Front Page Titles (by Subject) no . XII - The Works of Alexander Hamilton, (Federal Edition), vol. 5
no . XII - 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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- Foreign Relations ( Continued )
- Cabinet Opinion
- Cabinet Opinion—hamilton and Knox
- Washington to John Jay, Chief-justice, and James Wilson, James Iredell, and William Patterson, Associate-justices, of the Supreme Court of the United States
- Questions Proposed to Be Submitted to the Judges of the Supreme Court of the United States
- Washington to the Heads of Departments and the Attorney-general
- No Jacobin 1
- Instructions to the Collectors of the Customs 2
- Cabinet Opinion.—hamilton to Washington 1
- Notes By Hamilton, to Frame Letter of Secretary of State to Gouverneur Morris, Minister At Paris (cabinet Paper.)
- Cabinet Opinion
- Hamilton to Washington
- Hamilton to Washington (cabinet Paper.)
- Hamilton to Washington (cabinet Paper.)
- Americanus (from the American Daily Advertiser .)
- Hamilton to Washington (cabinet Paper.)
- Hamilton to Washington (cabinet Paper.)
- Points to Be Considered In the Instructions to Mr. Jay, Envoy Extraordinary to Great Britain
- Hamilton to Jay (cabinet Paper.)
- Treaty Project
- Hamilton to Washington (cabinet Paper.)
- Hamilton to Washington (cabinet Paper.)
- Hamilton to Randolph (cabinet Paper.)
- Hamilton to Randolph (cabinet Paper.)
- Remarks On Lord Grenville’s Project of a Commercial Treaty, Made At the Request of E. Randolph, Esq., Secretary of State
- Hamilton to Washington (cabinet Paper.)
- Remarks On the Treaty of Amity, Commerce, and Navigation, Made Between the United States and Great Britain
- Supplementary Remarks
- Horatius 1
- No . I
- No . Ii
- No . Iii
- No . Iv
- No . V
- No . Vi
- No . Vii
- No . Viii
- No . Ix
- No . X
- No . Xi
- No . Xii
- No . Xiii
- No . Xiv
- No . Xv
- No . Xvi
- No . Xvii
- No . Xviii
- No . Xix
- No . Xx
- No . Xxi
- No . Xxii
- No . Xxiii 1
The remaining allegations in disparagement of the third article, are to this effect: 1. That the exception of the country of the Hudson’s Bay company, owing to its undefined limits, renders the stipulations in our favor, in a great measure, nugatory. 2. That the privileges granted to Great Britain in our Mississippi ports, are impolitic, because without reciprocity. 3. That the agreement to forbear to lay duties of entry on peltries, is the surrender, without equivalent, of a valuable item of revenue, and will give the British the facility of carrying on their fur trade through us, with the use of our advantages. 4. That the articles which will be brought from Europe into Canada coming duty free, can be afforded cheaper than the same articles going thither from us charged with a heavy duty on their importation into the United States, and with the expense of a long transportation by land, and inland navigation. 5. That the population of Canada, which, by a census of 1784, amounted only to 123,082 souls, is too small to render the supply of European and Asiatic commodities, through us, of so much importance as to bear any comparison with the loss by the sacrifice of the fur trade. 6. That the intercourse to be permitted with the British territories, will facilitate smuggling to the injury of our revenue. 7. That the much greater extent of the United States than of the British territories destroys real reciprocity in the privileges granted by this article, giving, in fact, far greater advantages than are received. These suggestions will be discussed in the order in which they are here stated.
