B. It avoids the inconvenience of a temporary augmentation of price, which is incident to some other modes; or it produces it to, a less degree, either by making no addition to the charges on the rival foreign article, as in the case of protectingduties,or by making a smaller addition. The first happens when the fund for the bounty is derived from a different object (which may or may not increase the price of some other article, according to the nature of that object), the second, when the fund is derived from the same, or a similar object, of foreign manufacture. Oneper cent. duty on the foreign article, converted into a bounty on the domestic, will have an equal effectwitha duty of two per cent., exclusive of such bounty; and the price of the foreign commodity is liable to be raised, in the one case, in the proportion of one per cent.; in the other in that of twoper cent. Indeed the bounty, when drawn from another source, is calculated to promote a reduction of price; because, without laying any new charge on the foreign article, it serves to introduce a competition withit,and to increase the total quantity of the article in the market.
C. Bounties have not, like high protecting duties, a tendency to produce scarcity.
D. Bounties are, sometimes, not only the best, but the only proper expedient for uniting the encouragement of a new object. "The true way to conciliate these two interests is to lay a duty on foreign manufactures of the material, the growth of which is desired to be encouraged, and to apply the produce of that duty, by way of bounty, either upon the production of the material itself, or upon its manufacture at home, or upon both. "
"Pecuniary bounties are, in most cases, indispensable to the introduction of a new branch. Bounties are especially essential in regard to articles upon which those foreigners, who have been accustomed to supply a country, are in the practice of granting them. --The continuance of bounties on manufactures long established, must almost always be of questionable policy: because a presumption would arise, in every such case, that there were natural and inherent impediments to success. But, in new undertakings, they are as justifiable as they are oftentimes necessary.
5. Premiums "These are of a nature allied to bounties, though distinguishable from them in some important features. Bounties are applicable to the whole quantity of an article produced, or manufactured, or exported, and involve a correspondent expense. Premiums serve to reward some particular excellence or superiority, some extraordinary exertion or skill, and are dispensed only in a small number of cases. But their effect is to stimulate general effort;
6. The exemption of the materials of manufactures from duty. "The policy of that exemption, as a general rule, particularly in reference to new establishments, is obvious. Of a nature, hearing some affinity to that policy, is the regulation which exempts from duty the tools and implements, as well as the books, clothes, and household furniture, of foreign artists, who come to reside in the United States-an advantage already secured to them by the laws of the Union, and which it is, in every view, proper to continue.
7. Drawbacks of the duties which are imposed on the materials of manufactures. "Such drawbacks are familiar in countries which systematically pursue the business of manufactures; which furnishes an argument for the observance of a similar policy in the United States; and the idea has been adopted by the laws of the Union, in the instances of salt and molasses. It is believed that it will be found advantageous to extend it to some other articles.
8. The encouragement of newintentionsand discoveries at home, and of the introduction into the United States of such as may have been made in other countries; particularly, those which relate to machinery. "This is among the most useful and unexceptionable of the aids which can be given to manufactures. The usual means of that encouragement are pecuniary rewards, and, for a time, exclusive privileges. The first must be employed, according to the occasion, and the utility of the invention or discovery. For the last, so far w respects " authors and inventors," provision has been made by law. It is customary with manufacturing nations to prohibit, under severe penalties, the exportation of implements and machines, which they have either invented or improved. As far as prohibitions tend to prevent foreign competitors from deriving the benefit of the improvements made at home, they tend to increase the advantages of those by whom they may have been introduced, and operate as an encouragement to exertion.
9. Judicious regulations for the inspection of manufactured commodities. "This is not among the least important of the means by which the prosperity of manufactures may be promoted. It is, indeed, {255} in many cases, one of the most essential. Contributing to prevent frauds upon consumers at home, and exporters to foreign countries; to improve the quality, and preserve the character of the national manufactures"
10. The facilitating of pecuniary remittances from place to place -- "A general circulation of bank paper, which is to be expected from the institution lately established, will be a most valuable mean to this end.
11. The facilitating of the transportation of commodities. "There is, perhaps, scarcely any thin" which has been better calculated to assist the manufacturers of Great Britain, than themeliorationof the public roads of that kingdom, {256} and the great progress which has been of late made in opening canals. Of the former, the United States stand much in need;
These examples, it is to be hoped, will stimulate the exertions of the Government and citizens of every State. There can certainly be no object more worthy of the cares of the local administrations; and it were to be wished that there was no doubt of the power of the National Government to lend its direct aid on a comprehensive plan.
This is one of those improvements which could be prosecuted with more efficacy by the whole, than by any part or parts of the Union. "Good roads, canals, and navigable rivers, by diminishing the expense of carriage, put the remote parts of a country more nearly upon a level with those in the neighborhood of the town. They are, upon that account, the greatest of all improvement."
"It may confidently be affirmed, that there is scarcelyany thingwhich has been devised, better calculated to excite a general spirit of improvement, than the institutions of this nature.Theare truly invaluable. --In countries where there is great private wealth, much may beeffectedby the voluntary contributions of patriotic individuals; but in a community situated like that of the United States, the public purse must supply the deficiency of private resource. In what can it be so useful, as inpromptingand improving the efforts of industry? --
All which is humbly submitted.
ALEXANDER HAMILTON,
Secretary of the Treasury.
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