Hamilton Report on Manufactures TEXT Part V

The objections which are commonly made to the expediency of encouraging, and to the probability of succeeding in manufacturing pursuits, in the United States, having now been discussed, the considerations which have appeared in the course of the discussion, recommending that species of industry to the patronage of the government, will be materially strengthened by a few general and some particular topics, which have been naturally reserved for subsequent notice. 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 and such impoverishment of the nation.

I. There seems to be a moral certainty, that the trade of a country which is both manufacturing and agricultural, will be more lucrative and prosperous, than that of a 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 consumption and use; and which serves, to render their demand for a foreign supply of such articles in a great degree occasional and contingent. Hence, -while the necessities of nations exclusively devoted to agriculture, for the fabrics of manufacturing 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 difference of seasons have been elsewhere remarked; this uniformity 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 participants to turn to the disadvantage of the merely agricultural states. Peculiarity of situation, a climate and soil adapted to the production of peculiar commodities, may sometimes contradict the rule, but there every reason to believe that it will be found, in the main a just one.

Another circumstance which gives a superiority of commercial advantages to states that manufacture, as well as cultivate consists in the more numerous attractions, which a more diversified market offers to foreign customers, and in the greater scope which it affords to mercantile enterprise. It is a position of indisputable truth in commerce, depending, too, on very obvious reasons, that the greatest resort will ever be to those marts, where commodities, while equally abundant, are most various. Each difference of kind holds out an additional inducement and it is a position not less clear, that the field of enterprise must be enlarged to the merchants of a country, in proportion to the variety)', as well as the abundance of commodities which they find at home for exportation to foreign markets.

A third circumstance, perhaps not inferior to either of the other two, conferring the superiority which has been stated, has relation to the stagnations of demand for certain commodities, which at some time or other interfere more or less with the sale of all. The nation which can bring to market but few articles, is likely to be more quickly and sensibly affected by such stagnations than one which is always possessed of a great variety of commodities; the former frequently finds too great a proportion of its stock of materials, for sale or exchange, lying on hand — or is obliged to make injurious sacrifices to supply its wants of foreign articles, which are numerous and argent, in proportion to the smallness of the number of its own. The latter commonly finds itself indemnified, by the high prices of some articles, for the low prices of others: and the prompt and advantageous sale of those articles' which are in demand, enables its merchants the better to wait for a favourable 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 inferences are to be drawn; one, that there is always a higher probability of a favourable balance of trade, in regard to countries, in which manufactures founded on the basis of a thriving agriculture, flourish, than in regard to those, which are confined wholly or almost wholly to agriculture; the other, (which is also a consequence of the first) that countries of the former description are likely to possess more pecuniary wealth, or money, than those in the latter.

Facts appear to correspond with this conclusion. The importations of manufactured supplies seem invariably to drain that 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 account for this disparity between some of them; and among these causes, the relative state of agriculture but between others of them, the most prominent circumstance of dissimilitude arises from the comparative state of manufactures. In corroboration of the same idea, if ought not to escape remark, that the West India islands, the soils of which are the most fertile; and the nation, which in the greatest degree supplies the rest of the world with the precious metals; exchange to a loss; with almost every other country.

As far as experience at home may guide, it will lead to the same conclusion. Previous to the revolution, the quantity of coin possessed by the colonies, which now compose the United States, appeared to be inadequate to their circulation; and their debt to Great Britain was progressive. Since the revolution, the states, in which manufactures have most 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, account in a degree, for the phenomena remarked. The continual progress of new settlements has a natural tendency to occasion 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: and the different degrees of external commerce, which ate carried tan by the different states, may make material differences in the comparative state of their wealth. The first circumstance has reference to the deficiency of coin and the increase 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 concomitant of a flourishing state of manufactures, and of the reverse, where they do not prevail, afford a strong presumption of their favourable operation upon the wealth of a country.

Not only the wealth, but the independence and security of a country appear to be materially connected with the prosperity of manufactures. Every nation, with a view to those great objects, ought to endeavour to possess within itself all the essentials of national supply. These comprise the means of subsistence, habitation, clothing, and defence.

The possession of these is necessary to the perfection of the body politic, to the safety as well as to the welfare of the society; the want of either, is the want of an important organ of political life and motion; and in the various crises which await a state, it must severely feel the effects of any such deficiency. The extreme embarrassments of the United States during the late war, from an incapacity of supplying themselves, are still matter of keen recollection; a future war might be expected again to exemplify the mischiefs and dangers of a situation, to which that incapacity is still in too great a degree applicable unless changed by timely and vigorous exertion. To effect this change, as fast as shall be prudent, merits all the attention and all the zeal of our public councils; 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 precarious reliance, for the supply of essential articles, and must serve to strengthen prodigiously the arguments in favour of manufactures.

To these general considerations are added -some of a more particular nature.

Our distance from Europe, the great fountain of manufactured supply, subjects us, in the existing stale of things, to inconvenience and loss, in two ways.