- 1.It is true, that the country of the Hudson’s Bay company is not well defined. Their charter, granted in 1670, gives them “the sole trade and commerce of and to all the seas, bays, straights, creeks, lakes, rivers, and sounds, in whatsoever latitude they shall be, that lie within the entrance of the streights commonly called Hudson’s Streights, together with all the lands, countries, and territories, upon the coasts and confines of the said seas, straights, bays, etc., which are now actually possessed by any of our subjects, or by the subjects of any other Christian prince or State.“To ascertain their territorial limits, according to charter, it would be necessary to know what portion of country, at the time of the grant, was actually possessed by the subjects of Great Britain, or of some other Christian prince or State; but though this be not known, the general history of the country, as to settlement, will demonstrate that it could not have extended far westward, certainly not to that region which is the scene of trade in furs, commonly called the Northwest trade, carried on by the Canada company from Canada; the possession of which, as far as possession exists, is recent. We learn from a traveller who has lately visited that region, that one of this company’s establishments is in lat. 56, 9, N. long. 117, 43, W., that is, about 20 degrees of longitude westward of the Lake of the Woods; and it is generally understood, that the entire scene of the trade of this company is westward of the limits of the Hudson’s Bay company.Canada, on the north, is bounded by the territories of the Hudson’s Bay company. This is admitted by the treaty of Utrecht, and established by the act of parliament in 1774, commonly called the Quebec act. The treaty of Utrecht provides for the settlement of the boundaries by commissioners. I have not been able to trace whether the line was ever actually so settled; but several maps lay down a line as the one settled by the treaty of Utrecht, which runs north of the Lake of the Woods.In a case thus situated, the United States will justly claim, under the article, access to all that country the trade of which is now carried on through Canada. This will result both from the certainty that there were no actual possessions at the date of the charter so far interior, and from the fact of the trade being carried on through a different channel, by a different company, under the superintendence and protection of a different government, that of Canada. It may be asked, Why was the article embarrassed by the exception of the country of the Hudson’s Bay company? The answer is this, That the charter of this company gives to it a monopoly within its limits, and, therefore, a right to trade there could not have been granted, with propriety, to a foreign power, by treaty. It is true that it has been questioned whether this monopoly was valid against British subjects, seeing that the charter had not been confirmed by acts of parliament. But besides that this doubt has been confined to British subjects, it would appear, that, in fact, the company has enjoyed the monopoly granted by its charter, even against them, and with at least the implied approbation of parliament. In the year 1749, petitions were preferred to the House of Commons, by different trading towns in England, for rescinding the monopoly and opening the trade. An inquiry was instituted by the House. The report of its committee was favorable to the conduct and pretensions of the company, and against the expediency of opening the trade; and the business terminated there.This circumstance of there being a monopoly, confirms the argument drawn from the fact, that the Northwest trade is carried on through Canada by the Canada company; a decisive presumption, that the scene of that trade is not within the country of the Hudson’s Bay company, and is, consequently, within the operation of the privilege granted to us.Though it will be partly a digression, I cannot forbear, in this place, to notice some observations of Cato, in his 10th number. After stating, that in 1784 the peltry from Canada sold in London for £230,000 sterling, he proceeds to observe that, excluding the territories of the Hudson’s Bay company, nine tenths of this trade is within the limits of the United States; and, though with studied ambiguity of expression, he endeavors to have it understood that nine tenths of the trade which yielded the peltry that sold for £230,000 sterling in 1784, was within our territories. It is natural to ask, how he has ascertained the limits of the Hudson’s Bay company (which at other times is asserted, by way of objection to the article, to be altogether indefinite) with so much exactness as to be able to pronounce what proportion, if any, of the trade carried on through Canada may have come from that country, towards the calculation which has led to the conclusion that nine tenths of the whole lies within our limits? The truth is indubitably and notoriously, that whether any or whatever part of the peltry exported from Canada may come from the country of the Hudson’s Bay company, seven eighths of the whole trade which furnishes that peltry, has its source on the British side of the boundary line. It follows, that if it were even true that only one tenth of the whole lay in that part of the British territory which is not of the Hudson’s Bay’s company, inasmuch as only one seventh of it lies within our limits, the result would be, that the trade, in which we granted an equal privilege, was to that in which a like privilege is granted to us, as one seventh to one tenth, and not, according to Cato, as nine to one. This legerdemain in argument and calculation, is really too frivolous for so serious a subject. Or, to speak more properly, it is too shocking, by the spirit of deception which it betrays. Cato has a further observation with regard to the trade with the Indians in the vicinity of the Mississippi, and from that river into the Spanish territories. The product of all this trade, he says, must go down the Mississippi, and, but for the stipulation of the third article, would have been exclusively ours; because, “by the treaty of Paris, though the British might navigate the Mississippi, yet they did not own a foot of land upon either of its banks; whereas the United States possessing all the Indian country in the vicinity of that river and the east bank for many hundred miles, could, when they pleased, establish factories and monopolize that commerce.” This assertion, with regard to the treaty of Paris, is in every sense incorrect; for the seventh article of that treaty, establishes as a boundary between the dominions of France and his Britannic Majesty, “a line drawn along the middle of the river Mississippi, from its source to the river Iberville, and from thence by a line drawn along the middle of this river and the