Conceived in Liberty Volume 2 - Ludwig von Mises Institute

smelting process. On the other side were the finished-iron producers, who
wanted to encourage American bar- and pig-iron production by admitting
its products duty-free, but to prohibit finished-iron manufacturing in the
colonies. They were joined by the English shipowners, who wanted to encourage
the two-way transatlantic traffic of pig iron for finished products.
Finally, the latter group triumphed completely with the Iron Act of
1750. The act admitted colonial pig and bar iron duty-free but prohibited
any increase in finished-iron manufacturing, including slitting mills (to
make nails), plating mills (to make sheet iron) or steel furnaces (to make
steel). Fortunately, the Iron Act too was not very rigorously enforced. The
iron industry continued to grow in the colonies, the urban finishing mills
as well as the rural "plantation" blast furnaces for smelting ore into pig
iron, and forges for converting pig into bar iron. The colonists, moreover,
continued to finish most of their own bar iron. Ironworks were built in
every colony but Georgia; the heaviest concentrations soon emerged in
Pennsylvania around the Philadelphia area. However, the largest plants,
each a large-scale investment of $250,000, were the Principio works in
Maryland and the works of Peter Hasenclever in New Jersey, the bulk of
which was blast furnaces and forges for pig and bar iron. By the eve of
the American Revolution, American production of pig and bar iron had
exceeded the output of all of Great Britain.
The British government, as early as the seventeenth century, had placed
great importance on trees for masts for the Royal Navy. Although Britain
acted to suppress competing colonial manufactures, it wished to stimulate
supplies for the navy; for this purpose it coercively diverted colonial timber
to the production of masts and other naval stores. The main conflict centered
around this question: Who should gain the use and the profit of the
larger trees suitable for naval stores, the individual settlers or the Royal Navy ?
The Royal Navy first struck a blow in the imposed Massachusetts charter
of 1691, which decreed the reservation to the Crown of all trees of twentyfour
inches or larger in diameter then situated on the public domain. The
charter provision, however, was not enforced.
One of the main problems in trying to force American (particularly New
Hampshire) timber into naval stores was that such use was uneconomic.
Northern European naval stores were cheaper and of considerably higher
quality. And the colonists had better and more profitable uses for their
timber. A network of subsidies and prohibitions was therefore imposed;
the New England merchants, for example, refused to produce naval stores
unless the admiralty granted them the privilege of the advance guarantee
of a fixed price, a fixed quantity, and a long-term contract. In 1705, the
Naval Stores Act, accordingly, (1) extended the prohibition on private
cutting to pitch-pines and tar trees on the public domain, and to trees with
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