Front Page Titles (by Subject) no . XI - The Works of Alexander Hamilton, (Federal Edition), vol. 5
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no . XI - Alexander Hamilton, The Works of Alexander Hamilton, (Federal Edition), vol. 5 
The Works of Alexander Hamilton, ed. Henry Cabot Lodge (Federal Edition) (New York: G.P. Putnam’s Sons, 1904). In 12 vols. Vol. 5.
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The foregoing analysis of the third article, by fixing its true meaning, enables us to detect some gross errors, which have been principal sources of prejudice against it. One of these is, that the article gives to the other party a right of access to all our ports, while it excludes us from the ports of the British territories in our neighborhood. It has been clearly shown that it gives no right of access to any one of our Atlantic ports, and that it gives only a qualified and conditional access to the ports which we may have on the Mississippi, to be regulated by the privileges at any time allowed by law or compact in our Atlantic ports, and liable to cease with the cessation of those privileges. The charge, therefore, of want of reciprocity in this particular, vanishes, and with it all the exceptionable consequences which have been the fruit of the error. Such is the assertion of Decius, that a British trader may set out from Canada, traverse our lakes, rivers, and waters to New York, and thence to Philadelphia, while we are precluded from the navigation of the St. Lawrence, and other British rivers lower than the highest ports of entry from the sea. It would be an indulgent construction of the article, not to stop the British trader at Hudson, as the highest port of entry from the sea, and the boundary of inland navigation; but he could certainly have no claim of right under it, to go from New York to Philadelphia, because he must necessarily go by sea to arrive at the first place, and no such permission is stipulated by the article. Such, also, is the assertion of Cato, that Great Britain is admitted to all the advantages of which our Atlantic rivers are susceptible. The rivers, upon which no part of their territory borders, and which their vessels can only approach by sea, are certainly excepted.
Another of the errors referred to is this, that goods and merchandise may, under this article, be imported into any part of the United States upon the same duties which are now payable when imported by citizens of the United States and in vessels of the United States. It has been clearly proved that there is no pretence for this position, and that equality of duties only applies to importations from the British territories, in our neighborhood, by land and inland navigation.
Cato, Decius, and other writers against the treaty have fallen into this strange error, and have founded upon it much angry declamation. The first, however, embarrassed in his construction by the provision which reserves to Great Britain the right of laying countervailing duties, endeavors to escape from it by distinguishing goods imported for the Indian trade and those imported for other uses. Whatever may be the case with regard to the latter, the former, he is convinced, are certainly entitled to admission into our Atlantic ports on the privileged rights of duty, though he is very naturally perplexed to see how the discrimination could be maintained in practice. But where does he find room for this distinction? Not in the provision respecting countervailing duties, for that is general—not in the clause of the third article, to which he gives the interpretation, for that is directly against his distinction. The goods and merchandise, for the privileged importation of which it provides, are restricted to no particular object—have no special reference to Indian more than to other trade: on the contrary, they are expressly to be imported for “the purposes of commerce” at large; so that in the cases in which they are privileged, they are equally so, whether it be for a trade with our citizens or with Indians. The distinction, therefore, only proves the embarrassment of its inventor, without solving the difficulty. A curious assertion has been made on this article of duties. It has been said that, while we are obliged to admit British goods on the same duties with those paid by our own citizens, or importation in our own vessels, Great Britain, under the right to lay countervailing duties, may incumber us with an additional ten per cent. Can any thing be more absurd than the position that the right to lay countervailing duties exists in a case where there is no difference of duty to countervail? The term is manifestly a relative one, and can only operate where there is something on our side to be countervailed or counterbalanced, and in an exact ratio to it. If it be true that a very high law character is the writer of Cato, we cannot but be surprised at such extreme inaccuracy.
Other errors, no less considerable, will appear in the progress of the examination; but it will facilitate the detection of these, and tend to a more thorough understanding of the article, to state in this place some general facts, which are material in a comparison of the advantages and disadvantages of the article, to the respective parties.
The facts demonstrate that a trade between us and the British territories in our neighborhood, upon equal terms as to privilege, must afford a balance of advantages on our side. As to the fur trade, for a participation in one eighth of the whole, which we concede, we gain a participation in seven eighths, which is conceded to us. As to the European and East India trade, we acquire the right of competition upon equal terms of privilege, with real and considerable advantages of situation.
The stipulation with regard to equal duties was essential to the preservation of our superiority of advantages in this trade, while it would not interfere with the general policy of our regulation concerning the difference of duties on goods imported in our own and in foreign bottoms; because the supplies which can come to us through Canada, for the reasons already given, must be inconsiderable; because, also, distance would soon countervail, in expenses of transportation, the effect of the difference of duties in our market; and because, in the last place, this difference is not very sensible, owing to the large proportion of goods which are imported in the names of our own citizens. I say nothing here of the practicability, on general grounds, of long maintaining with effect this regulation.