lakes Maurepas and Pontchartrain to the sea,” and cedes to his Britannic Majesty all the country on the east side of the Mississippi. By the treaty of Paris then, his Britannic Majesty owned all the territory, except the town and island of New Orleans, on the east side of the Mississippi, instead of not having a foot of land there.What part of this territory does not still belong to him, is a point not yet settled. The treaty of peace between the United States and Great Britain, supposes that part will remain to Great Britain; for one line of boundary between us and her, designated by that treaty, is a line due west from the Lake of the Woods to the Mississippi. If, in fact, this river runs far enough north to be intersected by such a line, according to the supposition of the last-mentioned treaty, so much of that river, and the land upon it as shall be north of the line of intersection, will continue to be of the dominion of Great Britain. The lately-made treaty, not abandoning the possibility of this being the case, provides for a survey to ascertain the fact; and in every event, the intent of the treaty of peace will require, that some closing line, more or less direct, shall be drawn from the Lake of the Woods to the Mississippi. The position, therefore, that Great Britain had no land or ports on the Mississippi, takes for granted what is not ascertained, and of which the contrary is presumed by the treaty of peace.The trade with the Indian country on our side of the Mississippi, from the Ohio to the Lake of the Woods (if that river extends so far north), some fragments excepted, has its present direction through Detroit and Michilimackinac, and is included in many calculations, heretofore stated, of the proportion which the Indian trade within our limits, bears to that within the British limits. Its estimated amount is even understood to embrace the proceeds of a clandestine trade with the Spanish territories; so that the new scene suddenly explored by Cato is old and trodden ground, the special reference to which cannot vary the results that have been presented. It is still unquestionably and notoriously true that the fur trade within our limits bears no proportion to that within the British limits. As to a contingent traffic with the territories of Spain, each party will be free to pursue it according to right and opportunity; each would have, independent of the treaty, the facility of bordering territories. The geography of the best regions of the fur trade in the Spanish territories is too little known to be much reasoned upon; and if the Spaniards, according to their usual policy, incline to exclude their neighbors, their precautions along the Mississippi will render the access to it circuitous—a circumstance which makes it problematical, whether the possession of the opposite bank is, as to that object, an advantage or not, and whether we may not find it convenient to be able, under the treaty, to take a circuit through the British territories.
- 2.It is upon the suggestion of Great Britain having no ports on the Mississippi, that the charge of want of reciprocity in the privileges granted with regard to the use of that river, is founded. The suggestion has been shown to be more peremptory than is justified by facts. Yet it is still true that the ports on our side bear no proportion to any that can exist on the part of the British, according to the present state of territory. It will be examined, in a subsequent place, how far this disproportion is a proper rule in the estimate of reciprocity. But let it be observed, in the meantime, that in judging of the reciprocity of an article, it is to be taken collectively. If, upon the whole, the privileges obtained are as valuable as those granted, there is a substantial reciprocity; and to this test, upon full and fair examination of the article, I freely refer the decision. Besides, if the situation of Great Britain did not permit, in this particular, a precise equivalent, it will not follow that the grant on our part was improper, unless it can be shown that it was attended with some inconvenience, injury, or loss to us; a thing which has not been, and I believe cannot be shown. Perhaps there is a very importantly beneficial side to this question. The treaty of peace established between us and Great Britain, a common interest in the Mississippi; the present treaty strengthens that common interest. Every body knows that the use of the river is denied to us by Spain, and that it is an indispensable outlet to our western country. Is it an inconvenient thing to us that the interest of Great Britain has, in this particular, been more completely separated from that of Spain and more closely connected with ours?
- 3.The agreement to forbear to lay duties of entry on peltries is completely defensible on the following grounds, viz.: It is the general policy of commercial nations to exempt raw materials from duty. This has likewise been the uniform policy of the United States; and it has particularly embraced the article of peltries, which, by our existing laws, may be imported into any part of the United States free from duty. The object of this regulation is the encouragement of manufactures, by facilitating a cheap supply of raw materials. A duty of entry, therefore, as to such part of the article as might be worked up at home would be prejudicial to our manufacturing interest; as to such parts as might be exported, if the duty was not drawn back, it would injure our commercial interest. But it is the general policy of our laws, in conformity with the practice of other commercial countries, to draw back and return the duties which are charged upon the importation of foreign commodities. This has reference to the advancement of the export trade of the country; so that, with regard to such peltries as should be re-exported, there would be no advantage to our revenue from having laid a duty of entry. Such a duty, then, being contrary to our established system and to true principles, there can be no objection to a stipulation against it. As to its having the effect of making our country the channel of the British trade in peltries, this, if true, and it is indeed probable, could not but promote our interest. A large proportion of the profits would then necessarily remain with us, to compensate for transportation and agencies. It is likely, too, that to secure the fidelity of agents, as is usual, copartnerships would be formed, of which British capital would be the principal instrument, and which would throw a still greater proportion of the profits into our hands. The more we can make our country the entrepôt, the emporium of the trade of foreigners, the more we shall profit. There is no commercial principle more obvious than this, more universally agreed, or more generally practised upon, in countries where commerce is well understood.
