Report on Commerce
Jefferson’s report on commerce was his last effort as Secretary of State to achieve his longstanding goal of fundamentally reordering the new republic’s political economy by lessening American economic dependence on Great Britain and fostering closer commercial ties with France. Based upon almost two decades of study and practical experience, it reflected Jefferson’s vision of the United States as a virtuous agrarian republic in which the acquisition of new foreign markets for surplus agricultural production, in addition to territorial expansion, would postpone indefinitely the social degeneration and political corruption to which republics had been subject throughout history.
The report accordingly took aim at what Jefferson perceived as two threats to American agrarian republicanism. One was British mercantilism and its premise—disseminated widely in Lord Sheffield’s 1783 Observations on the Commerce of the American States and reiterated forcefully in Lord Hawkesbury’s 1791 Report of the Lords of the Committee of Privy Council … on The American Trade—that American reliance on Britain’s superior manufactures and credit justified the continuance of various restrictions on American trade and shipping. The other was Hamiltonian fiscalism, with its tacit assumption that temporary acquiescence in the British navigation system was necessary to ensure the smooth flow of Anglo-American trade and the resultant import duties that were essential for maintaining the nation’s public credit. With these targets in view, Jefferson’s report combined an incisive account of the privileges accorded and the restrictions imposed on American trade with a bold program of commercial discrimination that was calculated to win more favorable treatment for it in the international marketplace (for the antecedents to the report, see Merrill D. Peterson, “Thomas Jefferson and Commercial Policy, 1783–1793,” WMQ description begins William and Mary Quarterly, 1892– description ends , 3d ser., xxii , 584–610; Doron S. Ben-Atar, The Origins of Jeffersonian Commercial Policy and Diplomacy [New York, 1993], 17–133; Stanley Elkins and Eric McKitrick, The Age of Federalis [New York, 1993], 378–81; and Jefferson’s earlier reports on various aspects of American commerce in Vols. 18: 301–3, 565–70, 19: 121–39, 206–22).
The chain of events that led to the submission of the report to Congress just two weeks before Jefferson’s resignation as Secretary of State began almost three years earlier. On 23 Feb. 1791, in response to a message from the President nine days earlier describing British rejection of American overtures for a commercial treaty, the House of Representatives referred to Jefferson a committee report recommending a navigation act aimed at British trade and shipping and directed him to prepare a report for Congress on the state of American commerce with other nations and the means for improving it. Jefferson prepared most of the first state of the report during the recess between the adjournment of the first Congress on 3 Mch. and the convening of the second Congress on 24 Oct. 1791. He drew upon his studies of American trade, official and unofficial information supplied by then Assistant Secretary of the Treasury Tench Coxe, and the House committee’s recommendations for commercial retaliation against the British. He also solicited the views of certain Philadelphia merchants, to whom he variously submitted all or parts of the largely unrevised first state of the report late in August 1791, and continued to work on the text at Monticello during the next two months. Although Jefferson later suggested that he completed this state of the report before the second Congress convened, he continued to revise it during and perhaps even after this body’s first session, which lasted until 8 May 1792. The most significant revision he made in this or any other state of the report was replacing two pages in which he had cautiously advocated federal encouragement of household manufactures with two others in which he clearly stipulated that this was a state responsibility (see illustration). Jefferson very likely made this change in the aftermath of Alexander Hamilton’s 5 Dec. 1791 report on manufactures, whose call for federal support of a wide range of manufacturing he abhorred on constitutional and social grounds (Document i below; JHR description begins Journal of the House of Representatives of the United States, Washington, D.C., Gales & Seaton, 1826, 9 vols. description ends , i, 377–8, 388; NSP description begins Eileen D. Carzo, ed., National State Papers of the United States, 1789–1817. Part II: Texts of Documents. Administration of George Washington, 1789–1797, Wilmington, Del., 1985, 35 vols. description ends , vii, 408; Coxe to TJ, 4, 5 Mch., 15 Apr., 30 June, [ca. June], 19 July 1791; Thomas FitzSimons to TJ, 23 Aug. 1791; TJ to John Ross, 26 Aug. 1791; Ross to TJ, 27 Aug. 1791; George Clymer to TJ, 1 Sep. 1791; TJ to the Speaker of the House of Representatives, 20 Feb. 1793).
Jefferson did not submit the first state of the report to Congress. As early as December 1791 Hamilton convinced him that it would be advisable to delay submission of the document in order to avoid jeopardizing negotiations for the relinquishment of the western posts held by Britain in violation of the Treaty of Paris. In the following month, moreover, Jefferson learned of Spanish willingness to conclude a commercial treaty with the United States—five months after he had become aware of the French Legislative Assembly’s call for a new trade agreement. In view of the possibility of such dramatic changes in American commerce, Jefferson secured House approval in March 1792 to defer submission of the report until the next session of Congress (William Short to TJ, 6 June 1791; Josef de Jaudenes and Josef Ignacio de Viar to TJ, 27 Jan. 1792; Memoranda of Consultations with the President, [11 Mch.-9 Apr. 1792]; TJ to the Speaker of the House of Representatives, 22 Mch. 1792, and note). In addition to the motives he articulated, Jefferson withheld the report for two other reasons. Federalist control of the second Congress made it unlikely that any legislative action would result from his recommendations for commercial retaliation against Britain, and the discriminatory policies toward American shipping and tobacco that the Legislative Assembly had adopted in 1791 weakened his argument that the French treated American trade more favorably than the British.
