Google
This is a digital copy of a book lhal w;ls preserved for general ions on library shelves before il was carefully scanned by Google as pari of a project
to make the world's books discoverable online.
Il has survived long enough for the copyright to expire and the book to enter the public domain. A public domain book is one thai was never subject
to copy right or whose legal copyright term has expired. Whether a book is in the public domain may vary country to country. Public domain books
are our gateways to the past, representing a wealth of history, culture and knowledge that's often dillicull lo discover.
Marks, notations and other marginalia present in the original volume will appear in this file - a reminder of this book's long journey from the
publisher lo a library and linally lo you.
Usage guidelines
Google is proud lo partner with libraries lo digili/e public domain materials and make them widely accessible. Public domain books belong to the
public and we are merely their custodians. Nevertheless, this work is expensive, so in order lo keep providing this resource, we have taken steps to
prevent abuse by commercial panics, including placing Icchnical restrictions on automated querying.
We also ask that you:
+ Make n on -commercial use of the files We designed Google Book Search for use by individuals, and we request thai you use these files for
personal, non -commercial purposes.
+ Refrain from automated querying Do not send automated queries of any sort lo Google's system: If you are conducting research on machine
translation, optical character recognition or other areas where access to a large amount of text is helpful, please contact us. We encourage the
use of public domain materials for these purposes and may be able to help.
+ Maintain attribution The Google "watermark" you see on each lile is essential for informing people about this project and helping them find
additional materials through Google Book Search. Please do not remove it.
+ Keep it legal Whatever your use. remember that you are responsible for ensuring that what you are doing is legal. Do not assume that just
because we believe a book is in the public domain for users in the United States, that the work is also in the public domain for users in other
countries. Whether a book is slill in copyright varies from country lo country, and we can'l offer guidance on whether any specific use of
any specific book is allowed. Please do not assume that a book's appearance in Google Book Search means it can be used in any manner
anywhere in the world. Copyright infringement liability can be quite severe.
About Google Book Search
Google's mission is to organize the world's information and to make it universally accessible and useful. Google Book Search helps readers
discover the world's books while helping authors and publishers reach new audiences. You can search through I lie lull lexl of 1 1 us book on I lie web
al |_-.:. :.-.-:: / / books . qooqle . com/|
GIFT OF
SAMUEL A. GREEN
^ha rvard collegelibrary3s?j
GIFT OF
SAMUEL A. GREEN
|KSC HARVARD COLLEGE LI BKARY ]fi.~*
ALEXANDER HAMILTON'S
I
OV THE
SUBJECT OF MANUFACTURES,
MADE IK HIS CAPACITY OF
'71. J. -
• v
/
SXSORSTAH7 OF THE TREASURY, n ' '
: x .
/
■ /
/
r "
O If THE
FIFTH OF DECEMBER, 1791.
SIXTH EDITION.
TO WHICH ARE PBEPIXKB,
TWO PREFACES BY THE EDITOR. */'
,/I.Cfo"-
/ -
C/wW
V
r
^ PHILADELPHIA:
PRINTED BY WILLIAM BROWN.
Nov. 8, 1827.
•**■-
J-
<>
</
0y-^
yc. u. /<Hj$
HARVARD^
UN IVF -RSITY
■■'-.*
20 *
i -■*t**«#i
PREFACE TO THE FIFTH EDITION.
The Board of Managers of the Pennsylvania Society for
the encouragement of American Manufactures, presume they
could not render their fellow citizens a more acceptable ser-
vice at this period, when the protection of the manufacturing
industry of the country is in discussion, than by presenting
them with the celebrated Report of A. Hamilton on that to-
pic. It affords the proudest monument of his talents, and
contains more sound practical doctrines on the promotion
of the wealth and prosperity of nations, than any of the ab-
struse and ponderous volumes with which the world has
been inundated on this important subject for the last fifty
years. These only serve to confound and confuse the reader,
who is lost in the midst of abstract and metaphysical subtle-
ties, while the great outlines of the subject, those that are
amply adequate for the guidance of a statesman, are level to
the capacity of every person possessed of a moderate share
of understanding. To persons of this description the great
practical maxims of this report are almost as clear and con-
clusive as Blair's Sermons or Gen. Washington's farewell
address. This is the peculiar advantage of the 'doctrines, of
those who advocate the protection of national industry.
The Quarterly Review has pourtrayed the character of
Smith's "Wealth of Nations" very correctly in four lines,
which pointedly refer to its incomprehensibility. "Adam
Smith, the great advocate for the most unlimited freedom of
trade, is read in all countries and languages, whether " to in-
form youth, or puzzle the learned. 99 * That many of his
* Edinburgh Review, vol. 24, p. 301.
s..
doctrines are admirably calculated to "puzzle the learned,"
is beyond all controversy — and that therefore they cannot
be very well adapted to "inform youth" or guide states-
men, will be clearly admitted.
There is, however, one maxim in his book, which ought
to be posted in letters of gold, in Congress Hall and in the
houses of the president and secretary of the treasury. It is
worth all the rest of the work together. It is a maxim which
unfortunately our statesmen have generally disregarded —
and the disregard of which has cost this country millions of
dollars annually, since the establishment of tfie federal con-
stitution. This disregard has converted thousands of manu-
facturers and artificers into farthers — of farmers into cotton
and tobacco planters — glutted the foreign markets with our
produce — impoverished the country — excluded at least 20,000
emigrants annually, with all their skill, their talents, their
industry, and their capital. In a word, there is no distress,
no suffering, no paralysis of industry that has prevailed in
this country, which cannot be fairly traced to the opposition
between our policy add this grand maxim :
" Whatever tends to diminish in any country the num-
" her of artificers and manufacturers, tends to diminish
" the home market, the most important of all markets for
" the rude produce of the sqil — and thereby still further
" to discourage agriculture"*
This sound maxim may be fairly said to be " the Alpha
"and Omega," "the law and the prophets," as regards poli-
tical economy. It is the same, with respect to that science,
as " Love. God above all things, and your neighbour as your-
" self," in religion. The prosperity or decay of any coun-
try bears a regular proportion to its obcervanee, or rejection.
Great Britain has by every conceivable means, increased
"the market for the rude produce of her own soil," and
every soil under heaven. On this basis she has erected the
stupendous power she possesses, so far beyond what her na-
tural advantages entitle her to claim. In Ireland, on the
* Wealth of Nation*, Hartford edition, 1818, vol II. page 149.
contrary, every thing has for centuries concurred to diminish
this domestic market— hence her misery and wretchedness.
To the misfortune of our country, our system has been
in opposition to this maxim. At almost every step of our pro-
gress, we have, by the encouragement of foreign importa-
tion, been constantly " diminishing the number of artificers
" and manufacturers "* and thus "diminishing the home
" market for the rude produce of the soil." And in this
mistaken policy the farmers and planters of the country have
suicidally co-operated. They thought they were only guard-
ing against extortion on the part of the manufacturers — but
the stroke has recoiled on themselves, and on the country at
large. They have, as has been so often repeated, utterly dis-
regarded the admonitory fable of the Belly and the Members.
We shall conclude with a quotation from an essay recently
published by a member of the Board, respecting the writer of
this luminous report: —
" The opinions of Mr. Hamilton on these topics are enti-
" tied to particular attention. His associations were chiefly
"among the mercantile class, a very large proportion of
** whom were his warm admirers and partizans. Whereas
" with the manufacturers and mechanics generally he was un-
" popular. Had he any undue bias to mislead him, there*
" fore, it would have been in favour of the former and
" against the latter class. And when a man with such a
" mind, and under such circumstances, advocated the protec-
" tion of manufactures, for the promotion of national prospe-
" rity, those who take the opposite side of the question,
" ought to weigh the subject well, and consider whether, in a
" conflict of opinion between them and Mr. Hamilton, on*a
" point which he bad thoroughly investigated in all its bear-
" ings and aspects, it is not highly probable that they are in
" error — and that they sacrifice the vital interests of a great
;( nation by an obstinate adherence to theories, which, how-
" ever plausible, have never failed to entail wretchedness on
* Written, be it remembered, in 1824. The tariff of that year, imperfect
as it is, has produced a great change in our policy — and hence the prospe-
rity that prevails in those parts of the nation, where its operation is felt.
GIFT OF
SAMUEL A. GREEN
HARVARD COLLEGE LIBRARY
G^
* -a
10 ALEXANDER HAMILTON'S REPORT
"To endeavour, by the extraordinary patronage of govern-
ment, to accelerate the growth of manufactures, is, in fact, to
endeavour, 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 di-
rection to the industry of its citizens. This, under the quick-
sighted guidance of private interest, will, if left to itself, infal-
libly find its own way to the most profitable employment ;
and it is by such employment, that the public prosperity will
be most effectually promoted. To leave industry to itself,
therefore, is, in almost every case, the soundest as well as the
simplest policy. t
" 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 si-
tuation. The smallness of their population, compared with
their territory, the constant allurements to emigration from the
settled to the unsettled parts of the country ; the facility with
which the less independent condition of an artisan can be ex-
changed for the more independent condition of a farmer ;
these, and similar causes, conspire to produce, and for a length
of time must continue to occasion, a scarcity of hands for
manufacturing occupation, and dearness of labour generally.
To these disadvantages for the prosecution of manufactures, a
deficiency of pecuniary capital being added, the prospect of a
successful competition with the manufacturers of Europe, must
be regarded as little less than desperate. Extensive manufac-
tures can only be the offspring of a redundant, at least of a full
population. Till the latter shall characterise the situation of
this country, it is vain to hope for the former.
" If, contrary to the natural course of things, an unseasona-
ble and premature spring can be given to certain fabrics, by
heavy duties, prohibitions, bounties, or by other forced expe-
dients; this will only be to sacrifice the interests of the com-
munity to those of particular classes. Besides the misdirec-
tion 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 expense of the other parts of the society. It is far pre-
ferable, that those persons should be engaged in the cultivation-
of the earth, and that we should procure, in exchange for its
jlroductions, the commodities with which foreigners are able
to supply us in greater perfection, and upon better terms."
This mode of reasoning is founded upon facts and princi-
ples, 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
\ ON MANUFACTURES. H
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 con-
siderable 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 imputa-
tion, it is necessary to advert carefully to the considerations
which plead in favor of manufactures, and which appear to re-
commend 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 sup-
ply ; as the immediate and chief source of subsistence to man ;
as the principal source of those materials which constitute the
nutriment of other kinds of labour ; as including a state most
favourable to the freedom and independence of the human
mind : one, perhaps, most conducive to the multiplication of
the human species ; has intrinsically a strong claim to pre-emi-
nence over every other kind of industry.
But, that it has a title to any thing like an exclusive predi-
lection, in any country, ought tb be admitted with great caution.
That it is even more productive than every other branch of
industry, requires more evidence than has yet been given in
support of the position. That its real interests, precious and
important^ as, -without the help of exaggeration, they truly are 9
will be advanced, rather than injured by the due encouragement
of manufactures, may, it is believed, be satisfactorily demon-
strated. And it is also believed, that the expediency of such
encouragement, in a general view, may be shown to be recom-
mended 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 subtile 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 expenses incurred
in the business, and to maintain the persons who are employed
in it, but to afford, together with the ordinary profit on the
stock or capital of the farmer, a net surplus, or rent for the
landlord or proprietor of the soil. But the labour of artificers
does nothing more than replace the stock which employs thera«
(or which furnishes materials, tools and wages,) and yield the
.- ■*■
12 ALEXANDER HAMILTON'S REPORT
ordinary profit upon that stock. It yields nothing equivalent
to the rent-oi land. Neither does it add anv thing to the total
value of the whole annual produce of the land and labour of the
country. The additional value given to those parts of the pro-
duce of land, which are wrought into manufactures, is coun-
terbalanced 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 productive-
ness 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 manufactur-
ing labour reproduces a value equal to that which is expended
or consumed in carrying it on, and continues in existence the
original stock or capital employed, it ought, on that account
alone, to escape being considered as wholly unproductive.
That though it should be admitted, as alleged, that the con-
sumption of the produce of the soil, by the classes of artificers
or manufacturers, is exactly equal to the value added by their
labour to the materials upon which it is exerted ; yet it would
not thence follow, that it added nothing to the revenue of the
society, or to the aggregate valdfe of the annual produce of its
land and labour. If the consumption for any given period
amounted to a given sum, and the increased value of the pro-
duce manufactured, in the same period, to a like sum, the total
amount of the consumption and production during that period,
would be equal to the two sums, and consequently double the
value of the agricultural produce consumed. And though the
increment of value produced by the classes of artificers should
at no time exceed the value of the produce of the land con-
sumed by them, yet there would be at every moment, in con-
sequence of their labour, a greater value of goods in the mar-
ket than would exist independent of it.
