[21 April 1789]
The tonnage duty on vessels belonging to subjects of countries having a commercial treaty with the United States, or belonging partly to such subjects and partly to United States citizens, was under debate. Goodhue moved for a sixty-cent rate.
Mr. Madison. Some gentlemen have seemed to call in question the policy of discriminating between nations in commercial alliance with the United States, and those with whom no treaties exist; for my own part, I am well satisfied that there are good and substantial reasons for making it; in the first place, it may not be unworthy of consideration, that the public sentiments of America will be favourable to such discrimination. I am sure with respect to that part from which I came, it will not be a pleasing ingredient in your laws, if they find foreigners of every nation put on a footing with those in alliance with us. There is another reason which perhaps is more applicable to some parts of the union than to others; one of the few nations with which America has formed commercial connections has relaxed considerably in that rigid policy it before pursued, not so far to be sure as America could wish, with respect to opening her ports to our trade, but she has permitted our ready built ships a sale, and entitles them to the same advantage, when owned by her own citizens, as if they had been built in France, subjecting the sale to a duty of 5 per cent. The British market receives none; the disabilities of our ships to trade with their colonies continue even if they are purchased by the subjects of Great-Britain. Of consequence they cannot be sold without a considerable loss; nay so cautious are they to prevent the advantages we naturally possess, that they will not suffer a British ship to be repaired in America, beyond a certain proportion of her value; they even will not permit our vessels to be repaired in their ports.
Another consideration has some weight with me in deciding the question of discrimination. The policy of our ally, from the views of the minister employed, has frequently been adverse to the interest of this country. The person who has had the charge of our affairs at that court, has long been soliciting a relaxation in our favour, and although it cannot be declared that he has succeeded, yet there is reason to believe he has made some impressions, which our conduct ought to avoid effacing; they are such as merit national attention, and might justify a discrimination at this time, although it may be proper to hold ourselves at liberty to pursue that policy which a change may make necessary. There are also other considerations which ought to be taken into view. From artificial or adventitious causes the commerce between America and Great Britain exceeds what may be considered its natural boundary. I find from an examination of the accounts of tonnage for the three large states of Massachusetts, Virginia, and South Carolina, that the tonnage of nations in alliance with us holds no proportion with that of Great Britain, or of the United States. This is a proof, that a very small direct commerce takes place between those countries and this; that there is less of direct intercourse than would naturally be if those extraneous and adventitious causes did not prevent it; such as, the long possession of our trade, their commercial regulations calculated to retain it, their similarity of language and manners, their conformity of laws and other circumstances, all these concurring has made their commerce with us more extensive than their natural situation would require it to be. I would wish therefore to give such political advantages to those nations as might enable them to gain their proportion of our direct trade from the nation who has acquired more than is naturally her due. From this view of the subject, I am led to believe it would be good policy to make the proposed discrimination between them. Is it not also of some importance, that we should enable nations in treaty with us to draw some advantage from our alliance, and thereby impress those powers that have hitherto neglected to treat with us, with the idea that advantages are to be gained by a reciprocity of friendship? If we give every thing equally to those who have or have not formed treaties, surely we do not furnish to them any motive for courting our connection.
It has been objected, that the price of our produce at foreign markets would not bear this additional burthen, and that the freight must be paid by the planters. It will be unnecessary, after what was said by the gentleman from Pennsylvania (Mr. Fitzsimons) to take up the [time of the] committee in observing, that foreigners must receive our tobacco, rice, &c. in American shipping if they cannot be otherwise got. There may be a discrimination made in other respects beside in tonnage, so that a very high impost on this article need not be insisted upon. But will any gentleman say, British vessels ought to enjoy in American ports greater advantages than are enjoyed by Americans in British ports? Yet were the duties laid equal in both cases, the British merchant would have a very great superiority. In the first place, some of the most valuable ports which she possesses, and most conducive to our interest, are absolutely closed, whilst every port in the United States is open to her without restriction or limitation. Again, even in those which it is permitted America to enter her vessels, she must bring nothing but the produce of her own soil, whilst the British ship makes circuitous voyages, and brings with her the produce of every quarter of the globe; these are material advantages, and take the whole of these observations together, I think they furnish substantial reasons for making the proposed discrimination.
