Report on Manufactures - AbsoluteAstronomy.com

The Report on Manufactures is the third report, and magnum opus

Magnum opus

Magnum opus , from the Latin meaning "great work", refers to the largest, and perhaps the best, greatest, most popular, or most renowned achievement of a writer, artist, or composer.-Related terms:Sometimes the term magnum opus is used to refer to simply "a great work" rather than "the...

, of American Founding Father

Founding Fathers of the United States

The Founding Fathers of the United States of America were political leaders and statesmen who participated in the American Revolution by signing the United States Declaration of Independence, taking part in the American Revolutionary War, establishing the United States Constitution, or by some...

and 1st U.S. Treasury Secretary Alexander Hamilton

Alexander Hamilton

Alexander Hamilton was a Founding Father, soldier, economist, political philosopher, one of America's first constitutional lawyers and the first United States Secretary of the Treasury...

. It was presented to Congress

United States Congress

The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....

on December 5, 1791 and recommended economic policies to stimulate the new republic's economy and ensure the independence

United States Declaration of Independence

The Declaration of Independence was a statement adopted by the Continental Congress on July 4, 1776, which announced that the thirteen American colonies then at war with Great Britain regarded themselves as independent states, and no longer a part of the British Empire. John Adams put forth a...

won with the conclusion of the Revolutionary War in 1783.

Hamilton's "Report on Manufactures" laid forth economic principles rooted in both the Mercantilist

Mercantilism

Mercantilism is the economic doctrine in which government control of foreign trade is of paramount importance for ensuring the prosperity and security of the state. In particular, it demands a positive balance of trade. Mercantilism dominated Western European economic policy and discourse from...

System of Elizabeth I's England and the practices of Jean-Baptiste Colbert

Jean-Baptiste Colbert

Jean-Baptiste Colbert was a French politician who served as the Minister of Finances of France from 1665 to 1683 under the rule of King Louis XIV. His relentless hard work and thrift made him an esteemed minister. He achieved a reputation for his work of improving the state of French manufacturing...

of France. The principal ideas of the "Report" would later be incorporated into the "American System

American System (economic plan)

The American System, originally called "The American Way", was a mercantilist economic plan that played a prominent role in American policy during the first half of the 19th century...

" program by Senator Henry Clay

Henry Clay

Henry Clay, Sr. , was a lawyer, politician and skilled orator who represented Kentucky separately in both the Senate and in the House of Representatives...

of Kentucky and his Whig Party

Whig Party (United States)

The Whig Party was a political party of the United States during the era of Jacksonian democracy. Considered integral to the Second Party System and operating from the early 1830s to the mid-1850s, the party was formed in opposition to the policies of President Andrew Jackson and his Democratic...

. Abraham Lincoln

Abraham Lincoln

Abraham Lincoln was the 16th President of the United States, serving from March 1861 until his assassination in April 1865. He successfully led his country through a great constitutional, military and moral crisis – the American Civil War – preserving the Union, while ending slavery, and...

, who called himself a "Henry Clay tariff Whig" during his early years, would later make the principles outlined in the "Report" and furthered by Clay's "American System"

American System (economic plan)

The American System, originally called "The American Way", was a mercantilist economic plan that played a prominent role in American policy during the first half of the 19th century...

program cornerstone

Cornerstone

The cornerstone concept is derived from the first stone set in the construction of a masonry foundation, important since all other stones will be set in reference to this stone, thus determining the position of the entire structure.Over time a cornerstone became a ceremonial masonry stone, or...

s, together with opposition to the institution and expansion of slavery

Slavery

Slavery is a system under which people are treated as property to be bought and sold, and are forced to work. Slaves can be held against their will from the time of their capture, purchase or birth, and deprived of the right to leave, to refuse to work, or to demand compensation...

, of the fledgling Republican Party

Republican Party (United States)

The Republican Party is one of the two major contemporary political parties in the United States, along with the Democratic Party. Founded by anti-slavery expansion activists in 1854, it is often called the GOP . The party's platform generally reflects American conservatism in the U.S...

.

Hamilton's ideas formed the basis for the American School of economics

American School (economics)

The American School, also known as "National System", represents three different yet related constructs in politics, policy and philosophy. It was the American policy for the 1860s to the 1940s, waxing and waning in actual degrees and details of implementation...