II. "That the position, that artificers can augment the re-
venue of a society, only by parsimony, is true in no other
sense, than in one, which is equally applicable to husbandmen
or cultivators. It may be alike affirmed of all these classes,
that the fund acquired by their labour and destined for their
support, is not, in an ordinary way, more than equal to it. And
hence it will follow, that augmentations of the wealth or capi-
tal of the community, (except in the instances of some extra-
ordinary dexterity or skill,) can only proceed, with respect to
any of them, from the savings of the more thrifty and parsi-
monious.
III. " That the annual produce of the land and labour of a
country can only be increased, in two ways — by some improve-
ment in the productive powers of the useful labour, which actu-
ally exists within it, or by some increase in the quantity of
ON MANUFACTURES. 13
such labour. That %ith regard to the first, the labour of arti-
ficers being capable of greater subdivision and simplicity of
operation, than that of cultivators, it is susceptible, in a pro-
portionably 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 parti-
cular, therefore, the labour employed in the culture of land can
pretend to no advantage over that engaged iu manufactures.
That with regard to an augmentation of the quantity of useful
labour, this, excluding adventitious circumstances, must de-
pend essentially upon an increase of capital, which again must
depend upon the savings made out of the revenues of those,
who furnish or manage that, which is at any time employed,
whether in agriculture, or in manufactures, or in any other
way."
But while the exclusive productiveness of agricultural labour
has-been thus denied and refuted, the superiority of its pro-
ductiveness has been conceded without hesitation. As this
concession involves a point of considerable magnitude, in re-
lation to maxims of public administration, the grounds on
which it rests are worthy of a distinct and particular examina-
tion.
One of the arguments made use of in support of the idea,
may be pronounced both quaint and superficial. It amounts to
this — That in the productions of the soil, nature co-operates
with man ; and that the effect of their joint labour must be
greater than that of the labour of man alone.
This, however, is far from being -a necessary inference. It
is very conceivable, that the labour of man alone laid out upon
a work, requiring great skill and art to bring it to perfection,
may be more productive, in value, than the labour of nature
and man combined, when directed towards more simple ope-
rations and objects. And when it is recollected to what an
extent the agency of nature, in the application of the mechani-
cal powers, .is made auxiliary to the prosecution of manufac-
tures, 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 greafymeasure periodical
and occasional, depending on seasons, and 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 favourable circum-
stance, may frequently obtain a livelihood, even with a con-
siderable degree of carelessness in the mode of cultivation ;
a*^
]4 ALEXANDER HAMILTON'S REPORT
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 in-
genuity than agriculture, k 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 net sur-
plus, as it is called, which accrues to the proprietor of the soil.
But this distinction, important as it has been deemed, ap-
pears rather verbal than substantial.
It is easily discernible, that what in the first instance is di-
vided 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 lends or lets
it, and who, on his part, advances a second capital to stock and
improve the land, upon which he also receives the usual profit.
The rent of the landlord and the profit of the farmer are there-
fore nothing more than the ordinary profits of two capitals be-
longing 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 expenses of carrying it
on, answers to the ordinary profits of one or more capitals, en-
gaged in the prosecution of such manufactory. It is said one
or more capitals ; because in fact, the same thing which is con-
templated in the case of a farm, sometimes happens in that
of a manufactory. There is one, who furnishes a part of the
capital, or lends a part of the money, by which it is carried on ;
and another, who carries it on, with the addition of his own
capital. Out of the surplus which remains, after defraying
expenses, an interest is paid to the money-lender for the portion
ON MANUFACTURES. 15
of the capital furnished by him, which exactly agrees with the
rent paid to the landlord ; and the residue of that surplus con-
stitutes 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 Tent of the landlord and the revenue of the farmer
compose the ordinary profits of two capitals, employed in the
cultivation of a farm.
I'he 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 defray-
ing expenses, of * given capital, employed fn 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 xvhole 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 f
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 in-
volves numerous and complicated details, depending on an ac-
curate knowledge of the objects to be compared. It is not
known that the comparison has ever yet been made upon suf-
ficient data properly ascertained and analysed. To be able to
make it on the present occasion with satisfactory precision,
would demand more previous inquiry and investigation, than
there has been hitherto either leisure or opportunity to accom-
plish.
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 examina-
tion. But it ought to be acknowledged, that they have been
too little diversified, and are too imperfect to authorize a defi-
nitive conclusion either way ; leading rather to probable con-
jecture than to certain deduction. They render it probable,
that there are various branches of manufactures, in which a
given capital will yield a greater total product, and a consider-
ably greater net 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 net produce
will exceed that of agricultural industry ; according to a com-
pound 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
1G ALEXANDER HAMILTON'S REPORT
less difficult to infer generally, that the net 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 in-
dustry. How far it ought to influence the policy of the United
States, on the score of particular situation, will be adverted to
in another place.
The foregoing suggestions are not designed to inculcate an
opinion that manufacturing industry is more productive than
that of agriculture. They are intended rather to show that
the reverse of this proposition is not ascertained ; that the ge-
neral arguments which are brought to establish it, are not satis-
factory ; 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 manu-
factures, which may be otherwise perceived to exist, through
an apprehension, that they may have a tendency to divert la-
bour from a more to a less profitable employment.
It is extremely probable, that on a full and accurate de-
velopement of the matter, on the ground of fact and calculation,
it would be discovered that there is no material difference be-
tween the aggregate productiveness of the one, and of the
other kind of industry ; and that the propriety of the encou-
ragements, 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 judg-
ment of the policy, which ought to be pursued respecting its
encouragement, to contemplate the subject, under some addi-
tional aspects, tending not only to confirm the idea, that this
kind of industry has been improperly represented as unpro-
ductive in itself; but to evince in addition, that the establish-
ment and diffusion of manufactures have the effect of rendering
the total mass of useful and productive labour, in a community,
greater than it would otherwise be. In prosecuting this dis-
cussion, 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 unproduc-
tive 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
ON MANUFACTURES. yf
of the farmer, which furnishes materials to the manufacturer,
is unproductive, because he consumes an equal value of manu-
factured articles. Each furnishes a certain portion of the pro-
duce of his labour to the other ; and each destroys a corre-
spondent portion of the produce of the labour of the other. In
the mean time the maintenance of two citizens, instead of one,
is going on ; the state has two members instead of one ; and '
they together consume twice the value of what is produced
from the land.
If instead of a farmer and artificer, there were a farmer only,
he would be under the necessity of devoting a part of his la-
bour to the fabrication of clothing 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 la-
bour to the cultivation of his farm, and would draw from it a
proportionably less product. The whole quantity of produc- 1
tion, 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 lat-
ter would be left at liberty to pursue exclusively the cultiva-
tion 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 con-
trary 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 com-
modities, 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 la-
bour of both, bestowed upon land, would produce the same
quantity of provisions and raw materials only, as would be
produced by the entire 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 manu-
factures only, as would be produced by the entire sum of the
labour of one applied in the same manner. Hence the pro-
duce of the labour of the two farmers would not be greater
than the produce of the labour of the farmer and artificer ; and
C
*,,*<
IS ALEXANDER HAMILTON'S HEPOKT
hence it results that the labour of the artificer is as positively
productive as that of the farmer, and as positively augments
the revenue of the society. The labour of the artificer replaces
io 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 — Be-
sides this equivalent which .he gives for the portion of agri-
cultural labour consumed by him, and this supply of manu-
factured commodities for his own consumption ; he furnishes
still a surplus, which compensates for the use of the capital ad-
vanced either by himself or some other person, for carrying on
the business. This is the ordinary profit of the stock employ-
ed 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 manu-
facturing 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 showing that
the one, as well as the other, occasions a positive 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,
tuat manufacturing establishments' not only occasion a positive
augmentation of the produce and revenue of the society , but
that they contribute essentially to rendering them greater than
they tould possibly be^ without such establishments. These
circumstances are,
, 1. The division of labour.
t. An extension of the use of machinery-
3. Additional employment to classes oi the community not
ordinarily engaged in the business.
ON MANUFACTURES. 19
4. The promoting of emigration from foreign countries.
5. The furnishing greater scope for the diversity of talents
and dispositions which discriminate men from each other.
6. The affording a more ample and various field for enterprise*
7. The creating in some instances a new, and securing in alt %
' a more certain and steady demand for the surplus produce of the ')(
soil. x "
Each of these circumstances has a considerable influence
upon the total mass of industrious effort in a community: to*
gether, 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 economy of a nation, than the pro-
per division of labour. The separation of occupations causes
each to be carried to a much greater perfection than it could
possibly acquire, if they were blended. This arises princi-
pally from three circumstances.
1 st. 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 propor-
tion to the complication of objects, and the number among
which the attention is distracted.
2d. The economy of time, by avoiding the loss of it, inci-
dent to a frequent transition from one ope rati sn 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 re-
linquished ; 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 ope-
ration ; the distractions, hesitations, and reluctances, which at*
tend the passage from one kind of business to another.
3d. An extension of the use of machinery. — A man occu-
pied 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 abridge labour, than if he were per-
plexed by a variety of independent and dissimilar operations.
Besides this, the fabrication of machines in numerous instan-
ces, becoming itself a distinct trade, the artist who follows it,
has all the advantages which have been enumerated, for im-
provement in his particular art ; and in both ways the inven-
tion and application of machinery are extended.
20 ALEXANDER HAMILTON'S REPORT
4&nd 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 arti-
ficers or manufacturers, towards promoting an increase of pro-
ductive 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 im-
portance in the general mass of national industry. It is an
artificial force brought in aid of the natural force of man ;
and, to all the purposes of labour, is an increase of hands ; an
accession of strength, unincumbered too by the expense of main-
taining the labourer. 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 industri-
ous effort, and, in consequence, to the general product of indus-
try?
It shall be taken for granted, and the truth of the position
referred to observation, that manufacturing pursuits are sus-
ceptible 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 trans-
fer to foreign nations of the advantages accruing from the em-
ployment of machinery j 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 just been advanced. In consequence of it, all the differ-
ent processes for spinning 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 effect
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.
ON MANUFACTURES. 21
III. As to the additional employment of classes of the commu-
nity, 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 in-
stitutions prevail, besides the persons regularly engaged in
them, they afford occasional and extra employment to industri-
ous individuals and families, who are "willing to devote the lei-
sure resulting from the intermissions of their ordinary pursuits
to collateral labours, as a resource for multiplying their acqui-
sitions or their enjoyments. The husbandman himself experi-
ences a new source of profit and support from the increased in-
dustry of his wife and daughters ; invited and stimulated by the j
demands of the neighbouring 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 otherrvise be idle, (and in many cases a bur-
den on the community,) either from the bias of temper* habit,
infirmity of body, or some other cause, indisposing or disquali-
fying them for the toils of the country. It is worthy of parti-
cular 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 JBri-\
tain, it is computed that four-sevenths nearly are women and \
children; of whom the greatest proportion are children, and
many of them of a tender age*
And thus it appears to be one of the attributes of manufac-
tures, and one of no small consequence, to give occasion to the
. exertion of a greater quantity of industry, even by the same num-
ber of persons, where they happen to prevail, than would ex-
ist, if there were no such establishments.
IV. As to the promoting of emigration from foreign coun-
tries.
Men reluctantly quit one course of occupation and livelihood
for another, unless invited to it by very apparent and proxi-
mate advantages. Many, who would go from one country to
another, if they had a prospect of continuing, with more be-
nefit, 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 ma-
terials ; of an exemption from the chief part of the taxes, bur-
dens and restraints, which they endure in the old world ; of
r^-a^-i
22 ALEXANDEtt HAMILTON'S ltKPORT
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 equal*
ity 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
arid 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 manufac-
tures ; which, for the reasons just assigned, will have the
strongest tendency to multiply the inducements to it.
Here is perceived an important resource, not only for ex-
tending the population, and with it the useful and productive
labour of the country, but likewise for the prosecution of manu-
factures, without deducting from the number of hands, which
might otherwise be drawn to tillage ; and even for the indem-
nification of agriculture for such as might happen to bedivert*
ed 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 agricultu-
ral 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 ta-
lents 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 pow-
ers 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 ac-
tivity the whole vigour of his nature. And the community-
is benefited 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 coun-
try, a peculiar aptitude for mechanic improvements, it would
operate as a forcible reason for giving opportunities to the ex*
ON MANUFACTURES. 23
ercise of that species of talent, by the propagation of manufac-
tures.
VI. Jls 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 en-
terprise, is not among the least considerable of the expedients,
by which the wealth of a nation may be promoted. Even
things in themselves, not positively advantageous, sometimes
become so, by their tendency to provoke exertion. Every new
scene which is opened to the busy nature of man to rouse and
exert itself, is the addition of a new energy to the general stock
of effort.
