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Jul 23, 2016

Secretary of State Thomas Jefferson on the struggle for control of the global oil industry - in 1791

Report of Secretary of State Thomas Jefferson on the Subject of the  Whale Fisheries.
February 1st, 1791. 
Published by order of the Senate of the United States, Philadelphia


"The whale fishery was first brought into notice of the southern nations of Europe, in the fifteenth century, by the same Biscayans and Basques, who led the way to the fishery of Newfoundland.

They began it on their own coasts, but soon found that the principal residence of the whale, was in the northern seas, into which, therefore, they pursued him. In 1578, they employed twenty-five ships in that business; the Dutch and Hamburghers took it up after this, and about the middle of the seventeenth century, the former employed about two hundred ships, and the latter three hundred and fifty.
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The English endeavoured also to participate in it. In 1672*, they offered to their own fishermen a bounty of six shillings a ton, on the oil they should bring home, and instituted at different times, different exclusive companies, all of which failed of success. They raised their bounty in 1733** to twenty shillings a ton on the admeasurement of the vessel. In 1740, to thirty shillings, with a privilege to the fishermen against being impressed. The Basque fishery, supported by poverty alone, had maintained but a feeble existence, before competitors, aided by the bounties of their nation, and was, in fine, annihilated by the war of 1745, at the close of which, the English bounty was raised to forty shillings.

From this epoch, their whale fishery went on between the limits of twenty eight and sixty seven vessels, till the commencement of the last war.
The Dutch in the meantime, had declined gradually to about one hundred and thirty ships, and have since than fallen down to less than half that number: so that their fishery, notwithstanding a bounty of thirty florins a man, as well as that of Hamburgh, is now nearly out of competition.

In 1715, the Americans began their whale fishery. They were led to it by the whales which presented themselves on their coasts. They attacked them there in small vessels of forty tons. As the whale, being infested, retired from the coast, they followed him farther and farther into the ocean, still enlarging their vessels, with their adventures to sixty, one hundred and two hundred tons.

Having extended their pursuit to the Western islands, they fell in, accidently, with the spermaceti whale, of a different species from that of Greenland, which alone had been known in commerce. More fierce and active, and whose oil and head matter was found to be more valuable as it might be used in the interior of houses without offending the smell.

The distinction now arose between the northern and southern fisheries; the object of the former being the Greenland whale, which frequents the northern coasts and seas of Europe and America, that of the latter being the spermaceti whale, which was found in the southern seas, from the Western Isles and coast of Africa to that of Brazil, and still on to the Falkland Islands. Here again, within soundings, on the coast of Brazil, they found a third species of whale, which they called the black, or Brazil whale, smaller than the Greenland, yielding a still less valuable oil, fit only for summer use, as it becomes opaque at fifty degrees of Fahrenheit's thermometer, while that of the spermaceti whale is limpid to forty-one, and of the Greenland whale to thirty six, of the same thermometer. It is only worth taking therefore, when it falls in the way of the fishermen, but not worth seeking, except when they have failed of success against the spermaceti whale, in which case this kind, easily found and taken, serves to moderate their loss.

In 1771, the Americans had one hundred and eighty three vssels, of thirteen thousand eight hundred and twenty tons, in the nortjhern
* 25.Car.II.c ** 6. G.II.c35
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 fishery, and one hundred and twenty one vessels, of fourteen thousand and twenty tons, in the southern, navigated by four thousand and fifty-nine men. At the beginning of the late war, they had one hundred and seventy-seven vessels in the northern and one hundred and thirty-two in the southern fishery.

At that period, our fishery being suspended, the English seized the opportunity of pushing theirs. They gave additional bounties of five hundred, four hundred, three hundred, throw hundred, one hundred pounds sterling, annually, to the five ships, which should take the greatest quantities of oil. The effect of which was such, as, by the year 1786, to double the quantity of common oil necessary for their own consumption.

Finding, on a review of the subject, at that time, that their bounties had cost the government thirteen pounds ten shillings sterling a man annually, or sixty per cent of the cargoes, a part of which went consequently to ease the purchases of this article made by foreign nations, they reduced the northern bounty from forty to thirty shillings the ton of admeasurement.

They had some little time before turned their attention to the southern fishery, had given very great bounties in it, ^^ and had invited the fishermen of the United States, to conduct their enterprizes. Under their guidance and with such encouragement, this fishery, which had only begun with them in 1784 or 1785, was rising into value. In 1788, they increased ** their bounties, and the temptations to our fishermen, under the general description of "foreigners who had been employed in the whale fishery," to pass over with their families and vessels to the British dominions either in America or Europe, but preferably to the latter.

