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Subject Area: Economics
Subject Area: Political Theory

GALLATIN TO MONROE. - Albert Gallatin, The Writings of Albert Gallatin, vol. 1 [1879]

Edition used:

The Writings of Albert Gallatin, ed. Henry Adams (Philadelphia: J.B. Lippincott, 1879). 3 vols.

Part of: The Writings of Albert Gallatin, 3 vols.

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GALLATIN TO MONROE.

New York, 25th November, 1815.

Sir,—

Whilst last at Washington I communicated some observations connected with the late commercial convention with Great Britain, which, in conformity with your suggestion, I will now reduce to writing.

The last instructions given on that subject to which we were generally referred were those of 20th May, 1807. We had, in addition, the Act passed by Congress during their last session, subsequent to the ratification of the treaty of peace, by which a general and reciprocal abolition of all discriminating duties was proposed. Considering, therefore, this last object as that which by our country was considered most important and desirable in our relations with foreign nations, we offered in our note of 24th June to the British plenipotentiaries to agree to an arrangement confined to that object alone. But we refused to accede to their proposal (as contained in their note of the 23d) to omit altogether the article respecting India, and to sign a convention embracing not only the abolition of discriminating duties, but also all the other provisions respecting the intercourse between the United States and the British territories in Europe, contained in the article then and finally agreed to. The instructions of 20th May, 1807, whilst forbidding an attempt to modify the East India article by offering to waive the privilege of indirect outward voyages, gave the preference to the omission of any articles on the subject, and to a reliance on the regulations which Great Britain would find it her interest to make without any treaty stipulation. There was nothing, therefore, in those instructions forbidding us to accept the proposal of the British plenipotentiaries; but we preferred insisting on the India article, and, for the sake of its being inserted, to agree that the convention should be limited to a shorter period of time than had been contemplated. We refused to agree to the European article entire unless the India article made part of the convention. I mentioned at Washington, and will now repeat, the reasons which, in my view of the subject, rendered that course proper.

Not only had those instructions contemplated a treaty embracing important objects not included in the proposed convention, but they were framed at a time when Great Britain pursued a very different policy with respect to the East India trade from that which has lately been adopted. Whilst she continued to exclude her own subjects from any participation in that branch of commerce, the acknowledged incompetency of the East India Company to supply India with a sufficient amount of specie and to carry off the surplus produce of that country made it necessary for both those purposes to resort to the foreign nations, or, to speak more properly, to that of the United States. Without any treaty stipulation the subject might, therefore, be left safely at that time to such internal regulations as Great Britain would, of her own accord and in pursuance of her general policy, make in regard to it. This opinion is supported by experience, our vessels having been admitted in the British East Indies subsequent to the expiration of the treaty of 1794 as freely and on the same terms as they had been whilst that treaty was in force.

But a different policy has now been adopted by Great Britain. The India trade has, by the last modification of the charter of the East India Company, been opened to the private enterprise and capital of British subjects, and the same motives no longer exist, at least to the same extent, for encouraging our commerce. Without pretending to conjecture how far this new state of things may in practice operate, there was sufficient evidence of a change of disposition in the refusal on the part of the British plenipotentiaries to place in that respect by treaty the United States on the footing of the most favored nations, a provision which, it appears by your correspondence, could have been obtained without difficulty in 1806-1807. It appeared, therefore, unsafe to accede to the proposal of agreeing to the second article of the convention entire and alone, by which every commercial advantage the United States had to offer was yielded, without securing or reserving any means of obtaining the admission of our vessels in British India. And it seemed due to our government not to act upon an instruction given under circumstances different from the existing state of things, and which, with a knowledge of the change which had taken place, the President might have deemed proper to revoke or to modify.

It is not irrelevant to the subject also to observe that, although the British Parliament refused the proposal to place, permanently by treaty, the United States on the same footing with respect to the East India trade as the most favored nations, the convention secures to us that trade in the manner now enjoyed by those nations; and that Great Britain has by that refusal only reserved to herself the right of granting hereafter greater advantages to other nations than they now enjoy, without being obliged to extend those advantages to the United States.

The importance which public opinion and the general tenor of former instructions had attached to that subject would make it the duty of American ministers to pay particular attention to it. I must, however, acknowledge that if listening to my private opinion I would have set much less value on that trade than duty compelled me to do during the late negotiation. It consists almost exclusively in the exportation of specie, which experience at this moment forcibly proves to be the necessary basis of a solid system even of paper circulating medium; and in the importation of articles in competition with one of the most important branches of our manufacture and agriculture. Should the policy of the country induce the adoption of restrictive measures either on the exports or imports connected with that trade, they would have the collateral advantage of proving to the British government that, so far from being disposed to make any sacrifice in order to obtain what it supposes a privilege, the United States consider that branch of commerce as of no real advantage to them.

The only part of the convention, therefore, which to me appears truly valuable, is that which regulates the intercourse with the British dominions, and particularly the provision which abolishes all discriminating duties,—a policy which, removing some grounds of irritation, and preventing in that respect a species of commercial warfare, may have a tendency to lay the foundation of a better understanding between the two nations on other points; and which consists also with the soundest principles of political economy, giving the greatest extent to commercial enterprise in both countries, and enable alike the manufacturer and grower of produce to obtain the highest price for the products of their industry, and the consumer to obtain those articles at the cheapest rate. I feel also a perfect conviction that in the competition, founded on such fair principles, which will ensue, the natural and acquired advantages of America, above all, the superior activity, enterprise, and skill of her citizens over the subjects of any European nation, will give a decided superiority to the United States over Great Britain; and my only apprehension is that that superiority will be such as to convince that country that they cannot compete with us on equal terms, and to induce the British government not to renew the convention.

My colleagues and myself agreed on the general result; but, not wishing to commit either of them with respect to the grounds of their opinion, I have in this letter spoken in the first person. As you may easily ascertain whether I am mistaken, I will add that I am under the impression that even in that respect Mr. Clay and myself were substantially of the same opinion, and had taken nearly similar views of every subject connected with the negotiation.

I have the honor to be, very respectfully, sir, your most obedient servant.