The spirit of enterprise, useful and prolific as it is, must ne-
cessarily be contracted or expanded in proportion to the simpli-
city or variety of the occupations and productions, which are to
be found in a society. It must be less in a nation of mere culti-
tivators, 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 secur-
ing' 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 16 a principal mean, by which
the establishment of manufactures contributes to an augmen-
tation of the produce pr revenue of a country, and has an im-
mediate and direct relation to the prosperity of agriculture.
It is evident, that th\^pxertions 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, endea-
vour to procure from the same source the raw materials ne-
cessary for their own fabrics. This disposition, urged by the
24 , ALEXANDER HAMILTON'S REPORT
spirit of monopoly, is sometimes even carried to an injudi-
cious extreme. It seems not always to be recollected, that na-
tions, who have neither mines nor manufactures, can only ob-
tain 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 abridge 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 inter-
course 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 interrup-
tions 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
affirmed, that such interruptions are at times very inconveni-
ently felt, and that cases not unfrequently occur, in xvhich mar-
kets 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 im-
mense differences in the produce of their own soils, in different
years; and consequently in the degrees of their necessity for for-
eign supply. Plentiful harvests with them, especially if simi-
lar 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 set-
tlements in the United States must increase the surplus pro-
duce of the soil, and weighing seriously the tendency of the
system, which prevails among most of the commercial nations
of Europe ; whatever dependance may be placed on the force
of natural circumstances to counteract the effects of an artifi-
cial policy, there appear strong reasons to regard the for-
eign 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,
ON MANVPACTHRES. 25
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 pro-
duce of the soil is of the first consequence. It is of all things,
that which most effectually conduces to a flourishing state of
agricultures If the effect of manufactories should be to de-
tach 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 cultiva-
tion, 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 sur-
face 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 establishes
general propositions, that it is the interest of nations to diversify
the industrious pursuits of the individuals who compose them ;
[and] that the establishment of manufactures is calculated not
only to increase the general stock of useful and productive la-
bour ; but even to improve the state of agriculture in particu-
lar ; certainly to advance the interests of those who are en-
gaged in it. There are other views, p that will be hereafter
taken of the subject, which, it is conceived, will serve to con-
firm these inferences.
III. Previously to a further discussion of the objections to
the encouragement of manufactures, which have been stated,
it will be of use to See what can be said in reference to the
particular situation of the United States, against the conclu-
sions 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 fol-
low, that the same is true of a state, whidh having such vacant
D
J6 ALEXANDER HAMILTON'S REPORT
and fertile territory, tias 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 exclu-
sively the culture of his land, and enabling him to procure with
its products the manufactured supplies requisite either to his
wants or to his enjoyments. And though it should be true,
that in settled countries, the diversification of industry is con-
ducive 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 per-
manent 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 satis-
, factory answer —
| \*%If the system of perfect liberty to industry and commerce
i were the prevailing' system of nations, the arguments which dis-
I suade a country, in the predicament of the 'United States, from
the zealous pursuit of manufactures, would doubtless have great
force. It will not be affirmed, that they might not be permit-
ted, with few exceptions, to serve as a rule of national con-
duct. 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 a 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 ex-
change, mutually beneficial, of the commodities which each
was able to supply, on the best terms, might be carried on be-
tween 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 proba-
ble, that nations merely agricultural, would not enjoy the same
degree of opulence in proportion to their numbers, as those
which united manufactures with agriculture ; yet the progres-
sive 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 cha-
racterising the general policy of nations. The prevalent one
j has been regulated by an opposite spirit. The consequence of
it is, that the United States are to a certain extent in the situa-
tion of a country precluded from foreign commerce. They can,
ON MANUFACTURES. %J
indeed, without difficulty, obtain from abroad the manufac-
tured supplies, of which they are in want ; but they experience
numerous and very injurious impediments to the emission and V
vent of their <own commodities. Nor is this the case in refer-
ence to a single foreign nation only. The regulations of se-
veral countries with which we have the most extensive inter-
course, throw serious obstructions in the way of the principal
staples of the United States.*
In such a position of things, the United States cannot ex-
change with Europe on equal terms; and the want of recipro-
city 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 increasing, necessity \ on
their part , for the commodities of Europe, and only a partial and
occasional demand for their own, in return, could not but ex-
pose them to a state of impoverishment^ compared with the opu-
lence to which their political and natural advantages authorise
them to aspire.
Remarks of this kind are not made in the spirit of complaint.
It is 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. It is for the United States to con-
sider by what means they can render themselves least depen-
dent, 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 improve-
ments, which, upon the whole, have bettered our affairs. To
diversify and extend these improvements, 4 is, the surest and
safest method of indemnifying ourselves for any inconvenien-
ces, which those or similar measures have a tendency to beget.
If Europe will not take from us the products ofoursoil,upon terms
consistent with our interest, the natural remedy is, to contract,
as fast as possible, our wants of her,
2. The conversion of their waste into cultivated lands is
certainly a point of great moment in the political' calculations
of the United States. But the degree in which this may pos-
sibly be retarded by the encouragement of manufactories, does
not appear to countervail the powerful inducements to afford-
ing 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 tinder
good cultivation, than by having a greater quantity occupied
[* It maybe permitted to observe, that this argument, powerful as it was in
the time of Alexander Hamilton, derives great additional force from existing
circumstances, the grand staples of more than half the free population of the
Union being now prohibited in almost eyery country in Europe.]
Mia...
28 ALEXANDER HAMILTON'S REPORT
under a much inferior cultivation, and if manufactories, for the
reasons assigned, must be admitted to have a tendency to
promote a more steady and vigorous cultivation of the lands
occupied, than would happen without them, it will follow, that
they are capable of indemnifying a country for a diminution
of the progress of new settlements ; and may serve to increase
both the capital value and the income of its lands, even though
they should abridge 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 manufac-
tures. 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 after*
wards abandon them for agricultural, would be more than
an 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 pro-
fitable 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 interests of the com-
munity 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 imi-
tation ; the fear of want of success in untried enterprise ; the
intrinsic difficulties incident to first essays towards to competi-
tion xvith those xuho have previously attained to perfection in
the business to be attempted; the bounties, premiifms, 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 practise, that the sim-
plest and most obvious improvements, in the most ordinary
occupations, are adopted with hesitation, reluctance, and by
slow gradations. The spontaneous transition to new pursuits,
in a community long habituated to different ones, may be ex-
pected to be attended with proportion ably greater difficulty.
When former occupations cease to yield a profit adequate to
the subsistence of their followers, or when there was an abso-
ON MANUFACTURES. 29
lute deficiency of employment in them, owing to the supera-
bundance of hands, changes would ensue ; but these changes
would be likely to be more tardy than might consist with the
interest either of individuals or of the society. In many cases
they would not happen, while a bare support could be ensured
by an adherence to ancient courses ; though a resort to a more
profitable employment might be practicable. To produce the
desirable changes, as early as may be expedient, may there-
fore 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 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,
inseparable from first experiments.
The superiority antecedently enjoyed by nations, who have
pre-occupied 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 ai to quality and price, is in most cases impractical
ble. The disparity, in the one, or in the other 9 or in both, must J
necessarily be so considerable as to forbid a successful rivalship, f
without the extraordinary aid and protection of government. J
But the greatest obstacle of all to the successful prosecution N
of a new branch of industry in a country, in which it was be-
fore unknown, consists, as far as the instances apply, in the
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 disad*
vantages of a new undertaking, but with the gratuities and re-
munerations 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*
30 ALEXANDER HAMILTON'S REPORT
Combinations by those engaged in a particular branch of bu±
siness 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 coun-
try, 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
be introduced, may be essential to fortify adventurers against
the dread of such combinations — to defeat their effects, if form-
ed — 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 in-
dustry of a people, under the direction of private interest, will
upon equal terms find out the most beneficial employment for
itself, there is none for a reliance, that it will struggle against
the force of unequal terms, or will of itself surmount all the
adventitious barriers to a successful competition, which may
have been erected either by the advantages naturally acquired
from practice and previous possession of the ground, or by
those which may have sprung from positive regulations and an
artificial policy. This general reflection might alone suffice as
an answer to the objection under examination, exclusively of
the weighty considerations which have been particularly urged.
The objections to the pursuit of manufactures in the United
States, which next present themselves to discussion, represent
an impracticability of success, arising from three causes-
scarcity of hands, dearness of labour, want of capital.
The two first circumstances are to a certain extent real, and,
within due limits, ought to be admitted as obstacles to the suc-
cess of manufacturing enterprise 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 pre-
vent the advantageous prosecution of many very useful and
extensive manufactories.
With regard to scarcity of hands, the fact itself must be ap-
plied 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 flour-
ishing 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 agricul-
ture, than some other parts of the union, they exhibit a propor-
tionably 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 no-
ON MANUFACTURES. - . Jl
ticed 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 men-
tioned ; 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
labour; 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 increas-
ing the general stock of* labour, as has been elsewhere remark-
ed, 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 compo-
sition of our towns, will be made sensible? to what an extent
this resource may be relied upon. This exhibits a large pro-
portion 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 experi-
ence we have already had, that as soon as the United States
shall present the countenance of a serious prosecution ofmanu*
factures, 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 inter-
ests ?
It may be affirmed, therefore, in respect to hands for carry-
ing on manufactures, that we shall in a great measure tr&de
upon a foreign stock ; reserving our own, for the cultivation
of our lands, and the manning of our ships ; as far as charac-
ter and circumstances shall incline. It is not unworthy of re-
mark, that the objection to the success of manufactures, de-
duced from the scarcity of hands, is alike applicable to trade
and navigation ; and yet these are perceived to flourish, with-
out any sensible impediment from that cause.
As to the dearness of labour, (another of the obstacles al-
^ e S e d,) this has relation principally to two circumstances j 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 dispa-
Ml-*V.
32 ALEXANDER HAMILTON'S REPORT
rity 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 re-
gard to country labourers ; and while a careful comparison
shows 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 dif-
ference of price, in two countries, of a given quantity of man-
ual labour requisite to the fabrication of a given article, is as
ten ; 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 ten to five, in consequence of the intro-
duction of that power.
This circumstance is worthy of the most particular atten-
tion. 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 al-
ready possessed. The preparation of them here, is in most
cases practicable on nearly equal terms. As far as they de-
pend on water, some superiority of advantages may be claim-
ed, from the uncommon variety and greater cheapness of situ-
ations adapted to mill seats, with which different parts of the
United States abound.
So far as the clearness of labour may be a consequence of
the greatness of profits in any branch of business, it is no ob-
stacle to its success. The undertaker can afford to pay the
price.
There are grounds to conclude, that undertakers of manu-
factures in this country can at this time afford to pay higher
wages to the workmen they may employ, than are paid to si-
milar 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 expense of grounds, buildings,
machinery, and tools ; the wages of the persons employed in
the manufactory ; the profits on the capital or stock employed ;
the commissions of agents to purchase them where they are
ON MANUFACTURES. 33
made ; the expense of transportation to the United States, in-
cluding insurance and other incidental charges ; the taxes or
duties, if any, and fees of office which are paid on their expor-
tation ; 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 ad*
vantage, upon the whole, is at present on the side of the United
States, and the difference, in their favour, must increase, in
proportion as a certain and extensive domestic demand shall
induce the proprietors of land to devote more of their atten-
tion to the production of those materials. It ought not to es-
cape observation, in a comparison on this point, that some of
the principal manufacturing countries of Europe are much more
dependent on foreign supply for the materials of their manufac-
tures, than would be the United States, who are capable of sup-
plying themselves with a greater abundance, as well as a great-
er variety, of the requisite materials.
As to the second item, the expense of grounds, buildings,
machinery and tools; an equality at least may be assumed;
since advantages in some particulars will counterbalance tem-
porary disadvantages in others.
As to the third item, or the article of wages; the compari-
son certainly turns against the United States; though, as be-
fore observed, not in so great a degree as is commonly sup-
posed.
The fourth item is alike applicable to the foreign and to the
domestic manufacture. It is indeed more properly a result
than a particular to be compared.
But with, respect to all the remaining items, they are alone
applicable to the foreign manufacture, and in the strictest sense
extraordinaries, constituting a sum of extra charge on the fo-
reign fabric, which cannot be estimated at less than from 15
to 30 per cent, on the cost of jt 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 vith the circumstances
of scarcity of hands and clearness o^ labour, that extensive
manufactures can only grow out of a redundant or full popu-
lation, it will be sufficient to answer generally, that the fact
has been otherwise. That th (/situation alleged to be an es-
sential condition of success, has not been that of several na-
tions, at periods when they had already attained to maturity
in a variety of manufactures.
The supposed want of capital for the prosecution of manu-
factures in the United States, is the most indefinite of the ob-
jections which art usually opposed to it.