The effect of these measures had been prepared by our whale oils becoming subject, in their market, to the foreign duty of eighteen pounds fish shillings sterling the ton, which, being more than equal to the price of the common oil, operated as a prohibition on that, and gave to their own spermaceti oil a preference over ours to that amount. The particulars of this history are presented to the eye, more in detail, in the table No. 7.

The fishermen of the United States, left without resource by the loss of their market, began to think of accepting the British invitation, and of removing--some to Nova Scotia, preferring smaller advantages in the neighborhood of their ancient country and friends, others to Great Britain, postponing country and friends to high premiums.

The government of France could not be inattentive to these proceedings. They saw the danger of letting four or five thousand seamen, of the best in the world, be transferred to the marine strength of another nation, and carry over with them an art, which they possessed almost exclusively. to give time for a counter plan, the Marquis de la Fayette, the valuable friend and citizen of this, as well as they county, wrote to a gentleman in Boston to dissuade the fishermen from accepting the British proposals, and to assure them that their friends in France would endeavor to do something for them. A

^^ 26 G. III.c.50 ** 28 G. III.c.20
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(10) vessel was then arrived from Halifax, at Nantucket, to take off those who had proposed to remove. two families had gone aboard, and others were going. In this moment, the letter arriving, suspended their designs. Not another went aboard, and the vessel returned to Halifax with only the two families.

The plan adopted by the French ministry, very different from that of the first mover, was to give a counter invitation to the Nantucket men to remove and settle in Dunkirk, offering them a bounty of fifty livres, (between nine and ten dollars) a ton on the admeasurement of the vessels they should equip for the whale fishery, with some other advantages. Nine families only, of thirty three persons, accepted this invitation. 

This was in 1785. In 1786, the ministry were led to see, that their invitation would produce but little effect, and that the true means of preventing the emigration of our fishermen to the British dominions, would be to enable them still to follow their calling from their native country, by giving them new market for their oils, instead of the old one they had lost. The duties were therefore, abated on American oil immediately, and a further abatement promised by the letter No. 8, and in December, 1787, the arret, No. 9, was passed.

The rival fishermen immediately endeavoured to turn this measure to their own advantage, by pouring their whale oils into the markets of France, where they were enabled, by the great premiums received from their government, perhaps too my extraordinary indemnifications, to undersell both the French and American fishermen. 

To repel this measure, France shut her ports to all foreign fish oils whatever, by the Arret No 10. the British whale fishery fell, in consequence, the ensuing year, from two hundred and twenty-two to one hundred and seventy-eight ships. But this general exclusion had palsied our fishery also. On the 11th of December, 1788, therefore, by the arret No 11, the ports of France, still remaining shut to all other nations, were again opened to the produce of the whale fisheries of the United States; continuing, however, their endeavours to recover a share in this fishery themselves, by the aid of our fishermen. 

In 1784, -5-,6, they had four ships, in 1787, three; in 1788, seventeen in the two fisheries, of four thousand five hundred ton. These cost them in bounty, two hundred and twenty five thousand livres, which divided on one thousand, five hundred and fifty tons of oil, the quantity they took, amounted to one hundred and forty-five livres (near twenty-seven dollars) the ton; and on about on hundred natives on board the seventeen ships,( for there were one hundred and fifty Americans engaged by the voyage) came to two thousand two hundred and fifty livres or about four hundred and sixteen dollars and two-thirds a man.

We have had during the years 1787, 1788, 1789, on an average, ninety-one vessels, of five thousand eight hundred and twenty tons, in the northern, and thirty-one, of four thousand three hundred and ninety tons, in the southern fishery.
See No. 12.
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these details will enable Congress to see with what a competition we have to struggle for the continuance of this fishery, not to say its increase. Against prohibitory duties in one country, and bounties to the adventurers in both of those which are contending with each other for the same object, ours have no auxiliaries but poverty and rigorous economy. The business, unaided, is a wretched one.

The Dutch have peculiar advantages for the northern fishery, as being within six or eight days sail of the grounds, as navigating with more economy than any other nation in Europe, their seamen content with lower wages, and their merchants with lower profits.

Yet the memorial No. 13, from a committee of the whale merchants to the States general of Holland in the year 1775, states that fourteen millions of guilders, equal to five millions six hundred thousand dollars, had been lost in that fishery in forty-seven years, being about one hundred and twenty thousand dollars a year. The States general thereupon gave a bounty of thirty guilders a man to the fishermen. 

