Jefferson Vs. Hamilton

The two giants of the Washington administration were also the men whose ideas would personify the great debate about what the United States would look like in the future. They were Alexander Hamilton, who was appointed Secretary of the Treasury, and Thomas Jefferson, the first Secretary of State. Hamilton supported a strong federal government with the power to direct the economy, and a society built on industrial interests. Jefferson, on the other hand, believed in limited power for the national government and a society of independent land-owning farmers. As part of their ongoing feud, both men supported rival newspapers and regularly criticized their opposition in print. These attacks were not mild policy disagreements, but mudslinging that escalated into character assassination. Their feud, moreover, led to the development of the first American political parties.

Thomas Jefferson (1743-1826)

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; and he thereupon respectfully submits the following report....

The expediency of encouraging manufactures in the United States, which was not long since deemed very questionable, appears at this time to be pretty generally admitted....

There still are, nevertheless, respectable patrons of opinions unfriendly to the encouragement of manufactures ... It has been maintained, that agriculture is not only the most productive, but the only productive species of industry. The reality of this suggestion, in either respect, has, however, not been verified by any accurate detail of facts and calculations; and the general arguments which are adduced to prove it, are rather subtile and paradoxical, than solid or convincing....

The objections to the pursuit of manufactures in the United States, which next present themselves to discussion, represent an impracticability of success, arising from three causes: scarcity of hands, dearness of labor, want of capital....

With regard to scarcity of hands, the fact itself must be applied with no small qualification to certain parts of the United States. There are large districts which may be considered as pretty fully peopled; and which, notwithstanding a continual drain for distant settlements, are thickly interspersed with flourishing and increasing towns....

But there are circumstances ... that materially diminish, every where, the effect of a scarcity of hands. These circumstances are, the great use which can be made of women and children, on which point a very pregnant and instructive fact has been mentioned-the vast extension given by late improvements to the employment of machines-which, substituting the agency of fire and water, has prodigiously lessened the necessity for manual labor; the employment of persons ordinarily engaged in other occupations, during the seasons or hours of leisure, which, besides giving occasion to the exertion of a greater quantity of labor, by the same number of persons, and thereby increasing the general stock of labor, as has been elsewhere remarked, may also be taken into the calculation, as a resource for obviating the scarcity of hands; lastly, the attraction of foreign emigrants.... I t is not unworthy of remark, that the objection to the success of manufactures, deduced from the scarcity of hands, is alike applicable to trade and navigation, and yet these are perceived to flourish, without any sensible impediment from that cause.

As to the dearness of labor (another of the obstacles alleged), this has relation principally to two circumstances: one, that which has just been discussed, or the scarcity of hands; the other, the greatness of profits. ... It is also evident, that the effect of the degree of disparity, which does truly exist, is diminished in proportion to the use which can be made of machinery....

To procure all such machines as are known in any part of Europe, can only require a proper provision and due pains. The knowledge of several of the most important of them is already possessed. The preparation of them here is, in most cases, practicable on nearly equal terms. As far as they depend on water, some superiority of advantages may be claimed, from the uncommon variety and greater cheapness of situations adapted to millseats, with which different parts of the United States abound....

The supposed want of capital for the prosecution of manufactures in the United States, is the most indefinite of the objections....

The introduction of banks, as has been shown on another occasion, has a powerful tendency to extend the active capital of a country. Experience of the utility of these institutions, is multiplying them in the United States. It is probable that they will be established wherever they can exist with advantage; and wherever they can be supported, if administered with prudence, they will add new energies to all pecuniary operations....

It is a well known fact that there are parts of Europe which have more capital than profitable domestic objects of employment. Hence, among other proofs, the large loans continually furnished to foreign States. And it is equally certain, that the capital of other parts may find more profitable employment in the United States than at home....

It is not impossible, that there may be persons disposed to look, with a jealous eye, on the introduction of foreign capital, as if it were an instrument to deprive our own citizens of the profits of our own industry; but, perhaps, there never could be a more unreasonable jealousy. Instead of being viewed as a rival, it ought to be considered as a most valuable auxiliary, conducing to put in motion a greater quantity of productive labor, and a greater portion of useful enterprise, than could exist without it. It is at least evident, that, in a country situated like the United States, with an infinite fund of resources yet to be unfolded, every farthing of foreign capital which is laid out in internal meliorations, and in industrious establishments, of a permanent nature, is a precious acquisition.

And, whatever be the objects which originally attract foreign capital, when once introduced, it may be directed towards any purpose of beneficial exertion which is desired. And to detain it among us, there can be no expedient so effectual, as to enlarge the sphere within which it may be usefully employed: though introduced merely with views