E
34 ALEXANDER HAMILTON'S REPORT
It is very difficult to pronounce any thing precise concerning
the real extent of the monied capital of a country, and still
more concerning the proportion which it bears to the objects
that invite the employment of capital. It is not less difficult
to pronounce how far the effect of any given quantity of money,
as capital, or, in other words, as a medium for circulating the
industry and property of a nation, may be increased by the
very circumstance of the additional motion, which is given to
it by new objects of employment. That effect, like the mo-
mentum of descending bodies, may not improperly be repre-
sented, 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 unoc-
cupied, 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 pro-
secution 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 shown 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 advan-
tage : and wherever they can be supported, if administered
with prudence > they will add new energies to all pecuniary ope-
rations.
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 ani-
mated 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 employ-
ment. Hence, among other proofs, th* large loans continu-
ally furnished to foreign states. And it is equally certain,
that the capital of other parts may find more profitable employ-
ON MANUFACTURES. / Jjj
ment in the United States, than at home. And notwithstand-
ing 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. It is
certain, that various objects in this country hold out advan-
tages, which are with difficulty to be equalled elsewhere ; and
under the increasingly favourable impressions, which are en-
tertained 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 strength-
ened by the progress of our affairs. And to secure this ad-
vantage, little more is necessary, than to foster industry, and
cultivate order and tranquillity, 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 situ-
ated 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 establish-
ments 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 de-
tain it among us, there can be no expedient so effectual as to
enlarge the sphere, within which it maybe usefully employed:
though introduced merely with views to speculations in the
funds, it may afterwards be rendered subservient to the inter-
ests of agriculture, commerce, and manufactures.
But the attraction of foreign capital for the direct purpose
of manufactures ought not to be deemed a chimerical expecta-
tion. There are already examples of it, as remarked in ano-
ther place. And the examples, if the disposition be cultivated,
can hardly fail to multiply. There are also instances of ano-
ther kind, which serve to strengthen the expectation ; enter-
prises 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,
U2Li — ..
36 ALEXANDER HAMILTON'S REPORT
in the course of this report, he cannot but perceive very pow-
erful inducements to a transfer of himself and his capital to
the United States. Among the reflections which a most in*
teresting 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 improve*
xnentof the United States, ensure a continually increasing do-
mestic 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 au-
thorize a considerable degree of reliance on the aid of foreign
capital, towards the attainment of the object in view, it is sat-
isfactory to have good grounds of assurance, that there are do-
mestic resources of themselves adequate to it. It happens,
that there is a species of capital actually existing within the
United States, which relieves from all inquietude on the spore
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 eluci-
dation of the point seems, to be required by the stress which U
here laid upon it. This shall accordingly be attempted.
Public funds answer the purpose of capital, from the esti-
mation in which they are usually held by monied men ; and
consequently from the ease and despatch 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 trans-
fer 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 busi-
ness which offers, with as much confidence as if he were pos-
sessed 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 redemp-
tion of the principal — The amount of the coin, which is em-
ployed 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 —
ON MANUFACTURES. 37
1st. As to the point of the annual revenue requisite for pay-
ment 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 ap-
plied, 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 inter-
est, and two on account of principal.
Thus far it is evident, that the capital destroyed to the capi-
tal created, would bear no greater proportion than 8 to 100.
There would be withdrawn from the total mass of other capi-
tals 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 en-
terprise, which might appear to him eligible. Here then the
augmentation of capital, or the excess of that which is pro-
duced, beyond that which is destroyed, is equal to ninety-two
dollars.
To this conclusion it may be objected, that the sum of eight
dollars is to be withdrawn annually, until the whole hundred
is extinguished ; and it may be inferred, that in process of
time a capital will be destroyed equal to that which is at first
created. ♦
But it is nevertheless true, that during the whole of the in-
terval, 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 great-
er active capital in existence than if no debt had been contract-
ed. The sum drawn from other capitals in any one year will
not exceed eight dollars ; but there will be at every instant of
time during the whole period in question, a sum correspond-
ing 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 there-
fore constantly be more capital, in capacity to be employed,
than capital taken from employment. The excess for the first
vyear has been stated to be ninety-two dollars ; it wjll diminish
yearly ; but there always will be an excess, until the principal
of the debt is brought to a level with the redeeming annui-
ty ; that is, in the case which has been assumed by way of ex-
ample, to eight dollars. The reality of this excess becomes
palpable, if it be supposed, as often happens, that the citizen
of a foreign country imports into the United States 100 dol-
lars 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 prin-
cipal and interest ; but he still leaves ninety-two of his original
'••ya'.^T, »■ • «■ ^^
38 ALEXANDEtt HAMILTON'S REPORT
deposit in circulation, as he in like manner leaves eighty-four
at the end of the second year, drawing back then also the an-
nuity 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 drawn back. 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 ha6 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 debt ; but
in this, too much has been conceded. There is at most a tem-
porary transfer of some other capital to the amount of the annui-
ty, from those who pay, to the creditor who receives ; which he
again restores to the circulation, to resume the offices of a ca-
pital. This he does either 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 supposition, there is no destruc-
tion 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, and thence through
the public creditor into some other channel of circulation.
When the payments of interest are periodical and quick, and
made by the instrumentality of banks, the diversion or suspen-
sion of capital 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 destruc- •
tion nor transfer of any other capital, than that portion of the
income of each individual, which goes to make up the annuity.
The land which furnishes the farmer with the sum which he is
to contribute, remains the same ; and the like may be observed
of other capitals. Indeed, as far as the tax, which is the' ob-
ject of contribution, (as frequently happens when it does not
oppress by its weight,) may have been a motive to greater ex-
ertion in any occupation ; it may even serve to increase the
contributory capital. This idea is not without importance in
the general view of the subject.
It remains to see what further deduction ought to be made
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 arti-
cle which has been just discussed. It is imposible to say what
proportion of coin is necessary to carry on the alienations which
ON MANUFACTURES. 39
any species of property usually undergoes. The quantity in-
deed varies according to circumstances. But it may still with-
out hesitation be pronounced,from the quickness of the rotation,
or rather of the transitions, that the medium of circulation al-
ways bears but a small proportion to the amount of the pro-
perty circulated. And it is thence satisfactorily deducible,
that the coin employed in the negotiations of the funds, and
which serves to give them activity, as capital, is incomparably
less than the sum of the debt negotiated for the purpose of
business.
It ought not, however, to be omitted, that the negotiation
of the funds becomes itself a distinct business ; which em-
ploys, 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 consi-
derable proportion to the amount of the capital to which it
gives activity. The sum of the debt in circulation is continu-
ally 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 theo-
ry. The force of monied capital which has been displayed in
Great Britain, and the height to which every species of indus-
try 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 (he effect in
question. Among ourselves appearances thus far favour the
same conclusion. Industry in general seems to have been re-
animated. There are symptoms indicating an extension of our
commerce. Qur navigation has certainly of late had a consi-
derable spring, and there appears to be in many parts of the
Union a command of capital, which till lately, since the revo-
lution 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 distin-
guish between an absolute increase of capital, or an accession
of real wealth, and an artificial increase of capital, as an en-
gine of business, or as an instrument of industry and com-
merce. In the first sense, a funded debt has no pretensions to
40 ALEXANDER HAMILTON'S REPORT
being de med an increase of capital ; in the last, it has pre-
tensions 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 ab-
solute increase of capital, or an augmentation of real wealth ;
yet by serving as a new power in the operations 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 per-
suaded, 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 burdens, the greater the bless-
ings, 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 de-
sirable, 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 arti-
ficial capital is unnecessary. The debt too may be swelled to
such a size, as that the greatest part of it may cease to be use-
ful 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
tranquillity, to raise them ; as that the resources of taxation, to
face the debt r may have been strained too far to admit of exten-
sions 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 tenden-
cy to the accumulation of debt, there ought to be, in every go-
Ternment, 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 at-
tended with a danger of running into fallacies. Due allowance
ought therefore to be made for this possibility. But as far as
ON MANUFACTURES. 41
the nature of -the subject admits of it, there appears to be sa-
tisfactory ground for a belief, that the public funds operate as
a resource of capital to the citizens of the United States, and,
if they are a resource at all, it is an extensive one;
To all the arguments which are brought to evince the imprac-
ticability of success in manufacturing establishments in the
United States, it might have been a sufficient anszver 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 en-
couraging assurance of success in future attempts ; of these it
may not be improper to enumerate the most considerable.
I. Of skins. Tanned and tawed leather, dressed skins, shoes,
boots and slippers, harness and saddlery of all kinds, portman-
teaus and trunks, leather breeches, gloves, muffs and tippets,
parchment and glue.
II. Of iron. Bar and sheet iron, steel, nail rods, and nails,
implements of husbandry, stoves, pots, and other household
utensils, the steel and iron works of carriages, and for ship
building, anchors, scale beams and weights, and various tools
of artificers; arms of different kinds; though the manufacture
of these last has of late diminished for want of demand.
III. Of wood. Ships, cabinet wares, and turnery, wool and
cotton cards, and other machinerv for manufactures and hus-
bandry, mathematical instruments, coopers' wares of every
kind.
IV. Of flax and hemp. Cables, sail-cloth, cordage, twine,
and packthread.
V. Bricks and coarse tiles, and potters' wares.
VI. Ardent spirits, and malt liquors.
VII. Writing and printing paper, sheathing and wrapping
paper, pasteboards, fullers or press papers, paper-hangings.
VIII. Hats of fur and wool, and of mixtures of both. Wo-
men's 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 distil-
lers, 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 and smoking tobacco.
XV. Starch and hair powder.
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
F
I
42 ALEXANDER HAMILTON'S REPORt
of maturity, there is a vast scene of household manufacturing,
which contributes more largely to the supply of the communi-
ty, than could be imagined, without having made it an object
of particular inquiry. This observation is the pleasing result
of the investigation, to which the subject of this report has
led* and is applicable as well to the southern as to the middle
and northern states ; great quantities of coarse cloths, coat-
ings, serges and flannels, linsey-woolseys, hosiery of wool,
cotton, and thread, coarse fustians, jeans and muslins, checked
and striped cotton and linen goods, bedticks, coverlets and
counterpanes, tow linens, coarse shirtings, sheetings, toweling
and table linen, and various mixtures of wool and cotton, and
of cotton and 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 dictricts,
that two-thirds, three-fourths, and even four-fifths of all the
clothing of the inhabitants are made by themselves. The im-
portance 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 arti*
cles that are manufactured as regular trades. Many others oc*
cur, 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
favourable appearances, could not have been properly compris*
ed in an enumeration of manufactories already established.
There are other articles also of great importance, which, though
Strictly speaking manufactures, are omitted, as being immedi-
ately connected with husbandry : such are flour, pot and pearl
ash, pitch, tar, turpentine, and the like.
There remains to be noticed an objection to the encourage*
ment 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 par-
ticular classes at the expense of the rest of the community,
who, it is affirmed, would be able to procure the requisite sup-
pjies of manufactured articles on better terms from foreigners,
than from our own citizens, and who, it is alleged, are reduc-
ed to a necessity of paying an enhanced price for whatever they
want, by every measure, which obstructs the free competition
of foreign commodities."
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 j but
the fact does not uniformly correspond with the theory* A re-
ON MANUFACTURES. 4%
duction of prices has, in several instances, immediately succeed-
ed the establishment of a domestic manufacture. Whether it
be that foreign manufacturers endeavour to supplant* by un-
derselling our own, or whatever else be the cause, the effect
has been such as is stated, and the reverse of what might have
been expected.
But though it were true that the immediate and certain
effect of regulations controlling the competition of foreign -with
domestic fabrics > was an increase bfprice y it is universally true*
that the contrary is the ultimate effect with every successful
manufacture. When a domestic manufacture has attained to
perfection , and has engaged in the prosecution of it a competent
number of persons^ it invariably becomes cheaper. Being free
from the heavy charges which attend the importation of foreign
commodities, it can be afforded, and accordingly seldom or never
fails to be sold, cheaper, in process of time, than was the foreign
article for which it is a substitute. The internal competition
which takes place soon does away every thing like monopoly^
and by degrees reduces the price of the article to the minimum of
a reasonable profit on the capital employed. This accords with
the reason of the thing, and with experience.*
Whence it follows, that it is the interest of a community ,
with a view to eventual and permanent economy, to encourage
the growth of manufactures. In a national view, a temporary
enhancement of price must always be well compensated by d
permanent reduction cf 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 estab-
lishments, 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
stands in need, and consequently increases the value of his in*
come and property.
