (Washington, 1931–1944). description ends , XXX, 493). Other Americans in 1791 made similar statements. The following comment is typical: “Roads and Bridges, especially upon the great post road, through the union, are objects of national moment” ([Philadelphia] Gazette of the United States, June 29, 1791).

215See note 100.

216In a similar vein, Smith wrote: “The tax which each individual is bound to pay ought to be certain, and not arbitrary. The time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor, and to every other person. Where it is otherwise, every person subject to the tax is put more or less in the power of the tax-gatherer, who can either aggravate the tax upon any obnoxious contributor, or extort, by the terror of such aggravation, some present or perquisite to himself. The uncertainty of taxation encourages the insolence and favours the corruption of an order of men who are naturally unpopular, even where they are neither insolent nor corrupt. The certainty of what each individual ought to pay is, in taxation, a matter of so great importance, that a very considerable degree of inequality, it appears, I believe, from the experience of all nations, is not near so great an evil as a very small degree of uncertainty” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , II, 349).

In the course of a discussion of Colbert’s elimination of an arbitrary tax, Necker wrote: “Convaincu que rien n’est plus insupportable à l’homme que le caprice des autorités subalternes, il voulut y soustraire cet impôt par des reglemens uniformes, et il desira de le fixer d’une maniere invariable, en le proportionnant à la terre, par un cadastre général” (Necker, Œuvres description begins Jacques Necker, Œuvres de M. Necker (A Lausanne: Chez J. P. Heubach et Compagnie, 1786). description ends , III, 201).

Hume wrote: “But the most pernicious of all taxes are those which are arbitrary. They are commonly converted, by their management, into punishments on industry; and also, by their unavoidable inequality, are more grievous than by the real burthen, which they impose” (Hume, political Discourses, 119).

217Several Americans suggested similar criteria for deciding what manufactures should be encouraged. In 1791 Coxe wrote: “Should a considerable part of our capital be forced out of navigation and foreign trade, the government, without imposing generally heavy protecting duties, burdensome to the nation, may give employment for the money, by holding out effectual encouragement to one branch of manufactures at a time. If it be selected with judgment—if the use of manual labour be confined within as narrow limits as possible—if labour-saving machines be used—if the articles it works on, be made free of duty—if the growth of them be encouraged at home—if a convenient progressive duty be imposed, there can be little doubt of success” (Coxe, Brief Examination description begins Tench Coxe, A Brief Examination of Lord Sheffield’s Observations on the Commerce of the United States. In Seven Numbers. With Two Supplementary Notes on American Manufactures (Philadelphia: From the Press of M. Carey, 1791). description ends , 85).

For other examples, see Columbian Magazine, I (September, 1786), 28, and The American Museum, II (September, 1787), 258.

219Coxe, in replying to Lord Sheffield’s remarks concerning the high price of American iron products, wrote: “Bar iron before the revolution, was usually sold for sixty four dollars. It fell, after the war, to the same price; and large quantities of iron in bars and pigs were exported. The progress of manufactures has raised these articles to the highest prices ever known in peace; and only 200 tons in bars, and 3555 tons in pigs were exported in thirteen months and a half of 1789, and 1790” (Coxe, Brief Examination description begins Tench Coxe, A Brief Examination of Lord Sheffield’s Observations on the Commerce of the United States. In Seven Numbers. With Two Supplementary Notes on American Manufactures (Philadelphia: From the Press of M. Carey, 1791). description ends , 14).

220See Nathaniel Hazard to H, March 9, 1791. It should also be noted, however, that the belief that steel could be manufactured in sufficient quantity to meet the needs of the United States had been questiond in Congress. Richard Bland Lee of Virginia, for example, “did not believe that any gentleman would contend, that enough of this article to answer consumption could be fabricated in any part of the Union” (Annals of Congress, I description begins The Debates and Proceedings in the Congress of the United States; with an Appendix, Containing Important State Papers and Public Documents, and All the Laws of a Public Nature (Washington, 1834–1849). description ends , 153).

221For the duties cited in this section, see note 49.

224Inspection had been recommended by Silas Condict (Condict to Aaron Dunham, August 25, 1791, printed as an enclosure to Dunham to H, September 9, 1791).

225Arsenals had been suggested by Washington in a letter to H of October 14, 1791.

