American History

Report on the Subject of Manufactures Alexander Hamilton

December 05, 1791

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.

…It ought readily to be conceded that the cultivation of the earth – as the immediate and chief source

of subsistence of man – as the principal source of those materials which constitute the nutriment of

other kinds of labor – as including a state most favorable 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 anything 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 shown to be

recommended by the most cogent and persuasive motives of national policy….

…Manufacturing establishments not only occasion a positive augmentation of the produce and

revenue of the society, …they contribute essentially to rendering them greater than they could

possibly be, without such establishments. These circumstances are –

1. The division of labor.

2. An extension of the use of machinery.

3. Additional employment to classes of the community not ordinarily engaged in the business.

4. The promoting of emigration from foreign countries.

5. The furnishing greater scope for the diversity of talents and dispositions which discriminate men

from each other.

6. The affording a more ample and various field for enterprise.

7. The creating in some instances a new, and securing in all, a more certain and steady demand for the

surplus produce of the soil.

Each of these circumstances has a considerable influence upon the total mass of industrious effort in

a community….

I. As to the Division of Labor.

It has justly been observed that there is scarcely anything of greater moment in the economy of a

nation than the proper division of labor. The separation of occupations causes each to be carried to a

much greater perfection than it could possibly acquire if they were blended…. This arises principally

from three circumstances.

1st – The greater skill and dexterity naturally resulting from a constant and undivided application to

a single object….

2nd – The economy of time – by avoiding the loss of it incident to a frequent transition from one

operation to another of a different nature….

3rd – An extension of the use of machinery….

II. As to an extension of the use of machinery, a point which though partly anticipated requires to be

placed in one or two additional lights….

It shall be taken for granted, and the truth of the position referred to observation, that

manufacturing pursuits are susceptible in a greater degree of the application of machinery than those

of agriculture. If so, all the difference is lost to a community which, instead of manufacturing for

itself, procures the fabrics requisite to its supply from other countries. The substitution of foreign for

domestic manufactures is a transfer to foreign nations of the advantages accruing from the

employment of machinery, in the modes in which it is capable of being employed, with most utility

and to the greatest extent.

The cotton mill, invented in England within the last twenty years, is a signal illustration of the

general proposition which has been just advanced. In consequence of it, all the different processes

for spinning cotton are performed by means of machines, which are put in motion by water and

attended chiefly by women and children; and by a smaller number of persons, in the whole, than are

requisite in the ordinary mode of spinning. And it is an advantage of great moment that the

operations of this mill continue with convenience during the night as well as through the day. The

prodigious effect of such a machine is easily conceived. To this invention is to be attributed

essentially the immense progress which has been so suddenly made in Great Britain in the various

fabrics of cotton.

III. As to the additional employment of classes of the community not ordinarily engaged in the

particular business.

This is not among the least valuable of the means by which manufacturing institutions contribute to

augment the general stock of industry and production. In places where those institutions prevail,

besides the persons regularly engaged in them, they afford occasional and extra employment to

industrious individuals and families who are willing to devote the leisure resulting from the

intermissions of their ordinary pursuits to collateral labors as a resource of multiplying their

acquisitions or enjoyments.

The husbandman himself experiences a new source of profit and support from the encreased

industry of his wife and daughters, invited and stimulated by the demands of the neighboring

manufactories.

Besides this advantage of occasional employment to classes having different occupations, there is

another of a nature allied to it and of a similar tendency. This is – the employment of persons who

would otherwise be idle (and in many cases a burthen on the community), either from the bias of

temper, habit, infirmity or body, or some other cause, indisposing or disqualifying them for the toils

of the country. It is worthy of particular remark that, in general, women and children are rendered

more useful, and the latter more early useful, by manufacturing establishments than they would

otherwise be. Of the number of persons employed in the cotton manufactories of Great Britain, it is

computed that 4/7 nearly are women and children, of whom the greatest proportion are children and

many of them of a very tender age….