The objections which are commonly made to the expediency
of encouraging, and to the probability of succeeding in manu-
facturing pursuits, in the United States, having now been dis-
cussed, 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,
• [This is an eternal and irrefutable answer to those declamatory appeals to
the selfishness of our citizens, and to the deceptions outcry against "taxing the
many for the benefit of the few," by which such hostility and powerful opposition
to the protection of manufactures have been engendered in this country, and
produced so much distress and bankruptcy among the manufacturers* *nd *>
*nuch impoverishment of the nation.} Editor ofthit Edition.
44 ALEXANDER HAMILTON'S REPORT
I. There seems to be a moral certainty, that the trade of&
country which is both manufacturing and agricultural, will
be more lucrative and prosperous, than that of a country, which
is merely agricultural.
One reason for this is found in that general effort of nations,
(which has been already mentioned,) to procure from- their own
soils, the articles of prime necessity requisite to their own cot*-
sumption 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 exclu-
sively devoted to agriculture, for the fabrics of manufacturing
states, are constant and regular, the wants of the latter for the
products of the former are liable to very considerable fluctuation*
and interruptions. The great inequalities resulting from dif-
ference of seasons, have been elsewhere remarked; this uniform
mity of demand on one side,, and unsteadiness of it on the other,
must necessarily have a tendency to cause the general course of
the exchange of commodities between the parti c?,to turn tothe dis-
advantage of the merely agricultural states* Peculiarity of situa-
tion, a climate and soil adapted to the production of peculiar
commodities, may sometimes contradict the rule i but there i».
every reason to believe that it will be found, in the main y a just
one.
Another circumstance which gives a superiority of commer-
cial advantages to states that manufacture, as well as cultivate,.
consists in the more numerous attractions, which a more di-
versified market offers to foreign customers, and in the greater
scope which it affords to mercantile enterprise. It is a posi-
tion of indisputable truth in commerce, depending, too, on-
very obvious reasons,* that the greatest resort will ever be to
those marts, where commodities, while equally abundant, are
most various. Each difference of kind holds out an additional
inducement t 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 variet)', as well as the abundance of commo-
dities which they find at home for exportation to foreign mar*
kets.
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 commo-
dities, 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, ly-
ing on hand — or is obliged to make injurious sacrifices to sup-
ply its wants of foreign articles, which are numerous and ar-
ON MANUFACTURES. 45.
gent, in proportion to the smallness of the number of its ownv
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 inr
demand, enables its merchants the better to wait for a favoura-
ble change, in respect to those which are not. There is ground
to believe, that a difference of situation, in this particular, has-
immensely different effects upon the wealth and prosperity of
nations-,
From these circumstances collectively, two important infer-
ences are to be drawn ; one, that there is alu/ays a higher pro*
bability of a favourable balance of trade, in regard to countries, in
tvhich manufactures^ founded on the basis of a thriving agricul-
ture, flourish, than in regard to those, which are confined whollif
or almost wholly to agriculture; the other, (which is also a con-
sequence of the first,) that countries of the former description
are likely to possess more pecuniary wealth, or money, than?
those in the latter.
Facts appear to correspond with this conclusion* The im-
portations of manufactured supplies seem invariably to drain tht
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 striding. Other causes, it is true, help to ac-
count for this disparity between some of them ; and among
these causes, the relative state of agriculture * f but between^
others of them, the most prominent circumstance of dissimili-
tude arises from the comparative state of manufactures. In
eorroboration of the same idea, if ought not to escape remark,
that the West India islands, the soils of which are the most fer-
tile ; and the nation, which in the greatest degree supplies the
rest of the world with the precious metats ; exchange to a toss;
w\th 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 Uni-
ted States, appeared to be inadequate to their circulation ; and
their debt to Great Britain was progressive. Since the revolu-
tion, the states, m which manufactures have most increased,
have recovered fastest from the injuries of the late war ; and
abound most in pecuniary resources.
It ought to be admitted, however, in this as in the preceding
ease, that causes irrelative to the state of manufactures, ac-
count in a degree, for the phenomena remarked. The continual
progress of new settlements has a natural tendency to occa-
sion an unfavourable 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 :
fc
46 ALEXANDER HAMILTON'S REPOUT
and the different degrees of external commerce, which ate
carried tan by the different states, may make material differ-
ences in the comparative state of their wealth. The first cir-
cumstance has reference to the deficiency of coin and the in-
crease of debt previous to the revolution ; the last to the ad*
vantages which the most manufacturing states appear to have
enjoyed, over the others, since the termination of the late wan
But the uniform appearance of an abundance of specie, as the con-
comitant of a flourishing state of manufactures, and of the reverse, where
they do not prevail, afford a strong presumption of their favourable ope*
ration upon the wealth of a country.
Not only the wealth, but the independence and security oj a country f 9
appear to be materially connected toith the prosperity of manufactures*
Every nation, with a view to those great objects, ought to endeavour to
possess within itself all the essentials of national supply. These com-
prise 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 soci*
ety ; the want of either, is the want of an important organ of
political life and motion ; and in the various crises which await
a state, it must severely feel the effects of any such deficiency.
The extreme embarrassments of the United States during' thi
late uoar, from an incapacity of supplying themselves, are still
matter of keen recollection i 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. Fo effect
this change, as fast as shall be prudent, merits all the attention
and all the zeal of our public councils ; it is 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 precari-
ous reliance, for the supply of essential articles, and must serve
to strengthen prodigiously the arguments in favour of manu-
factures*
To these general considerations are added -some of a more
particular nature.
Our distance from Europe, the great fountain of manufac-
tured supply, subjects us, in the existing stale of things, to in-
convenience and loss, in two ways.
The bulkiness of those commodities which are the chief pro-
ductions 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 ma-
nufactured supplies brought from Europe are greatly enhanced
fcN ItAttttf ACTtJUE^. ^ 47
by the same circumstance of distance. These charges, again,
in the cases in which our own industry maintains no competi-
tion, 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 being the materi-
als of exchange for the foreign fabrics which we consume.
The equality and moderation of individual property, 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, aug-
ment the disadvantage, which has been just described.
As in most countries, domestic supplies maintain a very considerable
competition with such foreign productions of the soil, as are imported for
tale ; if the extensive establishment of manufactories in the United States
does not create a similar competition in respect to manufactured articles,
U appears to be clearly deflucible, from the considerations which have
been mentioned, that they must sustain a double loss in their exchanges
with foreign nations ; strongly conducive to an unfavourable balance of
trade, and very prejudicial to their interests.
These disadvantages press with no small weight on the land*
ed 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 should 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 burden to the farmer , while obliged to de-
pend, in so great a degree as he now does 9 upon foreign markets
for the vent of the surplu 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 manufac*
tures. Besides the fish, which, in many places, would be like-
ly to make a part of the subsistence of the persons employed ;
it is known that the oils, bones and skins of marine animals, are
ofe xtensive 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 opinion, that though
the promoting of manufactures may be the intrest of a part r
of the union, it is contrary to that of another part. The north-
ern and southern regions are sometimes represented as having,
adverse interests in this respect. Those are called manufac-
turing, these agricultural states, and a species of opposition i*
imagined to subsist between the manufacturing and agricul^
tural interests.
.. .. ■"«-?
48 ALEXANDER HAMILTON'S KEPOltT
This idea of an opposition between those two interests is the
common error of the early periods of every country, but ex-
perience gradually dissipates it. Indeed they are perceived so
often to succour and befriend each other, that they come at
length to be considered as one ; a supposition which has been
frequently abused, an4 is not universally true. Particular en-
couragements of particular manufactures maybe 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 connect-
ed. In the course of the discussion which has had place, va-
rious weighty considerations have been adduced, operating in
support of that maxim. Perhaps the superior steadiness of the
demand of a domestic market for the surplus produce of the soil,
is alone a convincing argument of its truth.
Ideas of a contrariety of interests between the northern and
southern regions" of the Union, are, in the main, as unfounded
as they are mischievous. The diversity of circumstances, on
which such contrariety is usually predicated, authorises a di-
rectly contrary conclusion. Mutual wants constitute one of
the strongest links of political connexion ; and the extent of
these bears a natural proportion to the diversity in the means
of mutual supply.
Suggestions of an opposite complexion are ever to be de-
plored, as unfriendly to the steady pursuit of one great com-
mon cause, and to the perfect harmony of all the parts.
In proportion as the mind is accustomed to trace the intimate
connexion of interest, which subsists between all the parts of
a society, united under the same government ; the infinite va-
riety of channels which serve to circulate the prosperity of each
to and through the rest, in that proportion will it be little apt
to be disturbed by solicitudes and apprehensions which origin-
ate in local discriminations. It is a truth, as important as it
is agreeable, and one to which it is not easy to imagine excep-
tions, that every thing tending to establish substantial and per-
manent order, in the affairs of a country, to increase the total
mass of industry and of opulence, is ultimately beneficial to
every part of it. On the credit of this great truth, an acqui-
escence may safely be accorded, from every quarter, to all in-»
stitutions, and 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 is the
interest of all parts of the Union. If the northern and middle
states should be the principal scenes of such establishments, they
TVQidd immediately benefit the more southern^ by creating a Je»
< ON MANUFACTURES. 49
mandfor productions^ some of which they have in common t with
the other states, and others qj which are either peculiar to hern,
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 and indigo are peculiar to the southern states : as
are hitherto lead and coat. Flax and hemp are or may be rais-
ed 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 cli-
mate 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 estab-
lishments 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 se-
conded by a considerable and increasing 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 facilitates the execution of
manufacturing enterprises ; but it indicates them as a neces-
sary mean to turn the thing itself to advantage, and to prevent
its being eventually an evil. If useful employment be not
found for the money of foreigners brought to the country to
be invested in purchases of the public debt, it will quickly be
re-exported to defray the expense of an extraordinary consumption of
foreign luxuries; and distressing drains of our specie may hereafter $«
experienced to pay the interest and redeem the principal of the purchased
debt.
This useful employment, too, ought to be of a nature to pro-
duce solid and permanent improvements. If the money merely
serves to give a temporary spring to foreign commerce ; as it
cannot procure new and lasting outlets for the products of the
country ; there will be no real or durable advantage gained.
As far a*s it shall find its way in agricultural meliorations, in
opening canals and in similar improvements, it will be produc-
tive of substantial utility. But there is reason to doubt, whe-
ther 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 mapufat>
G
.-1 .♦■■■« , -».i<.' "■• ■•■■■• ^-> ;w+—
50 ALEXANDER HAMILTON'S REPORT
turing 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 se-
cure a better prospect of useful employment, for whatever ac-
cession 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 per-
nicious effects.
The disturbed state of Europe, inclining its citizens to emi-
gration, the requisite workmen will be more easily acquired,
than at another time ; and the effect of multiplying the oppor*
tunities 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 politic.
A full view having now been taken of the inducements to
the promotion of manufactures in the United States, accompa-
nied 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 introduc-
tory to a specification of the objects which in the present state
of things appear the most fit to be encouraged, and of the par-
ticular measures which it may be advisable to adopt, in respect
to each.
In order to a better judgment of the means proper to be re-
sorted to by the United States, it will be of use to advert to
those which have been employed with success in other coun-
tries. The principal of ^these are —
I. Protecting duties — or duties on those foreign articles which are the
rivals of the domestic ones intended to be encouraged.
Duties of this nature evidently amount to a virtual boutfty
on the domestic fabrics, since by enhancing the charges on fo-
reign articles, they enable the national manufacturers to un-
dersell 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 thf United
States, in a variety of instances ; it has the additional recom-
mendation of being a source 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.
ON MANUFACTURES. 51
II. Prohibitions of rival articles, or duties equivalent to prohibitions.
This is another and an efficacious mean of encouraging na-
tional manufactures ; but in general it is only (it to be employ-
ed when a manufacture has made such a progress, and is in so
many hands as to ensure a due competition, and an adequate
supply on reasonable terms. Of duties equivalent to prohibi-
tions, there are examples in the laws of the United States :
and there are other cases to which the principle may be advan-
tageously extended ; but they are not numerous.
Considering a monopoly of the domestic market to its own manufac-
turers as the reigning policy of manufacturing nations, a similar policy
on the part of the United States, in every proper instance, is dictated, it
might almost be said, by the principles of distributive justice; certainly by
the ditty of endeavouring to secure to their own citizens a reciprocity of
advantages.
