INTRODUCTION. 65 



In the report on manufactures, Hamilton reviewed at length the positions 

 assumed by Adam Smith, " that individuals were better judges, than statesmen 

 or lawgivers could be, of the species of industry which their capital could em- 

 ploy to the greatest advantage ; that as every individual was constantly exerting 

 himself to find out the most advantageous use for his capital, the study of his own 

 advantage would necessarily lead him to prefer that employment which must be 

 most beneficial to the general society. That every individual, who had embarked 

 his capital in the support of domestic industry, naturally aimed so to direct it that 

 it might yield the greatest possible profit ; that what was prudent and economical 

 in a private family could scarcely be otherwise in that of a great country ; that 

 if a foreign country could furnish us with a commodity at a cheaper rate than we 

 could manufacture it, it would be for our interest to purchase it with some part 

 of the produce of our own industry, employed in a more profitable manner than 

 in making the commodities referred to ; and that to give the monopoly of home 

 market to the produce of domestic industry in any art or manufacture, would 

 be giving an artificial direction to private capital that must be either useless or 

 injurious." From which, and similar positions of a like nature, Smith had drawn 

 the conclusion that the application of private capital and labor ought to be as 

 little as possible controlled or restrained by regulations of government. Hamil- 

 ton discussed these doctrines with great ability. He admitted that if the reason, 

 by which the principle of free trade was defended, had more generally governed 

 the conduct of nations, they might have advanced with greater rapidity to pro- 

 sperity and greatness than they had done by the pursuits of maxims too widely 

 different. But he insisted that most theories had very many exceptions, and 

 that very cogent reasons might be urged against the hypothesis that manufactures 

 would grow up without the aid of government, "as soon and as fast as the natural 

 state of things and the interest of the community may require." He showed, as 

 objections to its truth, the influence of habit, the fear of failure in untried enter- 

 prise, the difficulties inseparable from competition with those who have attained 

 perfection in the business to be undertaken, and the bounties, premiums and arti- 

 Intr. 9 



