Prospectus of the SUM

Aug 1, 1791

The establishment of Manufactures in the United States when maturely considered will be found to be of the highest importance to their prosperity. It is an almost self evident proposition that that community which can most completely supply its own wants is in a state of the highest political perfection. . . .

The dearness of labor and want of Capital are the two great objections to the success of manufactures in the United States.

The first objection ceases to be formidable when it is recollected how prodigiously the proportion of manual labor in a variety of manufactures has been decreased by late improvements of Machines—and when it is also considered to what an extent women and even children in the populous parts of the Country may be rendered auxiliary to undertakings of this nature. It is also to be taken into calculation that emigrants may be engaged on reasonable terms in countries where labour is cheap, and brought over to the United States.

To insure success it is desireable to be able to enter into competition with foreign [manufacturers] in three particulars—quality, price, term of credit. To the first, workmen of equal skill is an essential ingredient. The means employed have not generally been adequate to the purpose of procuring them from abroad and those who have been procureable at home have for the most part been of an inferior class. To cheapness of price, a capital equal to the purpose of making all necessary advances, and procuring materials on the best terms is an indispensable requisite—and to the giving of Credit a Capital capable of affording a surplus beyond what is required for carrying on the business is not less indispensable. But most undertakings hitherto have been bottomed on very slender resources.

To remedy this defect an association of the Capitals of a number of Individuals is an obvious expedient. . . . It is presumeable that public Banks would not refuse their aid in the same way to a solid institution of so great public utility. The pecuniary aid even of Government though not to be counted upon, ought not wholly to be despaired of.

There is scarcely a state which could be insensible to the advantage of being the scene of such an undertaking. But there are reasons which strongly recommend the state of New Jersey for the purpose. It is thickly populated—provisions are there abundant and cheap. The state having scarcely any external commerce and no waste lands to be peopled can feel the impulse of no supposed interest hostile to the advancement of manufactures. Its situation seems to insure a constant friendly disposition. . . .

As soon as it is evident that a proper Capital can be formed means ought to be taken to procure from Europe skilful workmen and such machines and implements as cannot be had here in sufficient perfection. To this the existing crisis of the affairs of certain parts of Europe appears to be particularly favourable. It will not be necessary that all the requisite workmen should be brought from thence. One in the nature of a foreman for each branch may in some branches suffice. . . .

When application shall be made for an act of Incorporation it ought to include a request that provision may be made for incorporating the inhabitants of the district within a certain defined limit which shall be chosen by the Company as the principal seat of their factories and a further request that the Company may have permission to institute a lottery. . . . The State of Jersey if duly sensible of its interest in the measure will not refuse encouragement of this nature.

Source: 
Harold C. Syrett et al., The Papers of Alexander Hamilton, vol. 9 ( New York, 1965), 144-53.