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ALEXANDER HAMILTON AND THE REPORT ON MANUFACTURES: A SUGGESTION

Author(s): Bernard Mason


Source: Pennsylvania History, Vol. 32, No. 3 (July, 1965), pp. 288-294
Published by: Penn State University Press
Stable URL: http://www.jstor.org/stable/27770348 .
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ALEXANDER HAMILTON AND THE
REPORT ON MANUFACTURES:
A SUGGESTION
By Bernard Mason*

A MONG Alexander Hamilton's reports to Congress during his


administration of the Treasury Department the Report on
Manufactures has held a notable position. Appearing inDecember,
1791, the report gave voice to the aspirations and needs of nu
merous craftsmen and merchants. Although manufacturing com
prised a minor sector of the economy, Hamilton and other Amer
icans possessed a boundless
enthusiasm for the development of
industry. Perhaps this optimism partly owed its inspiration to the
speculative spirit of the times, but whatever its sources it per
meated the Report on Manufactures. Emboldened by the flourish
ing state of the "useful arts" and an abundance of many natural
resources, the Secretary of the Treasury outlined policies for the
stimulation of industrial growth which reflected a perspicacious
grasp of the necessities of the infant industries.
Scholars have long supposed that the Report on Manufactures
was the product of collaboration between Hamilton and his As
sistant Secretary of the Treasury, Tench Coxe.1 Writers based
this hypothesis on parallelisms in the Report and Coxe's public
essays; they observed thatHamilton and Coxe advocated a number
of ideas in common.2 For example, addressing themselves to the
major objections of a scarcity of labor and high wages in the
United States, the Secretary and his assistant projected the ben

*Dr. Mason is associate professor of history at Harpur College of the


State University of New York and was formerly assistant editor, 1959-1960,
of the Papers
1 of Alexander Hamilton.
Joseph S. Davis, Essays in the Earlier History of American Corporations
(2 vols., Cambridge: Harvard University Press, 1917), I, 362-366; Harold
Hutcheson, Tench Coxe: A Study inAmerican Economic Development
(Baltimore: Johns Hopkins Press, 1938), pp. 99-101 and n. Julian P. Boyd
has expressed a similar opinion which grew out of his perusal in 1929 of
the privately held Tench Coxe Papers.
2
Coxe, a Philadelphia^ was a long-time proponent of manufacturing. See
the list of his writings in the bibliography of Hutcheson, Tench Coxe.

288

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HAMILTON AND THE REPORT ON MANUFACTURES 289

efits of the use of machinery, the employment of women and chil


dren, and the attraction of European immigrants. Moreover, they
argued, American manufacturers possessed a very important ad
vantage, a veritable bounty, in the high costs of importation.
These costs, by raising the prices of foreign goods fifteen to fifty
percent, gave American products a competitive edge. The farmers,
too, would prosper, contended Hamilton and Coxe, because the
expansion of manufacturing would enlarge the domestic market
for agricultural commodities. Furthermore, they pointed out, the
farmers' foreign market was unstable, since it fluctuated under
various international pressures. Both men emphasized that a
nation which lacked manufactures could not be wealthy and power
ful. They agreed that bounties, protective duties, and prohibitions
should be adopted to promote manufacturing, although they differed
over their details.3
A further examination of Coxe's published disquisitions yields
a few additional arguments which parallel the Report on Manu
factures. Although Coxe was aware of the shortage of capital
for investment in manufacturing, he thought the United States
might induce European capital to seek investment here. Secondly,
since the nation did not grow and fabricate all of the materials
essential tomanufacturing, theAssistant Secretary of the Treasury
urged the free importation of needed products. Lastly, the rise of
industry encouraged the tillers of the soil, he demonstrated, since
the industries and artisans consumed the farmers' commodities.4
More suggestive evidence of the collaboration between Hamilton
and Coxe is found in an early draft of theReport on Manufactures
in theHamilton Papers.5 The handwriting and organization of the

3
4Davis, Essays, I, 362-366 ; Hutcheson, Tench Coxe, pp. 99-101,
Tench Coxe, A Brief Examination of Lord Sheffield's Observations . . .
(Philadelphia, 1792), p. 41; T. Coxe, Observations on the Agriculture,
Manufactures and Commerce of the United States in A Letter to A Member
of Congress (New York, 1789), p. 33; T. Coxe, A View of the United
States of America in A Series of Papers Written at Various Times be
tween the Years 1787 and 1794 (Philadelphia, 1794), pp. 23-24; Samuel
McKee, Jr., ed., Papers on Public Credit, Commerce and Finance by
Alexander Hamilton (New York: Columbia University Press, 1934), pp.
188, 241-243.
5 196-199, 211-214,
The manuscript is in two volumes of the Hamilton collection, Report on
Manufactures, 1790, ff. 2031-2062, 2170, vol. XIV, f. 2236, vol. XV, Alex
ander Hamilton Papers, Library of Congress.
Although the MS bears no date, internal evidence suggests that a clerk
made this copy in December, 1790. The opening portion of the report, citing
the House resolution which instructed Hamilton to draw up a report, stated