229Smith, in discussing the importance of coal to the coastal trade, wrote: “The coal-trade from Newcastle to London, for example, employs more shipping than all the carrying trade of England, though the ports are at no great distance” (Smith, Wealth of Nations description begins Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. of London and Edinburgh: One of the Commissioners of His Majesty’s Customs in Scotland; and Formerly Professor of Moral Philosophy in the University of Glasgow. The Fourth Edition, With Additions. In Two Volumes (Dublin: Printed for W. Colles, R. Moncrieffe, G. Burnet, W. Wilson, C. Jenkin, L. White, H. Whitestone, P. Byrne, J. Cash, W. M’Kenzie, 1785). description ends , I, 370–71).

230Coxe wrote: “All our coal has hitherto been accidently found on the surface of the earth, or discovered in the digging of common cellars or wells: so that when our wood-fuel shall become scarce, and the European methods of boring shall be skilfully pursued, there can be no doubt of our finding it in many other places. At present, the ballasting of ships from coal countries abroad, and the coal mines in Virginia, which lie convenient to ship-navigation, occasion a good deal of coal to be brought to the Philadelphia market. From this great abundance and variety of fuel, it results, that Pennsylvania, and the united states in general, are well suited to all manufactories which are effected by fire, such as furnaces, founderies, forges, glass-houses, breweries, distilleries, steelworks, smiths’ shops, and all other manufactories in metal, soap-boiling, chandlers’ shops, pot ash works, sugar and other refineries, &c. &c.” (The American Museum, VII [June, 1790], 299).

231See note 179.

232“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]).

233On November 16, 1791, “A petition of the distillers of spirits in the town of Salem, in the State of Massachusetts, was presented to the House and read, praying a reduction of duties, and farther revision and amendment of the act, passed at the last session, for laying duties on spirits distilled within the United States.…” This petition was “referred to the Secretary of the Treasury, for his information” (Journal of the House, I description begins Journal of the House of Representatives of the United States (Washington, 1826), I. description ends , 455).

See also Fisher Ames to H, September 8, 1791.

234A slave revolt on the plantations in Haiti began on August 23, 1791. It resulted in widespread property damage in most of the northern plain around Cap-Français.

235On November 24, 1791, “A petition of Kendrick Doyer, Geneva distiller, in the city of New York, was presented to the House and read, praying that the act, passed at the last session, imposing a duty on distilled spirits, may be so modified and amended, that the duty on Geneva, imported from abroad, may be augmented, and the duty on the said article, distilled within the United States, reduced.” This petition was “referred to the Secretary of the Treasury for his information” (Journal of the House, I description begins Journal of the House of Representatives of the United States (Washington, 1826), I. description ends , 461).

236See Nathaniel Gorham to H, October 13, 1791; Joseph Whipple to H, September 6, 1791.

237See note 105.

238See note 105.

239H is referring to the Society for Establishing Useful Manufactures.

241See note 179.

248In writing to an agent of the Hartford Company, George Washington had noted: “The patterns of Cloth which I have seen, and particularly the price which I have lately received, exceed in fineness and goodness whatever the most sanguine expectation could have looked for at this period” (GW description begins John C. Fitzpatrick, ed., The Writings of George Washington (Washington, 1931–1944). description ends , XXX, 279).

251Among the papers relating to manufactures in the Hamilton Papers, Library of Congress, is an undated letter from George Cabot to Tench Coxe enclosing specimens of lace and information concerning the lace factory in Ipswich, Massachusetts. Cabot’s letter reads in part: “In various parts of Masss the Females make Lace & edging for their own use & some small parcels for sale, but I believe the manufacture has nowhere become of sufficient consequence to attract notice except at Ipswich. The papers & specimens herewith handed you will enable you to form a good idea of the business as it is carried on at that place. I understand that the work is performed altogether by Women & Girls & that it occupies only (or chiefly) such portions of time as can be well spared from the concerns of the family” (ALS, Hamilton Papers, Library of Congress).

253In “Pay Book of the State Company of Artillery,” 1777, H had made notes from the section on glass in Postlethwayt’s Universal Dictionary.

255Tench Coxe had made a report on gunpowder and cannon to the board of the Pennsylvania Society for the Encouragement of Manufactures and the Useful Arts. See Coxe to H, March 5–9, 1790.