- 4.The fourth of the above-enumerated suggestions is answered, in its principal point, by the practice just stated, of drawing back the duties on importation, when articles are re-exported. This would place the articles, which we should send into the British territories, exactly upon the same footing, as to duties, with the same articles imported there from Europe. With regard to the additional expense of transportation, this is another instance of the contradiction of an argument, which has been relied upon by both sides, which is, that taking the voyage from Europe in conjunction with the interior transportation, the advantage, upon the whole, is likely to be in our favor. And it is upon this aggregate transportation that the calculation ought to be made. With respect to India or Asiatic articles, there is the circumstance of a double voyage.
- 5.As to the small population of Canada, which is urged to depreciate the advantages of the trade with the white inhabitants of those countries, it is to be observed that this population is not stationary. If the date of the census be rightly quoted, it was taken eleven years ago, when there were already 123,082 souls. It is presumable that this number will soon be doubled; for it is notorious that settlement has proceeded for some years with considerable rapidity in Upper Canada; and there is no reason to believe that the future progress will be slow. In time to come the trade may grow into real magnitude; but be it more or less beneficial, it is so much gained by the article; and so much clear gain, since it has been shown not to be true that it is counterbalanced by a sacrifice in the fur trade.
- 6.With regard to the supposed danger of smuggling, in the intercourse permitted by this article, it is very probable it will be found less than if it were prohibited. Entirely to prevent trade between bordering territories is a very arduous, perhaps an impracticable, task. If not authorized, so much as is carried on must be illicit; and it may be reasonably presumed that the extent of illicit trade will be much greater in that case than where an intercourse is permitted under the usual regulations and guards. In the last case the inducement to it is less, and such as will only influence persons of little character or principle, while every fair trader is, from private interest, a sentinel to the laws; in the other case, all are interested to break through the barriers of a rigorous and apparently unkind prohibition. This consideration has probably had its weight with our government in opening a communication through Lake Champlain with Canada, of the principle of which regulation the treaty is only an extension.
- 7.The pretended inequality of the article, as arising from the greater extent of the United States than of the British territories, is one of those fanciful positions which are so apt to haunt the brains of visionary politicians. Traced through all its consequences, it would terminate in this, that a great empire could never form a treaty of commerce with a small one; for, to equalize advantages according to the scale of territory, the small state must compensate for its deficiency in extent by a greater quantum of positive privilege, in proportion to the difference of extent, which would give the larger State the monopoly of its trade. According to this principle, what wretched treaties have we made with France, Sweden, Prussia, and Holland! For our territories exceed in extent those of either of these Powers. How immense the sacrifice in the case of Holland! for the United States are one hundred times larger than the United Provinces.
But how are we sure that the extent of the United States is greater than the territories of Great Britain on our continent? We know that she has pretensions to extend to the Pacific Ocean, and to embrace a vast wilderness, incomparably larger than the United States, and we are told, as already mentioned, that her trading establishments now actually extend beyond the 56th degree of north latitude, and 117th degree of west longitude.
Shall we be told (shifting the original ground) that not extent of territory, but extent of population, is the measure? Then how great is the advantage which we gain in this particular by the treaty at large? The population of Great Britain is to that of the United States about two and a half to one, and the comparative concession by her in the trade between her European dominions and the United States must be in the same ratio. When we add to this the great population of her East India possessions, in which privileges are granted to us, without any return, how prodigiously will the value of the treaty be enhanced, according to this new and extraordinary rule?
But the rule is, in fact, an absurd one, and only merits the notice which has been taken of it to exhibit the weak grounds of the opposition to the treaty. The great standard of reciprocity is equal privilege. The adventitious circumstances, which may render it more beneficial to one party than the other, can seldom be taken into the account, because they can seldom be estimated with certainty; the relative extent of country or population is, of all others, a most fallacious guide.
The comparative resources and facilities for mutual supply, regulate the relative utility of a commercial privilege; and as far as population is concerned, it may be laid down, as a general rule, that the smallest population graduates the scale of the trade on both sides, since it is at once the principal measure of what the smaller State can furnish to the greater, and of what it can take from the greater; or, in other words, of what the greater State can find a demand for in the smaller State. But this rule, too, like most general ones, admits of numerous exceptions.