III. Prohibitions of the exportation of the materials of manufactures.
The desire of securing a cheap and plentiful supply for the
national workmen, and, where the article is either peculiar to
the country, or of peculiar quality there, the jealousy of ena-
bling foreign workmen to rival those of the nation with its
own materials, are the leading motives to this species of regu-
lation. 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 circumspection, and only in very plain cases. It is seen
at once, that its immediate 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 though if it be really essential to
the prosperity of any very important national manufacture, it
may happen that those who are injured in the first instance,
may be eventually indemnified, by the superior steadiness of
an extensive domestic market depending on that prosperity :
yet in a matter, in which there is so much room for nice and
difficult combinations, in which such opposite considerations
combat each other, prudence seems to dictate, that the expedi-
ent 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 practised upon by the government
of the United States, (unless the allowance on the exportation
of dried and pickled fish and salted meat, could be considered
as a bounty,) and though it is less favoured by public opinion
than some other modes, its advantages are these —
1. It is a species of encouragement more positive and direct
than any other, and for that very reason, has a more immedi-
ate tendency to stimulate and uphold new enterprises, increas-
JJ ALEXANDER HAMILTON'S REPORT
ing the chances of profit, and diminishing the risks of loss, in
the first attempts.
2. It avoids the inconvenience of a temporary augmentation
of price, which is incident to some other modes, or it produces
it to a less degree ; either by making no addition to the charges
on the rival foreign article, as in the case of protecting duties,
or by making a smaller addition. The first happens when the
fund for the bounty is derived from a different object (which
may or may not increase the price of some other article, ac-
cording to the nature of that object) ; the second when the fund
is derived from the same or a similar object of foreign manu-
facture. 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 one per cent j 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 manufac-
ture 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 discou-
rage 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 ob-
ject 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 foreign material of the same kind — It is the interest of the
manufacturer to have the material abundant and cheap. If,
prior to the domestic production of the material, in suffi-
cient 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 interest both of the
farmer and manufacturer will be disserved. By either de-
stroying the requisite supply, or raising the price of the article,
beyond what can be afforded to be given for it, by the conduc-
tor of an infant manufacture, it is abandoned or fails: and
there being no domestic manufactories to create a demand for
the raw material, which is raised by the farmer, it is in vain,
that the competition of the like foreign article may have been
destroyed.
ON MANUFACTURES. 53
It cannot escape notice, that a duty upon the importation of
an article can no otherwise aid the domestic production of it,
than by giving the latter greater advantages in the home mar-
ket. It can 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 com-
mences his enterprise, under every advantage, which is attain-
able, as to quantity or price of the raw material : And the far-
mer, 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 domes-
tic 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 manu-
facture, or those for which there are very commanding local
advantages, pecuniary bounties are in most cases indispensable
to the introduction of a new branch. Jl 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 ar-
ticles, 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 estab-
lished, 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 un-
dertakings, they are as justifiable, as they are oftentimes ne-
cessary.
There is a degree of prejudice against bounties, from an ap-
pearance of giving away the public money without an immedi-
ate consideration, and from a supposition, that they serve to
enrich particular classes, at the expense of the community.
But neither of these sources of dislike will bear a serious ex-
amination. There is no purpose to ivhich public money can be
more beneficially applied, than to the acquisition of anew 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 eli-
»«
54 ALEXANDER HAMILTON'S REPORT
gible. As often as a duty upon a foreign article makes an ad-
dition to its price, it causes an extra expense to the communi-
ty, 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 expense, which is more than compensated by an
increase of industry and wealth; by an augmentation of resources and
independence ; and by the circumstance of eventual cheapness, which hat
been noticed in another place.
It would deserve attention, however, in the employment of
this species of encouragement in the United States, as a rea-
son 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 foun-
dation for such a question. The National Legislature has ex-
press 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 cen-
sus or enumeration taken on the principles prescribed in the
Constitution ;" and that u no tax or duty shall be laid on ar-
ticles 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
terras u 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 na-
tion would have been left without a provision. The phrase
is as comprehensive as any that could have been used ; be-
cause it was not fit that the constitutional authority of the
Union, to appropriate its revenues, should have been restrict-
ed 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 Na-
tional Legislature, to pronounce upon the objects, which con-
cern the general welfare, and for which, under that descrip-
tion, 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 ma-
ON MANUFACTURES. 55
nufactureb, and of commerce, are within the sphere of the
National Councils, as far as regards an application of money*
The only qualification of the generality of the phrase in
question, which seems to be admissible, is this — That the ob-
ject, to which an appropriation of money is to be made, be ge-
neral aud not local ; its operation extending, in fact, or by pos-
sibility, throughout the Union, and not being confined to a
particular spot.
No objection ought to arise to this construction from a sup-
position 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 YP ower to do anv other
thing, not authorised in the Constitution, either expressly or
by fair implication.
V. Premiums.
These are of a nature allied to bounties, though distinguish-
able from them in some important features.
Bounties are applicable to the whole quantity of an article
produced or manufactured, or exported, and involve a corre-
spondent expense — Premiums serve to reward some particular
excellence or superiority, some extraordinary exertion or skill,
and are dispensed only in a small number of cases. But their
effect is to stimulate general 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 in-
terest. They are accordingly a very economical mean of ex-
citing the enterprise of a whole community.
There are various societies in different countries, whose ob-
ject is the dispensation of premiums for the encouragement of
agriculture, arts, manufactures, and commerce; and though
they are for the most part voluntary associations, with compa-
ratively slender funds, their utility has been immense. Much
has been done by this mean in Great Britain : Scotland in par-
ticular owes materially to it a prodigious melioration of con-
dition. 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 burdens 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
56 ALEXANDEU HAMILTON'S REPORT
*
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 competi-
tors in our own and in foreign markets.
There are, however, exceptions to it ; of which some exam-
ples 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
advisable to extend it to some other cases. Of a nature, bear-
ing some affinity to that policy, is the regulation which exempts
from duty the tools and implements, as well as the books,
clothes, 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 for-
borne. 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 sim-
ilar kind, the competition of which with a like domestic arti-
cle is desired to be restrained, partakes of the nature of a raw
material, from being capable, by a further process, to be con-
verted into a manufacture of a different kind, the introduction
or growth of which is desired to be encouraged — A third,
where the material itself is a production of the country, and
in sufficient abundance to furnish a cheap and plentiful supply
to the national manufacturers.
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
consumers of sugar.
Cottons and linen 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 manufactures has attain-
ed 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,
ON MANUFACTURES. 57
for the purpose of preventing a competition with some domes*
tic production, the same reasons which recommend, as* a gene-
ral rule, the exemption of those materials from duties, would
recommend, as a like general rule, the allowance of drawbacks,
in favour of the manufacturer. Accordingly, such drawbacks
are familiar in countries which systematically pursue the busi-
ness 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 instan-
ces of salt and molasses. It is believed that it will be found
advantageous to extend it to some other articles.
VIIL The encouragement of new inventions and discoveries, at
home, and of the introduction into the United States of such as may hone
been made in other countries : particularly those which relate to ma-
chinery.
This is among the most useful and unexceptionable of the
aids which can be given to manufactures. The usual means
of that encouragement are pecuniary rewards, and, for a time,
exclusive privileges. The first must be employed, according
to the occasion, and the utility of the invention, or discovery.
For the last, so far as respects " authors and inventors," pro-
vision has been made by law. But it is desirable, 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 practised with advantage
in other countries. Here, however, as in some other cases,
there is cause to regret, that the competency of the authority
of the national Government to the good, which might be done,
is not without a question. Many aids might be given to in-
dustry ; 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 autho-
rity 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 intro-
duction 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, un-
der severe penalties, the exportation of implements and ma-
chines, 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 recipro-
city. Greater liberality, in such respects, might better com-
port with the general spirit of the country ; but a selfish and
H
r-
_i ' "**m
58 ALEXANDER HAMILTON'S REPORT
exclusive policy in other quarters will not always permit the
free indulgence of a spirit , which would place us upon an une-
qual 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 en-
couragement to exertion.
IX. Judicious regulations for the inspection of manufactured com-
modities.
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 pre-
vent frauds upon consumers at home, and exporters to foreign
countries— to improve the quality and preserve the character
of the national manufactures, it cannot fail to aid the expedi-
tious and advantageous sale of them, and to serve as a guard
against successful competition from other quarters. The re-
putation of the flour and lumber of some states, and of th&
potash 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.
Alike 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 pur-
chase 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 every where, and interest and
damages allowed in case of protest, it would greatly promote
negotiations between the citizens of different states, by ren-
dering 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 favouring this object intimately*fconcern all
the domestic interests of a community ; but they may with-
out impropriety be mentioned as having an important relation
to manufactures. There is perhaps scarcely any thing, which
has been better calculated to assist the manufactures of Great
Britain, than the meliorations of the public roads of that king-
dom, and the great progress which has been of late made in
opening canals. Of the former, the United States stand much
in need; for the latter they present uncommon facilities*
OK MANUFACTURES. 59
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 exantples, it is to be
hoped, will stimulate the exertions of the government and
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 comprehen-
sive 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 ge-
neral interest will be in danger to be sacrificed to the collision
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 perti-
nent to deserve a literal quotation : u Good roads, canals, and
navigable rivers, by diminishing the expense of carriage, put
the remote parts of a country more nearly upon a level with
those in the neighbourhood of a 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
neighbourhood. 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 pro-
duce. Monopoly, besides, is a great enemy to good manage-*
ment, 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
counties in the neighbourhood of London petitioned the par Ha*
ment against the extension of the turnpike roads, into the re-
moter counties. Those remoter counties, they pretended, from
the cheapness of labour, 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 pa-
triotism that the body in this country, in whose councils a
local or partial spirit is least likely to predominate, were at
liberty to pursue and promote the general interest, in those ia»
stances, in which there might be danger of the interference of
such a spirit. *
50 ALEXANDER HAMILTON'S REPORT
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 guarded from any peculiar tendency to injure them*
There are certain species of taxes, which are apt to be op-
pressive 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 discre-
tion 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 em-
ployed 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 or business have commonly weigh-
ty 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 them-
selves of so inconvenient a refuge. And the consequence is,
that they often suffer oppression.
When the disclosure too, if made, is not definitive, but con-
trollable by the discretion, or, in other words, by the passions
and prejudices of the revenue officers, it is not only an ineffec-
tual protection, but the possibility of its being so is an addi-
tional reason for not resorting to it.
Allowing to the public officers the most equitable disposi-
tions ; yet where they are to exercise a discretion, without cer-
tain 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 pro-
fits 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 go-
vernment, 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
ON MANUFACTURES. (ft
each person, to the discretion of certain officers, are as contra-
ry to the genius of liberty as to the maxims of industry. In
this light they have been viewed by the most judicious ob-
servers on government ; who have bestowed upon them the
severest epithets of reprobation ; as constituting ope of the
worst features usually to be met with in the practice of despo-
tic governments.
It is certain, at least, that such taxes are particularly inimi-
cal to the success of manufacturing industry, and ought care-
fully to be avoided by a government which desires to pro-
mote it.
The great copiousness of the subject of this report has in-
sensibly led to a more lengthy preliminary discussion, than
was originally contemplated, or intended. It appeared proper
to investigate principles, to consider objections, and to endea-
vour to establish the utility of the thing proposed to be en-
couraged, 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 entitled
to particular attention : The capacity of the country to furnish
the raw material — the degree in which the nature of the manu-
facture 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 in-
terests, 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 pre-eminent
rank. None are more essential in their kinds, nor so extensive
in their uses. They constitute, in whole or in part, the im-
plements or the materials, or both, of almost every useful oc-
cupation. Their instrumentality is every where conspicuous.'
It is fortunate for the United States that they have peculiar
advantages for deriving the full benefit of this most valuable
material, and they have every motive to improve it with sys-
tematic 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
-*r-
62 ALEXANDER HAMILTON'S REPORT
are productive coal mines already in operation, and Strong in-
dications, that the material is to be found in abundance, in a
variety of other places.
The inquiries, to which the subject of this report has led,
have been answered with proofs that manufactories of iron,
though generally understood to be extensive, are far more so
than is commonly supposed. 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 with-
out the aid of large capitals.
Iron works have 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 dol-
lars 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, unite in a greater degree than al-
most any others, the several requisites which have been men-
tioned 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 unques-
tionable, 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 enterprises, on
a more extensive scale, have been lately set on foot. The fa-
cility 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 them-
selves with nails and spikes. They are able, and ought cer-
tainly to do it entirely. The first and most laborious opera-
tion, 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 com-
munity, to the present support of their families, and to their
own future comfort* It is not . less curious than true, that in
ON MANUFACTURES. 63
certain parts of the country, the making of nails 19 an occa-
sional family manufacture.
The expediency of an additional duty on these articles is
indicated by an important fact. About 1,800,000 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 pound 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 regu-
lation 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 per-
fection 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 insure the end, it seems equally safe and prudent to ex-
tend the duty ad valorem upon all manufactures of iron, or
of which iron is the article of chief value, to ten per cent.
Fire arms and other military weapons may, it is conceived,
be placed without inconvenience in the class of articles rated
at fifteen per cent. There exist 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 manufactures of this na-
ture, 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 for use, so as always to have in store
the quantity of each kind, which should be deemed a compe-
tent supply.