Is it not wonderful, considering the real state of the trade, as depending on locality, that the treaty should be charged with sacrificing the fur trade to the British? If there be any sacrifice, is it not on their side; when the fact is that the quantity of trade in which they admit us to equal privileges is seven times greater than that in which we admit them to equal privileges?
The arguments against the treaty on this point are not only full of falsity, but they are in contradiction with each other.
On the one hand it is argued that our communication from the sea, with the Indian country, being much easier than by the St. Lawrence, we could furnish English goods cheaper, and of course could have continued the Indian trade in its usual channel, even from the British side of the lakes; nor could they have prevented it without giving such disgust to the Indians, as would have made them dangerous neighbors. On the other hand, it is argued that from superiority of capital, better knowledge of the trade, a better established connection of customers, the British will be able to supplant us, even in our own territories, and to acquire a monopoly of the whole fur trade.
Propositions so opposite cannot all be true. Either the supposed faculty of supplying English goods cheaper, which, it is said, would give us a command of the Indian trade, even on the British side of the lakes, not in the power of the British to prevent, overbalances the advantages which are specified on the other side, or it does not. If it does not, then it is not true that it could draw to us the trade from the British side of the lakes. If it does then it is not true that the British can supplant us in the trade on either side of the lakes; much less that they can obtain a monopoly of it on both sides.
Besides, if it be true that the British could not prevent our trading with the Indians on their side, without giving them such disgust as to make them dangerous to their neighbors, why is it not equally true, that we could not prevent their trading with the Indians on our side, without producing a similar effect? And if they have really a superiority of advantages, why would they not, on the principle of this argument, attract and divert the trade from us, though a mutual right to trade with the Indians in each other’s territories had not been stipulated?
The difficulty of restraining the Indians from trading at pleasure, is an idea well founded, as has been admitted in another place. But there result from it strong arguments in favor of reciprocation of privileges in the Indian trade, by treaty. One of them, its tendency to preserve peace and good understanding, has been already noticed; another arises from the consideration, that it will probably be the policy of the British to maintain larger military establishments on their frontier than we shall think eligible on ours, which will render it proportionably more easy to them to restrain their Indians, than it will be to us to restrain ours. This greater difficulty of executing restraints on our side, is a powerful reason for us to agree, mutually, to throw open the door.
It will not be surprising if, upon some other occasion, the adversaries of the treaty should abandon their own ground, and instead of saying the treaty is faulty, for what it stipulates on this point, should affirm merely that it has no merit on this account, since it only does what the disposition of the Indians would have brought about without it. But it is always a merit to divest an advantageous thing of cause of dispute, and to fix, by amicable agreement, a benefit which otherwise would be liable to litigation, opposition, and interruption.
As to relative advantages for carrying on trade, the comparison ought to be made with caution. That which has been stated on our side, namely, greater facility in conveying the materials of the trade from Europe to the scene where it is to be carried on, is a real one, and in process of time may be expected to make itself to be felt; yet hitherto, as before observed, it has had no sensible effect.
Of the advantages which have been stated as belonging to the other side, there is but one which has substance, and this is previous possession of the ground. But even this, from the very nature of it, is temporary. With our usual enterprise and industry, it will be astonishing if we do not speedily share the ground to the full extent of our relative advantages.
As to superiority of capital, it amounts to nothing It has been seen that the capital requisite for the whole trade is small. From a hundred to a hundred and fifty thousand pounds sterling would be a high statement. The whole of this, if we were to monopolize the entire trade, could not create a moment’s embarrassment to find it, in the opinion of any man who attends to the great pecuniary operations which are daily going on in our country. But that very capital which is represented as our rival, could be brought into action for our benefit in this very trade. The solution is simple. Our credit will command it in obtaining the foreign articles necessary for the trade, upon as good terms as the British merchants who now carry it on. The same objection of superiority of capital may with as much reason be applied to any other branch of trade between us and Great Britain. Why does it not give her a monopoly of the direct trade between her European dominions and the United States? The argument, if valid, would prove that we ought to have no commerce, not only with Great Britain, but with any nation which has more commercial capital than ourselves.
As to superior knowledge of the particular branch of business, there is still less force in that argument. It is not a case of abstruse science or complicated combination. And we are in no want of persons among us who are experimentally acquainted with the subject.
As to customers for the proceeds of the trade, we should stand upon as good a footing as the British merchants. What we did not want for our own consumption, might be sent upon equal terms to the very markets to which they send theirs; and to others which might be found preferable, because less well supplied with the kind of articles.