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290 PENNSYLVANIA HISTORY

manuscript suggest that this document was a clerk's transcription


of a previous draft. However, the Secretary and his aide ex
tensively revised this copy. Many of the interlineations, changes
and marginal notations are in Coxe's handwriting.6 The extent of
Coxe's contribution to the content of this clerk's copy cannot be
ascertained, since the draft from which the clerk made the tran
scription cannot be found.7
Some indication of the Philadelphian's participation in the
writing of the initial draft appears in the manuscript itself. A
portion of the document strikingly suggests sections of Tench
Coxe's lengthy pamphlet of 1789 on economic conditions in the na
tion. Pertinent excerpts of this essay are quoted below parallel to
the relevant statement in the draft report.8

Coxe Draft
An agricultural nation That Manufacturing, in a
which exports its raw mate- considerable degree, is nec
rials, and imports itsmanu- essary to this purpose ap
factures, never can be pears highly probable, since
opulent, because every we know not of any great
profitable advantage which manufacturing nation, how

the resolution's date as "the fifteenth day of January last." Since the House
voted the inquiry January 15, 1790, the author would not have used the
word "last" unless the year were still 1790. Another passage in the draft,
analyzing the role of the Bank of the United States, implied that the House
of Representatives was familiar with the Secretary's report on the bank of
December 13, 1790, and that Congress would charter the institution. If
Congress had enacted the bank legislation, the writer would have used
different phraseology in reference to the bank. Since the House passed the
bill February 8, 1791, completing Congressional action on it, early February
would be the latest possible date for this draft of the report.
An argument against the validity of a February date for the draft may
be found in one of Hamilton's revisions of a portion of the document. Dis
cussing the allowance of a drawback of the duty on molasses when it should
be exported as rum, the Secretary noted that the House "lately passed"
the excise bill which included this provision. The House approved the
measure January 27, and the Senate did its part February 26, 1791. Journal
of the House of Representatives of the United States of America, 1 Cong.,
3 sess., pp. 364-365, 372-373 (January 27, February 8, 1791) ; Journal of the
Senate of the United States of America, 1 Cong., 3 sess., pp. 289-290 (Feb
ruary 26, 1791).
6 an
There are two letters from Coxe to James Madison which provide
excellent model for handwriting comparisons with the draft report. Coxe
to Madison, March 21, 31, 1790. James Madison Papers, LC.
7
It may be significant, however, that each succeeding draft was richer,
more complex, more prolix, and addressed itself more to the theoretical
aspects of the subject, in a word, became more Hamiltonian.
8
Coxe, Observations, pp. 19, 20; Report on Manufactures, 1790, XIV,
Hamilton Papers, LC.

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HAMILTON AND THE REPORT ON MANUFACTURES 291

can be derived from its ever inconsiderable its agri


productions is given into culture may be, that does
the hands of the manufac not abound with money;
turing nation. nor is there any instance of
. . . to some a country which does not
[nations] of
whom nature has been so manufacture, that can re
bountiful as to supply these tain its specie, however
deficiencies with rich staple blest its soil or abundant its
productions; yet even such sources of the precious met
countries can never be in als. The importations of
dependent, opulent or manufactured supplies in
powerful. The present state variably drain the merely
of theWest India islands agricultural people of their
is a proof of this; their wealth. Hence it is that the
lands are fertile and their West India islands, the
productions valuable, yet soils of which are the most
they are dependent on other fertile; and the Nation
countries for their neces which in the greatest de
sary supplies, the balance gree supplies Europe with
of their trade is against Coin and Bullion; exchange
them, and they are inca to a loss with almost every
pable without foreign aid country in the world.
and support, to make a
respectable defence.

Another part of the draft also furnishes a link to Tench Coxe.


The draft projected the idea of a land reserve to be used to re
ward "the first introducers or establishes" of new machinery
but did not elucidate the proposal. The details of the plan were
elaborated in an addendum marked "A" which follows below.9

A Plan for creating a landed fund to be granted in


premiums to the Introducers, Inventors and Establishers
of manufactories, machinery and secrets in the useful
Arts.
There being six great staple raw materials, silk, cot
ton, wool, hemp, flax and iron, that are deemed capable
of being manufactured by water they may be con
sidered as forming
the 1st. Class, which may be encouraged by a
grant of 30,000 Acres of Land to the per
sons who shall introduce theModel and the
completest foreign mill for each. This will Acres
require 180,000
8
Ibid., Hamilton Papers, LC. The handwriting with two exceptions is
the same as that of the main body of the draft.