But it may hereafter deserve legislative consideration, whe-
ther manufactories of all the necessary weapons of war ought
not to be established on account of government itself. Such
/
64 ALEXANDER HAMILTON'S REPORT
establishments are agreeable to the usual practice of nations,
and that practice seems founded on sufficient reason.
There appears to be an improvidence in leaving these essen-
tial 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 ques-
tion 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 whiqh steel is the
article of chief value, may with advantage be placed in the
class of goods rated at seven and a half per cent. As manu-
factures of this kind have not yet made any considerable pro-
gress, 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
would certainly be favourable to manufacturers of the article ;
but the doubt is, whether it might not interfere with its pro-
duction.
Two circumstances, however, abate, if they do not remove,
apprehension, on this score ; one is, the considerable increase
of price, which has already been remarked, and which renders
it probable that the free admission of foreign iron would not
be inconsistent with an adequate profit to the proprietors of
iron works ; the other is, the augmentation of demand, which,
would be likely to attend the increase of manufactures of the
article, in consequence of the additional encouragement pro-
posed to be given. But caution, nevertheless, in a matter of
this kind, is most advisable. The measure suggested ought
perhaps rather to be contemplated, subject to the lights of fur-
ther 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 ingredient, 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,
ON MANUFACTURES. g#
are numerous in the United States ; some of whom carry orf
x business to a respectable extent.
To multiply and extend manufactories of the materials irt
Question, is worthy of attention and effort. In order tp this/
it is desirable to facilitate a plentiful supply of the materfyts/
And a proper mean to this end is to place them in the clatfsf
of free articles. Copper in plates and brass is already in
this predicament ; but copper in pigs and bars is not ; neither*
is lapis calaminaris, which, together with copper smd charcoal,
constitute the component ingredients of brass.' The exemp-
tion from duty, by parity of reason, ought to embrace aril sueh
of these articles, ate are objects' of importation.
An additional duty on brass wares will tend to the general
end in view. These now stand at five per cent, while those'
of tin, pewter, and copper are rated at seven and a half. There
appears to be a propriety in every vie. w in placing brass ware*
upon the same level with them ; and it merits consideration;
whether the duty upon alt of them ought not to bfc raised to
lien per cent/
LEAD.
. There are numerous proofs, that this material abounds ra
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 3
and, under a public administration, during the late war, yielded
3 considerable supply for military use. This is now in tfaef
hands of individuals,- who not only carry it on with spirit,- bull
have established manufactories of it at Richmond, m the sante
state.
The duties already laid upon the importation of this article*
either in its unmanufactured, or manufactured state 4 , ensure it
a decisive advantage in the holme market— ^which amounts tor
considerable encouragement.' t If the duty on pewter wares
should be 'raised, it would afford a further encouragement/
Nothing else occurs ad proper to be added.
FOSSIL 60AL.
This, as ah important instrument of manufactures, may witn rf
out impropriety be mentioned among the subjects of mis tc J
f° rU
A copious supply of it Would be of grearf consequence to
the iron branch : As an article of household fuel, also, it is art
interesting production? the utility pt which tnust increase 1
in proportion to the decrease of wood, 1 by tsbe progress of set*
dement and cultivation. And its importance to navigation, asf
an immense article of transportation coastwise, is signally e**
emplified in Great Britain.
I
g£ ALEXANDER HAMILTON'S REPORT
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 this 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 expense m this way, if it shall
appear to be necessary to, and shall be thought likely to answer,
the end.
WOOD.
Several manufactures of this article flourish tir the United
States. Ships are n* where built in greater perfection i and
cabinet wares, generally, are made little if at all inferior to those
of Europe. Their extent is such as to have admitted of con-
siderable exportation.
An exemption from doty of the several kinds of wood ordi-
narily used in these manufactures, seems to be all that is requi~
site r by way of encouragement. It is recommended by the
consideration of a similar policy being pursued in other coun-
tries, and by the expediency of giving equal advantages to our
own workmen in wood. The abundance of timber, proper for
ship building in the United States, does not appear to be any
objection to it. The increasing scarcity and growing import-
ance of that article in the European countries, admonish the
United States to commence r and systematically to pursue,,
measures for the preservation of their stock. Whatever may
promote the regular establishment of magazines of ship timber,
is in various views 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 differ-
ent kinds, is a very material recommendation.
It is pleasing, too, to observe the extensive progress they
have made in their principal branches ; which are so far matured
as almost to defy foreign competition. Tanneries in particular
are not only carried on as a regular business, in numerous in-*
stances,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 manufacture*
of it, which are imported ; the other by prohibiting the expor-
tation of bark. In support of the latter it is alleged, that the
price of bark, chiefly in consequence of large exportation*,.
©N MANUFACTURES. gf
lias risen within a few years from about three doliars 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 pro-
bable, 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 sup-
ply 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 favour 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 sup-
ply from such an increase.
It would be of benefit to this branch, if glue, which is now
rated at five per cent, were made the object of an excluding
duty. It is already made in large quantities at various tanne-
ries ; and, like paper, is an entire economy of materials, which %
if not manufactured, would be left to perish* It may be placed
with advantage in the class of articles paying fifteen per cent.
GRAIN.
Manufactures of the several species of this article have a
title to peculiar favour : 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 manufac-
ture 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 establish-
ed 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
ftg ALEXANDER HAMILTON'S REPORT
ought iq fye secured to the domestic manufacturers, as fast as circumstany
ce$ will adfnit. Nothing is more practicable, and nothing more desirable.
The existing laws of the United States have done much to*
wards attaining this valuable object. But some additions to
jthe 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 yery weighty objection to either.
An augmentation of the duties on imported spirits would
favour, as well the distillation of spirits from molasses, as that
from grain. And to secure to £he nation the benefit of a ma*
nufacture, even of foreign materials, is always of great, though
perhaps of secondary importance.
A strong impression prevails in the minds of those cony
cerned in distilleries, (including, too, the most candid and en?
lightened,) that greatet differences in the rates of duty on. fo*
reign and domestic spirits are necessary, completely to secure
the successful manufacture of the latter; and there are facts
which entitle this impression to attention.
|t is known, that the price of molasses for some years past,
has been successively rising in the West India markets, owing
partly to a competition which did not formerly exist, and partly
to an extension' of demand in this country ; and it is evident,
that t)?e late disturbances in those islands, from which we draw
pur principal supply, must so far interfere with the production
of the article, as to occasion a material enhancement of price f
The destruction and devastation attendant on the insurrection
In Hispaniola, in particular, must not only contribute yery
much to that effect, but may be expected to give it some dura?
tion. These circumstances, and the duty of three cents per gal*
Ion Qn molasses, may render it difficult for the distillers of thaf
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 ex»
tensive. It is not long since distilleries of it have grown up
among us Jo any importance. They are now becoming of con?
sequence ; but heh\g still in their infancy, they require prot
tection*
It is represented, that the price of some of the materials is
greater here, than in Holland, from which place large quantU
ties are brqught-r-the price of labpur 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 jt on, much less-^-the preju-
dices, in favour of imported gin, strong, These circumstan?
ees are alleged to outweigh the charges, which attend the
fringing of the articje from Europe tp \\\t United States, ancj
ON If ANUFACTUKKS. 69
ifae present difference of duty, so as £o obstruct the prosecution
A)f the manufacture, with due advantage.
Experiment could perhaps alope dccjcje with certainty the
justness of the suggestions', which are aaade j but in relation
to brandies pf manufacture so important., it wpujd seem inex-
pedient $o hazard an unfavourable issue, and b«e|tter to err on
the side pf too grea,t, than pf tpo sm#JJ a .djfferenjcej }n the parr
ticular in question,
It is therefpre submitted, that an addition of two cents per
gallon be made to the duty on imported spirits of the first
class of proof, with a proportion able increase pn those pf higher
proof; and that a deduction pf one cent per gallon be made
from the duty on spirits distilled within the United States, be r
ginning with the £rst class pf proof, and a proportion able de r
jductipn from tjie duty op those of higher propf,
It is ascertained, that by far the greatest part of the malt
liquors consumed in the United States are the produce of do r
mestic breweries. It is desirable, and in all likelihood, dttainr
able, that the yvhofe consumption *houl4 be supplied by Qur*
selves.
The malt liquors, made at home, though inferior to the best, j
flre equal to a great part of those which have been usually im y ,
ported. The progress already made is an earnest of what may j
be accomplished. The growing competition is an assurance ;'
pf improvement. This will be accelerated by measures, tendr j
ing tp ipyijfe a greater capital into th}s channel of employ, j
ment, j
Tp render the encouragement of domestic breweries decisr
jve, it may be advisable to substitute to the present rates of
duty, eight cent* per gallon generally ; and it will deserve to
be considered as a guard against evasions, whether there ought
not to be a prohibition of tneir importation, except in casks of
considerable capacity. Jt is tp 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 im?
ported, till it should be supplanted by the efforts of equal skill
or care at home.
Till that period, the importation so qualified, wouty be ai|
useful stimulus 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 do r
mestic industry, could not reasonably be deemed a hardship.
As a further aid to manufactures pf grain, though upon a
.smaller scale, the articles of starch* hair powder, and wafers,
may ? with great propriety, be placed among those which are rat*
ed at fifteen per cent. No manufactures are more simple, nor
more completely within the reach of a full supply, from dqmes*
tic sources ; ancf it i$ a policy, as, conwon a$ it is obviou^s, tq
^0 ALEXANDEtt HAMILTON'S REPORT
make them the objects either of prohibitory duties, or of ex-
press prohibition.
FLAX AND HEMP,
Manufactures of these articles have so much affinity to each
; other, and they are so often blended, that they may with adr
I vantage be considered in conjunction. The importance of the
• linen branch to agriculture*— ifs precious effects upon house-
hold industry-r~the ease, with which the materials can be pro-
duced at home, to any requisite extent— the great advances,
which have been already made, in the coarser fabrics of tbem,
especially in the family way, constitute claims pf peculiar
force to the patronage of government.
This patronage may be afforded in various ways ; by promo-
ting the growth of the materials; by increasing the impediments
to an advantageous competition of the rival foreign articles ;
by direct bounties or premiums upon the home manufacture.
First. &8 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 domes-
tic 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 ma-
king the proper allowances for those facilities, and with an
eye to the future and natural progress of the country, the
measure does not appear, upon the whole, exceptionable.
A strong wish naturally suggests itself, that some method
could be devised of affording a more direct encouragement to
jthe growth both of flax and hemp ; such as would be effectual,
and at the 6ame time not attended with too great inconvenien-
ces. 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 expense, or operate
unequally in reference to theVircumstances of different parts
of the Union ; and which would not be attended with very
great difficulties in the execution.
Secondly. As to increaaing the imflcdiments to an advantageous com*
petition 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 Jo be recommended by sufficient reasons.
The principal of these articles is sail-cloth ; one intimately
connected with pavigation and defence ; and of which a flou-
rishing manufactory is established at Boston, and very pro->
jnising ones at several other places.
It is presumed to be both safe and advisable 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
ON MANUFACTURES. 7J
sterling per eli is allowed in Great Britain, upon the export
tion of the sail-cloth manufactured in that kingdom.
It would likewise appear to be good policy to raise the duty
to seven and a half per cent, on the following articles : DriS*
lings, osnaburghs, ticklenburghs, dowlas, canvass, brown rolls,
bagging, and upon all other linens, the first cost of which at
the place of exportation does not exceed S5 cents per yard.
A bounty of 12 h per cent* upon an average, on the exportation*
of such or similar linens from Great 1 Britain,- encourages the
manufacture of them in that country, and increases the ob-
stacles to a successful competition: in the countries to which
they are sent.
The quantities of tow and other household linens manufac-'
tured in different parte of the United States, and the expecta-
tions, which are derived from some late experiments, of being
able to extend the use of labour-saving machines, in the
coarser fabrics of linen, 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 manufac-*
tured articles*
To afford more effectual encouragement to the manufacture,
and at the same time to promote the cheapness of the article,
for the benefit of navigation, it will be of great use to allow a
bounty of two cents per yard on all ' sail-cloth which is made
in the United States, from materials of their own growth.
This would also assist the culture of those materials. An en-
couragement 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 impor-
tance enough to warrant the employment of extraordinary
means in its favour.
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 1
in the different manufactories of this article, are employed either
exclusively, or with mor'e than ordinary effect. This very
important circumstance recommends the fabrics of cotton, in a more
particular manner^ to a country in which a defect of hands consti-
tutes the greatest obstacle to success.
