Hamilton’s Report on Manufactures

George Washington knew something had to be done. In his first message to Congress, Washington suggested that the United States needed a policy for American manufactures, especially for military security. Britain’s dominated the new Industrial Revolution. On January 15, 1790, the House asked Alexander Hamilton, Secretary of the Treasury, to formulate a plan. As knowledgeable as Hamilton was on banking and law, he knew he needed help preparing a report on manufactures. He sent a circular to societies throughout the United States to learn more about local manufacturing.[1]

“…[the safety of a free people] require that they should promote such manufactories as tend to render them independent of others for essential, particularly military, supplies…”[2]

                                                     George Washington

Tench Coxe, secretary of the Manufacturing Society in Philadelphia, responded. In his letter to Hamilton he enclosed eight of his essays. Carey had published four of them in the American Museum.   Coxe, well-known for his expertise and advocacy of manufacturing, outlined two difficulties of promoting national industries: the lack of skilled labor and the need for investment capital. Coxe considered America’s dependence on British goods damaging and suggested developing markets for America’s products in France.[3]

 

Linear Tench CoxeTench Coxe (1755-1824) supported Hamilton in the establishment of a national bank, but gravitated toward Thomas Jefferson’s emerging political party, convincing Carey to do so as well.

Tench Coxe was born in Philadelphia in 1755, into a landed, moneyed and distinguished family. He had the background Hamilton looked for in his associates.   Coxe’s great grandfather was the doctor to Charles II and Queen Anne. He was granted all the land in the New World from the 31st latitude to the 33rd latitude from the Atlantic to the Pacific—a track called “Carolana.” Eventually these lands were whittled down to what is now New Jersey, and Colonel Daniel Coxe III, Tench’s grandfather, encouraged its settlement. Coxe’s father became a merchant in Philadelphia, and Tench joined his father’s firm, Coxe and Furman, in 1776. Although Coxe was a merchant, he made most of his money speculating on land.[4]

In 1776, instead of becoming a revolutionary, he resigned from his Pennsylvania regiment. Violence against suspected Tories flared in Philadelphia. After patriots attacked a carriage in which he was riding, he fled to New York City, then occupied by the British. After the British invaded Philadelphia in 1777, Coxe returned to Philadelphia at best as a neutral, at worst as a Loyalist.   It was a decision he lived to regret. After the British evacuated the city in 1778, Tench Coxe’s name appeared on a list of traitors. He was hauled before a court and acquitted. Although evidence is scant about his activities during the British occupation, for the rest of his life Coxe defended his patriotism.[5]

Coxe’s credentials as an advocate manufacturing were impeccable. During the Constitutional Convention, he entered into debates on the political economy. He endorsed the Constitution as essential for an effective national economy. In 1787, he helped to found the Pennsylvania Society for the Encouragement of Manufactures. Through Coxe’s efforts the Society opened a textile factory that provided jobs for the unemployed and showed the value of American-made cotton. The project came to an early end three years later after a fire destroyed the factory.

Although he was a friend of James Madison, he was an economic nationalist who supported Alexander Hamilton’s efforts to establish a national bank.

Hamilton disagreed with Coxe’s ideas about developing new markets in France, but appointed him anyway as assistant secretary of the Treasury in May, 1790. Coxe went to work assembling a draft a report on manufactures. It was not philosophical or theoretical. Coxe complied with the congressional request. He formulated a strategy for developing American industry. It eliminated dependence on Europe for essential finished goods and military supplies.[6]

As he worked on his draft, he sent article’s to Carey’s American Museum. They covered British mercantilist policies advocated by Lord Sheffield favoring the status quo. These policies forced America to sell raw products to Britain and buy its manufactures.[7] Carey and Coxe became good friends.

Early in 1791, Coxe finished his report. His twenty-page manuscript was a jumble of editorial comments in the margins, with sentences crossed out and carets noting the insertion additional text. Hamilton went to work on a neatly transcribed copy of the manuscript, adding fifteen paragraphs based on additional research and refuting the theoretical arguments in favor of agriculture by the Physiocrats, and free trade by Adam Smith. Several drafts later, with additional comments from Coxe, the report was ready in December, 1791.[8] Hamilton sent it to the House. Carey published it in the Museum.

TRANSITION TO PUBLISHERHamilton, Coxe and the Experiment in Paterson

[1] Jacob E. Cooke, “Tench Coxe, Alexander Hamilton, and the Encouragement of American Manufactures,” The William and Mary Quarterly, Third Series, V. 32, N. 3, (July, 1975) 369-70.

[2] George Washington, First Message to Congress Annals of Congress, 1 (8 January 1790) 969 quoted in “The Aftermath of Hamilton’s ‘Report on Manufactures,’” Douglas A. Irwin, The Journal of Economic History, V. 64, N. 3 (September 2004), 800.

[3] Cooke, “Tench Coxe, Alexander Hamilton,” 370, ff 34.

[4] Harold Hutcheson, Tench Coxe: A Study in American Economic Development (Baltimore: The Johns Hopkins Press, 1938) 1-9.

[5] “Tench Coxe” American National Biography; Hutcheson, Tench Coxe, 1-9.

[6] Cooke, “Tench Coxe, Alexander Hamilton,” 372.

[7] Cooke, “Tench Coxe, Alexander Hamilton,” 372.

[8] Cooke, “Tench Coxe, Alexander Hamilton,” 374-5.

1760 – 1839