offer you our best services, in whatever future walk of life you may fix on, and, with great respect, Sir,

Your most obedient servants,

BIRD, SAVAGE & BIRD.

COMMERCIAL RELATIONS.

OUTLINE OF SMITH'S SPEECH ON MADISON'S RESOLUTIONS OF JANUARY 3, 1794.

Draft by Hamilton.

January, 1794.

The table which is annexed takes the year 1790 as the proper period to show the commercial policy of France previous to the revolution just terminated. The notes accompanying that table explain the alterations which have since taken place. There is, however, no mention of the expiration of the time limited for the premium on French fish imported into the French colonies, which happened in 1790, because this makes no alteration in the general complexion of the policy of France in this particular. It is usual for greater caution to limit the duration of premiums to a certain period, even where it is supposed that a further continuation may be necessary, and if the premim in question has not been removed, it affords no proof of an intention to relinquish it, as the situation of France at the time of the cessation, and since, may be presumed to have precluded arrangements affecting the trade of the colonies.

If any have been made, it may be inferred from Commères' pamphlet, that though the duty on foreign fish has been reduced from three to five livres, the premium on French fish has been raised from ten to twelve, which makes the aggregate of duty and premium, operating as a bounty on French fish, the same as before, namely, fifteen livres.

General Observations.

1. The commercial system of Great Britain makes no discri minations to the prejudice of the United States as compared with other foreign powers.

There is therefore no ground for a complaint on the part of the United States, that the system of Great Britain is particularly injurious or unfriendly to them.

2. The commercial system of Great Britain makes important discriminations in favor of the United States as compared with other foreign nations. This is exemplified in the instance of tobacco, lumber, pot and pearl ash, tar and pitch, pig and bar iron, which, when carried from the United States to Great Britain, are either exempt from duties, which are paid on the same articles brought from other foreign countries, or pay so much less duty as to give them a clear advantage in the competition for the British market. Our vessels in the direct trade with Great Britain, are in various instances exempted from duties, which are paid by the ships of other nations, and in general are on the same footing in that trade with the vessels of the British colonies. Admission is also given to a variety of the commodities of the United States in the British West Indies, which is not given to similar commodities of other foreign countries.

There is therefore ground to assert, that the commercial system of Great Britain is more favorable and friendly to the United States than to other foreign countries.

3. The commercial system of France previous to the revolu tion, made fewer and less important discriminations in favor of the United States, as compared with other foreign nations, than that of Great Britain. In the West Indies our privileges were the same. The same commodities only, and upon the same terms, might be carried thither, and brought from thence from and to the United States, which might be carried thither and brought from thence from and to other foreign nations. The discriminations in favor of the United States in direct trade with France, are not known to have extended beyond the articles of fish oils.

and vessels of the built of the United States when owned by French subjects, which were admitted to naturalization, and so far promoted the building of ships as an article of trade with France. This last discrimination is now abolished, and no new ones have been made in our favor.

There is therefore ground to assert that the commercial system of France towards the United States as compared with other foreign nations, has been and now is less favorable and friendly than that of Great Britain.

Particular Observations.

I. As to flour. This article, previous to the revolution in France, was subject to but a very light duty on its importation there. At present it is free to all the world. But unless material changes take place in the state of France, the United States are likely to derive little benefit from this circumstance.

The ordinary price of flour in France is about $5 66 cents per barrel (of Pennsylvania).

In Pennsylvania it may be stated at age; the freight to France is

amount to about

upon an aver; other charges which would make the costs

and charges of a barrel of American flour in France $6 33 cents; of course it cannot, except on extraordinary occasions, be sent there without loss.

In Great Britain it has been stated that flour was subject to a prohibitory duty till the price there was about 48 shillings the quarter. The flour of the United States can therefore only be carried occasionally to Great Britain as well as to France, but the occasions have hitherto been more frequent in Great Britain than in France.

Accordingly, in the course of the years 1786 and 1788, the whole quantity of flour sent from Pennsylvania to France amounted to 2396 barrels; that sent to Great Britain, to 828 barrels.

But the act of Parliament of the , puts this article upon a worse footing than heretofore, and experience only can decide, whether flour can be henceforth sent with most advantage to Great Britain or to France.

The quarter, however, which in relation to both nations, it most interests the United States to have access to, as a market for their flour, is the West India Islands. Here the comparison is decidedly in favor of Great Britain. The general system of France, is to prohibit the reception of our flour in her West India markets-that of Great Britain to permit it.

It is true, that occasional suspensions of the prohibition take place; but these suspensions being confined to cases of necessity, the system of France, which excludes us as far as possible, cannot on this account be viewed as less unfavorable to the United States, than if no such suspensions took place.

Flour appears to be the principal staple of the United States. This principal staple, is, upon the whole, more favored by the regulations of Great Britain than of France. Accordingly, in the year 1790, the exportations to the British dominions, amounted to $1,534,276; to the French dominions to $1,483,195. The comparison is the stronger in favor of Great Britain, from the circumstance, that this year was one of extreme scarcity in France. In ordinary years, the difference must be far greater.

II. As to tobacco. It may be presumed, that this is an article of such a nature, that it is immaterial to the United States, what duty is laid upon it in either of the two countries, if the same duties affect all other imported tobacco. "Tis a case in which neither of the countries produces itself the article, to enter into competition with that of the United States. The duty, therefore, must essentially fall upon the buyers, not the sellers.

Previous to the French Revolution, there was no import duty in France, upon tobacco, but it was under a monopoly of the Farmers General; a situation far more disadvantageous to the United States, than any tolerable duty could be, by destroying a free competition among purchasers.

The decree of January, 1791, has laid a duty upon this arti- . cle, if brought from the United States to France in American vessels, of 25 livres per kental; if brought in French ships, of only 18 livres and 15 sous. The tobacco of the United States has been, and is, upon no better footing, than that of some other foreign nations.

In Great Britain, as has been stated, a considerably higher duty is paid on other foreign tobacco, than on that of the United States; and it may be carried to Great Britain, in vessels of the United States, upon the same terms as in British bottoms, while the ships of other nations, bringing tobacco, are subjected to a greater duty on the tobacco which they bring than the ships. of Great Britain.

Although, therefore, there is a higher duty on tobacco in Great Britain than in France; yet as in France the duty is the same on other foreign tobacco as on ours; as in Great Britain a higher duty is charged on other foreign tobacco than upon ours; as the comparative rate, not the quantum of the duty in either country, is the only thing which concerns us, it is evident that our tobacco is much more favored by Great Britain than by France. Indeed the difference of duty operates as a positive bounty upon the tobacco of the United States.

As it regards our navigation, the comparison is still more striking. Here, too, we are more favored by Great Britain than other countries; while the existing regulation of France is in the degree the most exceptionable to be found in the code of any country. It amounts to a prohibition of carrying our own tobacco to France in our own ships.

Several European nations have aimed at a monopoly of the carrying trade of their colonies, but the spirit has not extended to their home dominions. Slight differences have been made between foreign and national ships in favor of the latter; but a difference amounting to an exclusion of the former is perhaps without example, except in the regulation in question.

The principle of this regulation would prostrate the navigation of the United States more effectually than any which is to be found in the system of any other country.

Hence, in respect to the article of tobacco, the staple of the United States which may be deemed second in importance, the regulations of Great Britain are far more favorable than those of France.

Great Britain took from us in the year 1790, $2,777,808, while France took only $427,746.