In case of a trade by land and inland navigation, the sphere of the operation of any privilege can only extend a certain distance. When the distance to a given point, through a particular channel, is such that the expense of transportation would render an article dearer than it could be brought through another channel to the same point, the privilege to carry the article through that particular channel to such point becomes of no avail. Thus the privilege of trading by land or inland navigation from the British territories on this continent can procure to that country no advantage of trade with Princeton in New Jersey, because supplies can come to it on better terms from other quarters. Whence we perceive, that the absolute extent of territory or population of the United States is no measure of the relative value of the privileges reciprocally granted by the article under consideration, and, consequently, no criterion of the real reciprocity of the article.
The objectors to the treaty have marshalled against this article a quaint figure, of which, from the use of it in different quarters, it is presumable they are not a little enamoured; it is this, that the article enables Great Britain to draw a line of circumvallation round the United States. They hope to excite prejudice by presenting to the mind the image of a siege, or investment of the country. If trade be war, they have chosen a most apt figure; and we cannot but wonder how the unfortunate island of Great Britain has been able so long to maintain her independence amidst the beleaguering efforts of the number of nations with whom she has been imprudent enough to form treaties of commerce; and who, from her insular situation, have it in their power to beset and hem her in on all sides. How lucky it is for the United States, that at least one side is covered by Spain, and that this formidable line of circumvallation cannot be completely perfected! or rather how hard driven must those be who are obliged to call to their aid auxiliaries so preposterous!
Can any good reason be given why one side of a country should not be accessible to foreigners, for purposes of trade, equally with another? Might not the cultivators on the side from which they were excluded, have cause to complain that the carriage of their productions was subject to an increased charge, by a monopoly of the national navigation; while the cultivators in other quarters enjoyed the benefit of a competition between that and foreign navigation? And might not all the inhabitants have a right to demand a reason, why their commerce should be less open and free, than that of other parts of the country? Will privileges of trade extend the line of territorial circumvallation? Will not the extent of contiguous British territory remain the same, whether the communications of trade are open or shut? By opening them may we not rather be said to make so many breaches in the wall, or intrenchment of this newly-invented circumvallation? if indeed it be not enchanted!
The argument upon this article has hitherto turned, as to the trade with the white inhabitants of the British territories, on European and East India goods. But there can be no doubt that a mutually-beneficial commerce in native commodities ought to be included in the catalogue of advantages. Already there is a useful interchange of certain commodities, which time and the progress of settlement and resources cannot fail to extend. It is most probable, too, that a considerable part of the productions of the British territories will find the most convenient channel to foreign markets through us; which, as far as it regards the interest of external commerce, will yield little less advantage than if they proceeded from our own soil or industry. It is evident, in particular, that as far as this shall be the case, it will prevent a great part of the competition with our commodities which would exist if those productions took other routes to foreign markets.
In considering the subject, on the side of a trade in home commodities, it is an important reflection that the United States are much more advanced in industrial improvement than the British territories. This will give us a material and growing advantage. While their articles of exchange with us will essentially consist in the products of agriculture and of mines, we shall add to these manufactures of various and multiplying kinds, serving to increase the balance in our favor.
In proportion as the article is viewed on an enlarged plan and permanent scale, its importance to us magnifies. Who can say how far British colonization may spread southward and down the west side of the Mississippi, northward and westward into the vast interior regions towards the Pacific Ocean? Can we view it as a matter of indifference, that this new world eventually is laid open to our enterprise, to an enterprise seconded by the immense advantage already mentioned, of a more improved state of industry? Can we be insensible that the precedent furnishes us with a cogent and persuasive argument to bring Spain to a similar arrangement? And can we be blind to the great interest we have in obtaining a free communication with all the territories that environ our country, from the St. Mary’s to the St. Croix?
In this large view of the subject, the fur trade which has made a very prominent figure in the discussion, becomes a point scarcely visible. Objects of great variety and magnitude start up in perspective, eclipsing the little atoms of the day, and promising to grow and mature with time.
The result of the whole is, that the United States make, by the third article of the treaty, a good bargain; that with regard to the fur trade, with equality of privileges and superior advantages of situation, we stake one against seven, or at most one against six; that as to the trade in European and East Indian goods and in home productions, we make an equal stake with some advantages of situation; that we open an immense field of future enterprise; that we avoid embarrassments and dangers ever attendant on an artificial and prohibitory policy, which, in reference to the Indian nations, was particularly difficult and hazardous; and that we secure those of a natural and liberal policy, and give the fairest chances for good neighborhood between the United States and the bordering British territories, and consequently of good understanding with Great Britain, conducing to the security of our peace. Experience, no doubt, will demonstrate that the horrid spectres which have been conjured up are fictions; and if it should even be slow to realize the predicted benefits,—for time will be requisite to give permanent causes their due effect in controlling temporary circumstances—it will at last prove that the predicted evils are chimeras and cheats.