Despite the failure to achieve a commercial treaty with Spain or a new commercial treaty with France, Jefferson also withheld the second state of the report from Congress. With a few minor exceptions, this text was initially identical to the first state of the report as Jefferson had revised it. But in February 1793 he variously submitted all or parts of this document to Tench Coxe, the President, and the British, French, Spanish, and Dutch ministers. After revising the text in response to Coxe’s suggestions, he secured Washington’s approval of the document as it stood and then made further revisions on the basis of the foreign ministers’ comments and his own ideas. These revisions essentially involved matters of detail that left the general thrust of the report untouched. In the same month, however, Jefferson obtained House approval to delay submission of the report until the newly elected third Congress met later in 1793, in part no doubt because he learned that Edmond Charles Genet was coming to America with authority to conclude a new French-American trade treaty, and in part because he feared that releasing the report at this time would engender British interference in American peace talks with the Western Indians. He probably also hoped that the new Congress would be controlled by Republicans sympathetic to his proposals for commercial discrimination against Britain (Document II below; Notes on Conversations with William Stephens Smith and George Washington, 20 Feb. 1793, and note; TJ to the Speaker of the House of Representatives, 20 Feb. 1793, and note).
Jefferson’s submission of the final report to Congress on 16 Dec. and a supplementary report to the House on 30 Dec. 1793 was the prelude to a sustained Republican legislative assault on the British navigation system. With a few slight exceptions, the former document was identical to the second state of the report as Jefferson had revised it, and thus did not reflect any of the changes in European commercial policy resulting from the French declaration of war on Britain in February 1793. Submitted to the Senate by Vice-President John Adams on 18 Dec. and to the House by Speaker Frederick Augustus Muhlenberg on 19 Dec. 1793, the report was published late in 1793 by order of the House (JS description begins Journal of the Senate of the United States, Washington, D.C., Gales, 1820–21, 5 vols. description ends , ii, 12; JHR description begins Journal of the House of Representatives of the United States, Washington, D.C., Gales & Seaton, 1826, 9 vols. description ends , ii, 18; Evans, No. 26339). The circumstances under which Jefferson released it seemed to be more favorable for the accomplishment of his objectives: Republicans narrowly controlled the House, though not the Senate; popular hostility to Britain was rising because of its seizures of American ships trading with France and its mediation of an Algerine-Portuguese truce that injured American shipping; and popular support for France remained strong, despite the fiasco of the Genet mission and French captures of American merchant vessels. Within this context British minister George Hammond correctly perceived that the report had an “avowed undisguised tendency … to recommend a closer connexion with France, and to inculcate the expediency of a direct system of commerical hostility with Great Britain” (Documents iii-v below; Hammond to Lord Grenville, 22 Feb. 1794, PRO: FO 5/4).
On 3 Jan. 1794, three days after Jefferson retired from office, James Madison launched the Republican drive to implement the report’s legislative recommendations by submitting eight resolutions to the House. The first resolution generally stated the desirability of a more rigorous policy of commercial discrimination, the next six called for specific discriminatory measures clearly aimed at British trade and shipping, and the last provided that compensation to American citizens for losses caused by foreign countries acting in violation of international law be paid from additional duties levied against those countries. Led by Madison, Republicans argued that the resolutions would improve the terms of American trade with Britain and other countries, end the corruption of American government and society caused by undue British economic influence, help resolve Anglo-American diplomatic differences, and strengthen American relations with the French sister republic. With the aid of data secretly supplied by the Secretary of the Treasury, the principal Federalist spokesman, William Loughton Smith of South Carolina, countered with a blistering attack on the anti-British thrust of Jefferson’s report. Examining every aspect of American commerce with France and Britain covered by the report, Smith argued that in the vast majority of cases British policies were more favorable to the United States than those of the French. Federalists also contended that Madison’s resolutions would devastate the thriving American economy, provoke a commercial and possibly even a shooting war with Britain, exacerbate Anglo-American diplomatic disputes, and destroy public credit. After weeks of debate, during which opinion in the House remained so closely divided that Republicans could barely pass Madison’s prefatory resolution, the House agreed on 5 Feb. to postpone debate on the remaining resolutions until 3 Mch. 1794. Republicans hoped that in the interval news of fresh British provocations would strengthen support for Madison’s proposals. Instead the arrival during this interval of news of British seizures of about 250 American ships in the West Indies and Lord Dorchester’s incendiary speech to the Western Indians created a war crisis of such gravity that commercial discrimination now seemed like a tepid response to British aggression. Congress accordingly took no further action on Madison’s resolutions and turned its attention to sterner measures, while the President dispatched Chief Justice John Jay on a mission to England that resulted in a treaty which prohibited commercial discrimination against Britain for a decade, thus dooming Jefferson’s hope of radically reshaping the American political economy (Annals, iv, 158–9, 174–209, 226–48, 256–349, 352–66, 395–410, 413–32; Madison, Papers, xv, 147–8, 167–71, 182–202, 204, 206–8, 210–43, 247–8; Syrett, Hamilton, xiii, 395–436; Hammond to Lord Grenville, 22 Feb. 1794, PRO: FO 5/4; Elkins and McKitrick, Age of Federalism, 381–96; Bemis, Jay’s Treaty, 353).