A person intimately acquainted with the British whale fishery, and whose information merits confidence, has given assurance that the ships employed in their northern fishery in 1788, sunk eight hundred pounds each on an average, more than the amount of the produce and bounties.

An English ship of three hundred tons and forty-two seamen in this fishery generally brings home, after a four months voyage, twenty-five tons of oil, worth four hundred and thirty seven pounds ten shillings sterling; but the wages of the officers and seamen will be four hundred pounds; there remain but thirty seven pounds ten shillings, not worth taking into account toward the outfit and merchant's profit. These then must be paid by the government; and it is on their idea that the British bounty is calculated.

Our vessels for the northern fishery average sixty four tons, and cost when build, fitted out and victualled for their first voyage, about three thousand dollars. They have taken on an average the last three years, according to the statement No. 12, eighteen tons of oil, worth, at our market, nine hundred dollars, which are to pay all expenses, and subsist the fisherman and merchant. 

Our vessels for the southern fishery average one hundred and forty tons, and cost, when built, fitted out and victualled, for their first voyage, about six thousand five hundred dollars. They have taken on an average the three last years, according to the same statement, thirty two tons of oil, each worth at our market three thousand two hundred dollars, which are, in like manner, to pay all expenses and subsist the owners and navigators.

These expenses are great, as the voyages are generally of twelve months duration. No hope can arise of their condition being bettered by an augmentation of the price of oil. This is kept down by the competition of the vegetable oils, which answer the same purposes, not quite so well, but well enough to become preferable, were the price to be raised, and so well indeed as to be more generally used than the fish oils for lighting houses and cities.
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The American whale fishery is principally followed by the inhabitants of the island of Nantucket, a sand bar of about fifteen miles long and three broad, capable of maintaining by its agriculture about twenty families; but it employed in these fisheries before the war, between five and six thousand men and boys, and in the only harbour it possesses, it had one hundred and forty vessels, one hundred and thirty-two of which were of the larger kind, as being employed in the southern fishery.

In agriculture then, they have no resource, and, if that of their fishery cannot be pursued from their own habitations, it is natural they should seek others from which it can be followed, and preferably those where they will find a sameness of language, religion, laws, habits, and kindred. A foreign emissary has lately been among them, for the purpose of renewing the invitations to a change of situation. But attached to their native country, they prefer continuing in it, if their continuance there can be made supportable.

This brings us to the question, what relief does the condition of this fishery require?
1st. A remission of duties on the articles used for their calling.
2d. A retaliating duty on foreign oils, coming to seek a competition with them in or from our ports.
3d. Free markets abroad.
1st. the remission of duties will stand on nearly the same ground with that to the cod fishermen.

2d. The only nation whose oil is brought hither for competition with our own, makes ours pay a duty of about eighty two dollars the ton, in their ports. Theirs is brought here too, to be reshipped fraudulently under our flag into ports where it could not be received under theirs, and ought not to be covered by ours, if we mean to preserve our own admission into them. 

The 3d, and principal object , is to find markets for the vent of oil. Portugal, England, Holland, Sweden, Denmark, Prussia, Russia, the Hanse towns, supply themselves and something more. Spain and Italy receive supplies from England, and need the less as their skies are clearer. France is the only country which can take our surplus, and they take principally of the common oil; as the habit is but commencing with them of ascribing a just value to that of the spermaceti whale. Some of this, however, finds its vent there. There was, indeed, a particular interest perpetually soliciting the exclusion of our oils from their markets. 

The late government there saw well that what we should lose thereby, would be gained by others, not by themselves. And we are to hope that the present government, as wise and friendly, will also view us, not as rivals, but as co-operators against a common rival. Friendly arrangements with them, and accommodation to mutual interest, rendered easier by friendly dispositions existing on both sides, may long secure to us this important resource for our seamen. Nor is it the interest of the fishermen alone, which calls for the cultivation of friendly arrange-
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ments with that nation. Besides, five eighths of our whale oil, and two thirds of our salted fish, they take from us one fourth of our tobacco, three fourths of our live stock (No. 14), a considerable and growing portion of our rice, great supplies occasionally of other grain; in 1789, which, indeed, was extraordinary, four millions of bushels of wheat, and upwards of a million of bushels of rye and barley (No. 15) and nearly the whole carried in our own vessels
 (No.16)

They are a free market now, and will in time be a valuable one for our ships and ship timber, potash and peltry.