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292 PENNSYLVANIA HISTORY

The 2d. Class will be more numerous. Let it


be supposed that itmay contain ten objects,
but being individually less important 15,000
Acres are proposed.10 This will require 150,000
The 3d class will be still more numerous, but
of less individual importance. Let it be
supposed that it may contain 17 objects
each to be rewarded by 10,000 Acres. This
will require 170,000

500,000
The above premiums may be applied indiscriminately
to reward Introductions, or native Inventions, which will
not yield an immediate or adequate benefit to the In
ventor.
The management and distribution of this fund it is
conceived would be most beneficially conducted under the
direction of the President of theUnited States. The prin
ciples of the distribution being fixed by the Law, the
might11
application of the fund to the several cases would be
most conveniently left in the judgment and discretion of
the President.

The penning of two words of course does not identify Coxe as


the progenitor of this plan, but the concept of utilizing land as an
inducement to the promotion of manufacturing was one of the
man's cherished ideas.12

The Assistant Secretary evolved the notion in the years 1787


1790. In a speech in 1787 to the founders of the Pennsylvania
Society for the Promotion ofManufactures and Useful Arts, Coxe
publicly advocated land as a premium for inventions. Although
he did not particularize about his plan, he suggested a grant of
one thousand acres to inventors and introducers of foreign
machinery. Shortly before his appointment to the Treasury in

10
In this sentence the word "individually" is an insertion in Coxe's hand
writing.
11
is an interlineation in Coxe's
12"Might" handwriting.
It is interesting to note that the largest rewards were to go to those
who introduced machinery from abroad. A number of Americans were keenly
aware of European technological progress, and Coxe himself had subsidized
the immigration of an English citizen who constructed a model of some
textile machinery. See Coxe to Madison, March 21, 1790, Madison Papers,
LC; scattered Coxe correspondence, 1789-1791, in Thomas Jefferson Papers
and Hamilton Papers, LC.

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HAMILTON AND THE REPORT ON MANUFACTURES 293

1790, Coxe recurred to this conception in correspondence with

James Madison. He told Madison:

I find the idea of a landed fund for the advancement of


manufactures is an old one inmy mind. On looking over
the little address to the fr[ien]ds of Manufacturing in
1787 I observe I have hinted it there. You will excuse
me therefore, if I wish not to part with it sooner than
can be avoided.

Ten days afterwards, in response to prodding by Madison, Coxe


amplified his original statement. He urged that

. . . Congress should lay off a million of Acres of the


nearest, least broken & most valuable land in their
western territory as a fund to reward the introductions
of Machinery inventions, arts and other things of that
nature from foreign Countries, and Inventions and dis
coveries first communicated to us by Natives or for
eigners the benefits of which, tho of no considerable im
portance to them should be useful to the United States.
From two years attention to this Subject and a constant
observation on foreigners I am satisfied it would have
a very beneficial effect. . . .

Although the acreage stipulated in the preceding letter was one


million, a substantially larger quantity than that specified in the
draft report, the kinship of the two plans is clear.13
The fate of the land fund proposal is suggestive and perhaps
significant. When Hamilton revised the draft, he struck out and
rewrote this whole section. The Secretary preferred a monetary
fund instead of a land reserve with which to encourage technological
innovation. Creating a special board of government officials to
administer the money, Hamilton recommended that the board's
revenue come from a particular customs duty which would be
levied for that purpose. Formulated in this fashion, the fund sur
vived all succeeding revisions and appeared in the final copy of
the report. It will be recalled that Hamilton made a similar choice

13
Davis, Essays, I, 355; Hutcheson, Tench Coxe, p. lOln; Coxe to Mad
ison, March 21, 31, 1790, Madison Papers, LC; T. Coxe, "An Address to
An Assembly of the Friends of American Manufactures . . . ," American
Museum, II (September, 1787), 248-255.

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294 PENNSYLVANIA HISTORY

in New York in 1784, when he favored the incorporation of a


bank whose basis was specie rather than land.14
Although the evidence presented here is incomplete, suggestive
rather than conclusive, it does point to the possibility that Tench
Coxe played a more considerable role in the formulation of the
Report on Manufactures than was hitherto apparent. It is to be
hoped that future research in presently inaccessible manuscripts
will illuminate more clearly the extent of the Hamilton-Coxe
collaboration.

14
Report on Manufactures, 1790, XIV, Hamilton Papers, LC; McKee.
ed., Papers . . . by Alexander Hamilton, pp. 273-275.

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