Thomas Jefferson Papers

To Thomas Jefferson from Tench Coxe, 15 April 1791

From Tench Coxe

[Philadelphia], 15 Apr. 1791. Encloses return of tonnage for one year, including several customhouse returns not received when Register made up former statement. It is in the form shown TJ in Feb., “except the interesting additions … exhibiting the European—African—Asiatic—West Indian and other Subdivisions of the American commerce, which have been since added. As far as my mind has been able to bring it up to view, the inward trade of the United States is exhibited in this paper.” Collectors have been directed to add a column to their returns which, after June, will give similar data for the export trade. The Controller, who is responsible for forms, has given Coxe leave to make any alterations to procure needed information. He has Register’s clerks making up current imports in same form and he proposes to do this for prior years to show quantities and kinds of imports from several foreign nations.—“Should you desire to reserve a copy of the document now sent, I beg leave to remark that it may be expedient to confine it afterwards to your private office as you will perceive there are several delicate points … too visible to admit of an exposure to any, but very confidential members of the government.”

He encloses plan of a manufacturing establishment which “may apply happily in the federal district.” He is not certain any but fine arts desirable in actual seat, but in a tract of 64,000 acres there may be a location with great water power in which this plan might be put in execution. “It is a favorite idea of mine … that this country should endeavour to employ in [manufactures], as much as possible, the great labor saving machines. Agriculture being the most natural employment, and manufacturers being often an. intemperate and disorderly class of people, modes of manufacture which do not require them, and which indeed in a certain degree supercede the occasion for them, appear to be very desirable. This sketch is meant to be disposed of as you may think proper,” Coxe having retained a copy. He will only observe that “the mode of raising the fund was obtained from the Secretary of the Treasury, who has every reason to believe that an establishment embracing the principal ideas in the plan will be very soon attempted in New Jersey upon subscriptions from New York, New Jersey and Pennsylvania. It may be worth considering whether the Potomack Navigation company might not find it their interest to admit of sales of Shares for 6 per Cent stock estimated at par, and when they shall have sold the whole a loan at 5¼ per Cent might be effected. The public paper would yield an interest more than equal to what they would have to pay and when our funds rise to par the paper might be sold, and the debt in Specie discharged.” [P.S.] “It appears that our fishing vessels exceed the number in the Registers return about 20 per Cent. The discovery of this error is very Material, and pleasing.”

RC (DLC); endorsed by TJ as received 15 Apr. 1791 and so recorded in SJL. Enclosures: (1) Tabulation of tonnage of vessels entering the United States from foreign ports between 1 Oct. 1789 and 30 Sep. 1790, together with coasting and fishing vessels, showing that vessels of American registry amounted to 492,100.1 tons; those of Great Britain 226,953.1; and those of France 13,801.4, with lesser amounts from Spain, Holland, Ireland, Portugal, and Denmark (dated 15 Apr. 1791, signed by Coxe and submitted in final form by Hamilton to the Senate on 25 Nov. 1791, ASP description begins American State Papers: Documents, Legislative and Executive, of the Congress of the United States, Washington, Gales & Seaton, 1832–61, 38 vols. description ends , Commerce and Navigation, i, 44–7). (2) “A Plan for a manufacturing establishment in the United States,” which proposed that a corporation be chartered in one or more states capitalized at $500,000 payable by subscribers in stock of the Bank of the United States and in public securities; that these securities be used to borrow an additional half million in specie in Holland or elsewhere; that, after the total capital was subscribed, the stockholders should elect a board of directors to conduct the affairs of the corporation; that one person, residing at the site of the factories, be chosen to superintend the operations of the business at an annual compensation suitable to his character and qualifications, though not to engage otherwise in its affairs or be employed in any other trade or business; that the directors be authorized to purchase land on some navigable river with streams and water power sufficient to operate “water machinery and works, bleaching and tan yards, breweries, distilleries, or such other factories” as might be undertaken; that this tract of land be laid out as a town or in lots with convenient streets, these lots to be sold or leased to manufacturers and tradesmen; that the legislature be petitioned for the purpose of opening roads, turnpikes, canals, and improvements of inland navigation to the interior and also for authorization to hold lotteries to pay initial expenses and to dispose of lots “in order to interest a large number as well of the citizens of the United States as of foreign countries in the proposed city”; and that application be made to Congress to have the post road go through the city and “to increase the duties upon such articles as shall be seriously and systematically undertaken, and otherwise to foster and encourage the institution.”

Coxe added: “The objects to which the stock can be applied with the greatest advantage appear to be such articles as are of considerable bulk, of general consumption, consequently almost or absolutely of necessity, and which are either made by such labour saving machines, as the cotton mills, flax mills, rolling and slitting mills, the tilt hammer, forges, powder mills, paper mills &c. or by labour saving processes, such as glass works, tanning, steel making, brewing, distilling, glue making, starchmaking &c. or by labour-saving slight, as in the manufactory of wire; wool and cotton cards; printed cottons, linens and paper; shovels; hinges, nails &c. The two first classes promise the greatest profit, though the latter well deserves consideration. Glass works are of great importance to this country, and with an adequate capital would probably yield good returns, but they might not at present be conducted with the greatest advantage in the proposed city. But in those instances wherein there is coal at hand, they may be introduced there at once. The city of Bristol in Britain has fifteen capital Glasshouses in which coal alone is used, as it is supposed.”

