Report on the Subject of Manufactures (1791). The American Economy: A Historical Encyclopedia

On December 5, 1791, Secretary of the Treasury Alexander
Hamilton submitted his Report on the Subject of
Manufactures to Congress. Hamilton argued that the United
States needed to develop domestic manufacturing as a means
of protecting its economic freedom. As a supplier of raw
materials for industrial England and other European powers,
the United States remained dependent on foreign governments
in economic matters. Hamilton pointed out that if the United
States would initiate a protective tariff, then investors would
contribute to the development of industries within the country.
These enterprises could take advantage of the internal
availability of natural resources. Although there were not
enough workers for a large number of these factories,
Hamilton pointed out that such a policy would also encourage
immigration and thereby eliminate the problem of a “scarcity
of hands.” Although Congress failed to implement all of
Hamilton’s proposals, after the War of 1812 the first protective
tariff was passed. “Protectionism,” as Hamilton’s philosophy
became known, continued in the United States until the
post–World War II era. Consequently, the nation developed
into an industrialized country instead of an agricultural one.
The Secretary of the Treasury, in obedience to the order of
the House of Representatives, of the 15th day of January
1790, 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 of 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 abridge
the vent of the increasing surplus or 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 that 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, favorable to national independence and safety.
There still are, nevertheless, respectable patrons of opinions, unfriendly to the encouragement of manufacturers. 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.”
“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 more effectually promoted. To leave industry to itself,
therefore, is, in almost every case, the soundest as well as the
simplest policy.”
“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 of emigration from the settled to the unsettled parts of the
country—the facility with which the less independent condition of a 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 continued 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 the county, ‘tis vain to
hope for the former.”
“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 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 were able to supply us in greater perfection, and
upon better terms.”
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 judgment 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 favor 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
a man—as the principal source of those materials which constitute the nutriment of other kinds of labor—as including a
state more 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 is has a title to any thing like an exclusive predilection, in any country, ought to be admitted with great caution. That 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 and importance, they truly are, will be advantaged, 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.
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 and 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
employees them (or which furnishes materials tools and
wages) and yield the ordinary profit of that Stock. It yields
nothing equivalent to the rent of the land and labour of the
country. The additional value given to those parts of the produce of land, which are wrought into manufacturers, 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.
To this it has been answered—
I “That inasmuch as it is acknowledged, 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 is 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 there labour to the materials upon with 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 in 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, will be equal to the two sums, and consequently double the value of the agriculture produce con-
sumed. 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 labour, a greater value of
goods in the market then would exist independent of it.”
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 there labor 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.”
III—“That the annual produce of the land and labour of a
country can 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 in simplicity of
operation, within 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 cultural of land
can pretend to no advantage over that engaged in manufactures: That with regard to an augmentation of the quantity of
useful labuor, 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 Agricultural or Manufactures, or in any
other way.”
But while the exclusive productiveness of Agricultural
labour has been thus denied and refuted, the superiority of its
productiveness has been conceded without hesitation. As this
concession involves a point of considerable magnitude, in
relation to maxims of public administration, the grounds
which it rests are worthy of a distinct and particular examination.
One of the arguments made use of, in support of the idea
maybe pronounced both quaint and superficial. It amounts
to this—That in the productions of the soil, nature cooperates with man; and that the effect of their joint labour
must be greater than that of the labour of man alone.
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 toward more simple
operations and objects: 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 the seasons, liable to various and long intermissions; while that occupied in many
manufactures is constant and regular, extending through the
year, embracing in some instances night as well as day. 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; 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. And if it may
likewise be assumed as a fact, that manufactures open a wider
field to exertions of ingenuity than agriculture, 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 on
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.
But this distinction, important as it has been deemed,
appears rather verbal than substantial.
It is easily discernable, 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. It seems to have been overlooked,
that the land is itself a Stock or capital, 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
leads 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 persecution 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,
Report on the Subject of Manufactures 519
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 knowledge 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; 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, 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; 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 averted 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 proportion 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.
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
then greater than they could possibly be, without such establishments. 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 another.
6. The affording a more ample and various field of
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.
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 implements, 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.
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.
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 Manufactures, towards promoting an
increase of productive industry, is apparent.
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, unencumbered too by the expence of
maintaining the laborer. 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. 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.
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. Of the number of persons employed in the
Cotton Manufactories of Great Britain, it is computed the 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 reason 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.
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.
If there be any thing 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 becomes 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.
This is among the most important of the circumstances
which have been indicated. It is a principal mean, by which the
establishment of manufactures contributed 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.
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 national 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.
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 detach 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.
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.
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 them—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. 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 had 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 supplied 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. 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 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.
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. ‘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 out 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.
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 must 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.
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 graduations. 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 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.
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
Report on the Subject of Manufactures 525
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.
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.
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 indispensable.
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. 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 of 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.
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 proportionally 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.
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 of its success. The Undertaker can afford to pay the
price.
There are grounds to conclude the undertakers of
Manufacturers 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, building
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 in Europe are
much more dependent on foreign supply for the materials of
the 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 change on
the foreign fabric, which cannot be estimated, at less than
[from 15 to 30] per Cent. on the cost of it at the manufactory.
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 concentrating the proportion which it bears to the
objects that invite 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 the 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
occasion 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,
528 Report on the Subject of Manufacturers
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; 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.
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
the 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
instance 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 is 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)
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 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
Report on the Subject of Manufactures 529
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 greate(r) exertion in any occupation; 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 out 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 in 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 deductible, 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 this 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 entirely 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 in 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 desirable, 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 running 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.
530 Report on the Subject of Manufacturers
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	Tanned and tawed leather dressed skins, shoes,
Skins.	boots and Slippers, harness and sadlery of all

kinds. Portmanteau’s and trunks, leather
breeches, gloves, muffs and tippets, parchment
and Glue.