Economic plan

Hamilton reasoned that to secure American independence, the United States needed to have a sound policy of encouraging the growth of manufacturing and secure its future as a permanent feature of the economic system of the nation. He argued these could be achieved through bounties or subsidies to industry, regulation of trade

Trade

Trade is the transfer of ownership of goods and services from one person or entity to another. Trade is sometimes loosely called commerce or financial transaction or barter. A network that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and...

with moderate tariff

Tariff

A tariff may be either tax on imports or exports , or a list or schedule of prices for such things as rail service, bus routes, and electrical usage ....

s (not intended to discourage imports but to raise revenue to support American manufacturing through subsidy), and other government encouragement. These policies would not only promote the growth of manufacturing but provide diversified employment opportunities and promote immigration

Immigration

Immigration is the act of foreigners passing or coming into a country for the purpose of permanent residence...

into the young United States

United States

The United States of America is a federal constitutional republic comprising fifty states and a federal district...

. They would also expand the applications of technology

Technology

Technology is the making, usage, and knowledge of tools, machines, techniques, crafts, systems or methods of organization in order to solve a problem or perform a specific function. It can also refer to the collection of such tools, machinery, and procedures. The word technology comes ;...

and science

Science

Science is a systematic enterprise that builds and organizes knowledge in the form of testable explanations and predictions about the universe...

for all quarters of the economy, including agriculture

Agriculture

Agriculture is the cultivation of animals, plants, fungi and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the...

The tariff

Hamilton reasoned that tariffs issued in moderation would raise revenue to fund the nation. The tariff could also be used to encourage domestic (or national) manufacturing and growth of the economy by applying the funds raised in part towards subsidies (called bounties in his time) to manufacturers. Hamilton sought to use the tariff to:

protect infant American industry for a short term until it could compete;
raise revenue to pay the expenses of government;
raise revenue to directly support manufacturing through bounties (subsidies)

Subsidies to industry

Hamilton reasoned that bounties (subsidies) to industry, which would rely on funds raised by moderate tariffs, would be the best means of growing manufacturing without decreasing supply or increasing prices of goods. Such encouragement through direct support would make American enterprise competitive and independent along with the nation as a whole. In part subsidies would be used to:

encourage the spirit of enterprise, innovation, and invention within the nation;
support the building of roads and canals to encourage internal trade;
grow the infant United States into a manufacturing power independent of control by foreign powers through reliance on their goods for domestic and especially defense supplies.

Adoption by Congress

Much of Hamilton's third report was eventually adopted by the United States Congress

United States Congress

after its issuance despite strong opposition to the support of industry through subsidy. Both sides agreed that manufacturing independence was desirable and necessary but disagreed on how to obtain it. The Jeffersonian

Thomas Jefferson

Thomas Jefferson was the principal author of the United States Declaration of Independence and the Statute of Virginia for Religious Freedom , the third President of the United States and founder of the University of Virginia...

Democratic-Republican Party's main objection to subsidy was their fear that subsidy would lead to corruption and favoritism of certain sections of the new nation over others; namely the north over the agrarian south. This divide (north vs. south) would come up again and again in issues of economic policy until the outbreak of the American Civil War

American Civil War

The American Civil War was a civil war fought in the United States of America. In response to the election of Abraham Lincoln as President of the United States, 11 southern slave states declared their secession from the United States and formed the Confederate States of America ; the other 25...

.

In response Congress adopted the report's entire recommendation with the exception of subsidy to industry; favoring increasing tariff rates and import restrictions to encourage manufacturing (which incidentally led many manufacturers to switch party allegiance from Federalist to Republican, being upset at Hamilton's moderate tariff policy).

Opposition to the Report

Leading opponents of Alexander Hamilton's economic plan included Thomas Jefferson

Thomas Jefferson

(until later years) and James Madison

James Madison

James Madison, Jr. was an American statesman and political theorist. He was the fourth President of the United States and is hailed as the “Father of the Constitution” for being the primary author of the United States Constitution and at first an opponent of, and then a key author of the United...

, who were opposed to the use of subsidy to industry along with most of their fledgling Democratic-Republican Party. Instead of bounties they reasoned in favor of high tariffs and restrictions on imports to increase manufacturing; which interestingly was favored by the manufacturers themselves who desired protection of their home market. Although the Jeffersonian stance originally favored an "agrarian" economy of farmers, this changed over time to encompass many of Hamilton's original ideas.

External links

Manufactures- from The Works of Alexander Hamilton, edited by Henry Cabot Lodge.
the Report- with page numbers for Selected Writings, Annals of Congress, Works of Alexander Hamilton.
Excerpts from the Report (Columbia University Press) (University of Chicago)
Excerpts from the Report (University of San Diego)