In conclusion, Coxe argued that the benefits of the plan would be (1) “That a capital in specie applied to labour saving machines &c. working in raw materials as cheap or cheaper than in Europe must yield a very handsome advance upon the six, seven, or eight percent produce of public funds or Bank Stock”; (2) “That the operation must favour the holders of the public debt and Bank Stock by creating a new object for them, and taking large sums out of the market”; (3) “That the purchase of lands at or near their value as farms which is a perfectly safe operation, promises, by the addition of1 an extensive, well placed, healthy manufacturing establishment, to yield a very handsome profit to the concerned, by the mere advance upon the lots”; and (4) “That the freight, insurance, commissions in Europe or the United States, damage, costs of packages, customhouse charges, compensation for credit, storeage, carting, and importer’s profit being 15 per cent upon every importation of the finest kinds of the goods we should manufacture in the first seven years, afford an advantage, more than double the medium dividends on Bank or public Stock: and that profits such as the European Manufacturers enjoy are moreover to be expected in all cases wherein labour-saving machines and processes are employed. These will enable the Society to avoid the means of manual labour, which, from the high rate of wages, is urged against such factories as are conducted, in that way, in the United States” (Tr in clerk’s hand, undated, in DLC: TJ Papers, 80:13913–16; with one alteration in text noted below).

The plan for a manufacturing establishment enclosed in the above letter embodies in specific form the “favorite idea” of which Coxe had long been the foremost and best informed advocate. It has been assumed that this plan was an elaboration of that outlined in the third number of Coxe’s Brief examination of Lord Sheffield’s observations on the commerce of the United States. Actually, what Coxe had written in that publication was only three or four sentences giving the essence of his scheme. This general description followed rather than preceded the plan outlined above (the third number appeared in Brown’s Federal Gazette only on 13 May 1791 and in Carey’s American Museum for April). Whether the particularized plan or the brief comment preceded the other is unimportant. The essential fact is that Coxe’s proposal anticipated in precise terms the manufacturing complex which Hamilton, Duer, and others brought into existence with the Society for Establishing Useful Manufactures (J. S. Davis, Essays in the Earlier History of American Corporations, i, 349–53; Jacob E. Cooke, “Tench Coxe, Alexander Hamilton, and the Encouragement of American Manufactures,” WMQ description begins William and Mary Quarterly, 1892– description ends , xxxii [July 1975], 382–3). Coxe had been assisting the Secretary of the Treasury for some weeks in the preparation of his Report on Manufactures and it is certain that Hamilton, who lent his powerful influence to bring SUM into existence, discussed the nature of the plan with Coxe before it was drafted and sent to TJ. He may very well have prompted Coxe to give concrete expression to this favorite idea of the Assistant Secretary, for late in March he informed Théophile Cazenove of his project and promised to give him a copy of the plan within eight or ten days (Cazenove to the Amsterdam houses he represented, 29 Mch. 1791, Cazenove Letter Book, Holland Land Company, Archives of the City of Amsterdam).

Coxe’s explanation that he sent the plan to TJ because it might “apply happily in the federal district” has been construed to be disingenuous, if not a ruse, in an effort to please and disarm the Secretary of State (Cooke, WMQ description begins William and Mary Quarterly, 1892– description ends , xxxii [July 1975], 384). The more plausible reason would seem to lie elsewhere. Coxe knew, as did everyone, how deeply Washington was interested in the Federal District and the Potomac Company as well. He could scarcely have expected TJ to embrace the plan for a manufacturing city with the enthusiasm that Hamilton displayed. In urging TJ to make such disposition of the plan as he thought proper, he may only have hoped that it would be brought to Washington’s attention. This supposition is supported by one alteration that Coxe made in his draft of the plan. As copied by his clerk, it first called for locating the establishment at the seat of some state government—this obviously because most state capitals were located at the head of tidewater with water power usually accessible. This provision Coxe struck out, as if to emphasize his interest in an operation in the Federal District distinct from the one he said Hamilton expected would be established in New Jersey (see note 1 below). In his own thinking Coxe envisioned manufacturing establishments located throughout the states, but this plan obviously called for a grand national enterprise such as Hamilton had in view.

The question immediately arises, then, as to whether the hand of the Secretary of the Treasury may have influenced Coxe to transmit such a plan to the Secretary of State. Within the space of a single week Hamilton, taking advantage of the President’s absence, had manipulated a meeting of the Cabinet in the hope of enabling Robert Morris to make another purchase of a vast tract of land from the Indians and, for perhaps ulterior motives, had had a hand in Tench Coxe’s vain application for the Comptrollership of the Treasury. He had also disclosed to Théophile Cazenove, but not to Washington, his hope to create a great manufacturing enterprise under the aegis of the government. Under these circumstances, fearing as he and his supporters did that TJ’s influence with the President was rising and that his proposed navigation bill might be adopted at the next session, Hamilton may well have influenced Coxe to send the plan to TJ in the hope that it would be forwarded to the President.

When Washington supported the efforts of Henry Lee and James Madison to establish a manufacturing metropolis at the Falls of the Potomac, TJ gave no encouragement to their hope of obtaining funds for the venture in Europe (see Editorial Note to group of documents on the location of the Federal District, at 24 Jan. 1791). If Coxe, or Hamilton, hoped to gain his influence with the President for a similar enterprise near the Federal District, or in New Jersey, he was doomed to disappointment. TJ treated Coxe’s proposal with silence. His real opinion of it was expressed two days later in a letter to James Monroe (TJ to Monroe, 17 Apr. 1791).

1These two words interlined in Coxe’s hand in substitution for “combination of the Seat of a State Government with,” deleted.

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