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5 pages double-spaced review papers concerned with an assigned class discussion reading.Outside research welcome to sustain key points, but analysis, reflection, organization, grammar & style are more important. Class Discussion: Col. Alexander HAMILTON, “Report on Manufactures” (1791)

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Alexander Hamilton
DECEMBER 5, 1791
[Page numbers from Selected Writings…]
(Page numbers from Annals of Congress)
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Communicated to the House of Representatives, December 5, 1791
[To the Speaker of the House of Representatives:]
The Secretary of the Treasury in obedience to the order of the
House of Representatives, of the 15th day of January 1790, has
applied his attention, at as early a period as his other duties
would permit, to the subject of Manufactures; and particularly to
the means of promoting such as will tend to render the United
States, independent on foreign nations, for military and other
essential supplies. And he thereupon respectfully submits the
following Report:
The expediency of encouraging manufactures in the United
States, which was not long since deemed very questionable,
appears at this time to be pretty generally admitted. The
embarrassments, which have obstructed the progress of our
external trade, {193} have led to serious reflections on the
necessity of enlarging the sphere of our domestic commerce: the
restrictive regulations, which in foreign markets abrige the vent
of the increasing surplus of our Agricultural produce, serve to
beget an earnest desire, that a more extensive demand for that
surplus may be created at home: And the complete success,
which has rewarded manufacturing enterprise, in some valuable
branches, conspiring with the promising symptoms, which attend
some less mature essays, in others, justify a hope, that the
obstacles to the growth of this species of industry are less
formidable than they were (972) apprehended to be; and that it is
not difficult to find, in its further extension; a full
indemnification for any external disadvantages, which are or may
be experienced, as well as an accession of resources, favourable
to national independence and safety.
There still are, nevertheless, respectable patrons of opinions,
unfriendly to the encouragement of manufactures. The following
are, substantially, the arguments, by which these opinions are
“In every country (say those who entertain them) Agriculture
is the most beneficial and productive object of human industry.
This position, generally, if not universally true, applies with
peculiar emphasis to the United States, on account of their
immense tracts of fertile territory, uninhabited and unimproved.
Nothing can afford so [279] advantageous an employment for
capital and labour, as the conversion of this extensive wilderness
into cultivated farms. Nothing equally with this, can contribute to
the population, strength and real riches of the country.”
“To endeavor by the extraordinary patronage of Government,
to accelerate the growth of manufactures, is in fact, to endeavor,
by force and art, to transfer the natural current of industry, from a
more, to a less beneficial channel. Whatever has such a tendency
must necessarily be unwise. Indeed it can hardly ever be wise in a
government, to attempt to give a direction to the industry of its
citizens. This under the quick-sighted guidance of private
interest, will, if left to itself, infallibly find its own way to the
most profitable employment; and it is by {194} 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.”
“This policy is not only recommended to the United States, by
considerations which affect all nations, it is, in a manner, dictated
to them by the imperious force of a very peculiar situation. The
smallness of their population compared with their territory — the
constant allurements 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 exchanged 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 labor generally. To these disadvantages for the
prosecution of manufactures, a deficiency of pecuniary capital
being added, the prospect of a successful competition with the
manufactures of Europe must be regarded as little less than
desperate. Extensive manufactures can only be the offspring of a
redundant, at least of a full population. Till the latter shall
characterise the situation of this country, ’tis vain to hope for the
“If contrary to the natural course of things, an unseasonable
and premature spring can be given to certain fabrics, by heavy
duties, prohibitions, bounties, or by other forced expedients; this
will only be to sacrifice the interests of the community (973) to
those of particular classes. Besides the misdirection of labour, a
virtual monopoly will be given to the persons employed on such
fabrics; and an enhancement of price, the inevitable consequence
of every monopoly, must be defrayed at the expence of the other
parts of the society. It is far preferable, that those persons should
be engaged in the cultivation of the earth, and that we should
procure, in exchange for its productions, the commodities, with
which foreigners are able to supply us in greater perfection, and
upon better terms.” [280]
This mode of reasoning is founded upon facts and principles,
which have certainly respectable pretensions. If it had governed
the conduct of nations, more generally than it has done, there
{195} is room to suppose, that it might have carried them faster
to prosperity and greatness, than they have attained, by the
pursuit of maxims too widely opposite. Most general theories,
however, admit of numerous exceptions, and there are few, if
any, of the political kind, which do not blend a considerable
portion of error, with the truths they inculcate.
