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 