England is the market for the greater part of our spermaceti oil. They impose on all our oils, a duty of eighteen pounds five shillings sterling the ton, which as to the common kind, is a prohibition, as has been before observed, as as to that of the spermaceti, gives a preference of theirs over ours to that amount, so as to leave in the end, but a scanty benefit to the fishermen; and not long since, by a change of construction, without any change of the law, it was made to exclude our oils from their ports, when carried in our own vessels. On some change of circumstance, it was construed back again to the reception of our oils; on paying always, whoever, the same duty of eighteen pounds, five shillings.

This serves to shew that the tenure by which we hold the admission of this commodity in their markets, is as precarious as it is hard. Nor can it be announced that there is any disposition on their part, to arrange this or any other commercial matter, to mutual convenience. 

The exparte regulations which they have begun for mounting their navigation on the ruins of ours, can only be opposed by counter regulations on our part. And the loss of seamen, the natural consequence of lost and obstructed markets for our fish and oil, calls in the first place, for serious and timely attention. It will be too late when the seaman shall have changed his vocation, or gone over to another interest. If we cannot recover and secure for him these important branches of employment, it behooves us to replace them by others equivalent. 

We have three nurseries for forming seamen:
1. Our coasting trade, already on a safe footing.
2. Our fisheries, which in spite of natural advantages, give just cause of anxiety.
3. Our carrying trade, the only resources of indemnification for what we lose in the other.

The produce of the United States, which is carried to foreign markets, is extremely bulky. That part of it now in the hands of foreigners, and which we may resume into our own, without touching the rights of those nations who have met us in fair arrangements by treaty, or the interests of those, who, by their voluntary regulations, have paid so just and liberal a respect to our interests, as being measured back to them again, places both parties on as good ground, perhaps, as treaties could place them: the proportion, I say, of our carrying trade, which may be resumed without affecting either of these descriptions of nations, will find constant employment for ten thousand seamen, be worth two millions of
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dollars annually, will go on augmenting with the population of the United States, secure to us a full indemnification for the seamen we lose, and be taken wholly from those who force us to this draft of self protection, in navigation.

Hence too would follow that their Newfoundland ships, not receiving provisions from us in their bottoms, nor permitted (by a law of their own) to receive in ours, must draw their subsistence from Europe, which would increase that part of their expenses in the proportion of four to seven, and so far operate as a duty towards restoring the level between them and us. 

The Tables No. 2 and 12, will shew the quantity of tonnage, and consequently the mass of seamen whose interests are in distress; and No. 17, the materials for indemnification.
If regulations, exactly the counterpart of those established against us, would be ineffectual from a difference of circumstances, other regulations equivalent can give no reasonable ground of complaint to any nation. Admitting their right of keeping their markets to themselves, ours cannot be denied of keeping our carrying trade to ourselves.

And if there be anything unfriendly in this, it was in the first example.

The loss of seamen unnoticed, would be followed by other losses in a long train. If we have no seamen, our ships will be useless, consequently our ship-timber, iron and hemp; our shipbuilding will be at an end, ship carpenters go other to other nations, our young men have no call to the sea, our produce carried in foreign bottoms, be saddled with war-freight and insurance in times of war; and the history of the last one hundred years, shews that the nation which is our carrier has three years of war for every four years of peace, (No. 18). 

We lose, during the same periods, the carriage for belligerent powers, which the neutrality of our flag would render an incalculable source of profit; we lose at this moment the carriage of our own produce to the annual amount of two millions of dollars, which in the possible progress of the encroachment, may extend to five or six millions, the worth of the whole, with an increase in the proportion of the increase of our numbers.

It is easier as well as better, to stop this train at its entrance, than when it shall have ruined or banished whole classes of useful and industrious citizens.

It will doubtless be thought expedient that the resumption suggested should take effect so gradually as not to endanger the loss of produce for want of transportation; but that, in order to create transportation, the whole plan should be developed, and made known at once, that the individuals who may be disposed to lay themselves out for the carrying business may make their calculations on a full view of all circumstances.

On the whole, the historical view we have taken of these fisheries proves they are so poor in themselves as to come to nothing with distant nations, who do not support them from their treasury. We have seen that the advantages of our position place our fisheries on
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a ground somewhat higher, such as to relieve our treasury from the necessity of giving them support, but not to permit it to draw support from them, nor to dispense the government from the obligation of effectuating free markets for them, that for the great proportion of our salted fish, for our common oil, and a part of our spermaceti oil, markets may perhaps be preserved by friendly arrangements towards those nations whose arrangements are friendly to us, and the residue be compensated by giving to the seamen thrown out of business the certainty of employment in another branch of which we have the sole disposal.

THOMAS JEFFERSON,
Secretary of State.
February 1st, 1791.

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