The bulkiness of those commodities which are the chief productions of the soil, necessarily imposes very heavy charges on their transportation to distant markets. These charges, in the cases, in which the nations, to whom our products are sent, maintain a competition in the supply of their own markets, principally fall upon us, and form material deductions from the primitive value of the articles furnished. The charges on manufactured supplies brought from Europe are greatly enhanced by the same circumstance of distance. These charges, again,
in the cases in which our own industry maintains no competition, in our own markets, also principally fall upon us; and are an additional cause of extraordinary deduction from the primitive value of our own products; these being the materials 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, augment 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, it appears to be clearly deducible, from the considerations which have been mentioned, that they must sustain a double loss in their exchanges with foreign nations; strongly conducive to an unfavourable balance of trade, and very prejudicial to their interests.

These disadvantages press with no small weight on the landed interest of the country. In seasons of peace, they cause a serious deduction from the intrinsic value of the products of the soil. In the time of a war, which 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 depend, in so great a degree as he now does upon foreign markets for the vent of the surplus of his labour.

As far as the prosperity of the fisheries of the United States, is impeded by the want of an adequate market, there arises another special reason for desiring the extension of manufactures. Besides the fish, which, in many places, would be likely to make a part of the subsistence of the persons employed; it is known that the oils, bones and skins of marine animals, are of extensive use in various manufactures. Hence the prospect of an additional demand for the produce of the fisheries.

One more point of view only remains, in which to consider the expediency of encouraging manufactures in the United States,

It is not uncommon to meet with an opinion, that though the promoting of manufactures may be the interest of a part of the union, it is contrary to that of another part. The northern and southern regions are sometimes represented as having, adverse interests in this respect. Those are called manufacturing, these agricultural states, and a species of opposition is imagined to subsist between the manufacturing and agricultural interests.

This idea of an opposition between those two interests is the common error of the early periods of every country, but experience gradually dissipates it. Indeed they are perceived so often to succour and 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 encouragements 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 connected. In the course of the discussion which has had place, various weighty considerations have been adduced, operating in support of that maxim. Perhaps the superior steadiness of the demand of a domestic market for the surplus produce of the soil, is alone a convincing argument of its truth.

Ideas of a contrariety of interests between the northern and southern regions”of the Union, are, in the main, as unfounded as they are mischievous. The diversity of circumstances, on which such contrariety is usually predicated, authorises a directly contrary conclusion. Mutual wants constitute one of the strongest links of political 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 deplored, as unfriendly to the steady pursuit of one great common 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 variety 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 originate in local discriminations. It is a truth, as important as it is agreeable, and one to which it is not easy to imagine exceptions, that everything tending to establish substantial and permanent 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 acquiescence may safely be accorded, from every quarter, to all institutions, 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 would immediately benefit the more southern by creating a demand for productions some of which they have in common with the other states, and others which are either peculiar to them, or more abundant, or of better quality, than elsewhere. These productions principally, are timber, flax, hemp, cotton, wool, raw silk, indigo, iron, lead, furs, hides, skins, and coals; of these articles cotton and indigo are peculiar to the southern states: as are hitherto lead and coat. Flax and hemp are or may be raised in greater abundance there, than in the more northern states; and the wool of Virginia is said to be of better quality than that of any other state: a circumstance rendered the more probable by the reflection that Virginia embraces the same latitudes with the finest wool countries of Europe. The climate of the south is also better adapted to the production of silk.

The extensive cultivation of cotton can perhaps hardly be expected, but from the previous establishment of domestic manufactories of the article; and the surest encouragement and vent, for the others, would result from similar establishments in respect to them.

If, then, it satisfactorily appears, that it is the interest of the United States, generally, to encourage manufactures, it merits particular attention, that there are circumstances which render the present a critical moment for entering with zeal upon the important business. The effort cannot fail to be materially seconded by a considerable and 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 necessary mean to turn the thing itself to advantage, and to prevent its being eventually an evil. If useful employment be not found for the money of foreigners brought to the country to be invested 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 be experienced to pay the interest and redeem the principal of the purchased debt.

This useful employment, too, ought to be of a nature to produce solid and permanent improvements. If the money merely serves to give 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 as it shall find its way in agricultural meliorations, in opening canals and in similar improvements, it will be productive of substantial utility. But there is reason to doubt, whether in such channels it is likely to find sufficient employment, and still more whether many of those who possess it, would be as readily attracted to objects of this nature, as to manufacturing pursuits; which bear greater analogy to those to which they are accustomed, and to the spirit generated by them.

To open the one field, as well as the other, will at least secure a better prospect of useful employment, for whatever accession of money there has been or may be.

There is, at the present juncture, a certain fermentation of mind, a certain activity of speculation and enterprise, which, if properly directed, may be made subservient to useful purposes; but which, if left entirely to itself, may be attended with pernicious effects.

The disturbed state of Europe, inclining its citizens to emigration, the requisite workmen will be more easily acquired, than at another time; and the effect of multiplying the opportunities of employment to those who emigrate, may be an increase of the number and extent of valuable acquisitions to the population, arts, and industry of the country.

To find pleasure in the calamities of other nations would be criminal: but to benefit ourselves by opening an asylum to those who suffer in consequence of them, is as justifiable as it is politic.