In order to an accurate judgement how far that which has been
just stated ought to be deemed liable to a similar imputation, it is
necessary to advert carefully to the considerations, which plead
in favour of manufactures, and which appear to recommend the
special and positive encouragement of them; in certain cases, and
under certain reasonable limitations.
It ought readily to be conceded, that the cultivation of the
earth as the primary and most certain source of national supply -as the immediate and chief source of subsistence to man — as the
principal source of those materials which constitute the nutriment
of other kinds of labor — 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-eminence over
every other kind of industry.
But, that it has a title to any thing like an exclusive
predilection, in any country, ought to 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, will
be advanced, rather than injured by the due encouragement of
manufactures, may, it is believed, be satisfactorily demonstrated.
And it is also believed that the expediency of such
encouragement in a general view may be shewn to be
recommended by the most cogent and persuasive motives of
national policy.
It has been maintained, that Agriculture is, not only, the most
productive, but the only productive species of industry. The
reality of this suggestion in either aspect, has, however, not been
verified by any accurate detail of facts and calculations; and the
general arguments, which are adduced to prove it, are rather
subtil and paradoxical, than solid or convincing. {196}
Those which maintain its exclusive productiveness are to this
effect: (974)
Labour, bestowed upon the cultivation of land produces
enough, [281] not only to replace all the necessary expences
incurred in the business, and to maintain the persons who are
employed in it, but to afford together with the ordinary profit on
the stock or capital of the Farmer, a nett surplus, or rent for the
landlord or proprietor of the soil. But the labor of Artificers does
nothing more, than replace the Stock which employs them (or
which furnishes materials tools and wages) and yield the
ordinary profit upon that Stock. It yields nothing equivalent to
the rent of land. Neither does it add any 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 produce
of land, which are wrought into manufactures, is counterbalanced by the value of those other parts of that produce, which
are consumed by the manufacturers. It can therefore only be by
saving, or parsimony not by the positive productiveness of their
labour, that the classes of Artificers can in any degree augment
the revenue of the Society.
To this it has been answered -1 “That inasmuch as it is acknowledged, that manufacturing
labour reproduces a value equal to that which is expended or
consumed in carrying it on, and continues in existence the
original Stock or capital employed — it ought on that account
alone, to escape being considered as wholly unproductive: That
though it should be admitted, as alleged, that the consumption of
the produce of the soil, by the classes of Artificers or
Manufacturers, is exactly equal to the value added by 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 value 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 produce 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
{197}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 consumed by them, yet there
would be at every moment, in consequence of their labour, a
greater value of goods in the market than would exist
independent of it.”
2 — “That the position, that Artificers can augment the
revenue of a Society, only by parsimony, is true, in no other
sense, than in one, which is equally applicable to Husbandmen or
Cultivators. It may be alike affirmed of all these classes, that the
fund acquired by their labor 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 capital of the
community (except in the instances of some extraordinary [282]
dexterity or skill can only proceed, with respect to any of them,
from the savings of the more thrifty and parsimonious.”
3 — “That the annual produce of the land and labour of a
country can only be encreased, in two ways — by some
improvement in the productive (975) powers of the useful labour,
which actually exists within it, or by some increase in the
quantity of such labour: That with regard to the first, the labour
of Artificers being capable of greater subdivision and simplicity
of operation, than that of Cultivators, it is susceptible, in a
proportionably greater degree, of improvement in its productive
powers, whether to be derived from an accession of Skill, or from
the application of ingenious machinery; in which particular,
therefore, the labour employed in the culture of land can pretend
to no advantage over that engaged in manufactures: That with
regard to an augmentation of the quantity of useful labour, this,
excluding adventitious circumstances, must depend essentially
upon an increase of capital, which again must depend upon the
savings made out of the revenues of those, who furnish or
manage that, which is at any time employed, whether in
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
productiveness has been conceded without hesitation. As this
concession {198} involves a point of considerable magnitude, in
relation to maxims of public administration, the grounds on
which it rests are worthy of a distinct and particular examination.
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 labor of man alone laid out upon a
work, requiring great skill and art to bring it to perfection, may
be more productive, in value, than the labour of nature and man
combined, when directed towards more simple operations and
objects: And when it is recollected to what an extent the Agency
of nature, in the application of the mechanical powers, is made
auxiliary to the prosecution of manufactures, the suggestion,
which has been noticed, loses even the appearance of plausibility.