II. Of Barr and Sheet Iron, Steel, Nail—rods & Nails,
Iron. 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 Ships Cabinet Wares and Turnery, Wool and
Wood. Cotton ca(rds) and other Machinery for manufactures and husband(ry,) Mathematical instruments, Coopers wares of every kind.
IV. Of flax Cables, sail-cloth, Cordage, Twine and pack-
& Hemp. thread.
V. Bricks and course 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 the 2/3 3/4 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.
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 commodi(es).
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 endeavor 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.
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
attainted 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
Report on the Subject of Manufactures 531
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 œconomy, 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.
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 Counry,
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) in 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 he 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 effect(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 later.
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
532 Report on the Subject of Manufacturers
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 operations 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 endeavor 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 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
Report on the Subject of Manufactures 533
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 mischievious. 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.
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.
But there are more particular considerations which serve
to fortify the idea, that the encouragement of manufactures
in 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. 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. 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 satisfactorily 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 (i)n 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 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, accom-
panied 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, intented 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.
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, 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 directed, 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 a 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 considerations combat each
other, prudence seems to dictate, that the expedient in question, ought to be indulged with a sparing hand.
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 by the Government of
the United states (unless the allowance on the exportation of
dried an pickled Fish and salted meat could be considered as
a bounty) and though it is less favored by public opinion that
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 small 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 articles
may have been destroy(ed).
It cannot escape notice, that a duty upon the importation
of (an) articles can not 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.
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 pubic 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] per Cent on their value, according to their bulk.
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 subjects, 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.
536 Report on the Subject of Manufacturers
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
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 authorized in the constitution, either
expressly or by fair implication.
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. From a similar establishment in the
United states, supplied and supported by the Government of
the Union, vast benefits might reasonably be expected. 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 advisable 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.
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.
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 of 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; and the Idea has been adopted by the
laws of the Union in the stances of salt and Molasses. 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.
Report on the Subject of Manufactures 537
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 utiity of the invention, or
discovery: For the last, so far as respects “authors and inventors” provision has been made by Law. 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 advantge 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; and others may be expected to occur from time
to time. The adoption of it seems to be dictated by the principle of reciprocity. Great 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. 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. 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 established 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, then the ameliorations of the public roads of that
Kingdom, and the great process which has been of late made
in opening canals. 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
538 Report on the Subject of Manufacturers
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.
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 the 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; 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. 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 that 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 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. 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.
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 united in a greater degree, than
almost any others, the several requisites, 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. The duty 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 desirable, 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 this 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.
The expendiency of an additional duty on these materials
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 lb would, it is presumable, 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. 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 rates
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; and to replace from time
to time such as should be withdrawn from use, so as always
to have in store the quantity of each kinds, 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 on 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 7 1/2 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 desirable 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
540 Report on the Subject of Manufacturers
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 in 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 rates at 7 1/2. 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.
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.
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. 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.
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.
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 seem 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 an objection to it. The increasing scarcity and the growing importance of that article, in the European countries,
admonish the United States to commerce, and systematically
to pursue, measures for the preservation of their stock.
Whatever may promote the regular establishment of the
Magazines of Ship Timber is in various views desirable.
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 consideration.
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
Report on the Subject of Manufactures 541
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.]
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 States 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 as 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 distilleries (including too the mot 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
fact 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 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, 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. 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
542 Report on the Subject of Manufacturers
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 guard 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 article of Starch, hair powder and
wafers, may with great propriety be placed among those,
which are rate 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 many
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 extend—the
great advances, which have been already made, in the coarser
fabricks of them, expecially in the family way, constitute
claims, of peculiar force, to the patronage of the government.
This patronage may be afford 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, tha(t) 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.
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.
It would likewise appear to be good policy to raise the duty
to 7 1/2 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 12 1/2 per Cent, upon an average on the exportation of such 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.
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
Report on the Subject of Manufactures 543
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 obstacles 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
nevertheless 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
lease 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.
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.
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, Surrinam and Demarara is said
to be preferable, even at a material difference of price, to the
Cotton of the Islands.
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.
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; 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 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
544 Report on the Subject of Manufacturers
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 7 1/2 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 continued
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.
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 fur, 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.
A promising essay, towards the fabrication of cloths, cassimires and other woolen goods, is likewise going on at
Hartford in Connecticut. 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, 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, perseverence 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 the 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 2 1/2 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.
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, Hankerchiefs Ribbons & Buttons are made though as yet but in small
quantities.
A Manufactory of Lace upon a scale not very extensive has
been long memorable at Ipswich in the State of Massachusetts.
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.
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. An extraordinary abundance of Fuel is a particular advantage by this Country for such manufactures. They,
however, require large Capitals and involve much manual
labour.
Report on the Subject of Manufactures 545
Different manufactories of Glass are not on foot in the
United States. The present duty of 12 1/2 per Cent on all
imported articles of glass amount to a considerable encouragement of 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.
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.
Printed books
The great number of presses disseminated throughout the
Union, seem to afford an assurance, that there is not 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 as 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.
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 a 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.
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.
546 Report on the Subject of Manufacturers
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 the interests of the revenue 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 is 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.
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 disbursements; 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 disbursement.
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 reasons to believe, that the progress of particular
manufactures has been much retarded by the want of skilful
workmen. And it often happens that the capitals employed
are not equal to the purposes of bringing from abroad workmen of a superior kind. Here, is case 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 of 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 mature
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 the
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;] 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
Report on the Subject of Manufactures 547
a general spirit of improvement than the institutions of this
nature. They are truly invaluable.
In countries where there is a 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
Secretary of the Treasury