Congressional Report on Manufactures

Excerpt from Report to Congress on the Subject of Manufactures

Presented to the Speaker of the House of Representatives, December 5, 1791

Published in the Annals of the Second Congress, Appendix, 1791–1793

Alexander Hamilton (1755–1804) was the first secretary of the treasury of the United States and one of its founding fathers. The founding fathers are the members of the Constitutional Convention who drafted the U.S. Constitution in 1787. Like his opponent in government, Thomas Jefferson (1743–1826), Hamilton greatly affected the shape of the new nation.

Hamilton was raised in the West Indies. He was the illegitimate (born of parents not married to each other) child of an aristocratic but unsuccessful Scottish trader who abandoned the family when Hamilton was about ten years old. When Hamilton's mother died in 1768, her relatives recognized his intelligence and arranged for him to attend preparatory school in New Jersey. After finishing his undergraduate studies, Hamilton then enrolled at King's College (now Columbia University) in 1773. As a student Hamilton wrote and published three highly praised pamphlets that brought him to the attention of General George Washington (1732–1799) just as the American Revolution (1775–83; the American colonists' fight for independence from England) was beginning. At the age of twenty-two, Hamilton joined Washington's military staff as an aide-de-camp, or military assistant, with the rank of lieutenant colonel. He remained on the staff for four years and became one of Washington's most valued aides.

During the war the Articles of Confederation, a governing document for the nation seeking its freedom, had been written. The Articles provided the original thirteen states (Connecticut, Delaware, Georgia, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, and Virginia) with more power than the central government. Hamilton believed the Articles of Confederation were weak and impossible to enforce. As a delegate to the 1787 Philadelphia meeting of the Constitutional Convention, he argued for a strong national government with almost unlimited power over the states. He proposed a government structure that featured a president who would be chosen for life and a senate whose members would be named by electors chosen by the people and who would also serve for life. He wanted to eliminate elected state governments by giving the president the authority to appoint the state governors and to veto (reject) all local and state laws. His views were in the minority and largely ignored.

With James Madison (1751–1836), a delegate from Virginia, and John Jay (1745–1829), the secretary for foreign affairs, Hamilton wrote a series of essays that were published in a New York newspaper between October 1787 and May 1788. These essays, published as a collection known as The Federalist Papers, argued his case for a strong national government. His essays influenced the men who drafted the U.S. Constitution.

Upon taking office, President George Washington (served 1789–97) appointed Hamilton as the first secretary of the treasury. Hamilton went to work with remarkable energy, and the country's foreign debt was repaid by the end of 1795. The Bank of the United States was established and funded. The U.S. currency (money system) grew strong. Hamilton believed that the federal government should take an active part in the national economy. He urged federal agencies to encourage new industry by protecting "infant," or newly formed, U.S. industries until they had established relationships with customers who were used to buying imported goods, and were thus able to compete on an equal basis with imports. Hamilton was convinced that the United States needed to balance its agricultural economy with industry to decrease dependence on European manufacturers and to stabilize the economy.

Hamilton was by no means the first champion of industrialization. An early supporter of U.S. manufacturing was Tench Coxe (1755–1824), a merchant from Philadelphia who became a noted political economist. His pamphlet, An Enquiry into the Principles on Which a Commercial System for the United States of America Should be Founded (1787), excited the supporters of U.S. industrialization. Coxe believed that the United States would be able to make industry a foundation of its democratic goals of independence and equality among citizens. He believed in a balance between agriculture and industry, and envisioned a time when machines could free humans from work and produce the goods Americans needed, leading to higher standards of life for all. With labor-saving machinery doing the work, Americans could continue to live independently, and with more money, on their farms. Coxe became a member of the United Company of Philadelphia for Promoting American Manufactures in 1775 and became president of the Pennsylvania Society for the Encouragement of Manufactures and the Useful Arts (founded in 1787). In 1790 Hamilton appointed him to be assistant secretary in the Treasury Department. Coxe produced the first draft of Hamilton's famous report to Congress about the benefits of industrialization.

On December 5, 1791, Hamilton presented the Report to Congress on the Subject of Manufactures. After completing his own thorough study of the existing factories in the United States, he had expanded greatly on Coxe's initial draft. His Report is now famous for its accurate prediction of the future of the industrial United States as it would appear in the years after the American Civil War (1861–65; a war between the Union [the North], who were opposed to slavery, and the Confederacy [the South], who were in favor of slavery). In this report Hamilton argued that by increasing the nation's industries the United States would achieve true independence by decreasing its reliance on other nations for military and essential supplies. Further, he foresaw the vast growth in population that would occur in the nineteenth century as more and more European immigrants arrived in America to make their homes in the new nation. He knew they would require jobs on a massive scale.

Believing the only way to support a growing population was to diversify the economy with a variety of industries, Hamilton asserted that the government should promote manufacturing by charging duties (taxes) on or stopping the import of rival products from other nations. Domestic manufactured goods, however, would be free from export duties and new inventions would be encouraged, especially inventions related to machinery. Hamilton understood that it would be necessary for the federal government to regulate industries in order to guarantee quality and safety and to avoid monopolies (exclusive possession or right to produce a particular good or service). He was ahead of his time in this area—it was not until the early twentieth century that the nation's government began to regulate business.