IV. As to the promoting of emigration from foreign countries. Men reluctantly quit one course of

occupation and livelihood for another, unless invited to it by very apparent and proximate

advantages. Many who would go from one country to another, if they had a prospect of continuing

with more benefit the callings to which they have been educated, will often not be tempted to change

their situation, by the hope of doing better, in some other way. Manufacturers who, listening to the

powerful invitations of a better price for their fabrics, or their labor, of greater cheapness of

provisions and raw materials, of an exemption from the chief part of the taxes, burthens and

restraints which they endure in the old world, of greater personal independence and consequence

under the operation of a more equal government, and of what is far more precious than mere

religious toleration – a perfect equality of religious privileges – would probably flock from Europe to

the United States to pursue their own trades or professions if they were once made sensible of the

advantages they would enjoy, and were inspired with an assurance of encouragement and

employment, will with difficulty be induced to transplant themselves with a view to becoming

cultivators of land….

V. As to the furnishing greater scope for the diversity of talents and dispositions which discriminate

men from each other.

…It is a just observation that minds of the strongest and most active powers for their proper objects

fall below mediocrity and labor without effect if confined to uncongenial pursuits. And it is thence to

be inferred that the results of human exertion may be immensely increased by diversifying its

objects. When all the different kinds of industry obtain in a community, each individual can find his

proper element and can call into activity the whole vigor of his nature. And the community is

benefited by the services of its respective members in the manner in which each can serve it with

most effect….

VI. As to the affording a more ample and various field for enterprise.

…To cherish and stimulate the activity of the human mind by multiplying the objects of enterprise is

not among the least considerable of the expedients by which the wealth of a nation may be promoted.

Even things in themselves not positively advantageous sometimes become so by their tendency to

provoke exertion. Every new scene which is opened to the busy nature of man to rouse and exert

itself is the addition of a new energy to the general stock of effort….

VII. As to the creating, in some instances, a new, and securing in all, a more certain and steady

demand for the surplus produce of the soil.

This is among the most important of the circumstances which have been indicated. It is a principal

mean by which the establishment of manufactures contributes to an augmentation of the produce or

revenue of a country, and has an immediate and direct relation to the prosperity of agriculture.

It is evident that the exertions of the husbandman will be steady or fluctuating, vigorous or feeble, in

proportion to the steadiness or fluctuation, adequateness, or inadequateness of the markets on which

he must depend for the vent of the surplus which may be produced by his labor; and that such

surplus in the ordinary course of things will be greater or less in the same proportion.

For the purpose of this vent, a domestic market is greatly to be preferred to a foreign one, because it

is, in the nature of things, far more to be relied upon….

…the foreign demand for the products of agricultural countries is, in a great degree, rather casual and

occasional than certain or constant….

To secure such a market, there is no other expedient than to promote manufacturing establishments.

Manufacturers, who constitute the most numerous class after the cultivators of land, are for that

reason the principal consumers of the surplus of their labor.

This idea of an extensive domestic market for the surplus produce of the soil is of the first

consequence. It is of all things that which most effectually conduces to a flourishing state of

agriculture. If the effect of manufactories should be to detach a portion of the hands which would

otherwise be engaged in tillage, it might possibly cause a smaller quantity of lands to be under

cultivation, but by their tendency to procure a more certain demand for the surplus produce of the

soil, they would, at the same time, cause the lands which were in cultivation to be better improved

and more productive. And while, by their influence, the condition of each individual farmer would be

meliorated, the total mass of agricultural production would probably be increased. For this must

evidently depend as much, if not more, upon the degree of improvement than upon the number of

acres under culture.

It merits particular observation that the multiplication of manufactories not only furnishes a market

for those articles which have been accustomed to be produced in abundance in a country, but it

likewise creates a demand for such as were either unknown or produced in inconsiderable quantities.

The bowels as well as the surface of the earth are ransacked for articles which were before neglected.

Animals, plants and minerals acquire a utility and value which were before unexplored….