The variety and extent of the uses to which the manufac-
tures of this article are applicable, is another powerful argu-
ment in their favour.
f% ALEXANDER HAMILTON'S REPORT
And the faculty of the United States to produce the raw
fnaterial in abundance, and of a quality, which, though alleged
to be inferior to some that is produced in other quarters, is ne J
vertheless capable of being ffsed with advantage in many fa-'
brics, and is probably susceptible of being carried* by a mort
experienced culture, to fftuch greater perfection, suggests an
additional and a very cogent inducement to the vigorous- pur*
suit of the cotton branch, in its several subdivisions.
How rriuch has been' already done, bars been stated in a pre*
ceding part of this? report.
In addition to this, it may be announced, that a society is*
forming with a capital which is expected to be extended to at
least half a million of dollars ; 6n behalf 6f which, measures
are already in train for prosecuting,* on a large scale, the mak*
ing 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 ran material, iV
undoubtedly a very serious impediment to the progress of those manufae J
tones'.
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 mate-
rial itself, have been anticipated, particularly in discussing the
subject of pecuniary bounties.
Cotton has not the same pretensions, with hemp, to format*
exception to the general rule.
Not beingv like hemp, an universal production of the coun-
try, it affords less assurance of an adequate internal supply ;
Dut th£ chief objection arises from the doubts, which are en-
tertained concerning the quality of the national cotton. It
is alleged 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 th^ eqtoatorf
the better the quality of the cotton. That which comes from
Cayenne, Surinam, and Demerara* is said to be preferable,
even at a material difference of pricey to the cotton of the'
islands.
Whife a hope may reasonably be indulgecf, tnat witfr ctue
Care and attention the national cotton may be made to ap-
proach nearer than it now does, to that of regions somewhat
tnore favoured by climate, and while facts authorise 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 coun-
try, than can be enjoyed by any which depends wholly oh
ON MANUFACTURES. 73
ternal supply, it will certainly be wise, in every view, to let
our infant manufactures have the full benefit of the best mate-
rials 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 manufacturers so essential an ad-
vantage, a repeal of the present duty on imported cotton is '
indispensable. !
A substitute for this, far more encouraging to domestic pro-
duction, 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 pr both would do much
more towards promoting the growth of the article, than the
merely nominal encouragement, which it is proposed to abo-
lish. The first would also have a direct influence in encou-
raging the manufacture.
The bounty, which has been mentioned as existing in Great
Britain, upon the exportation of coarse linens, not exceeding
a certain value, applies also to certain descriptions of cotton
goods of similar value.
This furnishes an additional argument for allowing to the
national manufacturers the species of encouragement just sug-
gested, 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 linen mixed, which are ma-
nufactured 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 expense would be well justified
by the magnitude of the object.
The printing and staining of cotton goods is known to be a
distinct business from the fabrication of them. It is one easily .
accomplished ; and which, as it adds materially to the value
of the article in its white state, and prepares it for a variety
of new uses, is of importance to be promoted.
As imported cottons, equally with those which are made at
home, may be the objects of this manufacture, it will merit
consideration, whether the whole, or a part of the duty, on the
white goods, ought not to be allowed to be drawn back in fa-
vour of those who print or stain them. This measure would
certainly operate as a powerful encouragement to the business ;
and though it may in a degree counteract the original fa-
brication of the articles, it would probably more than compen-
sate for this disadvantage, in the rapid growth of a collateral
branch, which is of a nature sooner to attain to maturity.
K
V
I'
74 ALEXANDER HAMILTON'S REPORT
When a sufficient progress shall have been made, the draw*
back 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 seven and a half 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 ob-
jection occurs to such an extension. The duty, then, consi-
dering all the circumstances which attend goods of this de-
scription, could not be deemed inconveniently high ; and it
may be inferred from various causes, that the prices of them
would still continue moderate.
Manufactories of cotton goods, not long since established
at Beverly, in Massachusetts, and at Providence, in the state
of Rhode Island, and conducted with a perseverance corre-
sponding 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 fami-
lies for household manufacture.
Other manufactories of the same material, as regular busi-
nesses, 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 establish-
ments of this kind already on foot.
WOOL.
In a country, the climate of which partakes of so consider-
able a proportion of winter, as that of a great part of the
United States, the woollen branch cannot be regarded as in-
ferior to any, which relates to the clothing 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 busi-
ness 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 ; and nothing seems wanting,
but an adequate supply of materials, to render the manufac-
ture commensurate with the demand.
A promising essay towards the fabrication of cloths, kersey-
meres and other woollen goods, is likewise going on at Hart-
ON MANUFACTURES. 75
ford, 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 surpass** any thing that could nave been looked for,
in bo short a time, and under bo great disadvantages ; and conspires with
the scantiness of the means, which have been at the command of the
directors, to form the eulogium of that public spirit, perseverance, and
judgment, which have been able to accomplish so much.
To cherish and bring to maturity, this precious embryo, must engage
the most ardent wishes, and proportionable regret, as far as the means of
doing it may appear difficult or uncertain.
Measures which should tend to promote an abundant supply
of wool, of good quality, would probably afford the most ef-
ficacious aid that present circumstances permit.
To encourage the raising and improving the breed of sheep,
at home, would certainly be the most desirable expedient for
that purpose, but it may not be alone sufficient, especially as
it is yet a problem, whether our wool be capable of such a
degree of improvement as to render it fit for the finer fabrics.
Premiums would probably be found the best means of pro*
moiing the domestic, and bounties the foreign supply. The
firbt 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 this purpose may be derived from the addition
of 24 per cent, to tne present rate of duty on carpets and car**
peting; an increase, to which the nature of the article suggests
no objection, and which may at the same time furnish a mo-
tive 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, handkerchiefs,
ribands, and 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 al-
luded to, seem to be the only species of encouragement advis-
able at so early a stage of the thing.
GLASS.
The materials for mating glass are found every inhere. In
76 ALEXANDER HAMILTON'S REPORT
the United States there is no deficiency of them. Tht sands
and stones called Tarso, which include flinty and crystaline
substances generally, and the salts of various plants, particu-
larly of the sea-weed, kali or kelp, constitute the essentialin-
gredients. An extraordinary abundance of fuel is a particular
advantage enjoyed by this country for such manufactures.
They, however, require large capitals, and involve much ma-
nual labour.
Different manufactories of glass are now on foot in the Uni-
ted States. The present duty of twelve and a half per cent,
on all imported articles of glass, amounts to a considerable en-
couragement to those manufactories. If any thing in addition
is judged eligible, the most proper would appear to be a direct
bounty on window glass and black bottles*
The first recommends itself as an object of general conveni-
ence ; 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.
GUNPOWDER.
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 fur-
ther extension very desirable.
The encouragements which it already enjoys, are a duty of
ten per cent, on the foreign rival article, and an exemption of
saltpetre, one of the principal ingredients of which it is com-
posed, 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 ad-
ditional inducement to placing it in the class of free goods.
Regulations for the careful inspection of the article would
have a favourable tendencv.
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 compe-
tent 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 them-
selves equally with those of other descriptions, to encourage-
ON MANUFACTURES. 77
merit, and appear to be as fully within the compass of domes-,
tic exertions.
PRINTED BOOKS.
The great number of presses disseminated throughout the
Union, seem to afford an assurance, that there is no need of
being indebted to foreign countries for the printing of the books
which are used in the United States. A duty of ten per cent,
instead of five, which is now charged upon the article, would
have a tendency to aid the business internally.
It occurs, as an objection to this, that it may have an unfa-
vourable 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 £11 the libraries of the wealthier
classes and of professional men, such an augmentation of prices,
as might be occasioned by an additional duty of five per cent,
would be too little felt to be an impediment to the acquisition.
And with regard to books which may be specially imported
for the use of particular seminaries of learning, and of public
libraries, a total exemption from duty would be advisable,
which would go towards obviating the objection just men-
tioned. They are now subject to a duty of five per cent.
As to the books in most general family use, the constancy
and universality of the demand would ensure exertions to fur-
nish them at home, and the means are completely adequate. It
may also be expected ultimately, in this as in other c&ses, that
the extension of the domestic manufacture would conduce to the
cheapness oj 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
Ar€ among the number of extensive and prosperous domes-
tic 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 in-
stance of molasses, on the exportation of distilled spirits.
Cocoa, the raw material, now pays a duty of one cent per
pound, while chocolate, which is a prevailing and very simple
manufacture, is comprised in the mass of articles rated at no
more than five per cent. -
There would appear to be a propriety in encouraging the
manufacture by a somewhat higher duty on its foreign rival,
than is paid on the raw material. Two cents per lb. on im-
**
78 ALEXANDER HAMILTON'S REPORT
ported chocolate would, it U presumed, be without inconve-
nience.
The foregoing heads comprise the most important of the
several kinds of manufactures, which have occurred as requir-
ing, and, at the same, as most proper for public encourage-
ment ; 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, supersede the necessity of many supplementary re-
marks. One or two, however, may not be altogether super-
fluous.
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 greatjAo countervail the
advantages of which they are productive, wnen rightly applied.
And it is presumed to have been shown, that they are, in some
cases, particularly in the infancy of new enterprises, indispen-
sable.
It will, however, be necessary to guard, with extraordinary
circumspection, the manner of dispensing them. The requi-
site precautions have been thought of ; but to enter into the
detail would swell this report, already voluminous, to a size
too inconvenient.
If the principle shall not be deemed inadmissible, the means
of avoiding an abuse of it, will not be likely to present insur-
mountable 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 manufac-
ture of an article, cannot with safety extend beyond those ma-
nufactories, 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 maybe more firmly relied ufion t
than that the interest* of the revenue x are promoted by whatever pro*
mo tee an increase of national industry and wealth.
ON MANUFACTURES. 79
In proportion to the degree of these, is the capacity of every coun-
try 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 im-
portation, 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 manufac-
tures 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 re-
duction in others, of duties, which have been pledged for the
public debt, is proposed, it is essential, that it should be ac-
companied 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^hy 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
have been decreed.
Secondly. To constitute a fund for the operations of a board,
to be established, for promoting arts, agriculture, manufac-
tures, 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 con-
fided to them, to defray ths expenses 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, oy proportionate rewards, judiciously held out and ap-
plied — to encourage by premiums, both honourable and lucrative, the eav
ertions of individuals, and of classes, in relation to the several objects they
are charged with promoting — and to afford such other aids to those 06-
jects, 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.
80 ALEXANDER HAMILTON'S REPORT.
r
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 reason 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 worklttCfc
of a superior kind. Here, in cases worthy of it, the auxil^ry^.
agency of government would in all probability be usefuh*-^
There are also valuable workmen, in every branch, who>*ar^R
prevented from emigrating solely by the want of means. 0c- .■■
casional aids to such persons, properly administered, might be
a source of valuable acquisitions to the country;
The propriety of stimulating by rewards, the invention and : -
introduction of useful improvements, is admitted Without dif- , ■
ficulty. But the success of attempts in this way must evident-
ly depend much on the manner of conducting them. It is
probable, that the placing of the dispensation of those rewarjS
under som$ proper discretio/iar^ydirection, where they mayjbe
accompaniedLby collateral exfiedzeh^jfgaviW serve to give^thjErtJ*
the surest OTfcacy. It seems* rnyjnfcticable to apportion r jt^
general rulef| specific compensations for discoveries of tin- , .?
known and disproportionate .utility. ' ,. ; V$i
The great use which may be made of a fund of this nature/^
to procure and import foreign improvements, is particularly^
obvious. Among these, the article of machines would form ■<
a most important item. * ■ - *
The operation and utility of premiums have been adverted ^
to; together with the advantages which have resulted from*'
their dispensation, under the direction of certain public and
private societies. Of this, some experience has been had in
the instance of the Pennsylvania Society, for the promotion of
manufactures and useful arts ; but the funds of that associa-
tion 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 scarce-
ly any thing, which has been devised, better calculated to ex-
cite a general, spirit of improvement than the institutions of
this nature. They are truly invaluable.
In countries where there is great private wealth, much may : .
be effected by the voluntary contributions of patriotic indivi-
duals ; but in a community situated like that of the United States, i
the public purse must supply the deficiency of private resource. In ;,
what can it be so useful as in promoting and improving" the effort* of )•,
industry ?
All which is humblv submitted.
ALEXANDER HAMILTON,
Secretary of the Treasury. !
■ -./
HUM
1
The borrower must return this item on or before
the last date stamped below. If another user
places a recall for this item, the borrower will
be notified of the need for an earlier return.
Non-receipt of overdue notices does not exempt
the borrower from overdue fines.
Harvard College Widener Library
Cambridge, MA 02138 6U.-495-2413
WIDENER
■•wvvv
Please handle with care.
Thank you for helping to preserve
library collections at Harvard.
Live Music Archive
Librivox Free Audio
Metropolitan Museum
Cleveland Museum of Art
Internet Arcade
Console Living Room
Books to Borrow
Open Library
TV News
Understanding 9/11