He was the third son of Charles Hamilton (d. 1818), who built Hamwood, and his wife Elizabeth, daughter of Crewe Chetwood of Woodbrook, Queen's County.
As a result of a timber operator being unable to honour his contract, they became owners of a mill at Hawkesbury, Ontario associated with lumbering along the Rideau River.
During the 1820s, a downturn in the timber trade resulted in hard times for the Hamilton family and the business teetered on the edge of bankruptcy.
A fee-based system was introduced and, at Bytown, a down payment was collected against future cutting fees which favoured the wealthier operators and discouraged speculation.
In 1822 or 1823, while Hamilton and his family were descending the Ottawa River to Montreal, their canoe overturned in rapids and their three young children drowned.