Cong. Register description begins Thomas Lloyd, comp., The Congressional Register; or, History of the Proceedings and Debates of the First House of Representatives … (2 vols.; New York, 1789; Evans 22203–4). description ends , I, 111–13 (also reported fully in N.Y. Daily Advertiser, 22 Apr. 1789; reported briefly in Gazette of the U.S., 25 Apr. 1789).
[21 April 1789]
Laurance objected to discrimination between countries having a commercial treaty with the United States and those which did not as contrary to the national interest.
Mr. Madison. I am a friend to free commerce, and at the same time a friend to such regulations as are calculated to promote our own interest, and this on national principles. The great principle of interest is a leading one with me, and yet my combination of ideas on this head, leads me to a very different conclusion from that made by the gentleman from New-York (Mr. Lawrance). I wish we were under less necessity than I find we are to shackle our commerce with duties, restrictions and preferences; but there are cases in which it is impossible to avoid following the example of other nations in the great diversity of our trade. Some reasons for this were mentioned on a former occasion; they have been frequently illustrated in the progress of this business, and the decision of the committee have proved them to be necessary.
I beg leave to remark in answer to a train of ideas which the gentleman last up has brought into view, that although interest will in general operate effectually to produce political good, yet there are causes in which certain factitious circumstances may divert it from its natural channel, or throw or retain in an artificial one. Have we not been exercised on this topic for a long time past? Or why has it been necessary to give encouragement to particular species of industry, but to turn the stream in favor of an interest that would not otherwise succeed? But laying aside the illustration of these causes so well known to all nations, where cities, companies, or opulent individuals engross the business from others, by having had an uninterrupted possession of it, or by the extent of their capitals being able to destroy a competition; let us proceed to examine what ought to be our conduct on this principle, upon the present occasion. Suppose two commercial cities, one possessed of enormous capitals and long habits of business, whilst the other is possessed of superior natural advantages, but without that course of business and chain of connections which the other has, is it possible in the nature of things, that the latter city should carry on a successful competition with the former? Thus it is with nations; and when we consider the vast quantities of our produce sent to the different parts of Europe, and the great importations from the same places, that almost all of this commerce is transacted thro’ the medium of British ships and British merchants, I cannot help conceiving that, from the force of habit and other conspiring causes, that nation is in possession of a much greater proportion of our trade than she naturally is intitled to. Trade then being restrained to an artificial channel, is not so advantageous to America as a direct intercourse would be; it becomes therefore the duty of those to whose care the public interest and welfare are committed, to turn the tide to a more favorable direction.
In the trade of South Carolina is employed annually about 56,977 tons of shipping. The proportion of French and Dutch is about 2,100 tons, while that of Great Britain is about 19,000. In Massachusetts the quantity is about 85,551 tons; it is stated, that there is belonging to the state 76,857, the remainder is foreign and mostly British. In Virginia we have 56,272 tons; 26,903 British, and only 2664 of the French and Dutch.1 I cannot, from this view of the subject, be persuaded to believe that every part of our trade flows in those channels which would be most natural and profitable to us, or those which reason would dictate to us, if we were unincumbered of old habits, and other accidental circumstances that hurry us along.
It has been asked by the gentleman from New-York, (Mr. Lawrance) what evidence we had that the public sentiments of America were in favor of discrimination? Perhaps it would be improper on this occasion to adduce any other proof of the fact than from the transactions of public bodies, and here I think is abundant proof to be found. The state of Virginia, if I am not mistaken, lays a double duty on tonnage; French and Dutch vessels pay half a dollar per ton, while the vessels of Great-Britain are subjected to one dollar. There are other distinctions in our revenue laws manifesting the same principle; some of them establish a preference to French wines and brandy. In Maryland a similar policy has prevailed; I believe the difference there is about one third in favour of our allies—if I err the gentlemen from that state can set me right; in Pennsylvania there is a discrimination of about a fourth. I do not certainly recollect, but I believe the like policy exists in other states; but I have not had an opportunity of searching their laws on this point, but what I have enumerated are facts affording substantial proof, that the public sentiment does favor the discrimination.
