BOUNTIES, COMMERCIAL, played an important role throughout the history of economic development in the United States. During the colonial period, Great Britain paid bounties to its American colonies that exported hemp, flax, tar, potash, indigo, and a number of other commodities. Such bounties stimulated colonial production of the commodities and diminished Britain's dependence on foreign nations for these items. North Carolina and South Carolina profited the most from these bounties. The production of naval stores (products from pine trees, such as pitch, turpentine, and rosin, used in shipbuilding) and indigo became, with rice cultivation, a cornerstone of the Carolinian economy. The loss of these bounties after the American Revolution brought disaster to those who depended on them, particularly those engaged in the production of naval stores and indigo. The colonial governments also offered bounties to encourage the manufacture of such goods as linen, woolens, iron, glass, brick, and salt, and after 1775 they redoubled their efforts to build up domestic manufactures by combining cash bounties, financial subsidies, and tariff protection.
Following the Revolution, the states continued to give bounties for wheat, flax, and even corn and for the manufacture of hemp, glass, and sailcoth. At least six states offered bounties for the production of silk. The federal government offered direct bounties for various commercial purposes. It achieved the same result indirectly by requiring the navy to buy only rope made from American hemp and by sending scientists abroad to find better strains of sugarcane and other plants that might be adapted to American growing conditions. On the eve of the Civil War, the Southern states, which felt that bounties, tariff protection, and subsidies to internal improvements had chiefly benefited other sections, incorporated a provision in the Confederate constitution forbidding them.
In 1890 the United States offered a bounty of two cents per pound on sugar produced within the nation. Individual states likewise gave bounties to the beet sugar industry. Such bounties, coupled with high tariff protection and huge subsidies in the far West for irrigation projects, have been responsible for the growth of the U.S. sugar beet industry.
In the twentieth century individual states continued to use bounties to rid the land of wolves and other carnivorous animals. The federal government, on the other hand, discarded bounties in favor of tariffs and quotas as its method of stimulating and protecting American industry.
Beer, George Louis. British Colonial Policy, 1754–1765. Gloucester, Mass.: Peter Smith, 1958. The original edition was published New York: Macmillan, 1907.
Handlin, Oscar, and Mary Flug Handlin. Commonwealth: A Study of the Role of Government in the American Economy: Massachusetts, 1774–1861. Cambridge, Mass.: Belknap Press of Harvard University Press, 1969.
Larson, John Lauritz. Internal Improvement: National Public Works and the Promise of Popular Government in the Early United States. Chapel Hill: University of North Carolina Press, 2001.
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