Things to remember while reading Report to Congress on the Subject of Manufactures:

• In 1791, when Hamilton presented his report to Congress, the United States had very little industry. English immigrant Samuel Slater (1768–1835), a textile worker who constructed the first mechanized textile mills in the country, had arrived only two years before. His first mill—and the nation's first factory—had not yet been built. Transportation was mainly by foot or horse, and there were few roads for travel or freight. It would be two years before Eli Whitney (1765–1825) invented the cotton gin and several more years before the machine makers, a group of inventors working mainly in the workshops of the Northeast, began the remarkable development of industrial technology that paved the way for mass production—the manufacturing of goods on a large scale through the use of machines and managed labor. Yet Hamilton understood the nature of industrialization, and was able to accurately foresee many of the changes that were about the take place in the United States.
• In the first textile mills in the Northeast, children were often preferred as the workers who operated the machines. They were easier to control, their hands were small and fast, and most importantly, they worked for very low wages. When Samuel Slater opened his first mills in the 1790s, he paid boys and girls aged between seven and twelve to operate the spinning machines. Most Americans were used to children working, particularly on the farms, and there was not yet a widespread movement to end child labor. In listing the employment of children as one of the benefits of industry, Hamilton expressed what was generally an acceptable viewpoint during the period.

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What happened next …

Hamilton's recommendations for developing and stimulating the economy were not well received in Congress. Many felt he was promoting his own personal interests at the expense of agriculture. Others feared the powerful federal government he proposed. His plan was never put to a vote.

Though Tench Coxe, the writer of the first draft of Report on Manufactures, was strongly pro-industry, he was not as firmly attached to Hamilton's Federalist Party. (Federalists believe in a strong federal government, national banks, and government aid of industrialization.) In 1803, after Coxe had publicly argued with the Federalists, Republican president Thomas Jefferson (served 1801–9) appointed him Purveyor of Public Supplies and Coxe joined the Republicans.

Did you know …

• Alexander Hamilton was known for his arrogant and forceful personality, which won him many enemies. One of those enemies was Aaron Burr (1756–1836). The rivalry between the two had probably started in 1791, when Burr abandoned Hamilton's Federalist Party to run as a Democratic-Republican candidate for the U.S. Senate seat in New York. (Democratic-Republicans, also known as Republicans, believed in stronger states' rights, less federal interference in people's lives, and a republic of landowning farmers.) Burr incurred Hamilton's wrath when he defeated Hamilton's father-in-law in the elections. In 1792 Burr offered to join the Federalists once again in order to run for governor of New York. Hamilton's strong opposition eliminated him from candidacy. Hamilton also opposed Burr's attempt to be the Federalist vice-presidential candidate in 1792. In the presidential election of 1800, there was a tie between the two Republican candidates, Jefferson and Burr. During this period in U.S. history, the candidate with the most votes became president and the one with the second largest number of votes became vice president. In case of a tie, the outcome was settled by Congress. Despite his longtime rivalry with Jefferson, Hamilton pushed his friends in Congress to elect Jefferson over Burr because he disliked Burr so strongly. With Hamilton's backing, Jefferson unexpectedly won by only one vote. In 1804 Burr was once again defeated in the election for governor of New York. During the campaign, Hamilton had publicly spoken negatively of Burr. The angry Burr challenged Hamilton to a duel, which took place on July 11, 1804. It is said that Hamilton shot into the air rather than firing upon Burr and was fatally wounded by his enemy. He died the next day.

Consider the following …

• Compare and contrast the views of Alexander Hamilton and Thomas Jefferson (see Chapter 1) on the benefits and disadvantages of industrialism. Try to find several strong arguments for each side of the issue.

• Briefly research the political parties that existed at the time of Thomas Jefferson's presidency: the Democratic-Republicans and the Federalists. Describe the basic sets of beliefs of each of these parties.

For More Information

Chernow, Ron. Alexander Hamilton. New York: Penguin Press, 2004.

Davis, David Brion, and Steven Mintz, eds. The Boisterous Sea of Liberty: A Documentary History of America from Discovery through the Civil War. New York: Oxford University Press, 1998.

Ellis, Joseph J. The Founding Brothers: The Revolutionary Generation. New York: Alfred A. Knopf, 2001.

Hamilton, Alexander. "Report to Congress on the Subject of Manufactures." Annals of the Second Congress, Appendix, 1791–1793.

Hindle, Brooke, and Steven Lubar. Engines of Change: The American Industrial Revolution, 1790–1860. Washington, DC and London: Smithsonian Institution Press, 1986.

Kasson, John F. "Republican Values as a Dynamic Factor." In The Industrial Revolution in America. Edited by Gary J. Kornblith. Boston, MA: Houghton Mifflin, 1998.