Cong. Register description begins Thomas Lloyd, comp., The Congressional Register; or, History of the Proceedings and Debates of the First House of Representatives … (2 vols.; New York, 1789; Evans 22203–4). description ends , I, 116–18 (also reported fully in N.Y. Daily Advertiser, 23 Apr. 1789; reported briefly in Gazette of the U.S., 25 Apr. 1789).
[21 April 1789]
After the committee approved a duty of thirty cents on the vessels of countries having a commercial treaty with the United States, Laurance moved that the same duty be charged other foreign ships. His motion was interpreted as an effort to prevent discrimination against British ships.
Mr. Madison Supposed the gentleman by this motion, intended to equalize the restrictions about to be laid on foreign nations, as he was opposed to a discrimination; if so, he acted consistent with his principles: But said he, I am actuated by a different sense of interest; and therefore shall be in favor of a larger sum than that proposed. The more the subject has been examined the greater necessity there appears for discrimination. If it is expedient for America to have vessels employed in commerce at all, it will be proper that she have enough to answer all the purposes intended; to form a school for seamen, to lay the foundation of a navy, and to be able to support itself against the interference of foreigners. I do not think there is much weight in what has been observed relative to the duty we are about to lay in favor of American vessels, being a burthen on the community, and particularly oppressive to some parts; but if there were, it may be a burthen of that kind which will ultimately save us from one that is greater.
I consider that an acquisition of maritime strength is essential to this country; if ever we are so unfortunate as to be engaged in war, what but this can defend our towns and cities upon the sea-coast? Or what but this can enable us to repel an invading enemy? Those parts which are said to bear an undue proportion of the burthen of the additional duty on foreign shipping, are those that will be the most exposed to the operations of a depredatory war, and require the greatest exertions of the union in their defence; if therefore some little sacrifice is made by them to obtain this important object, they will be peculiarly rewarded for it in the hour of danger. Granting a preference to our own navigation will insensibly bring it forward to that perfection so essential to American safety; and though it may produce some little inequality at first, it will soon ascertain its level, and become uniform throughout the union. A higher duty will become necessary on these principles, as well as on those of discrimination; the preference we give to foreign nations in alliance over those not in treaty, will tend to encrease the trade of our allies, but it will also enable our own shipping to carry on lower terms, than that nation who is in possession of such an unnatural proportion of commerce.
Cong. Register description begins Thomas Lloyd, comp., The Congressional Register; or, History of the Proceedings and Debates of the First House of Representatives … (2 vols.; New York, 1789; Evans 22203–4). description ends , I, 120–21.
[21 April 1789]
FitzSimons moved that sixty cents be set for the duty on foreign vessels. Tucker, though in favor of discrimination, thought sixty cents too high.
Mr. Madison Begged leave to express an idea which he thought would reconcile gentlemen to a more considerable duty than seemed to be contemplated. It was admitted on all hands, that America did not furnish shipping sufficient for the transportation of her own produce, and the apparent quantity would decrease from what it was now represented to be, if gentlemen considered that the American vessels, mentioned in the custom-house reports, may clear three, four, five or six times [a] year, and consequently multiplied the gross amount without its being substantially true. Another circumstance that decreases this apparent quantity is, that foreigners have in some instances, in order to obtain the privileges of our ships, masked their property under the American name. This reduction of our shipping serves only to shew the indispensible necessity of applying means to raise it up to what it ought to be. But in doing this we ought to be careful in avoiding any sudden or violent effect upon our commerce by the rise of freight. Let then the operation of the present discrimination continue for such a length of time, as it is likely will procure us a sufficient quantity of tonnage of our own, and then let the duty be encreased to a greater degree. This may be done by a small addition to the clause, saying, that the duty shall be a certain sum, but that after another day, it shall be encreased to a larger sum. Thus will both the objects of gentlemen be effected. Ship-building will be encouraged, and the freight will not be raised. He made a motion similar to what he had expressed.
Cong. Register description begins Thomas Lloyd, comp., The Congressional Register; or, History of the Proceedings and Debates of the First House of Representatives … (2 vols.; New York, 1789; Evans 22203–4). description ends , I, 122. The committee agreed to fifty cents, and then reported all of its resolutions on import and tonnage duties to the House. This report is printed in the N.Y. Daily Advertiser, 23 Apr. 1789, and the Gazette of the U.S., 25 Apr. 1789.