As to whatever may depend on enterprise, we need not fear to be outdone by any people on earth. It may almost be said, that enterprise is our element.
It has been alleged that our trade with the Indians would be interrupted by bad seasons and occasional wars, while that of Great Britain would be steady and uniform. As to the casualties of seasons, it is evident they must fall upon Great Britain as much as upon us, unless we suppose the elements in conspiracy against us; and as to wars, the possession of the posts would essentially change our situation, and render it peculiarly advantageous for preventing or repressing hostilities; so that with equally good management, our territories would not be more exposed than the British.
But the intrigues of the British traders residing among our Indians, would excite them to hostility. It could not be the private interest of the traders to do this; because, besides being amenable to punishment, if discovered,—besides that both the traders and the Indians within our limits, by the possession of the posts, would be under our control—wars interrupt, of course, the hunting of the Indians, and so destroy their means of trading.
As to Great Britain, she never could have had but one interest to prompt Indian hostilities—that was, to induce the United States to relinquish a part of their boundary. The restitution of the posts will put an end to this project. In regard to trade, she and her traders will have a common interest with us, and our traders, to keep all the Indians at peace, for the reason assigned above. This interest will be the stronger, because the best communication even with her own Indians, will be partly through our territory; and it would be impossible that it should not be impeded and interrupted by the operations of war between us and the Indians. In fact, under the circumstance of common privileges, there is every possible link of common interest between us and Great Britain in the preservation of peace with the Indians.
In this question of danger to our peace by the British participation in the trade with our Indians, the difficulty of restraining the Indians from trading with whom they please (which is admitted by the argument of both sides) is a very material consideration. Would there not be greater hazard to our peace from the attempts of the British to participate in a trade from which we endeavored to exclude them, seconded by the discontents of the Indians, than from any dispositions to supplant us, when allowed a free competition, when no cause of dissatisfaction was given to the Indians, and when it was certain, that war must interfere with their means of carrying on the trade? The security for our peace appears to be much greater in the latter than in the former state of things.
A suspicion is also suggested, that Great Britain, without exciting war, will indirectly trammel and obstruct our trade. To objections which suppose a want of fair dealing in the other party, it is very difficult to answer. All that a treaty can do, is to establish principles which are likely to operate well, if well executed. It is no objection to its merits, that the benefits aimed at may be frustrated by ill faith. The utility of any compact between nations must presume a sincere execution. The reverse may disappoint the best-conceived plan; and the security against it must be the mutual interest to perform, and the power of retaliation. If Great Britain acts with infidelity or chicanery towards us, we must retract the privileges granted on our side.
Another objection which is made, is, that while the British would have a right to reside among us, to hire houses and warehouses, and to enjoy every convenience for prosecuting the trade systematically, we should not be entitled to similar privileges with them, having only a right to pass “like pedlars with our shops upon our backs.” These are the expressions of Cato.
The position is founded on that clause of the British act of navigation, which forbids any but a natural-born or naturalized subject to exercise the occupation of a merchant or factor, in any of the British dominions in Asia, Africa, and America.
In the first place, it is to be observed, that as far as the article under discussion is singly concerned, there is no pretence to say that one party has greater rights as to residence than the other. If, therefore, Great Britain can prevent our citizens residing in their territories in our neighborhood, we are free by this article to apply to them a similar exclusion. And any right of residence which may be claimed under any other part of the treaty, will be temporary.
In the second place, the prohibition of residence in the act of navigation, proceeds on the ground of excluding foreigners from carrying on trade in the territories to which it extends. But the third article expressly gives us a right freely to carry on trade and commerce with the British territories on this continent, a right which necessarily includes the privilege of residing as merchants and factors. For wherever an end is granted, the usual and proper means of enjoying it are implied in the grant. Residence is a usual and necessary means of freely carrying on trade. Without it, the right of trade becomes essentially nugatory. This reasoning has peculiar force in relation to inland trade. And it agrees with decisions at common law, and with the opinion of Lord Coke, who tells us that “of a house for habitation an alien merchant may take a lease for years, as incident to commerce; for without habitation he cannot merchandise or trade.“ This, among other things, he informs us, was resolved by all the judges assembled for that purpose, in the case of Sir James Croft, in the reign of Queen Elizabeth; and we learn from it that the right to hire houses and warehouses is derived from the right to trade, as its incident. The same principle, in toto, has been recognized in other cases.
The whole of the article is an innovation upon the British act of navigation. Being abrogated as to the principal thing, there is no difficulty in supposing it so as to incidents; on the other hand, to pretend to exclude us from the right of residence, could not be deemed a fair execution of the article. Hence we find, that the want of reciprocity in this particular also fails, and with it the supposed disadvantage on our side in the supposed competition for the trade.