256Tench Coxe and William Barton were among those who mentioned paper hangings and books as examples of American manufactures which were already well established. See also the mention of sheathing in “Report of a Committee Appointed to Obtain Information on Manufacturing in Providence,” October 10, 1791, printed as an enclosure to John Dexter to H, October, 1791. The progress in the manufacture of paper hangings was mentioned in the Columbian Magazine, V (July, 1790), 60.

257Sugars refined in various degrees, form a branch so perfectly established as to require little attention, but to the acquisition of the raw material.” (Coxe, Brief Examination description begins Tench Coxe, A Brief Examination of Lord Sheffield’s Observations on the Commerce of the United States. In Seven Numbers. With Two Supplementary Notes on American Manufactures (Philadelphia: From the Press of M. Carey, 1791). description ends , 124.)

259Postlethwayt had offered suggestions for changes in the Royal Society of London which resemble H’s suggestions in the six following paragraphs. Postlethwayt wrote: “This celebrated body may, in other respects also, become instrumental to a still further advancement of all arts that are subservient to the interest of our trade and navigation. And this is submitted to be done, by enabling the Royal Society to confer suitable rewards and honours on all working mechanics, artisans, and manufacturers, who shall make any capital improvements in their several branches, and the like on those who shall make any important advancement in the arts of agriculture, or any thing connected therewith, as farming, grazing, nurserying, minerology, metallurgy, &c” (Postlethwayt, Universal Dictionary description begins Malachy Postlethwayt, The Universal Dictionary of Trade and Commerce, Translated from the French of the Celebrated Monsieur Savary, Inspector-General of the Manufactures for the King, at the Custom-house of Paris; With Large Additions and Improvements, Incorporated throughout the Whole Work; Which more particularly accommodate the same to the Trade and Navigation Of these Kingdoms, And the Laws, Customs, and Usages, To which all Traders are subject. Second edition (London: Printed for John Knapton, in Ludgate-Street, 2 vols., 1757). description ends , II, 638).

Concerning the encouragement of manufactures, Postlethwayt wrote:

“It is a maxim generally received, that one of the most effectual means to settle and improve commerce, or any other political interest, is the patronage of princes. Dispensing rewards, and exciting emulation, by investing with honours, and other marks of distinction, those persons who, by the force of genius or application, have made new discoveries, or improved upon any thing laudable, and conducive to the interest of the public; more especially such as, upon the strength of their own genius, and at their sole charge, have set up and maintained manufactures, and other works beneficial to the community; and when the introduction of them has been intirely owing to their industry and public spirit.

“This point we shall only treat in a general way, as it is not possible to prescribe rules for the conduct of it on particular occasions, since the honours, as well as rewards and encouragements, are always to be dispensed according to the station, and other circumstances of the claimants, and with an eye to the charge they shall have been at, and the benefits that shall result to the public from them.

“It is good policy to give yearly pensions, in order to draw over, and engage to stay in any country, able masters in manufactures, fulling, dyeing, and other works, either to introduce these sorts of businesses, or to improve such as have been already established, by advancing them to a degree of perfection and goodness that is certain to make them esteemed, and procure them a market every where.” (Postlethwayt, Universal Dictionary description begins Malachy Postlethwayt, The Universal Dictionary of Trade and Commerce, Translated from the French of the Celebrated Monsieur Savary, Inspector-General of the Manufactures for the King, at the Custom-house of Paris; With Large Additions and Improvements, Incorporated throughout the Whole Work; Which more particularly accommodate the same to the Trade and Navigation Of these Kingdoms, And the Laws, Customs, and Usages, To which all Traders are subject. Second edition (London: Printed for John Knapton, in Ludgate-Street, 2 vols., 1757). description ends , II, 129.)

260The need for skilled workmen and the laws of Great Britain that were intended to discourage the emigration of such workmen caused some discussion of this question. On July 6, 1790, “a Hosier” from Glasgow (possibly Samuel Paterson) had written to “The Manager or Partners of a Company for Weaving Cotton Cloth late got up or Erected in Philadelphia” and made a plea for stock weavers willing but unable to emigrate to America (ALS, Hamilton Papers, Library of Congress). See also Paterson to H, February 10, 1791.

Constant Southworth, among others, had complained of the lack of skilled workmen. See Southworth to William Williams, September 1, 1791, printed as an enclosure to John Chester to H, October 11, 1791, and George Cabot to H, September 6, 1791.

261See note 179.

Index Entries