It might also be observed, with a contrary view, that the
labour employed in Agriculture is in a great measure periodical
and occasional, depending on seasons, liable to various and long
intermissions; while that occupied in many manufactures is
constant and [283] regular, extending through the year,
embracing in some instances night as well as day. It is also
probable, that there are among the cultivators of land more
examples of remissness, than among artificers. The farmer, from
the peculiar fertility of his land, or some other favorable
circumstance, may frequently obtain a livelihood, even with a
considerable degree of carelessness in the mode of cultivation;
but the artisan can with difficulty effect the same object, without
exerting himself pretty equally with all those, who are engaged in
the same pursuit. And if it may likewise be assumed as a fact, that
manufactures open a wider field to exertions of ingenuity than
agriculture, it would not be a strained (976) 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 in manufactures
yields nothing equivalent to the rent of land; or to that nett
surplus, as it is called, which accrues to the proprietor of the soil.
But this distinction, important as it has been deemed, appears
rather verbal than substantial.
It is easily discernible, that what in the first instance is divided
into two parts under the denominations of the ordinary profit of
the Stock of the farmer and rent to the landlord, is in the second
instance united under the general appellation of the ordinary
profit on the Stock of the Undertaker; and that this formal or
verbal distribution constitutes the whole difference in the two
cases. It seems to have been overlooked, that the land is itself a
Stock or capital, advanced or lent by its owner to the occupier or
tenant, and that the rent he receives is only the ordinary profit of
a certain Stock in land, not managed by the proprietor himself,
but by another to whom he lends or lets it, and who on his part
advances a second capital to stock & improve the land, upon
which he also receives the usual profit. The rent of the landlord
and the profit of the farmer are therefore nothing more than the
ordinary profits of two capitals belonging to two different
persons, and united in the cultivation of a farm: As in the other
case, the surplus which arises upon any manufactory, after
replacing the expences of carrying it on, answers to the ordinary
profits of one or more capitals engaged in the prosecution of such
manufactory. It is said one [284] or more capitals; because in
fact, the same thing which is contemplated, in the case of the
farm, sometimes happens in that of a manufactory. There is one,
who furnishes a part of the capital, or lends a part of the money,
by which it is carried on, and another, who carries {200} it on
with the addition of his own capital. Out of the surplus, which
remains, after defraying expences, an interest is paid to the
money lender for the portion of the capital furnished by him,
which exactly agrees with the rent paid to the landlord; and the
residue of that surplus constitutes the profit of the undertaker or
manufacturer, and agrees with what is denominated the ordinary
profits on the Stock of the farmer. Both together make the
ordinary profits of two capitals [employed in a manufactory; as in
the other case the rent of the landlord and the revenue of the
farmer compose the ordinary profits of two Capitals] employed in
the cultivation of a farm.
The rent therefore accruing to the proprietor of the land, far
from being a criterion of exclusive productiveness, as has been
argued, is no criterion even of superior (977) productiveness. The
question must still be, whether the surplus, after defraying
expences, of a given capital, employed in the purchase and
improvement of a piece of land, is greater or less, than that of a
like capital employed in the prosecution of a manufactory: or
whether the whole value produced from a given capital and a
given quantity of labour, employed in one way, be greater or less,
than the whole value produced from an equal capital and an
equal quantity of labour employed in the other way: or rather,
perhaps whether the business of Agriculture or that of
Manufactures will yield the greatest product, according to a
compound ratio of the quantity of the Capital and the quantity of
labour, which are employed in the one or in the other.
The solution of either of these questions is not easy; it
involves numerous and complicated details, depending on an
accurate knowledge of the objects to be compared. It is not
known that the comparison has ever yet been made upon
sufficient data properly ascertained and analised. To be able to
make it on the present occasion with satisfactory precision would
demand more previous enquiry and investigation, than there has
been hitherto either leisure or opportunity to accomplish.
Some essays however have been made towards acquiring the
requisite information; which have rather served to throw doubt
upon, than to confirm the Hypothesis, under examination: But
{201} it ought to be acknowledged, that they have been too little
diversified, and are too imperfect, to authorise a definitive
conclusion either way; leading rather to probable conjecture than
to certain deduction. They render it probable, that there are
various branches of manufactures, in which [285] a given
Capital will yield a greater total product, and a considerably
greater nett product, than an equal capital invested in the
purchase and improvement of lands; and that there are also some
branches, in which both the gross and the nett produce will
exceed that of Agricultural industry; according to a compound
ratio of capital and labour: But it is on this last point, that there
appears to be the greatest room for doubt. It is far less difficult to
infer generally, that the nett produce of Capital engaged in
manufacturing e …
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