of leather, soap, and candles, etc., — and that others were supplying either the greater, or at least a considerable, part of the consumption of the country, such as iron and manufactures of iron; manufactures of cotton, wool, and flax; hats, paper, several manufactures of hemp, gunpowder, window glass, several manufactures of lead, etc. Home industry was, therefore, practically not far from the point of development indicated by Clay as the goal to be reached. In response to the request of Congress, to suggest methods by which the manufacturing industries might be encouraged, Gallatin suggested that “occasional premiums might be beneficial;” that “a general system of bounties was more applicable to articles exported than to those manufactured for home consumption;” that prohibitory duties were “liable to the treble objection of destroying competition, of taxing the consumer, and of diverting capital and industry into channels generally less profitable than those which would have naturally been pursued by individual interest left to itself.” A moderate increase of duties would be less dangerous, he thought; but, if adopted, it should be continued during a certain period to avoid the injury to business arising from frequent change. But, he added, “since the comparative want of capital is the principal obstacle to the introduction and advancement of manufactures,” and since the banks were not able to give sufficient assistance, “the United States might create a circulating stock bearing a low rate of interest, and lend it at par to manufacturers.”
